Podcasts about michael it

Hello out there, this is the Finding Nature podcast and my name is Nathan Robertson-Ball. I started this show with the intent of creating the types of conversations that I knew I needed but also thought people that work in the broad tent of sustainability wanted to hear too - combining discussions on the issues and problems our civilisation and planet face with the optimism of what has and could be done but also getting into the mindsets and philosophies of the people who have been on the frontlines of attempting and succeeding in this work. I wanted to have conversations that blend cognitive stimulation with emotional nourishment and spiritual enlightenment with the intent of helping me and hopefully you grow and evolve as a person and support our shared aspirations to contribute to a safer, more just and equitable future.Today's guest is Michael Bones, and when I invited him onto the show I thought maybe we'd have a chance of hitting those dimensions and the overlap between them, and it didn't disappoint. I absolutely loved speaking with Michael, as I have every time I have over the last couple years when we've connected over our shared love/hate of trying to work out how financial services entities and government can be far more proactive and take actually meaningful action on the dark shadow a changed and changing climate means for everything everywhere. Under Michael's cognition is an awakened spirit and loving human. We get through much on the climate risk and adaptation side, policy and the risks of capital flight in addition to the physical degradation of a stable climate. We chat about Michael's own grief and challenges when confronted with the breadth and depth of a changed climate, his own journey to reclaiming his own sanity and health, and he also manages to get a lot of me and my own despair and life meltdowns.April is about unity at the finding nature substack this month. Nick Lowles founded Hope not Hate in 2004 as an anti racist and anti fascist movement and this quote from him resonates after learning from Michael “It is in unity that we find strength; in unity we find hope, and in unity we can stand firm as the darkness approaches. Land us stand together - and stand firm - against many faces of hate”I absolutely adored this conversation. Michael is a special person, a gift to all of us as we navigate our own journeys. I hope you enjoy it and find your own story in parts of his. Til next time, thanks for listening. Events are live and more are coming - follow on Humanitix.Follow on LinkedIn, Substack and Instagram. Today's show is delivered with Altiorem. Use the code FindingNature25 to get your 25% off an annual subscription. Today's show is delivered with Climasens. Mentions Finding Nature when you contact them for 50% off your first asset heat risk assessment. Send me a messageThanks for listening. Follow Finding Nature on Instagram

As business owners, we often feel imposter syndrome or worry about our status. Have you ever wanted to elevate your image and be more relevant? In this episode of the #DoorGrowShow, property management growth expert Jason Hull sits down with Michael Sartain, CEO of Men of Action Mentoring to talk about how to make high-status friends and attend VIP events. You'll Learn [03:27] How to Utilize Networking [19:03] Becoming High-Status Using Social Media [26:54] How to be Relevant [38:58] Social Media is Fake [53:21] Authenticity vs Effective Content Tweetables “You need to be the person who always solves problems for other people and ask for nothing in return.” “You're building a brand. Status is status.” “A lot of our beliefs that we're holding on to that are holding us back.” “You make millions of dollars from solving other people's problems, not by doing what you love.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Michael: Your ability to grow is based on your perceived status, your perceived trustworthiness, your perceived know how. Not your actual know how.  [00:00:11] Jason: Welcome DoorGrow property managers to the DoorGrow show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing a business and life, and you're open to doing things a bit differently, then you are a DoorGrow property manager. [00:00:30] DoorGrow property managers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. [00:01:10] Now let's get into the show.  [00:01:13] So I have an awesome guest today. I actually joined his program just for kicks. This is Michael Sartain. Michael, welcome to the DoorGrow show.  [00:01:22] Michael: Hey, what's going on, man? Hey, I gotta be honest with you. Two years ago, I didn't know what doors meant and then I started hanging out with Justin Waller and he's like, "yeah, man, I have 300 doors." [00:01:29] I was like, "bro, what are you talking about?" [00:01:31] And then he's like, now he's got 400 doors. And I was like, "oh, it's like all these different properties." And then my buddy Myron he's got 17 homes that he owns up in Connecticut. He told me about, and I didn't understand how this whole thing worked. And then the property management side of it, like "my company, we're like, we're buying properties because we want to use the depreciation. And we need someone to keep, you know, these places rented, blah, blah, blah." And then the property management, I don't know that much about it. So that's why I was really excited to come on here and check this out.  [00:01:57] Jason: Cool. Well, yeah. And I didn't know very much about like maintaining a presence. [00:02:03] Looking cool, like actually looking cool on social media instead of just trying to look cool. And and so I've learned some good things by being in your program. So let's get into a little bit of background about you for those that are like, who's this Michael guy? And maybe how you kind of got into entrepreneurism and I think that'd be relevant to anybody listening. [00:02:25] Michael: So I'm originally from East Dallas. I grew up on the good side of the tracks and went to high school on the bad side of the tracks. And graduated from my high school, barely like did anything. It was not a very good experience. And I got into UT Austin because I was in top 10 percent of my class. [00:02:39] Went there four years, studied astronomy and business and then got out of there. And then I ended up managing a nightclub for a while, for a couple of years because MCI Worldcom and Enron had gone out of business. So if you know, UT Austin, Enron was like a huge supply of jobs once you graduated you know, as a Longhorn. [00:02:56] Once they go out of business, none of us can find jobs. I ended up working at a strip club for like several years as a DJ. And this is the first point in my life where I'm like, "okay, there's something going on here. There's things that I've been taught growing up, but there's something different now." Of course, I want to preface this. [00:03:10] By no means am I saying that people who go to a strip club or people who work in a strip club are indicative of the median of society. They clearly aren't, clearly are not. What I am saying though is that you can see the extremes in society when you go to places like that and from those extremes, you can see overt reactions. [00:03:27] One of the things that I do in my course is I teach how people can network, get invited where the cool kids sit like that phenomenon of where the cool guys are and the not cool guys, the hot club versus the not club that the club people don't want to go to, or the party everyone's trying to get into. [00:03:42] What is it that causes that phenomenon of popularity and status? There has to be something that can explain it. And so what I've been trying to do for the last 15 years is use evolutionary studies in order to figure out a way in order to do that. And so a lot of times when you do that, you know, you can see subcommunication between a man and a woman and you don't really know what's going on. [00:04:02] They have the internal focus of what's going on, but when you see it in like a nightclub or a festival or someplace like that, you see very overt communication. And from that, you can learn a lot of cool stuff. It's like watching, you know, crows you know, pick at a carcass versus watching a giant white tiger go kill a gazelle. [00:04:18] Like that is overt examples of predation that you can see and be like, okay, this is how biology works. This is how natural selection works, et cetera. And I know for your audience, you're like, "where the fuck's he going with all this?" Yeah. The reason why, just to explain. I got fascinated. I did seven years in the military after 9 -11. [00:04:33] I joined and I flew a KC 135 as an instructor navigator. And then I was I did counterintelligence for about the last two years I was there. And then, so, in that time period, I learned how a very structured business could work and like how accountability works. Accountability and leadership, I learned very much during that time period. [00:04:49] But at that same time period, I was also going out a lot and I was like very interested to me in like, what is it that caused certain men to be phenomenally good with women and get a lot of people to show up to an event and then what caused other men to just not get it. And I always, I also noticed that there was a very small group of men that got it. [00:05:05] And then a very large group of men that didn't understand this concept whatsoever. So I became fascinated with that idea of 2011. I ended up retiring from the military and I ended up moving to Las Vegas and this is the first time when I started going out to some of these nightclubs and these venues here in Las Vegas. [00:05:19] And I meet a lot of real estate agents. I meet a lot of accountants. I meet plastic surgeons, doctors. And it was very clear to me like that some of them got it and some of them didn't get it. I threw a real estate event recently where we took a blue heron home. And then we had a charity event for animals. [00:05:33] And while we're there, I invited every single female influencer in the city to show up. Well, these, some of these girls were interested in getting into real estate, but I just want you to imagine it was just like a regular real estate event that you have, except you're doing it for animal rescue. [00:05:47] So now all these people who are in real estate, mortgage brokers, et cetera, property managers like yourself, they would show up to this beautiful three story house. It was catered. It was beautiful. And then every pretty girl in the city in Las Vegas who wasn't working that night showed up to this thing. [00:06:01] So now you're drinking champagne. There's three times as many girls as guys. Some of you guys are listening to this and you're like, "okay, now I understand. I'm starting to understand what he does." You're able to create these incredible environments and in doing so, just imagine, everyone... I try to teach networking through events. [00:06:17] That's basically how I try to teach networking through small events at your house or large events, you know, like a CES conference. I try to teach networking through those mechanisms. And then I try to show how evolution created humans throughout history. Dr. David Buss writes in his book the evolution of desire throughout history. [00:06:34] The men who have worked in groups and in tandem with one another always had access to more resources and always had access to more women. And so that's the reason why, you know, I teach these concepts. And so what happens is that blue Heron thing that we did, the guy who ran it, he's at the forefront and he goes, "I want to just thank you guys for coming out here and helping me, blah, blah, blah." [00:06:52] He had endeared so much goodwill with every mortgage broker, real estate agent. It was really crazy. All these other real estate agents wanted to train under him. People started sending him business. His business blew up. Another example I give, that's Jeremy Green's name. I have another example of my buddy, Mark Pearlberg, who's one of those also in my program. [00:07:09] Mark is an accountant. Mark started to see the way that I would use zoom calls and on the zoom calls, Mark would go on and show. How he understood accounting backwards and forwards better than everyone else who was listening, he showed himself to be a subject matter expert in the zoom calls. He was hosting in doing so, just imagine Jason, like, you know, I don't believe accounting is your specialty, but if you listen to accountant at first, it's interesting, but after like an hour and a half, you get to the realization, like, "this is interesting, but I don't want to do this." [00:07:37] And then at about the two hour mark, you're like, "This is interesting. I don't want to do this. How much do I have to pay you to do this?" And so because what we did and he started hosting a podcast and because he started hosting these zoom calls with other professionals, now he tells me, he's like, "I actually had to slow down the podcast because I can't handle all the business that I have. [00:07:55] There's not enough of me. In order for me to be able to do this." And he works from home. He just, an incredible lifestyle that he's created. So when we go back to what we're saying before, you know, I learned initially, "okay, what are the mechanisms that cause people to be cool or not cool, to be popular, not popular, to be low status or high status?" [00:08:13] I learned that when I was working in Austin, you know, nightclub, I learned that when I was in the U S military, like what good leadership and bad leadership was. And then I learned it in the last 13 years here living in Las Vegas. And I took all those lessons and I, from the last say, 25 years, and I put them into a course called the men of action course and try to concisely take this 25 years of knowledge and put it into one space so that everyone can learn how to do these kinds of things. [00:08:35] Now, here's where it might be confusing for some of your audience, the mechanisms that men use in order to show status with women in order to date them and the mechanisms that men and women use in order to pitch an idea or to sell a product are the same mechanisms. They are the same. This is difficult. A lot of people don't grasp this. if you guys ever want to see a great example of this, great book you should all read is Oren Klaff's book called pitch anything. Listen to some of the words he uses. Jason, you remember eliminate neediness. [00:09:06] Do you remember that? Eliminate neediness. Where does that come from? Where does that come from? It didn't come from self help. Eliminate neediness is a dating concept. Okay? Avoid beta behavior. Do you remember? Oren Klaff says this in his book. He goes, "avoid beta behavior." Where does that come from, Jason? [00:09:21] That is a dating concept. So where do these things come from? At the highest level Jordan Belfort, he calls it goal oriented communication. So goal oriented communication is, "will you go on a date with me?" Goal oriented communication is, "Ken, will you invest in my project?" Goal oriented communication is, "will you come work for me?" [00:09:36] Goal oriented communication. I'm doing this because this is like the apex of community of goal oriented communication. All these places meet at the apex, and that is the understanding of basically Dale Carnegie's how to win friends and influence people, get people to talk about themselves. You can find common interests, figure out ways to break rapport, all these different things. [00:09:53] And like what I teach my clients, Jason, the number one thing I teach my clients when it comes to high stats networking is you need to be the person who always solves problems for other people and ask for nothing in return. A great example is, do you remember Harvey Keitel in the movie Pulp Fiction? [00:10:08] You remember he's the wolf? Do you remember Pulp Fiction? I haven't seen Pulp Fiction. Okay, so tonight you're going to watch Pulp Fiction. Every single other person watching this has watched Pulp Fiction. [00:10:17] Jason: I know, everybody else has watched it but me, so.  [00:10:19] Michael: There's a point, there's a point where they have to clean up a dead body and they have to call this guy named the wolf and he just, he fixes things. [00:10:25] He's a cleaner. The wolf shows up in his Acura NSX, it's Harvey Keitel and he just fixes things. He goes, "are you going to listen to me or do you want to go to jail?" And he does, he just fixes everything. That's what I become. I'm the guy who fixes things for other people. I have a bunch of friends. I help them find people for their sales team. Most of my friends have met their boyfriends or girlfriends through me. I help people find their employees. I'm the hub. I'm the hub of the social wheel. And that's what I teach you to do in my course. If you cannot replace your social circle, your girlfriend, or your job in 15 minutes, you don't have enough abundance and I need to teach you how to have more abundance. [00:10:56] And so how do you do that? There's just certain mechanisms that people who have an abundance mentality and understand networking have, and when they use those techniques, then they can have anything they want. They get into any door. So another example, Jason is like the guy who goes to the Tai Lopez conference or the Taylor Welch conference or goes to see Cole Gordon or goes to see Wes Watson or goes to see whoever. [00:11:17] The guy who is like, "Hey man, thank you for your time." The one who like goes and pays Patrick bed David for his counseling. And then there's the guy who Patrick Bet David who goes to see Patrick David for his counseling. And then Patrick David was like, "Hey man, can I come visit you and hang out? Come meet my wife. Let me take you out to dinner." Does that make sense? There's a mechanism you'll see, like with a lot of people have asked me this before. Why is it that, you know, other people are like paying to listen to Justin Waller speak, but like Justin Waller and I are like close friends? [00:11:42] Why is it that other people like buy Rollo's book, but Rollo is one of my best friends? Why is it like all these other people call me and I'm not trying to say this to brag, but the reason why I'm trying to say this is there's a status line that you get to where you're a customer, and then you're his friend. [00:11:56] How do you cross that status line? This is such a key for those of you who are like, trying to get into sales or trying to understand networking. It's just like, I'm paying this guy, like how much, like I'm paying Tony Robbins. I'm a customer. I'm customer. Now Tony's like sending me messages on my birthday. [00:12:09] What is that status line? Some people's like, "well, you just need to have more money." And I'm telling you that is not what the case is. That's definitely not what the case is.  [00:12:15] Jason: Who would want to connect with people that they're only connecting with you because of money? I mean, that'd be a really shitty reason to be connecting with somebody.  [00:12:22] Michael: In the beginning, you will. But after a while you learn, whenever I go up and talk to my favorite influencer, let's say I paid for his coaching program is my voice cracking or my eyes getting big is my vocal tonality changing because I see this person as high status. [00:12:38] Am I dressing too fancy to try to show off? Am I doing too much or am I just like just the normal dude? I am. Oren Klaff, one of my favorite YouTube content creators. I don't know if you are not Oren Klaff. I'm sorry, Orion Terriban. All right. His name is Psych Hacks. Well, I had him on my show a couple of days ago. [00:12:54] He kind of converges behavioral economics with evolutionary psychology. And he basically talks about the sexual marketplace as far as economics is concerned. Okay. Really great person. Have him on my show. Ask him a bunch of stuff during the show. One of the things I talk about is like, "Hey, Orion, I know that you do some sales stuff, some coaching stuff. If you want my help, I'll help you how to, you know, put out a low ticket offer, high ticket offer, how you can like buy back your time." he's like, "yeah, you know, I can't scale myself that much." I was like, "okay, so you're going to read buy back your time by Dan Martell." [00:13:21] And then I gave him a bunch of books, you know, that would probably help him. And then at the end, I was like, bro, anytime you want to call me and you ask me about any of this stuff, I'll help you. The guy who has the world, you guys look it up. The guy with the world record in the high jump on planet earth is a guy named Darius Clark. He went to Texas A& M. He's the leading scorer in slam ball. Have you ever seen slam ball, Jason? Remember the trampolines and the basketball, they go dunk on each other. Anyways, I bumped into Darius at a slam ball game. We started talking and I'm, and then Darius is like, "Hey man, I want to level up my social media." [00:13:50] And I'm like, "Darius, let me figure out ways that I can help you level up your social media." So it's like one guys are like a professional athlete. Another guy's an accountant. You might be saying like, "why is it you're able to do all these different things?" And the reason why is because these are evolutionary problems. [00:14:04] These are evolutionary challenges that all men we're looking for. There are three things that really differentiate men from women. Three massive things. There's more than three, but these are the three biggest ones. Jason here. Number one, this is the most obvious one. It's upper body strength. Men are about two standard deviations stronger than women as far as upper body strength, meaning the medium grip strength for a man it puts them in the top, you know, 98 percent and top 2 percent of women. Makes sense.  [00:14:27] Jason: Yeah. Which also throws off our balance is higher. Yeah.  [00:14:31] Michael: Correct. Also. Yeah. It also, there's a reason why some of the reasons why men live shorter lives is because they keep their weight up here around their waist. [00:14:37] Whereas women keep it below their hips. And that's really, it's further away from their heart. There's a couple other things according to that now that's the first thing. The second one is a variety of sexual partners. Men are again, two standard deviations. Yeah. Far more like meaning the median man is interested in more women than the other way around but puts them in the top 2%. [00:14:55] But the third one, and this was a really interesting one and I knew this one, but it was Tai Lopez I was at his house last Wednesday. And he was explaining this, do you know the main thing where women just do not care that much about at all? But men are obsessed with, you know what it is? It's in your title. [00:15:09] No, it's in your title.  [00:15:10] Jason: Let's see, friends, high status, what I don't know?  [00:15:13] Michael: Status. Women in general do not care as much about status as men do, meaning women don't kill each other over status as men have been doing for the last hundred thousand years. So in fact, Dr. Buss, women care about men having status. [00:15:26] Jason: Women care about men having status.  [00:15:28] Michael: Women care about the men that they're with having status, yes. Yeah, okay. Yes. I see. Meaning they care about status as an object to obtain, but not as a something for themselves. Or rather, if you've ever, if you've ever lived on a military base, it's one of the strangest things. [00:15:41] Whoever the base commander's wife is, she's like the leader of the wives. It's so weird. She did nothing. She didn't go to officer school. She didn't do shit, but because she's married to the 06, the base commander, whenever they have engagements, she is... it's so funny. Anybody who's been in the military, you know, this is true. [00:15:58] Whoever the base commander's wife is. She's all of a sudden like the leader of all the events, even though why? Because she's married to the base commander. That's the way it works. So men, women in general in gendered into themselves, don't care as much about status as men do men severely care about status far more than women do. [00:16:16] And so because of the, these concepts, that's why you'll see like with a lot of the stuff I'm saying when it comes to sales, this is for men and women, but when it comes to dating, women do not sit there and have to show their status in order to attract men. But the other way they do. Does that make sense? [00:16:29] Yeah. And that's why it's like an important differentiation to make. And that's one of the other things I teach in my course. Like when you also, when you're selling to men versus women, it's something that you need to understand. You don't necessarily need to sell to women based on status. Like how, "Hey Sherry, how'd you like those big shoulders to show off those muscles to get those guys?" No, they don't. It's that's a status thing shoulder to waist ratio is like a male strength machismo testosterone status thing that women just aren't as interested in, you know, so there's just interesting concepts like that. [00:16:59] This divergence innate differences between men and women and where do we find these differences? We find them in evolutionary studies.  [00:17:05] Jason: So I think it's really interesting what you talked about earlier. You mentioned like this gravitation towards basically what works, right. And we see this everywhere. [00:17:14] Like I've been in lots of different programs. I've worked with lots of different mentors, coaches, read lots of different books and I'm noticing more and more I evolve as a human being. I'm noticing more and more parallels between the best ideas. Like I just read a book on kids. It was like how to talk so kids will listen and how to listen so kids will talk. And it's probably one of the best communication books I've ever read. Like anybody could learn from reading this book because to some degree, we're all little kids in bigger. [00:17:44] Michael: Even without kids.  [00:17:45] Jason: And also I was like, this is brilliant, like self talk like psychology even in this book. [00:17:51] And I'm like, this could be applied to so many different things. And it talks about empathetic, like being empathetic in your communication. I'm like, this is brilliant. This will work so effectively for sales or for anything. And people think, "oh, it's for kids." Right. And so what works works. [00:18:05] And I read another book, something about relationships by David B. Wolfe. It was a really good book, and this was for grownups, but there were so many parallels between these things. And you had mentioned also with dating and you know, for example, sales really, there's so many parallels between going out and trying to get clients and trying to get dates. [00:18:27] Michael: The higher you go, they're not parallels. They're exactly the same. When you get to the top, they're exactly like what I'm saying is when you get to the top, meaning like Hugh Hefner, like when you're at the top and then you just see, it's just a total presentation and it's nothing but just showing status. [00:18:42] Oh, it's the same thing. It's the same. I bought a Tesla that like Playboy is a brand. Tesla is a brand. You start to see they're doing the same thing to your brain.  [00:18:51] Jason: So for the business owners, listening to this, who are not trying to be Hugh Hefner. Right. They're not, and maybe they're married like me and they're not like trying to get women, but they do want to increase their sales. [00:19:03] They do want to increase their status and they want to figure out how to attract more business. What are maybe some of the things that they could do to be more attractive to the real estate investors that they're trying to get as clients?  [00:19:18] Michael: Yeah, I will tell you the first thing is you need to be a way more cognizant of how you are perceived socially and for a lot of people, one of the things you have to understand is the more things become digital and the more your image can be spread across social media platforms, the less your actual merit of your business matters and the more the perception of your business matters. [00:19:40] Jason: Yeah. How do they get an accurate view of how they're perceived?  [00:19:46] Michael: You could ask other people. I mean, generally the market is going to tell you, right? What is the price of of a commodity? The market's going to end up telling you right. In a free market economy, but it's like when you make social media content, you need to make them the content to market your business in a sexy, fun way that catches people's attention, but it doesn't have to be extremely representative. And I know this is really hard for a lot of people to do because they're like, "no, I'm just going to be myself and make content that feels organic." And I'm just telling you that doesn't work. [00:20:14] I don't care what Gary Vanderchuck told you. That is not the way the world works. Everyone else is stunting. Everyone is using FaceApp and Facetune. All these other people are just showing images and pictures of the best parts of their life. I post on social media all the time. I did not post anything about me feeding my cats this morning. [00:20:30] Like, the people want to see the cool stuff. That's just generally the way it is. So, you're, the way you are perceived on social media again, that's what we, you know, Men of Action, our group, is when you're in a community that gives you accountability and feedback to let you know, hey man, this is not a good post or this is a good post. [00:20:45] When we are on Instagram specifically instagram trades, a currency and that currency is called status. That's all Instagram is. Facebook is not like that. By the way, you guys will notice for those of you do any kind of marketing, Facebook is going to work really well for your 38- 40 year old audience and older. [00:21:01] And Instagram is going to work for your audience below 38 to maybe 28 and then maybe to 25 and below 25, it's going to be TikTok. And you'll notice, depending on which audience you're trying to get to, that's where you're going to see the most prevalence on those different platforms. Also, you're also going to see the most politically progressive of those platforms will be TikTok and the most politically conservative all those platforms will be like Twitter or X. So you, these are kind of the things that you have to learn. What you need out there is a perception that people have of your business and you have it as an entrepreneur. So you need to be trustworthy. You need to seem like, you know, more than everyone else, like you're a subject matter expert and you need to seem extremely motivated. [00:21:40] And in doing so as well, when you show images of your business and you personally, you need to show relevancy, competency, access to scarce resources, and social proof. Those are the things that will help. So what I mean by social proof? Other people in the industry following you on Instagram is a great way to almost look like a testimonial or maybe they leave comments. [00:21:59] That's a great way to show social proof, relevancy. Are you trying to use banner ads from 25 years ago? Or you're like, "Well, I'm still using email blasts." Okay. If I'm talking to a guy in real estate and he's telling me about email blasts, I know he's not relevant anymore. If I'm sitting there talking to stuff, if that's all he's talking about, right? [00:22:17] If he's sitting there being like, you know, he doesn't use Instagram, but he's got an SEO guy. I'm like, okay, he's not relevant anymore. He doesn't know. He hasn't changed things. But when I talked to a guy and he's like, "yeah, what I did was I started a podcast and in my podcast, I do 20 minute interviews with different people using restream. And then I have a guy come through and make clips and then I have, and then the best clips I end up promoting those clips on Instagram or using meta. Facebook Ad manager, meta ad manager, and in doing so, then I make the best ones and I turn them into advertisements and I put a CTA at the end." I'm like, okay, that guy's relevant, that guy gets it. [00:22:49] Jason: Then we're relevant here at DoorGrow.  [00:22:51] Michael: What you're doing is extremely relevant.  [00:22:52] Jason: If they have an AOL email address, they're like, "what's your email?" [00:22:56] Michael: That's exactly, it's not relevant.  [00:22:57] "It's aol.Com." [00:22:58] "I have a Facebook, but I don't have an Instagram." You're just not relevant. Like I can tell you're not relevant. When people are like, "well, my audience isn't on Instagram." It's like, it doesn't matter if your audience is on Instagram, you're trying to grow your audience. And by the way, the market will tell you what it wants. And every day, I'm sorry for those of you who don't want to hear this. Every day, each one of these platforms becomes slightly less relevant. Okay? [00:23:19] TikTok is on its uprise right now. Instagram is becoming less relevant because of TikTok, Rumble, YouTube, and Facebook to a certain audience is also already completely irrelevant. You'll see women below a certain age do not have a Facebook, but they do have an Instagram. [00:23:32] So the answer is to have all of them. All of you should have, you should be making 30 to 90 second content, the up and down type of content. Not landscape of profile content. You should be making that and it should be going on Snapchat. It should be going on X. It should be going on YouTube. It should be YouTube shorts, TikToks, and Facebook and Instagram reels. [00:23:50] It should be going at all those different places. You can use HubSpot or some other platform in order to post that content. And the content doesn't just have to be clips that go viral from podcasts. You can do man on the street videos. And here's a big one. All of you can do this. You can do reaction videos. [00:24:04] All of you can do reaction videos. They're so easy to do. And by the way, you don't even have to like, you're just like, "Michael, I don't know how to use OBS and I don't know how to do a reaction video." All you have to do is sit like I'm sitting right now. I'm in my den. You know, obviously I put some soundproofing behind me, but I'm in my den, I got a big ol ring light in front of me, and somebody comes up to me and goes, "Michael, what do you think about the Trump assassination attempt?" [00:24:23] Or "Michael, what do you think about, you know, Kamala Harris or whatever?" And I'm like, and I just turn my camera like this, like I'm talking, "Man, I'll tell you what I'm thinking. I'm thinking, blah, blah, blah, blah, blah, blah." And you just say, and as soon as people watch the video and they're like, "This guy's about to tell me what he's thinking." [00:24:35] Then everyone will watch. And then some of you are listening right now and you're like, "I'm just a property manager. I don't want to talk about politics. Really go watch Ryan Pineda. Go watch Bradley, go watch Codie Sanchez, go watch Tom Bill. You go watch any of these guys who are crushing it in their fields. [00:24:51] They give their opinions on everything. Did you guys hear Alex Hormozi now talks about dating? What? Yeah. You're building a brand. Status is status. Like nobody cares. This is the other thing, Jason, a lot of your clients, and this is something I've talked to you about, and everyone in my program hears me talk about this ad nauseum. [00:25:08] Is the concept of like, I'm afraid that I'm going to post the wrong thing and nobody holds you accountable for anything you have to say, like, I was just looking at a video of Kamala Harris at a P Diddy party, walking around with Montel Jordan. No one seems to care that ever happened. No one cares about Joe Biden talking about, "I don't want to send my kids to school with the monkeys." [00:25:26] Nobody cares about it. No one cares. Like you said, like Donald Trump had sex with a porn star while his wife was pregnant and they brought it up during the debates and no one cares. Literally one of the most popular movies of all time The wolf of wall street is a about a man who did 15 months in prison for securities fraud, punched his wife in the stomach, kidnapped his own kid, did quaaludes and slept with prostitutes, and then afterwards, he is one of the top sales trainers in the world today. But you guys think anyone cares. Caitlyn Jenner runs over someone, kills them, and then four months later is named woman of the year. But you're like, "Michael, I'm a property manager. What if I post the wrong thing?" Here's another thing, Jason, and this is a poor reflection on humanity, but it's absolutely true. [00:26:09] If you get popular enough, they will forgive you for anything. And if you don't believe me right before OJ died, I had a conversation with him and they had offered him millions of dollars to do a fantasy football podcast, and I was like, OJ, what about those people you stabbed 56 times? Nobody cares. So many of you are watching this right now and you're like, you have 400 followers on Instagram and you're like so worried about posting the wrong thing, bro. [00:26:32] You don't have 400 followers on Instagram. You have four followers on Instagram and one of them's your mom. No one cares what you're doing. Most of you on social media are irrelevant and because you're irrelevant on social media, in reality, you're invisible. Listening to this, when you ask me what the advice is, your job is to become visible. [00:26:49] Some of you will be offended by what I say and the rest of you will be successful. You've got to decide which one you want to be.  [00:26:54] Jason: So I'm going to play devil's advocate for a second here, right? A lot of property managers, they think "I'm going to go start posting about property management. And maybe I'll get some investors that want to like work with me." [00:27:06] And so they start posting property management with this false assumption that people really care about property management, right? And so the analogy I'll usually share with property managers is I'll say, "how many plumbers are you following on social media?" And they'll say, "none." [00:27:23] "Why?" I said, "they want your business. Why aren't you following them?" And so there's this false reality that these social media marketers will sell to property managers. They're like wasting their time. And some of them spend a lot of money and time with these social media companies, wasting time promoting their property management business on social media, when nobody gives a shit about property management, even their clients don't wake up in the morning and go, "man, I'm thinking about property management." [00:27:50] Jason, what should they be doing instead?  [00:27:52] Michael: Yes. Jason you saying that just got me. I want someone who's watching this to do this and then tag me in the video when you do it. Jason, as a property manager, do you ever have nightmare tenants?  [00:28:03] Jason: So to be clear for those listening...  [00:28:05] Michael: yeah,  [00:28:06] Jason: I'm not managing properties. I'm coaching property management business owners, but they would say, "yes," they have nightmare tenants. All the time.  [00:28:12] Michael: Do you ever have nightmare vendors? Like guys who come like when I say vendor, what I mean is the plumber, the carpenter, the guy who comes...  [00:28:18] Jason: Yes, they have problems with vendors constantly, they have nightmare owners. [00:28:21] They're managing properties.  [00:28:22] Michael: What about, well, I wouldn't do nightmare owners cause you're trying to get business. I wouldn't talk about nightmare owners. What I would talk about is. I would start off a clip just like this. "I had a nightmare tenant. This guy was destroying," and then it would just show pictures. [00:28:34] "This guy was destroying everything in the place. I swear. He didn't know how to, he couldn't aim and hit the toilet. He has just destroyed the place. And this is what I did to fix it. And here's three tips for you to deal with a nightmare tenant." Viral. Yeah. Viral. Not only are you viral. Everyone's coming to you. [00:28:52] It's like, "man, I don't want a nightmare tenant. I just bought this two bedroom, two bathroom. I don't want a nightmare tenant. I'm going to go do what he does."  [00:28:59] Jason: I don't want it to be a meth house eviction. Like, yeah.  [00:29:02] Michael: Yes. Yeah. You know what i'm saying? Like that's what I would do. I would go over like what are these and because what you're going to do is what are the biggest fears of the people who are hiring property owners, my nightmare tenant, my tenant who doesn't pay. Like those kind of things, and I would make content. What are the three steps that I did to do with the five tips that a lot of people's in this place don't do right? I would make content like that. And you could do opus there's these ai software apps that'll basically take the clip and then they'll just inject B roll that fits whatever the words you're saying. [00:29:33] You don't have to hardly do any work when you do it and then all of a sudden it's like, "it was a nightmare. This guy's made my place look like a roach house. Roach infested." And then it'll actually pull up an image like a whatever, a stock Shutterstock image of a roach infested home, whatever. [00:29:47] Jason: Now they're using ai. Even I'm seeing a lot of AI images Just flashing. Yeah. Yeah. Or, yeah. Correct.  [00:29:51] Michael: It could actually illustrate using artificial intelligence, illustrate the image for you. You could actually do that. So you don't have run into any copyright issues. Right. Or any permission issues. [00:30:00] There's just so many ways to do this. But what are you doing? You're showing relevancy and competency. You know how to use Instagram. You know how to create a clip using artificial intelligence. You have good audio. You have good lighting. You're showing relevancy. You're showing competency. You're showing high intelligence. [00:30:15] You're showing high social status. And then in the comments, you're like "LMAO." Like people are laughing my ass off. "This happened to me." "Oh my God, Jason, same shit." "100 percent true." And now I have social status. I have all these things. Why? Because I made some content that was engaging about something that is incredibly unsexy, which is property management. [00:30:35] That's how you do it. What are those ultimate fears that your prospective clients have? And I would just do nothing but make content about that. I have a friend of mine, FedEx fearless. His name's Bismarck. And this guy, he goes, "these are three reasons why you are ugly." And I'm like, "what?" [00:30:48] And like, he really goes after people. "This is the reason why your girlfriend is cheating on you right now." And everyone just, I'm like, "what?" And I don't want to watch, but I'm like, I need to watch this video.  [00:30:57] Jason: What's going on there? Yeah.  [00:30:59] Michael: It's so great. It's so great. " No, Michael, you need to be authentic with your social..." no, you don't. You don't need to be authentic. You need to capture people's attention. You need to be attractive. Your primary job is to be attractive on social media. Now what happens is now you got them with the hook, "Here are the top three things that I do to deal with this horrible tenant that I have" And then when they come in the hook now throughout there you give those three, explanations But you also throw in a little piece of advice that shows just a little humble brag that shows "In my 27 years of property management, this is the thing that I've learned." [00:31:30] Okay, little humble brag. And at the end, it goes, "if you want to learn more, comment, the word guide below," or if you're on YouTube, you'd be like, "go down into the description and click the link. And then blah, blah, blah." And it just ends up right down your sales funnel, maybe to a low ticket offer, maybe an ebook that you wrote something like that. [00:31:45] And the next thing, you've 10xed profits. You've 10x revenue. You're selling a course on property management while writing a book on property management, while having a podcast on property management, while being a property manager, all of it at the same time. And then you got to hire a new accountant because you got too many write offs. [00:31:59] Like you don't have enough time to pay your taxes. You got to get too much money. That's it. That's how this works. And that's about what I just explained to you. It's just the difference between getting it and not getting it, being relevant and not being relevant. And so a lot of people, what they're, they listen to me and they always make me out to be the bad guy because cause what I do is I tell people, no one cares about you. And no one likes to hear that. They like to think that the rest of the world cares about property managers. But like you said, no one's following plumbers. Right. But if I was a plumber, I would do the same thing, "man, I walked into this house and this toilet had exploded and just have an image of it." [00:32:30] And it'd be like, "okay, I need to hear what this is." "And then a monster crawled out of the toilet." I'm just kidding. And like, I would just, that's what I would do just to keep people's attention.  [00:32:37] Jason: So for those listening, can we qualify you a little bit related to social media, because you've got a good following? [00:32:43] You've got a sizable business because people listening if they don't know who you are, I want them to recognize you're very qualified to talk about this. Not so humble brag about yourself for a second.  [00:32:55] Michael: I have a men of action. We have 1600 clients that have gone through there. [00:32:58] 200 video testimonials if you go on the school server. And also we have a free community a free school server. What's about 43-4,500 guys in there. You're welcome to message. One of the things that I've told people is that if I join a group and they tell me not to talk to the other people in the group, I know this is a scam. [00:33:12] You'll notice sometimes with MLMs, you'll see that. I implore you to talk to anyone, any client that's ever gone through my program and they will tell you how incredibly satisfied they were. Also you, Jason, I'm sure you've seen my course is extremely comprehensive. It's about 65 hours long. That doesn't even include the live calls. [00:33:29] And then also there's a book, there's a required book list that you have to read in order to go through the course.  [00:33:33] Jason: I'll tell you right now, like an eight figure business for you.  [00:33:36] Michael: Just today, we've done eight figures in total, but as of this month, this is the first month we'll recross the mark. [00:33:42] It was what? 833 a month or something like that. We cross that this month. So that's about, yeah. So we're doing about a little bit under eight figures in revenue per year.  [00:33:50] Jason: This is more than any property managers probably listened to my show. So just for perspective. Okay. Yeah. Got it.  [00:33:57] Michael: Yeah. I mean, because coaching is scalable. [00:34:00] That's the reason why. And like the other thing I want you guys understand is a lot of people got into real estate because they were trying to find a scalable way of making income and they're using you to make their lives scalable. So if you guys read, buy back your time by Dan Martell, they're paying you to buy back their time as real estate owners. [00:34:15] That's what their job is. And essentially you're going to eventually do the same thing. You're going to pay someone to buy back your time from them. So the main difference, and I'm sure many of you entrepreneurs already know this, but. When you start off in the workforce, you are trading your time for money. [00:34:28] You're working at Chick fil A or McDonald's and you're being paying an hourly salary later on. You're trading your money for time. I pay one guy. He comes into my house. He turns on my computer, he turns on my camera, he turns on my lights, he sits me down, and then he just starts yelling at me to talk about certain subjects, and I have no idea, I'm just like, drinking coffee, and I'm like, what up, and he goes, "what do you think about this?" And I'm like, "oh man, let me tell you something, and then they record it," and then it's just a reaction video, and I do nothing. [00:34:53] I pay to get my time back. I have several editors that live in Romania and Nigeria and all these, because I don't want to edit videos anymore. I used to be a video editor and a videographer. I don't want to do it anymore. I pay one place to do the live editing for my podcast. I don't want to do that anymore. [00:35:07] I pay to get my time back. For those of you who are considering hiring a personal assistant, once again, highly recommend Dan Martell's book, Buy Back Your Time. In the book, he talks about taking your yearly salary and divided by 8, 000. And that's what you pay the guy hourly. Take your yearly salary, how much you make in a year, your yearly income divided by 8, 000. [00:35:24] That's it. They go over the reason why, but it ends up becoming like a 40 hour work week. You end up paying him one, you pay him half of what one hourly wage for years. So if your time is worth a thousand dollars an hour, you might pay him 500 an hour to get certain things done for your life. And one of my favorite sayings in that book is something done 80 percent right is 100 percent awesome. [00:35:43] And like, it was one of the hardest things to give up. The guy who does my timestamps, that was really hard. I love doing timestamps because timestamps were giving me clips and those clips would go viral and the virality would make me money, but I had to give that up. And eventually you're going to give up all these processes. [00:35:57] Another thing I'll explain for you guys who are entrepreneurs, one of the greatest tools you will ever find is an app called loom. Look up loom. What loom is allows you to make videos, but the video it's like, it's showing the screen on your phone or it's showing the screen on your computer while they're listening to your voice and you send it to your person. [00:36:12] So like, for instance, I do mass invites for certain events that I do. So I'll go on loom and I'll have a guy, maybe he speaks you know, Farsi or maybe this guy speaks like his English. Isn't that great? What I'll do is I'll go through my invite slowly and I'll do it like for 30 minutes, I'll just do invites and I'll show so he can see what it looks like. [00:36:28] And then I send it to him and then he looks at it and he has no questions. And my invites are done like that. Loom is one of the greatest way of passing along SOPs to people and then using them in order to buy back your time. So understanding all these concepts, it makes you more relevant, makes you more competent. [00:36:43] It gives you higher status. It gives you more access. And these are the things that you're looking for. In any walk of life, but especially in something like property management and you guys also understand as property managers Your job isn't sexy So what you have to do is you have to show the sexy parts of your job, right? [00:36:57] When I my favorite one are accountants and dentists. They're not my friend my friends who are dentists who know what they're doing, they show the fucking horror job teeth, You know car accident, messed up teeth, meth addict, whatever, and then they get the teeth back to 100%. And like me, as someone who doesn't care that much about dentistry, I'm just like staring like, "Oh my God, that was incredible." [00:37:17] Yeah. what you do is you figure out people's primary driver emotion and their biggest fear. And then from those things, from the primary driver emotion and their biggest fear and from those things then you make your content attacking those primary driver emotions and those biggest fears, okay. And when you do so it doesn't make any difference if you're an accountant It doesn't make any difference if you're a property manager doesn't make any difference what it is that you sell people will watch and they will be obsessed. [00:37:42] My brother, he watches videos of horseshoes. They basically, you know, they shave off the end of the horse's hoof and then they put the shoes on. He said it's like the most relaxing thing in the world to watch. And I wouldn't even think about that, but why is it? It's like something we don't even think about that much, but it's pretty amazing. [00:37:56] Like when you see, it's like very relaxing to watch stuff like that. You can do stuff like that.  [00:38:00] Jason: There's a guy that's viral for just, he finds distressed houses. And he just cleans up their lawn and the sidewalk. He's like, "Hey, could I mow your lawn? And it's like relaxing to watch the transformation." [00:38:12] Yeah.  [00:38:12] Michael: Another one that's great was if you guys watch the early Ryan Pineda stuff, what was he doing? He was flipping couches. He would find crappy couches, clean them up, and then he would sell them again. And he made a living from flipping couches. There's just all these different things. And like the concept of it sounds so boring, but I want to watch someone do it. [00:38:28] Right. It was the one where you'd buy those storage units and then you'd see whatever's in this. Oh, I forgot what that was. It was pawn shop, pawn stars or something where the people would buy storage units and open up in there. And there's like, sometimes there'd be nothing in the storage unit. Sometimes there'd be like a dead body in there or some crazy shit. [00:38:41] Like they find like a skull and like all of a sudden. Bag full of money. Yeah. Yeah. By the way, you guys know the producers were putting that bag of money in there, right? Like that wasn't real. That wasn't real.  [00:38:52] Jason: Reality TV isn't real either. You like to say social media isn't real and that's okay or something. [00:38:58] Michael: So rule number four in men of action is social media is fake and I'm okay with that because the money's real. And the world isn't fair. And I'm okay with that.  [00:39:05] Jason: Yeah.  [00:39:06] Michael: The world isn't fair and I'm okay with it. Rule number four in a, in social and of action is about acceptance. It's about accepting the world the way it is and never being a victim. [00:39:14] It's sure things are hard for you, but you're never a victim. You might be too short. English might not be your first language and you're having a hard time speaking it. You might be born poor. You might be born with some kind of ailment or disability that you feel like holds you back, but that's where you are. [00:39:27] You start from where you are. And then you create from there. Okay. You were saying something before about how you notice like all these books kind of converge in to the same place, three books that have nothing to do with each other, but it's the same concept. Ready? The power of now by Eckhart Tolle, the subtle art of not giving a fuck by Mark Manson and sapiens by Yuval Noah Harari. [00:39:45] You're like, wait a second. It's all the same thing. It's all the same. It's all this. I get to choose how react. I get to tell myself stories that change my behavior. It's all three of these books that have nothing to do with each other end up being the same book, not exactly the same book, but similar books. [00:40:00] Because once you get to the highest levels of enlightenment, transcendence, goal oriented communication ends up being the same thing for everyone.  [00:40:07] Jason: There's a one of my favorite books is by Byron Katie called Loving What Is. And basically, she takes you through this process of just asking yourself these four sort of questions to challenge your current view of reality. [00:40:21] And it takes you out of this victim sort of view. It's very much like cognitive behavioral therapy, maybe, or something like this, right? Yes. Or CBT or something. But yeah, so asking this question, is this belief that I have actually true? And a lot of our beliefs that we're holding on to that are holding us back. [00:40:36] And like, if we're not getting results in life, it's because we currently have beliefs that are not working for us. And so, if you see people that things are working well for them, even though you think, like, somebody might be watching right now going, "Michael is completely full of shit. He's throwing out all these crazy stuff and he's, he worked at a strip club" and somebody's like, so against that or whatever. [00:40:56] They're like their own stumbling block and they're in their way and they won't pay attention to the truth or the things that you're sharing that are good because they're so stuck on everything in the universe having to look a certain way that they are not even open to receiving more, they're not willing to challenge their own thinking. [00:41:13] They're not going to progress. They're going to stay stuck.  [00:41:16] Michael: They identify more with their identity than they identify with success.  [00:41:20] Jason: Yeah. Good way of saying it. And I love how you talked about kind of these currencies. One of my mentors in the past was Alex Charfen. And he's from here in the Austin area as well. [00:41:30] And he was talking about time, energy, focus, cash, and effort. He calls the five currencies. And Hormozi went through Alex Charfen's like coaching with me. I met Layla and Alex in this. And one of the things that I then saw Alex talk about these currencies. But what I thought was interesting is Alex said the most significant of those five currencies in order to scale and grow your business is focus. [00:41:52] It's the most important to scale, grow a company. And then Dan Martell, I once saw him teach this framework that was, it was like about the power of one. He's like, "the most effective business is a business has one sales funnel, one product, one..." it was like all ones, like, And I see property managers, a lot of times they'll try and like start five different businesses. [00:42:14] They're like, I'm going to start a cleaning company, a maintenance company, like all these other things.because they're complimentary real estate brokerage. And then they wonder why none of them are growing because they lack focus. And so all these things kind of converge, making sure that we have focus. [00:42:28] You also mentioned Dan Martell, who I think is a brilliant entrepreneur, he generally was coaching like software companies, SAS companies to help them grow and scale, but his stuff's applicable to coaching businesses. I've noticed it's applicable to anything because the principles are valid. [00:42:44] And one of the things I've had my clients do to get them to that next level, to basically get their time back is to have them do a time study to where they become accountable for their time, which things are positive and which things are negative, like plus or minus, which things give them energy in life and which things take it away in their own business. [00:43:00] And I have them do this like usually once a quarter. And when I did my first time study, I realized I was doing like four hours of podcast production in a week. It all added up and I was like, holy shit. So then I just hired a company to do it. It was a no brainer to let that go because it was stupid at that point for me to hold on to that once I could see that challenge. [00:43:20] And you mentioned loom, awesome tool for like one of my favorite tools, like it, which is next level. It's like loom, but it's Wistia's video recorder. It lets you actually record the screen and yourself. And then after the recordings made. You can then have it mid recording. You can switch which parts are showing and have segues between the two. [00:43:42] And it's super fast. It's like super cool. But we use tools like that.  [00:43:46] Michael: Productivity. Yeah, definitely.  [00:43:47] Jason: Yeah. So, I love all these ideas for collapsing time. Michael has dropped several awesome tools, knowledge bombs, ideas for those that are listening and also how to leverage content social media wise. [00:43:59] So what you know, if we were to bring this full circle what would you say is the most important thing that maybe business owners or property managers could be doing to scale and grow their business?  [00:44:13] Michael: Right now? Again, one more time. It is: understand, your ability to grow is based on your perceived status, your perceived trustworthiness, your perceived know how. Not your actual know how. Like, I can tell you so many guys that I know that are real estate experts on YouTube. And then I have my friends of mine that are real estate agents. And they're like, "that guy doesn't know shit." And I'm like, "no, he's coaching the white belts." That's the why, the reason why he says the things that he says. [00:44:39] And they have a hard time dealing with it. So, understanding that concept. And then. You have to leave yourself. You have to subvert your own ego, go on places like TikTok or Instagram places you'd never think to go to, and then look at who's going viral, who's in your exact industry, and you're going to need to take pieces from what you see. [00:44:56] Like, what are the kinds of videos that do really well? And you're going to be able to find those very quickly. You can literally right now would go on Tik Tok and look up property management and you'll find a bunch of videos, like just pick the ones that go the most viral or a real estate, a podcast, and then pick the topics that go the most viral and just blatantly steal them, steal, blatantly steal everything. [00:45:19] You in the beginning, no creativity necessary, just steal. Okay, and you do that for a while and then you start to sort of get your footing And then you start to realize wait a second, I've been running ads and my ROAS per dollar my ads is x 1. 2 or 2. 0 or whatever but in organic my cost per lead is like nothing because my organic traffic, it costs me so much less to get a lead. [00:45:44] It's incredible. Then I go on someone else's podcast because my content is getting better and better. And then all of a sudden now, you know, Rich Summers and Ryan Pineda want me to come on their show to talk about, you know, maybe I'm on ice coffee hour or whatever, talking about real estate. [00:45:58] And then I get on bigger and bigger shows and now my cost per lead decreases even more because I just had this simple understanding that the way it works is my perceived status my perceived know how and my perceived trustworthiness to other people are the reasons why people will buy my product. Now you may already obviously everyone who's listened to this if you have any success in property management You already have your funnel is probably dealing with either word of mouth shaking hands, or it's dealing with some sort of paid advertisement, but I implore you try organic. Try to use organic and then organic meaning using Instagram posts or Facebook posts. [00:46:33] And then once you do that, try to take your best content and turn your best content in an advertisement and promote those, promote that content. That's something we've also been doing. And if you want examples on everything I just said, a great book, a great place to start is the 100 million offer series by Alex Hormozi. He goes over every single thing that I just talked about. It's absolutely fantastic. It's really great stuff. The difference is with my program, MOA, we're a little bit more bespoke for what it is exactly that you're doing. But we're mostly talk about networking. And then the other thing is, When you actually meet that person in person that you want to work with, do you come off as a fan boy? [00:47:06] Do you come off as too eager? Do you, does your body language show signs of neediness or signs of low status? Are these things that you can watch? And then how do you figure that out? You watch yourself on camera. Do you watch yourself on other people's podcasts? Because that's one of the things is like as social media grows and more people are exposed to more people, just remember like if you consider in the plasticine, you know, we live in hunter gatherer societies of 150 people and now we can legitimately have a hundred thousand friends on social media in that kind of situation because we're exposed to more people, we are more attuned to status, physical appearance, et cetera. And so now what happens is humans essentially become more shallow. [00:47:46] They become more attuned to other people's status and rightly or wrongly. Is it a negative commentary on humans? Yes, it probably is, but it's the world you live on. And if you want to get rich, you need to listen to what I'm saying. And if what I'm saying, offends you, get ready to stay poor. Like, I'm sorry. [00:48:01] If you guys are listening to this right now, and you're like, "No, social media is going to go away and we're going to go back to walking up to doors and do an email blast and buying banner ads." If that's what you think, go back to your AOL. com email and just keep believing that's the case. [00:48:16] It's all about the handshake. It's like, if that's what you believe, that's fine. But for the rest of you who are ready to understand that if you think things are bad, I got news for you. They're only going to get worse. Meaning people aren't going to put their phones down at dinner. People aren't going to take fewer photos. [00:48:30] People. I was reading something. It was like, like in one day, now more photos are taken in like an hour than were taken during the entire year of 1985 or something like that. It was like the amount of photographic and video data that's uploaded in one hour exceeds the total photographs taken in an entire year back in the 1980s. [00:48:49] Some absurd number like that. If you think things are going in one direction, things are getting faster. They're more virtual. They're more digital. Digital, they're going to be controlled by artificial intelligence and they're going to be more scalable. You need to get on that train. The train is leaving. [00:49:05] You need to get on the train. Now, if you don't want to get on the train, that's fine, but notice as the world passes you by and the rate at which it passes you by only increases every year. If you want to learn about that, read Ray Kurzweil series called the singularity is near, and you can see how he talks about the rate of change is increasing, and then the rate of change is also increasing. [00:49:24] Jason: Okay, so this is awesome stuff. So Michael one thing I want to point out for those that are listening. Because I think you've sold your Men of Action short a little bit. So I'm gonna, I want to say something about it because what I think is in, what people think is in there probably based on what you're saying is it's a bunch of social media stuff and it's like how to, maybe how t

Father Michael Hurley joins Patrick to discuss Mary and the Rosary (7:59) Difference between how we honor Mary and how we honor God. Where does the rosary come from? (17:56) Dennis - How to stay focused during the rosary?   I try to do it regularly. (21:45) Break 1 Michael - It seems like there's an over emphasis of Mary in the rosary.  How 'bout Jesus?  I'm non-Catholic, but have been present in the rosary w/Catholic friends.  I even went to a Catholic Camp. (30:22) Meditating on the Mysteries of the rosary. Donna - About 7 years ago, while praying the rosary, and for each mystery,  imagined and saw each of my five sons in each sorrowful mystery.  I just felt like Mary had given me a gift, of actually seeing the suffering through her eyes, as I was seeing my sons. (37:12) Break 2 Can you make up mysteries of the rosary? (43:56) Deb - When my mom had a massive hemorrhage thought she was going to die.  She woke up was confused; I touched her feet started praying Hail Mary and finished the prayer and that was her first words she spoke. Mary Helen - The rosary, how instrumental it was in bringing me back to the Church;  And what I'm doing here in the Portland area with the Dominicans and the rosary. Resources: Rosary Center and Confraternity https://rosarycenter.org/

https://theapsocietyorg.wordpress.com/news-and-events/suntree-retreat-2024/   Episode from 2022 Suntree: https://thewonderpodcast.podbean.com/e/live-from-suntree-retreat/   ----more----     Mark: Welcome back to The Wonder, Science Based Paganism. I'm your host, Mark, Yucca: And I'm Yucca. Mark: and today we have a really exciting group of people to talk about a really exciting upcoming event, which is the Sun Tree Retreat, which is the second of these retreats that we've held in person for atheopagans from all over the world who can come. Held in Colorado Springs, Colorado, and it's going to be over Labor Day weekend this summer. So, I'd like to introduce our two panelists here, who were at the last one Rana and Michael. Michael: Hello. Yucca: Rana, we Mark: I can't hear you at all. Rana: Oh, thank you for having us. Yucca: Welcome. And I think both of you've been on the podcast before, right? So, welcome back. Michael: Oh, thanks. Can Yucca: Yeah. Michael: put that Yucca: So let's, let's start with the, some of the details because that's coming up really soon, right? That's Mark: It is, Yucca: two months, which is not very long. Mark: nope, not very long, especially if you have to get plane tickets and that kind of thing, so, Really encourage folks that want to go to get registered and get organized around it, because it's going to be a really good time. So, details. The event is August 30th, which is a Friday starting in the afternoon through noon ish or one o'clock or so 2nd. Registration includes nine meals. As a part of your, your registration fee you also need to register for lodging, which is very affordable and you can find all the information about it by going to the Athe O Pagan Society website, which is the ap society.org, THE ap society.org, Yucca: And the lodging has several diff oh, Michael: notes as well for this Yucca: absolutely, yeah, we'll put that in the show notes so that people can just go ahead and click on it. I was gonna say the lodging has several different options including tent camping, and yurt and Mark: guest house, you're. Yucca: I think it's dry camping, but you could, if you have an RV and you're in the area, you can do an RV too, is that correct? Mark: Yes, there are no hookups, but but there is parking for RVs. We had a couple of people, at least one couple came last time, actually in a school bus, Yucca: was really cool. Mark: was converted. It was really cool. Yucca: Yeah, Mark: So, Michael and Rana we wanted to talk some about why this event was so cool last time and what we're looking forward to going into this next one at the end of this summer. So why don't we start with kind of golden moments. Michael, you want to go ahead? Michael: I wanted to just say beforehand, you mentioned the meals, and one of the high points of it was the options available. Like, every dietary requirement was accommodated, I think. Mark: Yeah, Michael: The catering team there are fantastic, and I think people shouldn't feel concerned about food at all because the options were great the food was really high quality I think everybody felt really good about the food, so that was an important, that was a real high point so just wanted to make sure we got that mentioned. And, Mark: Yeah, great. Thank you. And, and eating together was really a high point for me. Just sitting down for meals, you know, they had these round tables that I think seated eight or ten or something like that, and different combinations of people would sit together for different meals. And so we got to know one another better in those mealtimes. So that was a high point for me. Somebody want to go with another cool thing that they remember from Suntree in 2022? Yucca: well, I remember Robin led these I'm not sure what you would really call it,  Rana: yeah, the meal acknowledgement. We have talked about them in the group, but it was really different being able to experience it together. And it was things like bringing to mind the history of our food or thinking about the systems that brought it to us today or the hands that it passed through. And we've had some discussion in Mihal's full moon. We were doing like a full moon lunch thing for a little while as well where we kind of continued that conversation and, and thinking about that, which is something that I find really enriching and really enjoy. Also want to strongly second the dietary accommodations that they had. I really, really appreciate it because I have a little bit of an odd diet and I felt. Really good and definitely did not lack for good options for food. Mark: Mihal, you want to go? Michael: yeah, what I found really interesting about the, The whole experience was how quickly we created a community in space particularly when we did our Fire Circle get togethers. And the kind of spontaneous sharing that occurred at those events was really amazing. People really just suddenly kind of created this family. in situ and it was it was great to be part of that. Just sometimes if you go to other kind of retreats it can take a while to kind of break down those those barriers we put up. Just as just as being human but it seemed within a just a few hours we'd kind of already started to create a special Sun Tree community and I thought that was fantastic. Mark: Yeah, I really agree with that. I mean, I've been to a whole lot of various kinds of pagan gatherings and retreats of various sorts. And it seemed as though we just kind of got at this visceral level that we were among, you know, people that were of like mind and similar values. And so that we were safe. Right? We were all, we were all going to play nice with one another, and so we could talk about really deep stuff in our, in our lives, and in our, our experience. And I found that really moving throughout the whole long weekend. It was, it was, it came up over and over again. Yucca: I was also really struck just by the immediate level of respect and consent that was just part of the, Everybody had going in. So I had my five year old with me and in a lot of situations in our culture, people you know, will go up and touch five year old's heads and give them hugs and, you know, all of those sorts of things. And I remember it just being great because people automatically were so great with her about asking for her permission. Like, do you want a hug? And would you like to shake hands? And that was just the culture of it. And it was just so refreshing and wonderful to just be in that space, just from the get go. Like Mark: and I mean, we had, we had laid out guidelines around consent and around conduct because, you know, we wanted to be very clear about, you know, what the expectations are, but it seemed like people read them and were like, yeah, that's civilized behavior. That's how I'm going to be. And the subject Honestly, never came up. There was never a situation where somebody felt like they had been inappropriately touched or or somehow invaded in that kind of way. And I thought that was, that was really pretty amazing. Michael: I just wanted to talk about the actual place as well. The Retreat Center is Really, really phenomenal. There's this beautiful forest. You're kind of just on the edge of Colorado Springs, so it's not too far from any stores or anything that you might need. But once you get in there, you suddenly feel like The outside world has disappeared just in this beautiful forest really a fantastic place just to go for walks just to go into the forest by yourself if you want to go for I think one of the big highlights was that we had a lunar eclipse while we were, while we were there, and being able to all, for the whole, all of us to go out there onto this big lawn and just stare up at the, at the moon together, and people howling at the moon, it was It was just a really fantastic experience as well especially just having that, we, we had the the Ponderosa Lodge, which is this big log cabin lodge that we can use for a lot of our activities, for rituals, and for our workshops. And that's a real, that's, that's a really nice space as well, there are different rooms, so you can kind of break off and do different things with people, or you can kind of come to the main room and have a bigger discussion. We had dance parties there, we had the Carnival of Change, which was a chance to kind of take on a different persona, like dress up. be a different version of yourself for the evening. So I think the whole, the whole retreat center just kind of facilitates that. There's a, there's a labyrinth there as well, which we didn't really incorporate too much into any rituals the last time around, but I think we're going to try and bring that in more this time around. Mark: Yeah, it's a beautiful spot. Rano? Rana: Yeah, the, the shared experience of the lunar eclipse was pretty special and it, it just so perfectly aligned with what we were doing. It was the same night as the Carnival of Change and it just felt like great, like the weather cooperated and we got to see this cool celestial event. It wasn't even at a super late time, like it was, it felt like a Yucca: like eight or nine. Yeah, Rana: Yeah, yeah, it felt like started our evening, kind of, or, you know, it didn't, it wasn't, you know, too far on late night or anything. The Carnival of Change itself was really fun, just to be able to play dress up together and listen to some music and, and just have fun. And I also like, like Michael said being able to split off into other little rooms and areas. It And I think for me, something that I really appreciated was the ability to have these just kind of unplanned moments where so much of our online interactions are very scheduled and it, you just show up at a certain time and there's a group of people and that's kind of mostly how it's gone. But, like, I just remember some folks were up later one night just all chatting and hanging out. And I love that feeling of if you're up late and feeling a little bit chatty or sociable, you can just kind of see who's up and just take a seat and hang out for a bit. And that's something that otherwise has felt like not really something we have access to. So it was particularly nice just to be able to connect in a more organic way, depending on how you're feeling. Mark: hmm. Yeah. Nihal? Michael: Yeah I think we, there was a lot of, there's been some learnings from that event as well, and I think there, we were really concerned about accessibility this time around, because there was a lot of movement between different areas. And so this time around we are definitely going to be making it more accessible as well. There's going to be designated drivers, so we want to make sure that everybody feels comfortable and everybody's able to take part in all the different events that we're having. So, I, I know that there's going to be a lot of more accessibility this time around, especially just in terms of shuttling people around the property. Yucca: Because there were a few hills and we were moving from the bottom of the hill back up to the dining room and then back down. Michael: Yes, yes, yeah, but I think we, Mark: and we were at 7, 000 feet. Michael: that was another, yeah  Mark: yeah one of the things that we learned from the Sun Tree Retreat in 2022 is that we had programmed a lot of the time, but some of the most memorable and wonderful moments were the unscripted times. The, the, The break periods when we could just gather together and socialize, or plan what we wanted to do for a rite of passage during the rite of passage period that we had later on, which was one of the most moving things to me. That was really an experience. So this time we've programmed in more free time. There's still plenty of workshops and, and rituals and experiences to have, but we've made it a little bit looser so that people have opportunities just to hang out and experience the place and one another. Michael: yeah, yeah, I just wanted to I might talk about the rites of passage a bit more because that was quite a unique experience. I guess we didn't really know how that was going to go because it's kind of like, it's a make your own ritual event, basically. You, you just DIY it with some help from some friends. So I think people were, they had various things that they wanted to celebrate or commemorate and or mark the end of a period in their life, or the start of a period in their life. And we all came together and celebrated those those events together. And I think what was really amazing was just the creativity that people brought to their rituals. Really very moving and even though they were very personal, I felt that We all kind of, as a community, came together and it became something for all of us. Mark: Yeah. I felt so included in all of those rituals. I felt like my being there mattered. And even if just as a witness and that. You know, that there was room for everyone to have the kind of experience that they wanted to have. And it, and we, we ended the rites of passage with a wedding, which was sweet. It's kind of, you know, the classic act four of the movie, right? And that was really lovely. So, I was, I was super happy with that, and we're doing that rites of passage process again this summer. Michael: Maybe we could talk about some of the workshops that took, that people liked. Mark: Oh, yeah. Michael: I really, I think one of the highlights was the Cosmala workshop, bead workshop, which is basically making a bead necklace that, with each bead representing an important part of, in the life of the universe, or in your own personal life, or just various different events that you want to commemorate. That's, that's kind of right, isn't it? Or was there any Mark: John Cleland Host, who is our friend and a real innovator in the whole realm of naturalistic paganism, one of the earliest people to write about it in its new resurgence. He has this amazing more than a hundred bead string. Of, that all, it starts with the Big Bang and it works all the way until, at least until the Sun Tree Retreat, because he had special beads made for the Sun Tree Retreat that he distributed to people so they could put them on their own cosmola. That was very, very cool. And some of them are signed by people like Starhawk and Jane Goodall and just really a fascinating, wonderful ritual tool and evocative piece of art. Yucca: so there were a lot of different styles of workshops too. There was a, like a history one and there was a John did another one which was like the Wheel of the Year, which he had some really cool handouts for too for that. Mark: We live the year for families, which I thought was really wonderful. You know, a lot of people in our community have families that they're working to build traditions with together, and so, and John has really, you know, pioneered some of that, you know, working with his, with his wife and his sons. And just had a lot of great ideas about different things he could do at different times of the year and was, you know, freely sharing all that stuff. It was great. Rana: There was also a group guided meditation that we did outside overlooking Pikes Peak on their big, expansive, beautiful lawn with all the ponderosa pines, which I'd never, I don't think I'd ever seen them before. I'd never been to Colorado before. And that was really lovely just to kind of take a moment to be there and be present. And there was also a body painting. Which, I appreciated the, like, especially interactive stuff because it's something we're normally restricted about online. And I really loved Mihal's presentation about virtual meals because I think food is just such an integral way to connect with other people and you can infuse it with all this symbolism. And it gave me a lot of ideas. I need to revisit my notes on that and thinking forward to the next one a little bit too, just that ability to share food and those meal acknowledgements really adds to that feeling of making meaning with other people and making community. Michael: Yeah, we had a food altar as well, which was kind of cool. An abundance of food. People brought stuff to share. And I thought that was fantastic as well. Just, uh, one, one person brought some really good kimbap, which I love. So that, if you don't know what that is, it's Korean sushi, basically. And it was just really good. Mark: Yeah, there, there was there was just a vibe of generosity and mutual support. Mutual affirmation. You know, I came away from it feeling like, you know, I've got these amazing, super cool people in my world, and they feel the same about me, and that's just good for my life, generally. Even if I'm not going to see them for a couple of years, except online, just knowing that we shared this experience together just helps me to feel affirmed in who I am and what I do. And I, I, I think I think that was the general vibe that people got out of the event. Yucca: That certainly was, I felt that strongly as well. I was, you know, riding that for several weeks after coming home. Michael: Definitely an afterglow of, kind of like, hard to come down from the high of the event as well. It took a while because it was so special. Mark: yeah, absolutely. So we want to talk a little bit about some of the offerings we're going to have this time. Some of them are repeats from last time, but some of them are new. Let me see if I can pick one. Oh, go ahead. Michael: I was just going to say, maybe everybody's had a chance to look at the program and if you, if there's any particular highlights you want to, that you'd like to talk about that maybe you're looking forward to. Mark: There's so many things. Um,  Michael: Well, should we talk, let's talk about the theme first. Mark: sure, of course. That's a great Michael: we didn't, we didn't have a theme last time, but we do have a theme this, this time. Mark: Which is Solarpunk, a chosen family reunion. The idea being that Solarpunk being a very kind of optimistic movement for the betterment of the world, the betterment of our relationship with nature rather than kind of the doom and gloom that we, that we see everywhere around us now, Solarpunk is a, It's a genre of of writing and of art that is optimistic and looks to the future as, yes, filled with challenges, but also filled with opportunities for us to grow and change and do better. And the chosen family reunion part is I mean, I certainly felt and I think that a lot of us felt at the last Sun Tree Retreat that these, these people were my chosen family. It was, it felt like, oh, wow, all my cousins and uncles and, and nephews and nieces have all shown up and now we're having this great sort of family hoopla together. It was, it was great that way. Yucca: And one of the workshops is going to be on solar punk and atheopaganism more specifically, right? That's Mark: yeah. Michael: Yeah, Hanna is going to be leading that one. Mark: Mm hmm. I'm looking forward to that one as well. And of course we'll have some some elements that will be around, you know, learning how to organize rituals or to you know, to design them. Or you know, kind of learning the observational skills about getting more in touch with the processes of nature around you. Mm hmm. That was something about the, the lunar eclipse last time that it really dovetailed with something that, that Yucca and I talk about on here all the time, which is just about, you know, paying attention, about being present and experiencing the moment and observing what's happening in nature, and That was such a dramatic event. It really, really riveted our attention for about an hour or so. Michael: We're bringing back the Cosmala again, because that was so popular, and I think, I'm sure that new people are going to want to try their hand at making Cosmolas. Mark: I've never made one. I, I'm, it's an oversight. I have to do it now. Going to do a reader's theater. I'm organizing that of a reworking of the myth of Hades and Persephone and Demeter in Greek mythology. Because, even though that's a very popular myth in pagan, kind of modern pagan circles and a lot of different groups have done reenactments of the Eleusinian mysteries that enact that story, it's a pretty terrible story, really. I mean, Hades, Hades captures the innocent daughter Kore, drags her away and makes her his wife. That's terrible. Not so cool in modern, Yucca: way of putting it, Mark: yes, that is a very polite way of putting it, yeah. So, so I rewrote it. I rewrote it to have a different kind of ending and a different set of teachings than the original story did. And we're going to do a reader's theater where people who come to the workshop can pick up a script and take a part and we'll all read it together. And and it'll be fun and hopefully people will enjoy it. So that's another thing we're going to do. Michael: Yeah, we've occasionally done death cafes online which are kind of opportunities to talk about death and, you know, I think our movement's kind of a death positive movement, and we want to kind of honor that, and so something I'm going to be leading is an Irish wake kind of experience, and, you know, at an Irish wake, it's not just mourning the dead, it's kind of celebrating life. And kind of celebrating chaos and causing mayhem. So we're gonna have we're gonna have a bit of an Irish wake experience and I'm, people are gonna be invited to bury the things they want to bury, or remember the things they want to remember. And then we will also cause some mischief as well. Mark: Sounds great. I'm up for all of that. Yucca: And on Saturday, at lunchtime, we're planning to do the same thing that we did last time. to do a live podcast episode, and that may be an opportunity for folks who can't attend in person to zoom in and connect. Yes, Mark: Yes, cross, cross your fingers for the internet connection at the Retreat Center. Yucca: that's why we say May, we're going to try really hard, technology willing, right, Rana? Rana: So, the last time we had Sun Tree, we hadn't yet started our adult salon. Which we recently rebranded as Adult Forum, and I'm really excited to be able to have that in person for the very first time. I've really valued it as a space to connect and share resources and share a little bit about our experiences and our lives. And for folks that might not be as familiar with what it is, it is a peer support space to discuss adult topics openly, and it is, we consider it kind of semi structured. We usually start with a topic just as a starting point of conversation, and then we let things naturally flow depending on what the participants want to talk about, what's on their minds, can go through multiple topics in one session. It is a confidential and non judgmental setting where we're really there to learn from each other's experiences, share our knowledge, especially if you have a range of ages. There's folks that have just lived different lives or experiences that may have things to share feel less alone. In a lot of things that we encounter in life I know. There's a real epidemic of loneliness, especially in America, and it's something I always have felt really deeply about, but don't really know what to do about it, so I appreciate being able to be a part of this space and have this space together in order to continue that kind of connection and We're going to have a way for people to anonymously submit topics or questions while we're at the event so that the people that are there attending are really crafting what it is that we want to talk about and the topics have really ranged in the past and included things like money, relationship styles, aging, death, altered states, sexuality, and more and Yeah, I've just been really looking forward to it. It is an 18 plus event, and I just, I can't wait to have that in, in person. I think it'll be a great version of it, just because we've always had it remote. Mark: Yeah. Michael? Michael: I know there's one of the FAQs we get around this is that you know, is it going to be recorded? Am I going to be able to participate online? And unfortunately, no, it's just for some of the reasons we discussed. First of all, technology, it's not always reliable, so we can't really do live stuff. I think it's possible that some of the workshops will be recorded. That depends on the presenter. And, but we don't want to, we want to also, honor people's confidentiality as well. So it's possible that we can record some of them, but maybe some of them won't be recorded. But that's why we also offer our totally online conference every other year as well. So if you can't make it in person to SunTree, we will be doing our web weaving online conference next year. So that is just a way of bridging that gap where if you can't make it in person, there is still an online space for you to take part in. Mark: Right. Right. And I, and I should point out the adult forum will not be recorded. It's, it's a totally confidential, just live action space for people to, to have discussions about sensitive stuff. So you needn't worry that you're going to find yourself on the internet talking about personal things. Yucca: Right, and for any of the presenters who do choose to have their, their presentation recorded, it would just be of them, not of the audience. So there'll be the private, privacy for the folks in the audience. Mark: Yeah, because, I mean, there are, in our community, there are people who are You know, in various stages of outness in relation to their non theist atheopaganism, right? Some are out as atheists, but not necessarily the pagan part. Some are completely solitary in, in their You know, practice of their path, and we want to be respectful of all of that. So, it's really important to us that people be able to participate without endangering something that, that is important to them. Mijo? Michael: Something that's New this time around, as well, is that we will be kind of having formal vendors. I will be sharing a sign up sheet for people in the coming days, where you, if you want to, if you've got anything you want to sell, or products or services we will have a space for you to do that. So, if you're, it could be anything, you could be selling, selling your own craft, or, I guess, doing Readings or things like this. We'll just sign up and we'll we'll reach out to you if we need, if we have any further questions about the kind of stuff you're going to be sharing with us. Mark: We should say, though, that, that the vending is going to be during a particular window of time at the event, because what we don't want is for a vendor to be there stuck behind a counter, and for the entire event and unable to participate in the various activities, right? Because they're part of the community and we want them in with us doing all the stuff. So we're going to have a marketplace slot in the program, and that's when you can do your vending and, you know, promote your services and all that kind of stuff. So what else should we say about this? I mean, we know because we've been there, it's really cool. Hope that our listeners Yucca: to just put that out there for that part of the world. It's a nice warm time of year. Last time Michael: Will the swimming pool, Yucca: May, which was a little bit iffy, we got really lucky. last Mark: we did. Yucca: I think it started snowing right after we left, Mark: Yeah, something like three days afterwards it started snowing at the retreat center, but that's not going to happen this time, because we're on Labor Day weekend and it should be pretty temperate and nice. Michael: I think there's a swimming pool there as well. Mark: Oh, that's right, it was closed when we were there before, but there is a swimming pool there. Yes, Michael: We should double check if we have access to that, but I think we will, but we should probably double check that. Mark: yes, that's true. Ha ha ha! Michael: I guess you should definitely get booked in quickly if you are intending to come. Because we're, it's coming up fast. I can't believe it's only two months away, so you really need to start thinking about getting your, making your way there and booking your tickets. Mark: Yeah, yeah it's very affordable especially when you consider that it includes nine meals and the lodging for the, the Yurt guest houses is only 75 for the entire event. So it's you know, we, we, we set price points low because we wanted people to be able to access it and we know that there are travel expenses associated. We if you, if you want to come, but there are, you know, financial issues, we have limited scholarship support, so please contact us. You can use the the Wonder Podcast queues at gmail. com, podcast email address to contact us, and we'll get back to you about that. But we'd really encourage our listeners, you know, if you like what you've been hearing on this podcast for the last five years now come and, come and meet us. Come and, and, you know, meet the community and, and check us out. Michael: It was just, I don't know if I expressed how Amazing it was, but it was just such a unique, a singular event and kind of a highlight of my life, I'd really say. It was just spectacular, and I don't know if I, I don't know if I captured that before, but I just thought it was just an amazing thing to be part of. And I think it's going to be just as amazing this time around. Mark: Me too. Yeah. I, I, I can't wait to see you all. And and other folks that, you know, I met two years ago. I'm just, I'm so looking forward to it rana, I Rana: so for me, it, it really felt like coming full circle, like I'd connected with you all, and we spent so much time together during the pandemic. so much. My personal life was also going through some transition and Suntree was actually pretty emotional for me. It was good But I don't know it's a little hard to explain But it just felt like I did a lot of emotional processing while I was there But I very much felt like I was in community I was able to finally meet these people that I had connected with and So now it just feels like I have something to look forward to You going forward knowing that we're gonna do this with some regularity. And for myself as well, it also gave me some more confidence traveling alone because I'm used to traveling with a partner if I go somewhere, especially airplane travel. And so it helped me feel a little bit more adventurous and confident feeling like I went to a state I've never been to before and met up with some people and everything went great. Like, no, no complaints. Mark: really felt that same sense of just really being able to be myself. And I was surprised by that because as one of the organizers last time, I thought I was kind of going to have to be on and sort of be a host. You know, for the whole weekend. And that really wasn't the case at all. I, I, I just felt like, you know, I was, I was welcomed there, warts and all, and there were plenty of other people to help. And it was great. It was just really a good, good time. Well, listen, thank you. Oh, Michael: Hopefully we can do the, the firewalking this time, because last time we couldn't do it because there was a burn ban, but there is potential for doing a firework walk. So people are into that, that might be available. So we'll see what happens. Yucca: Keep our fingers crossed. Mark: that would be exciting. I've never done that, and I'd like to try it. I don't know why I'd like to try it. I, but I would. Michael: That's the ultimate ritual, I guess. And for anybody who's kind of, their ears are pricking up when they hear that the person leading that has got decades of experience. Mark: Yeah. And, you know, very, very careful rules around, you know, everybody having to be absolutely sober, you know, being, you know, a lot of focus, doing this in a really sacred kind of container, so that's that's That's all to the good. Let me see. So, we're gonna put the link to the the event in the show notes. You can go, you can read the program, you can read about the event, you can see a picture of the Ponderosa Lodge and Atheopagan Society website, there's also a gallery of photos that were taken at the last Suntree retreat. So you can take a look at that.  Michael: Could you add in the show notes as well? Could you add the episode we actually recorded? Yucca: Oh yeah, let's link to that because we, yeah, that would be nice to go back and listen to actually. And what was it like in the moment? So that'll be in the show notes too. Mark: yeah, yeah, I just, I just remember we're sitting there and we're talking and people would cruise up to the table glowing and sit down in front of the microphone for a little while and talk about the experience they were having and then toddle off and somebody else would come by. It was just, it was lovely. So listen, folks Sun Tree Retreat, you don't want to miss it. Please come join us, visit with us. We, we would so love to see you. And we will be back next week with another episode of The Wonders of Science Based Paganism. Thank you, Rana and Michael. Thank you for being here. Michael: Thank you.   

In this profound episode, Jonathan is joined by esteemed theologian and author Michael Horton to discuss his latest book, "Recovering Our Sanity: How the Fear of God Conquers the Fears that Divide Us." In a world teetering on the brink of chaos—from unsettling politics to the lingering effects of the global pandemic—Horton's book offers not a typical self-help guide but a deep theological exploration of how a proper fear of God can liberate us from our myriad earthly fears.Dr. Horton, Professor of Theology and Apologetics at Westminster Seminary, explains what it truly means to fear God—both biblically and theologically—and how this reverential fear can effectively drive out fears of the future, others, and even death itself.Throughout the episode, Dr. Horton discusses the different types of fears that plague our society—from cultural anxieties to personal struggles—and how these stem from a lack of genuine fear of God. He emphasizes confronting our earthly fears with the hope found in Christ, rooted in the Gospel, and the shift from self-preservation to a Christ-focused life.This episode is a humbling, thought-provoking, and hope-igniting journey that challenges listeners to replace false securities with the profound joy of knowing Christ, who commands us, "Do not be afraid." Join us as we explore how cultivating a healthy fear of God can recover our sanity in these turbulent times.To ask Jonathan a question or connect with the Candid community, visit https://LTW.org/CandidFacebook: https://www.facebook.com/candidpodInstagram: https://www.instagram.com/candidpodTwitter: https://twitter.com/thecandidpodTRANSCRIPT:This transcript recounts Candid Conversations with Jonathan Youssef Episode 249: Recovering Our Sanity: How the Fear of God Conquers the Fears That Divide Us: Michael Horton.  [00:01] Jonathan: My very special guest is Mike Horton. He is a professor of systematic theology and apologetics at Westminster Seminary in California, and he is the author of many books, including The Christian Faith Ordinary and Core Christianity. He also hosts the White Horse Inn radio program. He lives with his wife, Lisa, and their four children in Escondido, California, and it looks like he's on his back patio,  having a conversation with me and being very gracious with his time. Mike Horton, thank you so much for taking the time to be on Candid Conversations.[00:45] Michael: Thank you, Jonathan.[00:50] Jonathan: I do thank you for your time. Now Mike, I've read your books, I have subscribed and I do recommend all of our listeners subscribe to the White Horse Inn. If you could just give us a quick, whirlwind tour of your story, we can talk a little bit about the podcast and some of your books as we progress through the interview.[01:19] Michael: Well, thank you, Jonathan. Yeah, I was raised in a Christian home and came to understand the doctrines of grace partly through my older brother. Kind of had my own little, not little, my own Romans revolution and then started digging deeper into Church history and theology and biblical studies, and eventually went to Biola University, Westminster California, then to Oxford for doctoral studies and then post-doc at Yale and came back to teach at my alma mater and have been here for 25 years. Blessed to be able to have a hand, with my colleagues, in training pastors; pastors training pastors.[02:17] Jonathan: I've been a recipient of many of the students of Westminster Seminary who taught me at Reformed Theological Seminary in Atlanta, and I've been really blessed by your work. You've got a very jovial, friendly, California vibe to you, but when you speak, you're like a double-edged sword. It's so penetrating. And I think there could be a theological issue that I've been struggling with for months and you'll say it so concisely in a few sentences, and I'll think, Where was that when I needed that?[03:09] Michael: You're too kind. Thank you.[03:11] Jonathan: Tell us a little bit about the White Horse Inn. It has been on for something like thirty years.[03:17] Michael: Yeah, thirty-plus, almost thirty-five years now. It has been such a fun thing. I've learned so much from my colleagues on the program. I still learn from the new team. We produce a magazine, too, Modern Reformation Magazine, which is really—I encourage people to subscribe to that. It's a good digest of topical theology related to culture. The umbrella organization is called Sola Media, and one of the things that we do that I'm so excited about being a part of is called Theo Global, where we host theological conversations (like we do on the White Horse Inn) between Baptist, Lutheran, Reformed, Anglican traditions and bring people together from a particular region. So we've been doing it for eleven years in India and also almost that long in Nigeria or in Kenya, in Nairobi. And then also Cairo for the Middle East. We just did one in Thailand that Pakistanis and Indians were able to come to, because they're not able usually to see each other. And then we are, Lord willing, starting another one in Southeast Asia, probably Singapore.So these have been so rich. Out of them are coming, a series of theology books from the global church to the global church. And so instead of having just regional theologies or theologies that pretend that they're not culturally contextual, we want to hear the voices of people from different locations testifying to the same Gospel, and that's just really been lots of fun.[05:42] Jonathan: Well, having ministered near that area of the world in Australia, you're right, there can be a disconnect between the cultures. We read each other's books and that sort of thing, and those are Western cultures, but I think we miss out on hearing about what is happening in Southeast Asia, Because they do face similar obstacles but also some quite different. As one of the points of your book is, there is still the one true God and the one Gospel that reaches across those cultures and reaches across so many of those things that we would consider barriers. And I think that's wonderful. I pray the Lord would bless that.[06:30] Michael: Thank you. One of the things I find, Jonathan, is there is a sweet unity around the Gospel that binds us when I go to these other places. Wherever I am in the world, I don't feel like I'm a stranger because I'm with my brothers and sisters. I wish I felt the same way in America. It's very different here.[06:51] Jonathan: Yeah, I was going to say it's interesting that what you're doing is you're unifying and uniting across denominations, across cultural things, and yet that's working almost in the opposite direction of where we see things here, which is there's division within denominations; there's division within small regions. You're undoing what is happening on a bigger scale in some of the Western parts. It's exciting to hear that's not happening everywhere, that there's actually some unification taking place and that's encouraging. And I know that's going to be an aspect of what we talk about in our conversation about one of your new books.Now, I know that you had some health issues with your heart a couple of years ago. Maybe for some of our audience who didn't know or having heard any updates, are you healthy?[07:54] Michael: Thanks for asking. Yes, what it was was a valve that just exploded in my heart, so it was an emergency open-heart surgery. But they said—they know my arteries and my heart better than anybody, they said, you'll die of something, but it won't be of heart disease. You have a good heart; you have good arteries; this was just a fluke.[08:24] Jonathan: Unbelievable.[08:25] Michael: So—yeah. I'm fully recovered. They said I could go bungee jumping again if I want to.[08:32] Jonathan: Again. I'm glad that you were already doing that—I picked up your book a while ago and I've been wanting to have you on the podcast ever since reading it. And the book is called Recovering Our Sanity: How the Fear of God Conquers the Fears that Divide Us. And my goodness, what a perfect title for everything we see. Give us a little bit of the reason for writing and the timing of the book.[09:18] Michael: Well, it had been percolating for years now, actually. I wrote a book many years ago called Beyond Culture Wars: Is America a Mission Field or a Battlefield? And this is in a similar vein, but really in light of the fears that really divide us today. And the center used to be the Bible, the Gospel, getting the Gospel right and getting the Gospel out. We have our doctrinal differences across the evangelical mainstream, but basically we had different political views and those political views didn't divide between brothers and sisters and churches.And what I've seen lately has just been like a food fight in a cafeteria, and political issues and social issues raised to the level of the Trinity. And it's like, okay, well, we can argue about that over coffee, but we don't bring it into the church. That used to be kind of how people thought about things. These things are important, but they're not as important as our unity in Christ. But I hear people attacking pastors, pastors attacking their flock, back and forth over these issues. And I think people don't get this heated over the doctrine of election or justification or the Trinity. Does it suggest that these issues are deeper in our hearts than the truth of Christianity, so what really binds us?And I looked at it and I said what really binds us is salvation, what we think we're saved from. If we think we're saved from the people over there who are threatening our values, or the people over there who are different from us ethnically, or the people over there who have a different view of economics and social justice? What are we really afraid of? What are our ultimate fears? And I argue that we have all these secondary fears. The real fear deep down, the mother of all fears, is the fear of death. And none of the solutions that can be offered by FOX or CNN, there is no solution to that. But we have it. Why isn't that on our dashboard as central, getting it right and getting it out?[13:01] Jonathan: In the book you cast a broad net in kind of what you've just said up here, picking out a few of the issues that you're seeing so much division over. But then you lay out some of the theological framework to reorientate your reader to where fear should rightly be placed. And it's away from the fear of one another and having a right fear of God.And you use the word sublime in the book, which I found really helpful as an aspect of God. I wonder if you could give us a little bit of explanation and walk that out for us.[13:52] Michael: Sure. I love that word. Sublime is really, I think, what we're talking about when we talk about the fear of God. Some people will say, “Well, it's not really fear. It's reverence, awe.” Fear is a big part of it, but it's a kind of fear that attracts. Think of what happens if you've ever stood at the mouth of a volcano, looking over it, watching the lava flow. Or I live in Southern California, so we have fires, and there's a kind of weird attraction to going to the fire and seeing it. Or you're out on the ocean and you're terrified. A squall comes up you're afraid, but you're also kind of your heart is racing not just because you're afraid, but also because you're kind of in awe of what's happening. In awe of the waves.God, you know whenever an angel shows up in the Bible, an emissary of God, what's the first thing? You know the number-one commandment throughout Scripture? The number-one command is “Be not afraid.” Because when even the mailman of God shows up, people are terrified.[15:31] Jonathan: Yeah, or Moses's face is a little too bright.[15:36] Michael: Yeah. Hey, put a napkin over that or something… That's what, really, is the basis for all sublime events, encounters that we have is really the fear of God. And so it's … A Jewish writer, John Levinson, puts it well. He says, “In the Hebrew Scriptures God beckons with one hand and repels with the other.”So there's a kind of don't get too close. Even Jesus in His Resurrection, “Don't touch me. I'm different.” God is different from us. And that sense of awe, of majesty, of even terror. Think of the disciples in the boat with Jesus. They were afraid of the storm, and then Jesus calmed the storm and they were afraid of Jesus. Who is this who has control over the winds and the waves? They were terrified. And that's the kind of Who is this? What am I dealing with here? The kind of shock and awe, the surprise is something that is missing, I think, from a lot of our experience as Christians today.[17:11] Jonathan: Well, and I know in the book we've seen a lot of the statistical evidence that comes in support of what you've just said, which shows that evangelical Christians really don't know what they believe. They have a complete misunderstanding of God, of the nature of Christ, of their roles.[17:51] Michael: If the fear of God is not the beginning of our wisdom, then something else will be. We'll fear something else. We will fear other people who are different from us and we'll fear cancer, we'll fear losing our job, we'll fear environmental collapse and catastrophe, we'll fear these other people taking over. It's not that those … that there aren't legitimate concerns of a political and social and cultural nature. But we have a disordered fear. And if we have disordered fears, we have disordered loves.God is not only the source of our greatest fear, legitimate fear; He's also the only one who conquers our fears and says, “Welcome home, prodigal. Welcome home, here's the feast.”[19:22] Jonathan: And deals with our, as you refer to it, the mother of all fears.[19:27] Michael: Death. We're dying. In California, people aren't allowed to die; they pass away; and we put these cemeteries out, far away from view, or we turn them into parks and things. And it used to be every time you walked into a church there would be headstones, and it reminded you as you walked in why you're going in there. The Gospel is for dying people, and we're all on that road. And so the question is, How do we face death? … How is that ultimate anxiety relieved? We mourn, but not as those who have no hope. So what does that mean for my daily life now? I could be twelve years old and I'm dying. I could be eighty and I'm dying. So what … Let's talk about that. Let's talk about the dying and the resurrection of the dead and being attached to Jesus so that what He is in His humanity right now, glorified, we will be. Let's talk about that. That's a lot better than anything on CNN or FOX.[21:00] Jonathan: I love it. I think in the book you tell the story of when you went to a debate with, I might be messing this up, but I think it was with an atheist and you sort of said, “Yep. Great. Can I talk about Jesus now” and kind of put him off, and he sort of like, “I wasn't prepared to debate that.”[21:22] Michael: Yeah. This was years ago. Bill Nye the Science Nye.[21:24] Jonathan: Bill Nigh, that's right.[21:25] Michael: He was talking about how religion is based on false fears and so they develop myths and so forth.[21:37] Jonathan: And you were like, “Well, that's true.”[21:39] Michael: Yeah. I don't disagree; that's a pretty fair analysis of religions. I guess you'd have to take one by one and analyze it, but as a generalization, now can I talk about Jesus and His Resurrection? Let's keep getting back to the main business here.[21:59] Jonathan: The main issue. Yeah. In the book you draw this distinction between naturalistic and hyper supernatural, but then you sort of carve out this third option of ordinary. Can we talk a little bit about that and how we see that playing out in our world today, particularly in the Church?[22:23] Michael: Sure. Often what you see today is a naturalism underwriting the progressive agenda and John Lennon's “Imagine.” On the right, you tend to have a hyper supernaturalism wedded to a conservative agenda. And so what do I mean by that? Well, a naturalistic worldview says, of course, God isn't involved. If God exists, then He's not involved in this world. He didn't create it, it's self-evolving and so forth.A hyper-supernatural worldview says that God works miraculous. You know, to say that God did it means it's a miracle.[23:34] Jonathan: Yeah.[23:35] Michael: Whereas in the Bible God does all sorts of things. Mostly, He doesn't perform miracles. What about all the times when we cut our finger and it heals after a week? What about that? What about a child [who] has a brain bleed in NICU and it resolves in 24 hours. How about those? Those aren't miracles. People say, “the miracle of childbirth.” There's no miracle of childbirth; it's just a spectacular example of God's providence. That's part of our problem is we're looking for God only in the spectacular, only in the extraordinary, only in places where we can point to and say, “Oh, God did that.”So we can't explain how somebody recovered from cancer; we say, “Well, God did it, not the doctors.”[24:46] Jonathan: Right.[24:47] Michael: Well, how about God did it and the doctors did it. God did it through the doctors.[24:52] Jonathan: How much control does God have here?[24:55] Michael: Right. He has control of everything. It's not just supernatural events; it's not just miracles. God's in control of every second, every breath. Every breath that you and I take is under His dominion.[25:11] Jonathan: That's right. He holds all things together. You know, I hear that phrase a lot, “That was a God thing. That was a God thing,” and I always have to stop and say to them, “Everything is a God thing.” I mean, conversations. The fact that your brain works. The ability to read. The ability to understand and reason. It's like I hate when you get that narrow scope, as you're saying. We've lost the sublime. We've lost an understanding of how much—you know, it's almost a deistic view that, you know, God sort of—[25:42] Michael: Yes![25:43] Jonathan: He's put some things in place and then He occasionally steps in and—[25:47] Michael: That's why I argue that actually naturalism and hyper supernaturalism unintentionally conspire with each other against Christianity—[25:57] Jonathan: Right.[25:58] Michael: —you know because, you know, we get to the place where we don't see God in our ordinary, everyday existence, but only in these punctuated events, and we've got to raise things. I think we do a lot of pretending. We pretend that things that have an ordinary explanation are miracles because we have to have God in our life. These large swaths of our lives where there are no miracles are upheld by God's marvelous providence.[26:40] Jonathan: Right. Amen to that. In the book, one of the fears you mentioned is fear of losing your job. And I think in the book you helpfully distinguish between calling and vocation or job and helping us understand and distinguish the two things. I wonder if we can talk a little bit of bringing clarity to that, because we're longing for something to put our identity in. Is it a football club? Is it a university? We're currently, I don't know when this will air, but we're in the middle of March Madness. Who did you pick? What's your university? What's your background?And vocation is very much one of those things we can put our identity in, and yet I think you talk about the ultimate and the penultimate between calling and vocation. I wonder if you could bring some clarity to that, and then we'll turn to some of the practical outworkings of the division we see after that.[27:53] Michael: Yeah. Well, one of the things I try to maintain throughout the book is, look, the things I'm talking about are not unimportant. They are legitimate fears. There is a legitimate anxiety. The question is, where do we go with that? But yes, let's affirm it. It's real, it's a deal, but penultimate not ultimate.For example, if I am in a circle of people I've never met before, we're having breakfast, and I ask them, “Tell me about yourself,” very ordinarily they'll say, “Well, I'm a dentist. I'm a …”Now okay, there's an example. That is part of our identity. Vocation is a gift of God; it's a calling. So to say, you know, we shouldn't place our identity in our vocations, well, not ultimately. That's the problem. It's a part of our identity, just like being a father is part of my identity. That's a calling. And we have to realize, as Luther said, we have many callings, many vocations during our life. We're parents, we're spouses, we're children, we are extended family members, we're dentists, and cleaning movie theaters. We have all kinds of callings/vocations. Sometimes we have a vocation to suffer, to carry a cross. Sometimes we have a vocation to be a friend. We have lots of vocations, and keeping them in balance is very important.Keeping them penultimate, not ultimate, is my point. My ultimate identity is chosen, redeemed, justified, being sanctified, will be glorified, in union with Christ. That's my identity and that's really who I am. Paul talks about himself as if he's almost collapsed into Jesus. His identity is so bound up with Christ that he can even say his suffering is something he glories in because it shares in Christ's suffering. That's my identity; that's where I really find who I am. The other stuff is not just stuff I do, that turns it back into a job. It is part of my identity, but it's penultimate, not ultimate.[30:57] Jonathan: Well, as we said at the beginning, we see division in so many different places. We're, of course, as you know, we're in another election year, and that—fear is going to be used as a … it's going to be weaponized this year, particularly this year, in America. And we have an international audience, so I want to be sensitive, but I know that internationally also they see a lot of American news as well. I think you talk about how, in the book, two sides to the fear coin. You mention both in the book. One side, fear is easily exploited as a motivator. On the other, fear is a weak motivator in the long term. Why is that? Let's kind of unpack that a little bit.[32:07] Michael: Yeah. I use the analogy of deer who are … there is this fight or flight that God gave us and the animals as well. It's purely instinctual, instinctive. You don't … Whether you're a deer or a human being, you don't really think about, you don't contemplate, you don't calculate, you don't explore what … You have a car coming towards you, you flee. You get out of its way if you can. But what happens is—That's adrenaline. That adrenaline rush is just a marvelous gift of God's providence. The problem is what would happen is deer had this disease of constantly being afraid, every crack of brush of another deer drove them wild running in fear? That's what I see us doing now, and what happens is it works in the short term. If you're going to cynically use fear to get a herd of people to do what you want them to do, that might work in the short term, but long term, people can't live like that. Long term, people actually become cynical. They won't participate at all. They'll just turn it off because “I've had this scare a thousand times and I'm not going to have it anymore. I'm tired of it.” It just runs out.And that's what I think a lot of people are feeling right now with American politics. So I'm not an analyst of American politics by any stretch of the imagination; I'm simply looking at it on the pastoral side. What is driving us to be like the deer in the headlights every five minutes? And it's exhausting us.[34:33] Jonathan: Yeah.[34:34] Michael: Each side whipping up the other side against each other. If I don't win this election, dot, dot, dot. If the other person wins the election, dot, dot, dot. It's apocalypse not. I especially find offensive any use of God or the Bible or Christ for that fear. Anyone who does that, particularly cynical leaders who don't even go to church, aren't professing Christians really, but they use the lingo to gain the nomination of particular groups. When Christians participate in that, they carry crosses to the U.S. Capitol to storm it and talk about hanging the vice president, and they're carrying crosses with Bible verses, this is the sort of thing that must just aggravate our Lord and Savior whose name is taken in vain.And yeah, is that a critique especially of evangelical political conservatives? Yes, it is. Because they are my brothers and sisters closest to me. The secularists aren't really invoking the name of Jesus and Bible verses and carrying crosses. I'm more worried about evangelicals distorting the gospel than I am about who wins this next election.[36:54] Jonathan: What is that doing to your testimony to those people who don't know the Lord? What message is it giving them?[37:10] Michael: That Christianity is about power.[37:11] Jonathan: Right, exactly.[37:12] Michael: It's not about a cross with God who has all power becoming flesh being spat upon and then being crucified upon a cross, bleeding for our sins. It's about basically choosing Caesar over Jesus, making Pilate our hero rather than Jesus.[37:45] Jonathan: I found that chapter, I can't remember if it's the Christian nationalism chapter or the one before, but it was really helpful the way that you walked out American history in a way that probably a lot of the readers might say, “I don't know if I understood that.” Or “I don't know if I fully understood Thomas Jefferson and his letter to the Danbury Baptist Church in Connecticut.” Understanding separation of church and state, understanding like how we got to where we are and the creating of even thinking between the British … French revolution and those different paths that were laid out before us. And even just understanding our own history and how we got to where we are, I think a lot of it is just cast as Christian nation. And I found it helpful the way you distinguish that.Because I hear this a lot in the church in terms of America being the new Israel, are there blessings that have come with certain things? Sure, fine. Our Constitution is well put together. I love the history of Witherspoon, the Scottish Presbyterian, and you can see some of that in the language that comes out through the Constitution. Again, I think it's helpful to have your historical understanding rather than this reinterpretation that we have now that it's, as you said, it's this feeling like someone's come in and taken this from us. And now, to use the title of your other book, now we're at war, right? It's not a mission field, it's a battlefield. We're fighting for the honor of our country. And all that's done is create us and them division and a lack of clarity and a lack of what we're called to in a mission sense as Christians. Where was I going with that? Who knows? Anyway, I found it helpful.[40:10] Michael: You said it better. Preach it, brother.[40:16] Jonathan: Just random thoughts. Just reading your books and regurgitating it to the people. So later on in the book you sort of walk us through the areas where division has come in. So we have Christian nationalism has certainly seeped into churches. Then you have some really helpful, short chapters with issues with LGBTQ+ community, cancel culture, racism. Let's just kind of walk through some of these and help Christians who are listening to this who are saying, I thought this was the right way to handle that situation but you're saying something else. Let's kind of walk through maybe even just one or two of those. Again, you had a really great illustration under your LGBTQ+ chapter of the young man whose family had sent him to you and you were pastoring him and what happened with all that. If you could tell us a little bit about that, just to help kind of encapsulate what we're talking about here.[41:35] Michael: Sure, this brother struggling with homosexuality, his dad was on the board of a prominent evangelical organization, and his pastor had told him that we basically don't want your influence in the church, so he was considering leaving the faith. But then he read Putting Amazing Back Into Grace, a book I wrote a long time ago, and came out to work at our organization as just a pretext for just hanging out and shepherding this guy. He became a part of our church and a lot of people looked after him and we got a lot back from him.He went back home, and his pastor said that all this reformed teaching he was getting was heresy and so forth, and no, you've lost your salvation. Romans says that He gave them over to a depraved mind. So he committed suicide and …So what is it? Why do you do stuff like that? Well, you do it out of bad theology, to be sure, but also out of fear. There are a lot of churches that just don't want to deal with it. They don't want to have this problem. They don't want to say that they have people in their congregation who are really, really suffering. If you're a secularist, you don't suffer from homosexuality. You don't suffer with gender dysphoria. Only Christians do. And only Christians suffer with greed and envy and malice and other sins that are listed in these same sin lists in the New Testament. You don't lose your salvation over those.The key is repentance, right? We're called to a life of repentance. Whatever our tendencies are towards particular sins, we're all corrupt in heart. We're sinners and we're sinned against and we are in a sin-cursed world. And so where do we go with that fear? And then once that fear is solved objectively in Christ, having been justified through faith, we have peace with God. That's an objective fact. With that now as an objective fact, how do I respond to this brother or sister who's justified just as I am, and who is being sanctified just as I am, but has propensity toward a particular sin that I think is particularly serious, particularly great? How do I love this person? How do I respond to this person?John Calvin said a pastor needs to learn how to have two voices: one for the sheep and one for the wolves. And what I've seen in some very close cases to my own experience, what I've seen sometimes is pastors confusing the sheep for wolves and treating them as apostates or as people who, you know, if you really were a Christian, you wouldn't be suffering with that. Well, they're not saying, “I have a right to this sin.” They're not saying that it's okay. That's why they're struggling with it—and they're struggling with it in your church.So one of the surveys, actually a couple of the surveys concluded that about 80 percent of people in the LGBTQ+ community were raised in conservative Roman Catholic or Protestant churches.[46:39] Jonathan: Give that statistic again because I think we need to hear it again.[46:42] Michael: I don't know exact, it's in the 80s, 80 percent.[46:46] Jonathan: Over 80 percent.[46:49] Michael: Right. And what's even more striking is the same percentage said that they would come back to church, even if they didn't change their rules, but listened to them and cared for them. That's what I found amazing. I was glad that they asked … they added in that survey even if they didn't change their beliefs but they were kind and they listened and they cared for me.So if I'm fearful, here again the adrenaline, the deer in the headlights, that's a gift God gave us for fleeing something that is imminently threatening. This is not imminently threatening. If I come to understand that, then I'm not a deer in the headlights; instead, my brother or sister, my friend, parent, I'm someone who is looking out for the best of this person and now I can actually get ahold of myself and think and make judgments and articulate things. And ask questions and get information. That's a big part of it. It's not all spiritual. People are suffering from mental health disorders, and that's physical, that's brain chemistry. All kinds of things.People are suffering from sins that have been committed against them in the past. A lot of this is very complicated, and it's not all that person's direct fault. Again, we're all sinners, sinned against, and live in a sin-cursed world. And all those factors play into what we have to consider when we're not the deer in the headlights but can sit down with people over a long time, be willing to walk with them over a long time, be willing to read up on things, ask them questions, we're that interested in them and understanding what they're going through, understanding their pain. It's like if they have cancer we'd be at their house with casseroles, but if they have these things, you know … So let's … fear of the Lord drives out the fears of everyone and everything else. This is the beginning of wisdom.[48:52] Jonathan: Exactly. Well, I think we could probably have this conversation for probably another four more hours, which we might do just because we're having so many technical difficulties. You know, I can't recommend this book enough. Mike Horton, Recovering Our Sanity: How the Fear of God Conquers the Fears that Divide Us. I told my team I want to re-air this as we get closer to November so that we can all be reminded once again of what we're called to. Mike, what are you working on at the moment?[50:35] Michael: I've been kind of obsessive compulsive about a project, three volumes with Eerdmans. First volume is coming out in May, titled Shaman and Sage. This is a very different project. It's the history of spiritual not religious. Where does this come from? You have this divine self within trying to break out of all constraints. And so I trace it all the way back to ancient Greece and to the Renaissance. And then the second volume, Renaissance to the scientific revolution. And then the third volume is covering Romanticism to the present.[51:31] Jonathan: Oprah.[51:32] Michael: Exactly.[51:35] Jonathan: That's going to be a massive help for believers, because that's the one we see a lot in those statistics. Yeah, I hear that from quite a few people, spiritual but not religious, or whatever the phrase is. But well, Mike Horton, it's been such a privilege. I'm so grateful for your time and coming on to Candid Conversations and sharing with us.[52:10] Michael: Jonathan, thank you so much. It's been a pleasure.[52:14] Jonathan: Thank you, brother.  

Unlock the secrets to successful business acquisitions with Michael Byars, the mastermind of Acquisition CEO, revealing strategies and human elements that shape mergers and acquisitions. Discover what separates a good deal from a great one as we debunk the myth of the 'once in a lifetime' opportunity. Effective communication and asking the right questions during negotiations are highlighted, illuminating the true value of a business. We delve into the critical role of assembling a collaborative leadership team and achieving mutual benefit in deal-making while navigating NDAs and legal considerations. Whether you're looking to hone negotiation skills or curious about buying a company, Michael's invaluable insights are shared generously. This episode is a resource for entrepreneurs and business owners aiming to expand their corporate empire with confidence and skill, offering a blueprint for your next big business move.NOTABLE QUOTES"I enjoy doing good business with good people." – Michael"If everyone [were] a winner, life would get boring. You got to have some losers tossed in there to remind you where you're at." – Michael"For someone to [sell their business], they have to have a problem. And for them to do the transaction with you, you have to be the best fit to solve that problem." – Michael"I don't want to waste their time, but I shouldn't waste mine either." – Michael"I'm a buyer for life." – Michael"When I do the due diligence, I'm digging into the business, but I'm also digging into them as a person." – Michael“It's amazing what the reputation of somebody or some business can do, no matter who the new management is." – Philip"When I'm looking at acquisitions, I'm buying their good track record. If it's no good, I'm not going to touch it." – Michael"If you're looking for deals, deals will come your way." – Michael“The more you can solve the customer's problem, the better off you're going to be. People will pay to have their problems solved.” – Michael“If you had something for 20 or 30 years, all your employees are like family. At that point, you want to make sure that whoever comes in, whoever you pass the torch to, it's going to take care of that family environment you built.” – Michael“I always want to learn from my mistakes.” – Michael“Business is not all about numbers. You're dealing with humans also, so figure out who they are.” – Michael“When you get into the business and when you're running your own business, it's the people that can make or break that business.” – Philip“I don't want to be the smartest person in the room, I want to find the smartest person for that job and I want to go back in conference with them. I've got to let them have free reign.”  – Michael“The numbers have to be there, but it's also the person behind the numbers that matters a lot.”  – PhilipRESOURCESMichaelWebsite: https://michaelbyars.com/Website: https://acquisitionceo.com/Facebook: https://www.facebook.com/AcquisitionCEOsLinkedIn: https://www.linkedin.com/in/acquisitionceo PhilipDigital Course: https://www.speakingsessions.com/digital-courseInstagram: https://www.instagram.com/iamphilipsessions/?hl=enTikTok: https://www.tiktok.com/@philipsessionsLinkedin: https://www.linkedin.com/in/philip-sessions-b2986563/Facebook: https://www.facebook.com/therealphilipsessions Support the Show.

Want to become more Stoic? Join us and other Stoics this October: Stoicism Applied by Caleb Ontiveros and Michael“It's worse to be the thief, than the person who has their things stolen from them”In this conversation, Michael and Caleb talk about how Stoics think about anger, revenge, and justice.They cover common philosophical views of punishment – and note where the Stoics would disagree. This topic is important in many areas of our lives. It's about how we handle situations when someone has treated us badly, how we think about guilt, and how we can build just communities.(00:35) Introduction(06:55) Common Accounts of Punishment(15:51) Stoicism and Anger(25:47) Epictetus on Punishment (32:26) Responding as a Stoic(33:56) The Stoic Review of Everyone Else's Take on Punishment ***Subscribe to The Stoa Letter for weekly meditations, actions, and links to the best Stoic resources: www.stoaletter.com/subscribeDownload the Stoa app (it's a free download): stoameditation.com/podIf you try the Stoa app and find it useful, but truly cannot afford it, email us and we'll set you up with a free account.Listen to more episodes and learn more here: https://stoameditation.com/blog/stoa-conversations/Thanks to Michael Levy for graciously letting us use his music in the conversations: https://ancientlyre.com/

In today's CIHAS episode, I'm speaking to online personal trainer and performance nutritionist, Michael Ulloa. Michael is on a mission to make the fitness industry a more welcoming and accepting space for all, which is exactly what we dive into in this ‘sode. We are unpacking some toxic myths about exercise, Michael spills the beans on his feelings about Joe Wicks, and we discuss what really goes into professional fitness models' photo shoots. Plus we answer loads of your questions like how to find a more joyful relationship with movement after a lifetime of using it as punishment for eating. Find out more about Michael's work here.Follow his work on Instagram here.Follow Laura on Instagram here.Subscribe to Laura's newsletter here.Enrol in the Raising Embodied Eaters course here.Here's the transcript in full:INTRO:Michael: The way that we're being sold health and fitness just isn't sustainable or achievable in any way and then people blame themselves and feel worse and then therefore they're more likely to spend money on all these other programs repeatedly and it's just a vicious cycle that just doesn't ever end.Laura: Hey, and welcome to the Can I Have Another Snack? Podcast, where we talk about appetite, bodies, and identity, especially through the lens of parenting. I'm Laura Thomas. I'm an anti diet registered nutritionist, and I also write the Can I Have Another Snack? Newsletter. Today, I'm talking to Michael Ulloa.Michael is an online personal trainer and performance nutritionist who is on a mission to make the fitness industry a more welcoming and accepting space for all. In today's episode, Michael and I are shooting the shit about the fitness industry, unpacking some toxic myths about exercise, and answering loads of your questions: like how to find a more joyful relationship with movement after a lifetime of using it as punishment for eating.Some of you have been asking for more episodes on movement and fitness, so I think you're going to enjoy this conversation. We'll get to Michael in just a second, but first, I want to tell you real quick about the benefits of becoming a paid subscriber to the Can I Have Another Snack? Newsletter and community.For just £5 a month, or £50 a year, you get access to the extended CIHAS universe. That means exclusive weekly discussion threads, links and recommendations, you get commenting privileges and access to my monthly Dear Laura column, as well as the whole CIHAS archive and a few other sweet perks, but more than anything, you're supporting independent evidence based nutrition information free from diet culture and anti fatness. I can't do this work without the help of paying subscribers. So if you get something out of being here, then please consider upgrading your subscription today. And if you're still not convinced, then check out this recent review I received from a reader. They said: "Laura's podcast and newsletter are always thought provoking, filled with care and compassion, and a respite from one size fits all health and nutrition advice."So if that sounds good to you, then head to laurathomas.substack.com and become a paying subscriber today. Alright team, let's get to today's episode, here's Michael. MAIN EPISODE:All right, Michael, I need to know what the deal is. Because you're like one of maybe five PTs who isn't pushing aesthetic or weight loss goals on us.Has that always been your deal? Or is this more of an evolution for you? Michael: Yeah, it's definitely an evolution and it's funny you mentioned that because I get a lot of angry messages from personal trainers that don't think that my approach is right, which is always quite funny to me. I don't know, it's, I definitely, when I first started off in the fitness industry... I've been a personal trainer now for nearly 10 years.And in terms of personal training, that kind of makes you a bit of a veteran because a lot of trainers are quite short lived on average. When I first started off, I definitely did have your typical, like, mainstream slightly bro approach to fitness and nutrition. And I know most people that maybe work in the kind of space that, like, you operate in, for example, there tends to usually be a reason or a thing that caused them to go down that path.But I didn't have that at all. It really has just been a really slow evolution of just actually reading the research, working with people on a day to day basis, getting feedback from clients about what is working and what isn't, and then just really tweaking things over a very long period of time. I've also had some very honest clients, which have been great too, who kind of really follow my content on social media and they would message me like, oh, that's not very helpful. How about approaching it like this? And i'm always open to feedback, I always want to improve my practice and my messaging and I was always just quite receptive to that and I don't know... 10 years later I now finally feel like i'm working with people in a way that genuinely helps them long term and i'm actually creating content that is useful for people rather than just almost creating content for other personal trainers, which seems to be what a lot of fitness professionals do.Laura: Tell me about the angry messages. Why are other PTs up in your shit about...? Michael: I really don't know. I wish I knew the answer. I think... I guess if you're attacking someone's entire being and their work and their ethos that they've believed in for so many years, then I guess that a lot of people will react to that in quite a negative way.I really don't understand it at all either. Usually male coaches too, are very angry in the way that I approach social media and some of the names and things I've been called are pretty grim, but I only... I wish I knew the answer to that, but some, for some reason people get very angry in the way that I am approaching fitness and nutrition.But yeah, I really don't mind. Like I, as I said, I feel like I'm really helping people now and I'm happy to keep championing that message. Laura: I mean, I'm just wondering if part of it is because that myth, certain myth of no pain, no gain. And that you need to like, basically punish yourself with exercise in order to achieve a particular body type.You're saying, actually, we don't need to do that. It's okay if you don't kill yourself with exercise. We shouldn't be weaponising it against ourselves. For me, it speaks to how deeply internalised people's anti fat bias is. You're challenging the fundamental sort of premise that their beliefs are resting on, which is that, you can't be fit and fat.Or you...yeah, like I said before, that you have to punish yourself with exercise or like that... it's somehow okay to exist in a body that isn't fulfilling this ideal that we have been told that we should not strive for. Michael: Completely. And I mean, if we're completely honest about it, the way that the fitness industry is set up now is way more profitable for these people too.So if you do start attacking the way that they're approaching their lives or their businesses too, then they're probably going to be a little bit grumpy about that. It's so much easier for me as a personal trainer to make money saying, here we go, come sign up for the six week program and we'll strip body fat off you in such a short space of time, rather than me saying, cool, let's work together for three, six, 12 months. And let's really work on those habits and have you feeling and performing better. Like it's just such a hard sell. I mean, especially for, as I mentioned, like, personal training tends to be quite a short lived career for a lot of people. And I appreciate that when people first start off, the best way to get clients is shock and awe, like showing before and after photos, like having the secrets or whatever it is. And the best way to get clients at the start is by doing that. So people are going to follow that path rather than doing it the right way. That is a bit of a slow burner. I know that a lot of coaches aren't really up for that, sadly. Laura: Yeah, no, I think you make a really good point when you're talking about... the financial aspect of things, because, yeah, there's no money to be made in being like, yeah, take a rest day or go for a gentle walk and look at the sky. Yeah, those like making huge promises of around body transformations and then making people sign up for some sort of like intensive bootcamp situation. Of course, that makes sense from like a business model perspective, but as so often is the case, anything that involves capitalism is probably not great for our health overall. Okay, so I am absolutely not in the fitness space at all. I've purged my social media account. I think I follow you and maybe a couple of other personal trainers, because I find it really annoying, honestly, watching fitness content.Michael: I strongly relate to that. And first of all, thank you for following me, but yeah, I honestly, I feel exactly the same way.  Laura: And I think, especially since having had a baby and because I have some enduring physical stuff going on as a result of my pregnancy in terms of, like, pelvic health, even the stuff that is like geared towards women who have had babies and like postpartum stuff.It's just anyway, so I've just checked out of it. So I have no idea. What is going on in that space, really? So I need you to like, translate it all for me. What are some of the most pervasive and toxic fitness myths that you're seeing at the moment? Michael: Everything. Honestly, every topic is so toxic at the moment.It's really frustrating. And I speak to... There's a few coaches that I'm really good friends with, who I think you probably know as well, that I tend to follow their content, I like engaging with them and talking about the fitness industry, but I have also removed myself from a lot of the mainstream approach because...I don't find it motivating or helpful in any way. Like I think a lot of the... Laura: You don't even hate follow some people just to have like stuff to...? Because I hate feed a lot of big feeding. I hate-feed?! I hate-follow a lot of big accounts. I just have this folder on my Instagram called Ammunition.And I just save posts in there that I want to come back and get angry about at some point. What are you seeing from... I know you do it! But what are you seeing from those folks? Michael: So I do a little bit of that. And I, so I've also, I've got an Instagram account for my dog, but I started up ages ago. I don't post anything to it, but every time I see something pop up on, like, the explore page or I see another trainer share, I'll send it to her account. And then I'll use that as fodder for, like, creating content and coming up with ideas. But I do not, I don't hate follow that many people now because like I spent a lot of time on social media, right?And I know that because of that following these accounts and seeing them on a day to day basis all of the time does massively negatively impact my mental health. And I think if i'm feeling that way as a fitness professional who knows the research, knows what these accounts are doing to us and can see through the nonsense... how are everyday people feeling? When they're seeing this content and they don't really know if it's the truth or not. So I actually don't follow that many trainers. There's probably a lot of trainers who... . Laura: So very evolved of you. Michael: Yeah. Thank you. Thank you. There's a few trainers who, like, I know through just from working in gyms or whatever, I'll follow them, but I mute them so that I don't have to see their content.Laura: Yeah, that's smart. Michael: But yeah, I don't know. There's so many myths about every topic. Like you mentioned there about, like, women's health and pelvic health and anything pre and postnatal. The stuff around that is really gross because it's not even just the fact that they're spreading misinformation. They somehow always tie in with just losing weight, like this is pretty much what it all comes down to, right? Laura: Yeah. Yeah. That's the subtext. It's always there. Michael: It's always like improve your pelvic health and slim your waist, like it's everything. It just pushes people down the route of still obsessing about body weight and focusing on body weight rather than focusing on general health and wellbeing and health promotion, and it's infuriating.I guess the same as, like, building muscle. Like it's nearly always advertised by these guys that are absolutely jacked, clearly taking steroids, using images of themselves going... you can look like this if you work out like me and buy my programs and my nutrition plans, and you're just never going to look like these people. So you're always going to fail. Like everything within the fitness space is geared towards repeat sales and having people come back for more because the way that we're being sold health and fitness, just isn't sustainable or achievable in any way. And then people blame themselves and feel worse. And then therefore they're more likely to spend money on all these other programs repeatedly. And it's just a vicious cycle that just doesn't ever end. And that's why with my page, I'm trying to step away from any aesthetic goals. Like you'll probably see through my social media, I don't, I'm not against people having aesthetic goals. I just don't really ever talk about it because I don't think it should ever be the focus of someone's fitness journey. I mean, I think that's the bit that seems to piss people off. Laura: Yeah. And I mean, there's some interesting research that shows that people who exercise for aesthetic goals, they're less likely to engage in something that is sustainable for them.Like, it's more likely that they will give up. And I don't mean that in, like, defeatist kind of way, but it just won't be sustainable for them. Versus for people who are approaching, I don't know, a type of exercise or training or whatever it is from a place of maybe wanting to feel stronger or feel more comfortable in their bodies or because they have mobility stuff that they're working through or something like that.So it's really difficult though, because And we'll get to some of the listener questions in a bit where they're asking this, like, how do you uncouple the aesthetic goals from, those more internally motivated goals from the perspective that we are just constantly being drip fed, idealised images of people all over the internet? And then, like you say, half the time those images aren't even real, right? There's people on ‘roids. There are people who are like starving themselves, like making themselves dehydrated, like posing in particular ways. I don't even know what other tactics people use to stylise these images.But I feel like the sort of falsification of these pictures is huge in the fitness industry. Michael: It's honestly horrific. And I would probably go as far as to say, like, every professional fitness model has taken or is taking steroids of some form. That's like the level of manipulation that the fitness industry...I don't know, I don't think there's any issue with... having aesthetic goals. Like I always like to hammer this point home because I think sometimes with my content, I can... people misconstrue that I'm against anyone having any aesthetic goal at all. I'm not, it's just, I think that the emphasis needs to be elsewhere.For example, when I first started in the fitness industry, I was in that loop of must build muscle, have to build muscle to show that I know what I'm talking about and also to be seen as manly and capable or whatever, and I would do a lot of strength training. I would never do cardio because cardio is bad.It ruins your gains. Laura: It's for girls.Michael: Yeah, it's just exactly that. And it's so frustrating that I would... I spent years just, like, strength training, nothing but strength training, even when I was going through cycles of really hating it. Like I had to do strength training, got to build muscle. When I switched up my training... I still do strength training now. I enjoy building muscle. The challenge of building strength and muscle is really fun, but I also do a lot of cardio because I really enjoy it and it makes me feel great in terms of physical and mental health. And actually since switching up, dropping a bit of strength training that I was doing and doing more cardio, the exercise I really enjoy, I've made so much more progress with my strength building and muscle building gains.And I've just got such a better balance with it all. So if someone listening to this is really struggling of knowing like what they should really be doing, what should they be focusing on? Honestly, just like enjoyment and mental health, that needs to be the priority. And then everything else just tends to fall into line after that.And the fitness industry, just the tactics, as I said, like the trainers use. The one thing that really annoys me is a lot of personal trainers will, anyone who follows any trainers will... I've seen this in the past where a trainer goes through a really extreme cycle of dieting, exercise regime because they're training for a photo shoot - in quotation marks - Where they'll go and get professional photos done that they've dieted down to within an inch of their lives. And they'll get a little snapshot image of look how amazing I look and then they'll use that in all their advertising of promoting healthy behaviour change or whatever other nonsense. It's if you're not using healthy, sustainable habits in achieving your physique, then you should not be allowed to use that in terms of advertising it to say that you're going to help people improve their health and their life, their health and their lives.It's just, it's incredibly infuriating and... Laura: it's false advertising. Michael: Massively. Yeah. Massively. Laura: Need to get that fucking, is it ASA, advertising...? Michael: Yeah. Yeah. Standards Agency. Absolutely. Yeah. Laura: I'm on the case! But two interesting things that I wanted to pick out from what you were saying.First of all, I think there's some complexity and nuance around this idea aesthetic goals, isn't there? Because we are all aesthetically driven, right? We are all, like we're aesthetic creatures in some ways, like when you brush your hair in the morning or I don't know, you trim your beard, Michael, or like I chose clothes that I thought looked somewhat okay together. Like those are all aesthetic goals, right? And so I think it's really, like, hard for people to decouple aesthetic goals from their overall movement, exercise routines, whatever you want to call them. But I think what you're saying, and certainly what I would advocate is that the fitness industry has just blown... yeah, they've blown up aesthetics to be like the sole purpose that people should exercise, right? And that I think is the problem is that yeah, they've just coupled exercise and aesthetics to the point that it's like you were saying, people are engaging in disorderly eating behaviours. They're using illicit drugs, they are, like, punishing themselves to look a particular way, and that's when it becomes problematic, right? Michael: Completely agree. Laura: And you end up on that slippery, slippery slope to disordered eating and eating disorders. Michael: Yeah, it's so true the barometer of success or health or knowledge within the fitness industry is body fat levels. That's pretty much what it all comes down to. Like a trainer who is absolutely jacked and really ripped is seen as being an authority figure without really knowing anything about them. And whereas you'll have a trainer who's in maybe a naturally larger sized body who naturally carries a little bit more body fat, has a much healthier balance of exercise and nutrition, a far better trainer. Just look at the comments under the content that they push out there onto social media and people will criticize them and say they don't know what they're talking about. Like our barometer of success is leanness. I don't know what the answer is to trying to combat that other than just keep churning out content, calling out this nonsense.But unfortunately you feel like you take a few steps forward when it was like two, three years ago, when you see, started to see a lot more body diversity on fitness accounts and kind of big companies like Gymshark and Nike and stuff were using people in larger bodies to advertise clothing.That's now disappearing again because it's no longer.... and it's just toxic. And you just have to go on like TikTok, the latest platform, even though it's been around a few years, I felt like we were maybe making a bit of progress. Then TikTok just flips that again, and you just got to search the hashtag fitness on TikTok.And it's just white, slim, muscular people clearly taking steroids that are the main bulk of the content that you're going to see. It's infuriating. Laura: Everyone in the fitness industry really collectively needs to be speaking out against this, but I think there's a simultaneous thing that has to happen whereby we are amplifying and centering experiences and the work of fat fitness creators, right? And I'm using fat, for anyone who's not listened to the podcast before, fat as a neutral descriptor, as a reclamation of a word that is often used to weaponise and hurt people and harm people. So, yeah, I'm just thinking of some people off the top of my head.Like Intuitive Fatty, Jessamyn Stanley is fantastic for yoga content. Lauren Leavell does a lot of barre stuff, but there's loads. I mean, is there anyone that you would want to give a shout out to like anyone that's doing...? Michael: The Instagram handle Decolonizing Fitness? Ilya. The content is amazing. We're trying to set up a time for Ilya to come into our podcast to chat about this at the moment. And I just... there's so many voices that need to be amplified. And I know that I always have to check my privilege in the content that I'm creating. Like you see very few men within the kind of body neutrality, body positivity, space, whatever you want to call the area I'm working in.So I always like to acknowledge that, okay, I'm creating content for a space that isn't really for me, but I do think that can be really powerful. And we still need more voices of guys, especially within this space, calling it out because I rarely ever see male fitness professionals creating the kind of content that I am.They tend to go down the more mainstream approach. And I like to yes, fitness can look like me. I look how the fitness industry says you're supposed to look, but it doesn't have to look like that, right? This is one way it can look, but it doesn't need to be like that for everyone. And I think that can be really powerful whilst amplifying the voices of those who are marginalised and don't get the airtime that I do.Laura: Yeah, absolutely. And I think, yeah, you make a really good point about men in this space. Like just in body neutrality, body positivity and again, there are some really great people doing stuff in that space. I agree like it's still underrepresented, but like the 300 pound runner. I don't know if you've come across his stuff? Michael: yeah, Martinus Evans.Laura: Yeah, His stuff is really cool as well. But yeah, anyway, just wanted to shout out some accounts and I'll link to them in the show notes as well. Yeah, so you mentioned that fitness professionals will embark on this really extreme diet, they will really bulk up, they'll, probably restrict what they're eating for a really long time, and then they'll do all their photos, and they'll probably go back to whatever they were doing before that. And it just reminded me when... and this is it's like really sad, but do you remember when Joe Wicks was talking all about binging? He went to America, and then it ... he just started talking about like he was eating all this chocolate and pizza and like stuff that he obviously was restricting so hard that when he went to the States, he had this like backlash against all of that and his body was just like, fuck this, and he just started eating like all of the food that he'd been denying himself.It just made me think of that and how he's... how disordered like this space is and how normalised that kind of thing is like that just like binge restrict cycle. Michael: Yeah, I mean when your entire business model relies on getting people really lean. If you're not sticking to those rules and keeping your body lean 100 percent of the time, then your business model kind of goes to shit. And I guess that's probably why he was having issues coming to terms with that. Joe Wicks is a really funny one because I don't like his content at all. I'll throw that out there. Some of the nutrition stuff he's spouted has been... I was going to say nonsense, but it's actually just damaging some of the stuff he comes out with.Also, on the other hand, I feel like, maybe this is giving him too much credit, I always feel like his heart is in the right place, but he just goes about it in completely the wrong way. I don't know if you would agree with that. When I hear him being interviewed, I feel like he's a really passionate guy who feels like he's doing the right thing, but he's just absolutely not.Because all of his content is focused on being lean and weight loss. And I just wish that... he's got such a huge platform now. It's terrifying. That if you had someone like him who could start promoting like a balanced and sensible message, it's never going to happen because he makes too much money now, then it would just be so powerful.Laura: But I don't know, like this piece around heart in the right place. I think we say that about a lot of these actually quite problematic white men. Joe Wicks, Jamie Oliver, I'm just gonna say it, don't @ me. But, of course their heart's in the right place, but their heart's also in their fucking bank balance, right?Michael: Completely, 100%. Laura: So that's one part of it, but also, I don't know when we can, when someone is, like you say, promoting harmful messages around food and around nutrition. And I don't. I think it matters where their heart is. Michael: Agreed. I wonder whether this... Laura: A murderer could use that justification to be like, Oh, well, this man is really toxic to women, so I'm just going to kill him.But that's not the solution. Michael: I know. I wonder whether kind of in my head, the reason I use those words is because I think of kind of the fitness industry as like a huge, like a line of like how problematic someone is. And I feel like he feels he's trying to do the right thing despite doing it very badly.Whereas you have a lot of people within the fitness space that go far beyond that, who are intentionally doing the really bad thing, trying to make a lot of money, it's still very bad. And Jamie Oliver is one of those as well, where he's got such a huge platform, thinks he knows what he's doing is the best thing, but it's just not. Like trying to ban the buy one get one free offers when people are really struggling to feed their families right now.It's just, I feel yes, hearts in the right place, but just no, like they need to be more informed and go about it in a better way. Laura: And especially when they are being given this feedback, right? Like it's one thing if you fuck up and you say, I was really wrong about that and I've learned some new information now like you have, right? And like I have. And you hold your hands up and you say, yeah, I was really fucking wrong and I'm sorry that I've caused harm and I don't want to do that anymore. I'm gonna learn and I'm gonna do better. And Michael: that's the sign of a good practitioner, right? And yeah. Laura: But speaking of Joe Wicks... Michael: Oh god!Laura: So, so you are a new ish parent, right? You have a seven month old. Michael: Yes, my son is seven months old, yeah. Laura: How do you feel about the prospect of Joe Wicks teaching your kid PE someday? Michael: Oh, just no, like awful. Yeah it's terrifying, isn't it? And these people do wangle their way into every aspect of our society of fitness.And there's just no getting away from them now. Personally, I never watched any of his school fitness things throughout lockdown. I know they're very popular. What was his wording? Did you watch any of them then with your kids? Laura: I didn't cause my little one was just a newborn at that point. And he's only three now.It just wasn't on my radar. I've seen his books. He has the burpee bears. And I've written a couple of like book reviews. They're super like, just tongue in cheek. But it strikes me as really problematic that he feels that we need to teach specific moves like burpees or other things like that to children, like to young children, like primary school age kids, and I don't really have a good justification for that because I'm not a fitness professional that other than does a five year old need to learn how to plank? Right? Or should we not be focusing on embodied movement that is climbing on play equipment in the playground or running or skipping or jumping or like, all of these things that kids, depending on their level of mobility and ability that they would intuitively do?Michael: I am completely with you there. I don't think we need to be teaching a five year old how to do a burpee. It's a bit ridiculous, to be honest. Yeah, that's the way that movement should be promoted and advertised to kids, if you want to use those kind of technical terms. It should just be about play and fun and movement, and that's... what it should be. Like if a kid sees their parent doing burpees or lifting weights and they want to try a bit out and get involved yeah, absolutely. But it just, it shouldn't be the go to, right? Yeah, absolutely. Laura: Yeah. My kid has seen me do a downward dog and he like gets involved and we do the cosmic kids yoga. I feel like that's a slightly different thing because it's a, it's so gentle and b it's animal poses. I don't know. All right. So I got sent through loads of questions from listeners and I thought they were really fun. So I just thought we could go through them. I think we've touched on a bit of it already, but maybe you can just give me your quick fire answers.Michael: Sure. Yeah. Laura: So this is an interesting question that Gwen from Dieticians for Teachers sent in. She said she would like to know more about the messages in your formal training. I think we can take a good guess, but I guess what she's getting at is, like, what toxic messages were in your formal training?Michael: Unfortunately, when you're learning to become a personal trainer still so much of it is about weight loss, still. You'll get taught, right, this is what we're going to learn about nutrition and this is how you help someone lose weight. So that is still at the core. And I guess a lot of the training for personal trainers, in terms of nutrition anyway, It's still very like basic government guidelines, which you can take those as you will. Some recommendations are maybe okay, others not that helpful. The training for nutrition for personal trainers is so, so, so, so basic that I would encourage any personal trainer who has recently qualified and not done any further nutrition study from there to please sign up to another course and learn more because what you learn as a personal trainer at the basic level is just nowhere near good enough to work with clients in depth.Laura: I have a lot of thoughts about personal trainers and nutrition, but I'm going to keep them to myself! Michael: No, no feel free to talk about it! It terrifies me. And it's very rare now that... a lot of the people I work with have had personal trainers in the past. The large majority of them have had negative experiences, and it's quite scary that's now just the norm.And I'll ask questions of my clients in consultations whilst working together and they'll be like, Oh, I've never been asked that before. I've never even considered that. And it just blows my mind that these things are being missed out or neglected by coaches. But the training is just not there. Laura: It's so interesting that the focus, I mean, it's not surprising, but that the focus is still on body size and not like flexibility or mobility or like rehab or like any of these, which I'm sure they like get touched on, but it sounds like from what you're saying that the real central focus is not mental health or like overall wellbeing. It's here's how you try and get people shredded, which we know is like biogenetically, if not difficult, if not impossible for most people. Michael: Pretty much. Yeah. Like I'm sure... I don't want to call out every personal training course. Like I did qualify a few years ago now, but I know there's some personal training qualifications that are trying to shift that, but it is still a large majority.And that is why a lot of the coaches coming through now, it's still very much before and after photos, weight centric. Yeah, unfortunately. Laura: Well, it's good to know that maybe there are some shifts coming down the pipe a little bit and I guess it just goes to show why again, you need to keep, like, pushing these alternative messages.Okay. This I thought was a really interesting question. And so this person asked, is exercise truly necessary? I don't enjoy exercising, but I do move a lot during the day, running errands and running after a toddler, all while baby wearing a newborn. And then the follow up question is, and if it is necessary to exercise intentionally, what form of exercise is best for someone who wouldn't otherwise prioritise it? Michael: That's such a good question. And it's very nuanced as well, depending on the person's situation. I would say, I mean, no, it's not necessary if you're moving around a lot throughout the day. However, so many health benefits come from incorporating some form of like direct exercise that it would be really sad to not explore all the potential areas that people could incorporate exercise into their life that maybe might not be the mainstream approach, right? If you are someone who moves around a lot throughout your day, if you say running errands and your general movement and step count is actually really high, then you could argue that as long as you get your nutrition, right, you're doing pretty well.However, strength training. Every time someone comes to me, no matter what their fitness goals are, I try and incorporate some form of strength training that I can, but that can take so many different forms. Laura: This person is carrying a baby around! Michael: Right. Yeah, exactly. Which is strength training, right?Exactly. So it's... when I say strength training, a lot of people listening to this episode right now will automatically... they'll think, like, gym, barbells, dumbbells, heavy weights, and it can come in so many different forms and it can be with resistance bands, body weight, dumbbells, kettlebells, barbells at home. It can be like TRX, it can be like so many different ways that you might enjoy at some point. So don't just think, Oh, I'm not an exercise-y person. I've always hated it because there are so many different ways that we can incorporate exercise. That is a very vague answer. without me knowing much more about this person. However, if you can find a form of exercise you enjoy, that should be a priority because the health benefits are huge. Laura: I'm going to push back because this is my opinion, not necessarily based on scientific fact, but it does feel as though there is this tendency, and I'm also conscious of your bias as a fitness professional, that exercise is held up as the pinnacle of health.And it's like the one thing that we need to do in order to be healthy. And I'm not disputing that there are health benefits. I also am like curious about the magnitude of those benefits within the broader context of health and health behaviours, but also nesting that within sort of social determinants of health and like, how do we measure the effect size of exercise individually from, I don't know, sleep, other elements of mental health, community? I guess what I'm maybe trying to temper is like that there are so many, like, variables and factors that contribute to someone's overall picture of health and I appreciate that movement can be an important facet of that.Michael: Yeah, no I really like that point because it is so important and I think that's why it's important to approach exercise and hence why I said without knowing more about this person, it's hard to give an exact answer. I think it's important to look at all of those things in terms of context when you're trying to prescribe or recommend exercise to someone, right?Let's say that this person is, they're likely lacking in sleep right now at the moment, right? Because their life is very busy running around after small humans. If that person is exhausted and they have no free time at all. I'm not then going to say, right, you've got to go and exercise 30 minutes a day for three times a week, because it's just not going to be helpful. There's other areas of your lifestyle that we can focus on to improve your health. However, if there is a bit of wiggle room, if you have a bit of time, then maybe there are things that we could explore that you could quite comfortably fit into your day without it taking over your life like a lot of the fitness industry wants us to do. Laura: Yeah. I think that the, maybe the TL;DR there is you don't have to sweat it when you are running around after a small child and doing other, all these other things. But if it feels like it's something that you want to explore, and you're curious to give something a try, then yeah, you could have a think about some gentle movement or something, see how that feels and how that fits in the context of your life But yeah, it's tricky to prescribe something without knowing, yeah knowing someone's life and what they want to get out of it. Michael: So true and you're never gonna know if it was directly the exercise. It could be so many other things that then, yeah, that then causes the health benefit.I would just say, once again, like anecdotally, rather than looking at research, every person that I've worked with that we've tried to think, right, how can we incorporate exercising today in some format? The large majority of the time, everything else feels better and improves as a result.Laura: Yeah, no , it can, it has a knock on effect on like sleep and pain and like all these other things. So, okay. How can I move my body without shame and guilt driving it? These are two separate questions, but I'm just lumping them together, and then this, another person asked, how to find the joy in movement after a life forcing it?Michael: I think first of all, it's really important to, like, vet where you're getting all of your inspiration and information from is a really important one because a lot of the time, if we're following the kind of general societal recommendations when it comes to exercise and nutrition. It's always going to have quite a prescriptive image focused approach to movement.And if you can shift away, like what we spoke about at the start of this, you don't follow many personal trainers because you don't think that they're motivating or helpful to you. They actually just make you feel worse. I'm the same. When I constantly see gym bros. telling me that I have to lift weights X amount of times a week, and I've got to get shredded and have low body fat levels, it has the complete opposite impact on me. So if you can first of all vet where you're getting your information from, that is absolutely huge. And then, yeah, I guess also once again, it's not beating yourself up for having the more mainstream thoughts that you used to have. I know a lot of people when they're trying to shift into kind of taking a more intuitive eating approach or a more intuitive eating approach with like exercise too, as well as nutrition, we can sometimes feel really guilty when we start slipping back into older habits that maybe are slightly disordered.I'm just... like giving yourself a bit of leeway and a bit of space to grow and learn. I'm still doing that. I still probably get things wrong and have room for improvement, but I think by doing that, removing the pressure on yourself can be really helpful. Laura: Yeah. Two things that I might add to that are something that I've explored with clients as part of working on the relationship with food and body and movement often comes up as part of that, we might explore this idea of, what it feels like in your body where you've had a period where you haven't moved at all, right? Maybe it's because you're recovering from an injury or because you just were so burnt out with exercise that you just really didn't move. How did that feel in your body? Did you get any pain or did it feel nice to rest or what was that experience? And then also thinking about periods of your life where maybe you've been really deeply invested in fitness culture. And maybe doing the punishing exercises, maybe also getting injuries because of that, maybe getting ill a lot of the time, maybe losing your period, like all kinds of different things, like different experiences that you could have in your bodies.If you've got that framing of this is what no exercise feels like in my body, and this is what too much feels like in my body, then it can help you explore what some sort of happy balance might feel like. So that's something that I encourage people to think about. And I also just wanted to shout out Tally Rye's Intuitive Movement Journal.It's her book Intuitive Movement as well. It is isn't it? Clients have found that those are helpful resources for navigating stepping back from exercise and just exploring what rest feels like through kind of the framework of, or a similar framework to intuitive being. So if intuitive being resonates with you, then maybe Tally's work will as well. So I'll link to them in the show notes. All right, this will be our last question. And it is: I cut out all deliberate movement for a while, by which I mean, I walk to get places and that's it. I'd like to try some movement. and see how it makes me feel. But where on earth do I even start? Michael: Okay, once again, without a lot of context, this is very hard to give specific advice.So I would say think about where you would feel most comfortable exercising and start from there. So I know that for a lot of people, the gym environment can be incredibly intense and intimidating for many reasons. So if you think that maybe that feels a bit much and it's going to put you off. Let's write that off. Don't do that. So let's think, okay, maybe we could start some movement at home. Is there a form of exercise that you really enjoy? Do you like dancing? Do you like jump rope? Do you like bodyweight workouts? What is it that kind of you think, Oh, actually that sounds quite fun to me and start there.And then let's say that there's so many decent content creators online, depending on what you like that I could recommend. Feel free to reach out and just start from that point. If you're thinking that kind of back to my earlier point that, okay, strength training doesn't have to look like that in the gym. What can it look like? A set of basic resistance bands from Amazon for 10 quid, you've got a gym at home. Like you don't have to go to a gym. There's so many different ways that it could look start from that start from what gives you that, Oh, that's interesting. I might give it a try, and start really, really small and build from there and that's probably the best place to start. Laura: If someone hasn't done much movement other than, like, incidental daily movements for a while... there's obviously a lot of privilege in this question but I'm wondering if you would recommend like doing a couple of one on one sessions with a trainer, like a safe trainer that could help build up strength or make like a bespoke kind of program for someone or just help them with their form so that they... I'm maybe thinking of myself here, but I know that I have to be really careful what I do at home because I'm more likely to end up injuring myself just because of my like, specific needs and in terms of managing pain. And so what I've ended up doing... and again shitload of privilege in this but, I'm, after three years of pelvic girdle pain, I'm like, at my limit. So I've started seeing a physio one on one who does clinical Pilates. So it's like very much helping me build my strength, which I could do... like I was going to a barre class before that, but I was walking away with more pain, even though it was supposedly like a supervised class, like there were no adjustments. There were no like modifications for my body, like nothing. So I personally, I have found that trying to build my strength and reduce pain, like finding someone who's really specialised has been a game changer for me. Michael: Yeah, I would say... I was gonna say one of the benefits of COVID. That's not what I meant. I was gonna say for the benefits of kind of the lockdown that happened as a result of COVID is the fitness industry got pushed forward by about five to ten years in terms of the way that it can support people, especially on a tighter budget as well. There are now so many... Laura: oh, you mean like online?Michael: Online support, right? Because I know that personal training is an investment for a lot of people. It's not a cheap route to go down. If you can afford it, absolutely, yes. If you can have the support of a professional who's got years of experience, it does speed things up and it makes things a lot more kind of personalised and perhaps more enjoyable.However, the way that the online fitness space works now, it has improved massively. And for, kind of, much cheaper options, monthly options, you can get the support of a trainer online that will be able to do a video call with you to check your form. You can send them videos. Like I speak to people that follow me on Instagram all the time and they'll ask me a question. I'll say, just send me a video of you doing the exercise. I'm happy to give you some pointers. If you find people online that are truly passionate and care. If you send them a video of you doing an exercise, they'll happily help you out. So there are so many different routes that you can go down to get the support that don't cost a huge amount of money.Once again, even the cheaper forms are still an investment, but there are different routes that you can go down now. Yeah, absolutely. Laura: Yeah. Okay. I appreciate that. And then just to add to that, like I've done some sessions with this, like a one on one physio. And now I'm going to, like the group classes as well.So it's, I think, helpful to just... if you have any kind of rehab that needs to be done, or if you just want to feel more confident in the movements. Cause like Pilates can be tricky if you don't know exactly what you're doing to just be thrown into a class situation. So it's helped me at least like doing a few sessions, even though I've done Pilates before, but just having that refresher to then go into a class setting, it's just helped build up my confidence a little bit. And it's also, I'm not going to like this, like a gym. Sorry, I said that with so much disdain, realizing you're a personal trainer! Michael: Ugh, these disgusting personal trainers!Laura: It had, like, a visceral effect. Michael: It's so funny though, isn't it? That it's so sad that's what the fitness industry has become. And especially as a trainer who is one, every time I meet someone and they'll ask oh, what do you do? I have to like preface, Oh, like I'm not like the rest of them, but I'm a personal trainer, like it's really sad.Laura: I do the same thing, but with nutrition, I'm like, I'm a nutritionist, but I'm not that kind of nutritionist. Michael: I'm not going to sell you a cleanse, I promise! Laura: All right, Michael, this has been so fun to have you on and just shoot the shit about fitness culture. But at the end of every episode, my guest and I share something that they have been snacking on. So it can be a book, a podcast, a TV show. Yeah, just about anything that, that you feel like. So what are you snacking on at the moment? Michael: So one podcast I'm listening to, this is going to be a bit of a curve ball, there's probably quite a few people, especially in the UK listening to it... I don't like politics because in this country, it's so gross the way that politics is at the moment, but I like being well informed in what's going in politics because it has such a huge knock on impact to like societal changes.Laura: I was really glad that you said that, because when you said I don't like politics, I was like, argh where is this going! Michael: no, I do, but I get so infuriated by it because it's so important and I feel like coaches need to be informed because it does directly impact everything we're doing with our clients in terms of like socioeconomic impacts and food access and education and stuff, so I've been listening to The Rest Is Politics podcast. I don't know if you've ever listened to it. It's actually really good. It's Alastair Campbell, Rory Stewart, Labour side, Tory side. They chat about all daily topics and I quite like that they disagree and argue. I, depending on what you think about those two individuals, I'm still very mixed on what I think of them.However, I think it's very good to have a nice balanced approach there. So that's the podcast I've been listening to a lot recently. I really like it. In terms of food. So I can't eat eggs and dairy. I'm lactose intolerant and intolerant to eggs as well. Laura: I think you were probably going to wait for like the bummer, yeah, for me to be like, oh, that's such a bummer. But I'm vegan, so I don't eat any of that stuff . Michael: Yeah, I know. I was saying, I'm like the worst gym bro ever. I can't have whey protein shakes and I can't eat like 12 eggs a day. So maybe that's another reason they all hate me. So I found a vegan chocolate bar from Aldi. I don't know if you've ever had it. I don't think so. What? So they do milk, in quotation marks, milk chocolate and a white chocolate. They do a dark chocolate too, but a lot of vegan chocolate is dark. Anyway, so I haven't even tried that but their milk chocolate and their white chocolate is so good .And i'm getting through far too much of this chocolate at the moment but I finally found a chocolate bar that tastes amazing. They're by far the best chocolate you can get that's vegan, hands down Laura: That sounds really good, but we don't have an Aldi near us. We have a Lidl. Michael: So it's worth commuting. Laura: Oh, is it? Michael: Yeah. Yes. Laura: Okay. Might have to go to the dark depths of Dalston too.Okay. So I'm actually going to do a podcast also, and it's Getting Curious with Jonathan van Ness, which everyone knows who JVN is, obviously. He's amazing. Yeah, love them. There was like a bit of a thing a while ago where on their Netflix show they talked about like food addiction and it was just really problematic and icky and fatphobic. But JVN seems to have really been on a bit of a journey with this stuff and the latest, well, at the time that we are recording, they've just come out with a podcast called... well, an episode of their podcast Getting Curious called What's the Cultural History of the Calorie? With Dr. Athia Chaudhry. They're a fat activist and it's immersed in like fat politics. So, yeah. I would recommend going and giving that one a listen, because yeah, JVN has been on a journey, it seems. Michael: That sounds awesome. And that is my afternoon listening. Thank you very much. Laura: I will link to all of those things in the show notes.Michael, before I let you go, can you tell everyone where they can find out more about you and your work? Michael: Of course, so, most of the content I create is through Instagram, so it's just my name, which is very hard to spell, so probably best if you check it in the show notes. Laura: Yeah, I will link to everything.Michael: Thank you very much. So it's @MichaelUlloaPT, and that's on Instagram, Threads, Twitter, TikTok, whatever platform, it's all the same. Laura: All right, Michael, I will make sure that... It's all fully linked in the show notes so that everyone can find you. Thank you so much for coming on and yeah, like I said before, shooting the shit with us about fitness culture was really fun.Michael: Thank you so much for having me.OUTRO:Laura: Thanks so much for listening to the Can I Have Another Snack? podcast. You can support the show by subscribing in your podcast player and leaving a rating and review. And if you want to support the show further and get full access to the Can I Have Another Snack? universe, you can become a paid subscriber.It's just £5 a month or £50 for the year. As well as getting tons of cool perks you help make this work sustainable and we couldn't do it without the support of paying subscribers. Head to laurathomas.substack.com to learn more and sign up today. Can I Have Another Snack? is hosted by me, Laura Thomas. Our sound engineer is Lucy Dearlove. Fiona Bray formats and schedules all of our posts and makes sure that they're out on time every week. Our funky artwork is by Caitlin Preyser, and the music is by Jason Barkhouse. Thanks so much for listening.ICYMI this week: "I'm Not Your Target Audience" - How Do We Get Men To Care?* Reclaiming our Appetites* MORE Teens, TikTok, and some Good News for a Change.* Dear Laura: I'm freaking out about what my kids eat - but is it really about them? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit laurathomas.substack.com/subscribe

Michael Sullivan is a property management entrepreneur who has grown his business to 275 doors. Join property management growth experts Jason and Sarah Hull as they chat with former DoorGrow client Michael Sullivan to learn about his experience starting and growing a property management business. You'll Learn [01:44] Getting started in the property management industry [07:49] Growing a property management business [24:01] Having support and feeling fulfilled in the business [28:13] Growing and scaling to the next level Tweetables “To go faster, you need to invest the currency of cash if you want to get more of the other currencies and to get the business to the next level.” “If you're not making mistakes, you're not learning.” “A lot of us business owners, we have a bit of ego.” “Being an entrepreneur can be one can be very lonely, and it is really important to have people in the same industry kind of in your village.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: To go faster, you need to invest the currency of cash. If you want to get more of the other currencies and to get the business to the next level. Welcome DoorGrow hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management, growth expert, Jason Hull, the founder and CEO of DoorGrow, along with Sarah Hull, the co owner and CEO of DoorGrow. [00:01:09] Now let's get into the show and our guest today is Michael L Sullivan. Michael Sullivan is here hanging out with us. He is a client of ours and of Sullivan property management. Did I say that right? MLS ullivan property management. All right, your initials. Got it. And Michael, welcome to the show.  [00:01:33] Michael: Thank you. Thank you very much. Good to be here.  [00:01:36] Jason: We're glad to have you. So we've really enjoyed having you in our program and it's been really amazing seeing your progress. So maybe to kick things off, let's start with talking about how you got into this crazy industry of property management. Like you woke up when you were like maybe five years old and said "property management is the thing for me" maybe. [00:01:57] Michael: Yeah, like every little boy and girl, dreams about being a real estate agent or a property manager.  [00:02:03] Jason: It's right there next to veterinarian and firefighter. [00:02:06] Michael: I think that's right. That's right or professional baseball player so, I left the teaching profession in 1993 and became a real estate agent, a general brokerage real estate agent here in the Greater Research Triangle region of North Carolina, and I did very well. I, on average, sold anywhere between 5 and 15 million dollars worth of real estate when our average sale price was $150,000. Yeah, we were shifting a lot of shacks, and it was a good life. And for the 15 or so years between 1993 and the Great Recession of 2007, 2008, my biggest fear was, "what is going to happen when the market flips?" Because inevitably, real estate flips. It goes from a boom market to a bust market, a buyer's market to a seller market. And so during those years, I socked away cash. When the market crashed in 2008, I had an inventory of 40 general brokerage homes that were for sale. I had clients that were still moving to Massachusetts or Plano, Texas, or Austin, or Seattle, you know, to the other tech hubs in the United States and my clients were like, "All right, problem solver, what are you going to do because we still have to move?" And I was like, "we're going to rent them." And so with an Excel spreadsheet and time, because I had lots of time then I started managing property and in the first year, our goal was 30 homes and we had 50 and it was me and one part time assistant and an Excel spreadsheet. Well, after about 18 months, that didn't work anymore. So I went out and I found what I thought was a reasonable property management software. And then over the course of the next decade or so, we got up to 110 properties or so and things were good, you know, we were chugging along and profits were good, but I really didn't know what I didn't know, I kind of. [00:04:22] Believe that once you had an Appfolio or a Buildium on board that you had won the day and that your business was set and you know, it should be easy. And I soon discovered when I got to 115 doors and just kind of got stuck there that the business wasn't growing the way it should be. And I couldn't figure out why. I was on Facebook one day. And there was this guy, Jason Hull, talking about this company called DoorGrow. And so I did the click, click, clickety click. And then I started listening to some of his podcasts and I started researching DoorGrow and I thought, " huh, this guy knows a whole lot about this industry and maybe this is someone I need to engage with." and so that's how I came to DoorGrow about two and a half years ago, I think.  [00:05:21] Jason: And now you're on one, you're on one of the podcasts.  [00:05:24] Michael: I know.  [00:05:25] Jason: So what challenges did you start to realize you were dealing with at the time? Because generally, you've made a ton of changes in your business since working with us, and you know, it's been impressive to watch. What do you feel like were your challenges at that time? Like, what did you not know that you did not know? So  [00:05:43] Michael: I knew that there were currencies in a business, but I didn't know that there were five of them. And I knew that I was working really hard. So the currency of effort was there. Yeah, my bank account showed me that the currency of cash was there. Yeah, the currency of focus was really lacking because I was still doing a lot of general brokerage and still trying to do property management. The focus of energy was lacking. Because it was draining me kind of going in these different directions. And then there was a lack of time. I didn't have time to take off. I didn't have time to turn it off because it was me and an assistant property manager at that time, I was still doing all of the day to day operations and the round pegs in the round holes work. And figuring out those currencies and how to better divide them and focus on them was one of the things that I didn't know and that once I could put a name to it and once I could focus on fixing where there was a deficiency, then I kind of won the battle. I felt, you know, before you launched all of your different systems to help property managers, I listened to you and I went out and got Lead Simple. I went out and got Property Meld and kind of brought them into the fold. And I recognize that those tools, which you paid dearly for using these outside vendors, really bring you a wealth of time that didn't exist before. So I was able to capture that currency and by extension, the currency of effort was able to kind of tamp down because I had systems now in place to deal with the endless maintenance requests that having a practice that. Goes up over a hundred percent in growth is going to require.  [00:07:48] Jason: So let's talk about that growth. You had mentioned you'd gotten up to maybe, where were you when you started with DoorGrow?  [00:07:56] 118. [00:07:58] 118. Okay.  [00:07:59] And where are you at right now?  [00:08:01] Michael: 275.  [00:08:03] Jason: I mean, it sounds like you had pretty decent profit margin before. Well, what was that? If you don't mind sharing, what is it? [00:08:09] Michael: So, on a gross per door basis, when I joined DoorGrow, we were right at about $122 a door per month. Yeah. And today we're up. $153 and 82 cents per door per month.  [00:08:26] Jason: That's very specific. So, you know, your numbers, which is good.  [00:08:30] Michael: Well I try. Yeah. And year over year revenue increases from last year is up 58.7%.  [00:08:36] Jason: Wow. That's awesome. So money's up. So the cash currency has improved the focus currency. Have you been able to do less in the business and narrow your focus?  [00:08:48] Michael: Yes. So Saturday is my benchmark. I call it my Zen day. And if Saturday can be a Zen day for me, where I don't feel like I have tasks that I have to accomplish, that I can do the things that I want to do, still working on the business, not in the business, then I feel like the week has been a win. If I feel like there are pressing tasks that I have to work on within the business on Saturday, then I feel like the week has not been a win. So if Saturday is Zen, if I come into it feeling very kind of centered and relaxed, then I feel like things are in balance the way they should be. [00:09:34] Jason: So what percent profit margin are you operating at now?  [00:09:37] Michael: So coming into this year 2022, we were at 27 percent profit margin, but a lot of that was really underpinned by very robust general brokerage sales. I made a concerted effort this year to pour gasoline on the fire to really grow the business. The goal is to be over 300 doors by the end of the year. So we're 25 away. Nice. I'm pretty sure we're going to make that, you know, that goal. But our profit margin right now is at. 11 and a half, 11 and three quarters percent. So it's down substantially, but that was deliberate.  [00:10:14] Jason: Got it. And is deliberate because  [00:10:18] Michael: why? [00:10:18] Because we're making an investment in people. We're making an investment in systems and we're making an investment in things like vehicles and computers and marketing.  [00:10:30] Jason: Yeah. So I think that's an important thing for business owners to recognize that. To go faster, you need to invest the currency of cash if you want to get more of the other currencies and to get the business to the next level. And you can grow faster if you have thinner margins, which can feel a little more dangerous. And you know, if you're investing into the growth of the business and into the future, but you know how to add doors, so this isn't a concern for you. [00:10:57] Michael: It isn't. My bookkeeper and my accountant were a little apoplectic until I told them like, this is where we're going. And what I said to my bookkeeper was before the great depression of 1929, Ford motor company was the preeminent motor car company in the world. They had an amazing market share. Then the stock market crashed and the economy tanked and Ford circled the wagons, folded their tents and got very conservative. They scaled back. General Motors, by extension, said, "ah," and they saw it as an opportunity and they poured gasoline on the fire. And for the next 70 years, General Motors was the dominant car company in the world. And so I kind of am using that model.  [00:11:47] Jason: Yeah. So, now a lot of people listening to this might think, well, cool, I can get Property Meld, I can do something, you know, get something like Lead Simple, or we have a better tool now, which is DoorGrow Flow. " I can go and get tools and maybe I can do it on my own." Because I think this is the challenge. A lot of us business owners, we have a bit of ego. " I've made a lot of mistakes in the past and we think I can do it myself. Maybe if I watch enough YouTube videos, listen to enough podcast episodes, I can figure it all out on my own. I don't need DoorGrow or I don't need it." Like, so what would you say to people that listening to this or thinking that?  [00:12:22] Michael: So I would say to them, when I think back to me and one assistant and 115, 110 doors and good profit margins. You know, and a good life. I was in a really kind of felt very isolated and very alone I didn't have other friends or colleagues in the property management space that I could talk to. I felt like I was the only person in the world that was doing this, and once I joined DoorGrow and made very valuable, long lasting friends within the organization that I can call on off hours to discuss specific problems related to property management, that burden of feeling on my own and alone disappeared. Being an entrepreneur can be one can be very lonely, and it is really important to have people in the same industry kind of in your village. And that's why that's 1 of the benefits of joining DoorGrow is that I can call friends in Texas, Idaho, Pennsylvania, California and say, "hey, I've got this going on. What do you think?"  [00:13:40] Jason: Yeah, and I think you know, that's a testament to you is that you've been such a contributor that in the mastermind that it's allowed you to connect with all of these people, you know, there are some people that join the program and they still stay somewhat isolated. They're like, "I'm going to watch videos I'm going to learn stuff and do my own thing and they maybe don't get some of those advantages or benefits But I think that's key. [00:14:02] So yeah Yes. I mean, Sarah, when she had her property management business, I imagine you experienced some of the same sort of things of thinking it's. You know, this is, you're the only one in the world doing this. You're on your own.  [00:14:17] Sarah: Yeah, very much. And especially in the area that I was in I was always different and I just kind of do things differently and I think differently and oftentimes people are like, she's nuts, like, why would you do that? [00:14:29] Even my mom, sometimes she's like, are you sure you're going to do that? Like, are you sure? Like, I'm kind of nervous. But I've just always done things a little differently. And it's so, it is really lonely. And I think the mindset that I had back when I was in Pennsylvania versus, you know, the mindset I have now really has a lot to do with who you surround yourself with and that can. [00:14:53] I think it can just give you hope and it can show you like, Hey, like, I'm not so crazy. Like I've got it. Like I've got it figured out and I'm like doing the right thing and I'm on the right path. And you know, it feels right, but sometimes it's just, you know, you're like, Oh, is this really right? [00:15:07] Because it feels good to me, but man, everybody else is doing something so different.  [00:15:12] Michael: Yeah. And that's another benefit that DoorGrow has given me is. I now have the ability to say no. So I am the business development manager. I have someone in charge of maintenance. I have someone in charge of tenant experience. [00:15:28] I have someone in charge of ops within the office. They color within their lines and we are good. My job is to go out and build the business to work on the business, not work in the business. And until I joined DoorGrow, it didn't matter what came my way. Property wise, I was going to take it last week. I turned away more properties than we took on because they weren't the right fit. [00:15:53] And I have a very nice conversation with prospective clients about qualification and that they're qualifying us to make sure we're a good fit for them. But at the same time. I'm qualifying them, their mindset, their properties, their attitudes toward spending money, their attitudes toward maintaining their properties, and if those things don't align with what we believe here, that housing is a human right that people have the right to live in nice homes that are maintained and maintained properly, then We're not going to accept the business. [00:16:30] We're also not going to accept people that are rude, mean and abusive. Because I've learned since kind of letting the stress of being a general brokerage real estate agent. Slip away that there is plenty of good business out there and that it's more important to have the Philosophical fits with the business than it is to take just any property no matter what the cost  [00:16:57] Jason: Yeah, your ability to say no in business Gives you a business that you feel you can easily say yes to each  [00:17:03] Michael: day. [00:17:04] That's right.  [00:17:05] Jason: Yeah. Yeah. It's nice to not have to wake up and go, man, I really don't want to do this today. And that's because we're setting boundaries for ourselves and that boundary in those containers allow us to create a business that we really like to be inside.  [00:17:20] Michael: Right. That's correct. Yeah. Now,  [00:17:22] Jason: when you came. [00:17:23] To us DoorGrow initially. I remember like you really had this mindset that you, and now you're doing business development, you had mentioned, you really believed you were the operator. It all was on your shoulders to operate the business, do operations, and you were good at it, but you believe that was your primary gift, I think, to the business and what your contribution needed to be. [00:17:45] And and I know you had some conversations with Sarah and some shifts in that, so could you touch on that a bit?  [00:17:51] Michael: Yeah well, control freak and always have been a control freak. I know one of those. You know, own it. And to a certain degree, I still, I observe. I trust and verify, but I don't get involved. [00:18:07] My number two said it best the other day. He said, yeah, with you. I only have to come to you if I know it's a problem that I can't solve. So I have kind of empowered the people who work with me to color in their lines. And when they are in trouble, come here and ask and we'll figure it out. I have also given them permission to make mistakes because if you're not making mistakes, you're not learning. You're static, and I let them see that I make mistakes and that I admit when I make a mistakes above all else. I expect complete honesty here. We make mistakes. We admit our mistakes. You know, if we have to eat it because it's a financial error that we've made well, then by golly, we're going to eat it because it was our mistake. And we come by it honestly the empowerment of becoming a business development manager is I don't have to worry that the books are balanced every week because I know that there is someone who I've paid good money to who has balanced the books and they can't hide because the system has been created where I can see that it's been uploaded into the accounting software and that the books are in balance. [00:19:25] I can verify that the financial piece of the puzzle in the business is running properly because I get a report monthly from my accountant and my bookkeeper that says, "this is where we are. This is your cash flow. This is your profit. This is where you're spending a lot of money. Are you okay with that?" and I pay them good money to do those things. I have a maintenance coordinator who deals with maintenance and on the Property Meld dashboard, which I log into every morning. I can see the tasks picking off or I can see things progressing and I can see that we're handling our maintenance requests in 3 to 4 days on average and that's fine. I've also told him to maintain his sanity because he's a bit of a control freak. If it's after hours and it's a garbage disposal in a dishwasher and it's after 5 o'clock, you don't need to deal with that today. If it's a leak and we have a catastrophe, then you deal with that after five o'clock, but the small stuff can wait until tomorrow. [00:20:26] It's still important. It's important to get it done and move it off our plates, but you don't have to deal with it when you need to be spending time with your children at soccer camp or baseball practice or whatever he does in the evening with his four kids. And then my other teammates, I can see that they are moving their tasks forward and that I don't have to worry about the job that they're doing. And that's empowered me to go out and find the right properties to bring into the practice for us to manage.  [00:20:56] Jason: You know, one of the gifts that I see in you, which I think really sets you apart, Michael, is coming into the program you're really intelligent. You know this. You're an intelligent guy. I think everybody can pick that up just by hearing you and listening to you. But even though you're intelligent, you have humility about, you know, and this openness to learning. And you've come into the program and you just started to do stuff. Like you tried it out. You experimented, and you allowed yourself the time to prove whether or not it would work or not. And some of the times we get clients that are intelligent, but they're not humble and they're usually the biggest stumbling block to themselves. So I just wanted to point that out. I'm curious what Sarah's experience has been of you as well, because she worked closely with you on like reviewing some of the systems, reviewing your team assessing you and some of this kind of stuff. [00:21:54] Sarah: So, yeah, I think I definitely agree with what you just said about being open to learning and trying things just a bit differently. And I think a lot of entrepreneurs, we do things differently. We're okay with that. But sometimes if it's not our idea, then we're like "I don't know if I want to do it because I didn't think of it." right. So, I think Michael is, he's open to thinking differently. He's open to trying things out and implementing a system. He'll do the research. He doesn't just, you know, blindly jump and he's like, well, Jason said to do this, so I'm going to do it, but he'll do the research and he's very thorough. And I really appreciate that about Michael. He's all into the details and he knows exactly what's going on in his business. He's not like, "Hey, I'm just going to kind of sit back and like, let the team run everything, and then I just, I'm going to cross my fingers and hope and pray that everything is going well, right?" like we know that it's going well because you're not the one who's doing it, so you've been able to get out of the hot seat in a lot of different ways and get yourself more into the things that you actually enjoy. because I remember that conversation with you about the operations and you said, "well, I really just, I love to sell" like, okay, then let's let you sell. Like if you're doing things in the business and you're just holding on to them going, "well, I have to be the one to do this." I think it's really common for us to think that like, " well, I own the business, so I have to do this piece or I own this. And it has to be me. It doesn't always have to be you." do you have to know what's going on? Absolutely. Do you have to have the right people on your team? Absolutely. And do you have to set it up so that things can run smoothly? Absolutely. But do you have to be the one who's actually like doing the work? Right. And I think that's one of the biggest shifts that I've seen in you is that you're able to say, okay I don't have to do this part and I don't want to do this part. [00:23:54] This is where I want to be. So I'm going to move closer to this and I'm going to figure out how to get these pieces kind of offloaded.  [00:24:01] Michael: Yeah. Yeah. When you taught me how to write R docs and after I had a disastrous hire two years ago, disaster, and I had to fire someone, something I'd never had to do, but it was my fault. There was nothing wrong with the person I hired. She was just the wrong fit for the job. And then we sat down, we wrote R docs. With detailed job descriptions and parameters and that made bringing on the next person who is now in that role a dream because she fit the culture. We knew what her profile was before she even interviewed with us. We knew who the person was and then she walked through the door and poof, there she was. And that's one thing I didn't know. I just thought you could teach someone into a position. Well, you can teach skills, but you can't teach the human touch. And that's what I had missed with the disaster, the mistake that I made.  [00:25:02] Jason: Yeah. You'd learn some concepts from us, like the three fits , mapping out R docs. One of you explain what R docs are for those of us. This is DoorGrow speak here.  [00:25:11] Sarah: I know it is. So an R doc, it's just basically a fancy word for job description. We call it R doc because every section on it starts with 'R.' [00:25:20] Jason: There you go. So the ultimate job descriptions. Awesome. So, yeah, so all of these little pieces and systems and mindsets that you've installed in your business have really, I think, primed your business for a lot of growth. Like, where do you see the business going in the future?  [00:25:37] Michael: Oh, so that's another thing I learned. And it was at, I think, Austin at the Austin meeting. And it was you said it in the first like two minutes and I got my nugget and I was like, okay, I can go home. I got it. You said, don't limit your growth. And I had constantly said 200 doors, 200 doors. That's where I'm going. That's where I'm going. And you already passed that now. Yeah, you said that. And I was like. " Why would I create like this false ceiling that I'm going to just bump into and stop at?" Yeah. So, ultimately, and I'd like to retire in the next 10 to 12, 15 years, maybe. We're realistically thinking in the neighborhood of 1,000-2,000 doors. Yeah, people have started to come a calling about, "Hey, do you want to sell your business?" And the time is not right. Some of the financial offers that have been made already are very intriguing. Yeah. But then I'm like, " what will I do with myself?" You know, "what's the next iteration?" And I think until I figure that out, we're going to just stay the course. [00:26:47] Jason: Yeah, I think that's one of the key things that I think a lot of people realize in the program that if it was just about money, then maybe you'd cash out, but it's not just about money, right? There's other things we want out of our experience here on this planet. And that's something else you got a lot of clarity on is what really personally drives you, which allowed you to build the business and the team around you so that you really could move into those plus signs and out of those minus signs. [00:27:13] Michael: Yeah, so the key is I went to the Netherlands in May to see art because it's my thing. Cool. And a little ostentatious to fly to Europe to see Vermeer, but I did it. And I was gone for a good long time and things here chugged right along and it was beautiful. And I knew then that we were doing things right, that I could leave and not be here for 10 days, and the business continued to operate. I continued to watch and check in. But they didn't need me.  [00:27:49] Jason: And how's that different from before you came to DoorGrow?  [00:27:53] Michael: Oh my God. Like the first meeting in Austin that I came to, I had I came really close to not coming because I was like "I can't leave. I just can't leave. I can't leave them." I was wrong. I was wrong and I went to Austin and I went to Vegas and you know, things were good. Yeah.  [00:28:12] Jason: Yeah. So awesome. Well, it's been really cool to see your progress. We really appreciate. Seeing your growth and yeah, there's no question in my mind. A lot of people hear you say, Oh, maybe a thousand, 2000 doors. And they probably think: this guy is ridiculously off his rocker that he could just believe that and the audacity to have that mindset. And I'm sure when you first came to DoorGrow, a thousand doors was like, probably magic, some magic, like pipe dream in the ethers that you would never even consider. I don't know, but. [00:28:40] Michael: 300 seemed unimaginable.  [00:28:43] Jason: Yeah, but now it seems very doable. And you're aware of the DoorGrow code and like we've got clients breaking a thousand doors. We've got clients doing it. And there's no question in my mind. You could easily do this in the next two to three years. If you really wanted to easily.  [00:28:57] Michael: Yeah, I work my golden 100. That's another thing I learned at DoorGrow. To have people that are valuable people that I love and care about that. I have to touch every 30 days because they love and care about me and buy it. So they send business. They ask questions and we share information. Yeah. And for that, I'm indebted to you.  [00:29:19] Jason: Not at all. Well, great. Well, yeah we, it's been really awesome seeing your growth. So cool. Anything else we should ask Michael? We've got him hanging out here with us. What's next for you, Michael? What's next?  [00:29:31] Michael: Well, once we go over 300, then the double it again. [00:29:34] Jason: Yeah. So what I see next for you is you've got some of the systems installed. And then I think what it will be next is to level up your three key systems of. People, process, and planning and maybe starting to build out even a little bit more of that executive team. I think you've got a good team going now and I think then what would be next would be maybe starting to acquire you'll be the one eating up some of these other companies. And I think, maybe working with us on acquisitions, and I think that'll be the quick pace to grow. And that also bring you really great people too, if you want. So [00:30:07] Michael: we're working on two. They're on a slow simmer because companies that I'm looking at have some. Bookkeeping issues. We'll just put it at that.  [00:30:17] Jason: It's an opportunity. Yeah. Always do.  [00:30:20] Michael: So we may be able to fix the problem. Definitely.  [00:30:24] Jason: You'll be able to fix the problem. Yeah. Yeah. Very cool. Well, I'm excited to see what you do in the future. I know like, I've seen companies hit all these different stages. I know. We know the challenges that you're going to hit at these different stages in growth. We're here to support you. And for those listening here on the DoorGrowShow if you are struggling, you're hitting some of these sticking points, these milestones, you're stuck in your mindset, whatever. Be like Michael, be like Mike, not Mike, but all the reference, be like Michael and you know, talk to us and let us map things out with you and see if we could help you out. We'll be sure with you. So, well, Michael, appreciate you coming on the show. We appreciate having you as a client and grateful for you.  [00:31:09] Michael: Thank you. Thanks. I appreciate it. Have a good day.  [00:31:12] Jason: All right. Cool. So, if you're wanting to get into our free community of property management entrepreneurs on Facebook, go to DoorGrowClub.Com. We have some free gifts that we want to give to you. You'll provide your email as you join the group, we'll give you an, a drip, an email drip of some free gifts, including a fee Bible and some vendors that you can use and some different tools just to help you help yourself and help the industry level up. [00:31:42] And we, and if you provide your info, we will also reach out to see if you'd like to have a conversation with us and see if we could help you grow your business, which the answer usually is. Yes, we can. So we would love to support you and help you out. And if you're wanting to test out your website, which you think might be amazing, go to doorgrowcom/quiz and test your website. A lot of times, this is a great gateway to realizing that you have some blind spots in your business. When you see that your website is leaking lots of money. Which is something we can help you out with. There's a lot of other leaks you can't see, and this might crack your mind open, get you to be open minded like Michael and allow us to be able to help you and support you and make a lot more money, have a lot more freedom and make a bigger difference out there in the marketplace. [00:32:34] We appreciate you listening to our show. If you could do us a favor and leave us a good testimonial on, if you're hearing us on iTunes or like, or comment all of these things help us out and help us get the message out to enact our vision and our mission for this industry of helping it level up. [00:32:50] And until next time to our mutual growth, everybody, bye everyone.  [00:32:54] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!  [00:33:21] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Michael Bungay Stanier is the founder of Box of Crayons and author of The Coaching Habit who also recently published his latest book called How to Begin: Start Doing Something That Matters. He discusses his process in writing this book and discovering that a worthy goal has three characteristics; it is thrilling, important, and daunting. Michael shares his insights on the steps to finding your worthy goal and challenging yourself to unlock your greatness.  HIGHLIGHTS A worthy goal is thrilling, important, and daunting Draft your goals: Name the prizes and punishments Change: Fix what's broken or amplify what's working? Get motivation by understanding your worthy goal   QUOTES Michael: "We unlock our greatness by working on the hard things. It's not by winning. It's by working on the hard things. And so, the daunting is the work that's needed where you step out your edge and you're like, look, I'm pretty accomplished and I'm okay with my talents, and I know some stuff, but this is making me sweat a little bit." Michael: "It's better when you draft it. The first draft is not going to be as good as the second draft is not going to be as good as the third draft. Don't get seduced into thinking your first goal is the real goal." Michael: "If your brain spends too much time focused just on the outcome, it's actually demotivating because your brain is just not that good at telling the difference between what's happening and what you're imagining is happening. So if you spend your whole time visualizing hitting your quota or buying your house or whatever, at a certain point your brain goes, well, done. It feels like you've actually got this and you lose some of your motivation. It's bizarre but powerful." Find out more about Michael in the links below: LinkedIn: https://www.linkedin.com/in/michaelbungaystanier/ Personal website: https://www.mbs.works/ Corporate website: https://boxofcrayons.com/ More on Andy: Connect on LinkedIn Learn more at AndyPaul.com Sponsored by: Revenue.io | Unlock exponential growth with an AI-powered RevOps platform | Revenue.io Explore the Revenue.io Podcast Universe: Sales Enablement Podcast RevOps Podcast Selling with Purpose Podcast

In this episode:Mike and Ed continue their discussions on what the original Avengers are doing in their post-Avengers lives. For instance, Thor now seems to be working for the American military in Vietnam. Was he drafted? Or did he consider deserting to move back to Asgard? Will super-powered individuals become the next weapon of war? Will heroes sell their services to the highest bidding country? Is there a way to stop the escalation, or is this just the new way of the world?Behind the issue:Stan had Thor appear in Vietnam, but never had him coordinating with the US military. Comic books in the 1940s were practically US-propaganda, and the heroes were expected to be fighting against Hitler. But in the 1960s, the writers mostly kept the heroes out of real-world conflicts. It wasn't until the modern era that writers considered the possibility of heroes fighting in Vietnam.In this issue:Thor is spotted in Vietnam and shot by a hunter. The hunter then comes across an ancient temple and, through the machinations of Loki, the hunger takes over the Destroyer armour with his mind. The hunter pilots the Destroyer in a fight with Thor. Meanwhile on Asgard, Loki is imprisoned.This episode takes place:While people are still adjusting to “Cap's Kooky Quartet” - and missing their “old” Avengers.Assumed before the next episode:People are wondering what Thor was doing in Southeast Asia.Full transcript:Edward: All right, Mike. Continuing our, where are they now? Series. We now know where Thor has been for the last couple of months.Michael: Yeah. He's decided to take his retirement to Vietnam.Edward: Vietnam, you'd think with his hair like that, he would've been a conscientious objector, but no Siri, don't stereotype Thor. He is right there with the military. Right in the thick of things.Michael: All kidding aside, it's pretty wild that this man, or this being Thor, who's associated with, the American military and the military industrial complex has gone to Vietnam, clearly on behalf of the Americans, and intervened in international affairs. Clearly as an agent of America, or at least on America's interest. Yeah, for sure. Doesn't that make it a little more complicated over there? Is that what we wanna,Edward: I think it makes it less complicated. ANCO was clear before that the Avengers were an American superhero organization that had American interest at heart. Their leader was Captain America. It's pretty clear that they were into America and hey, they were supported and run by, stark Corp, who are like basically a big American company. They're an American team now, Thor leaves the American team that he leaves the Avengers.What does he do next? He doesn't go back up to Asgard. He goes and works for American interests in a non Avengers way.Michael: It seems a little, isn't it? I don't know. I find it uncomfortable that we would entrust, international diplomacy to, well, it's costume adventures.Edward: Well, it's not diplomacy. He's not negotiating peace treaties. He's swinging his hammer and like on a hitting North Vietcong.Michael: But this. But there's consequences to that though. Like aren't you worried that that's gonna lead to say, other Superpowered beings that might be drafted in by the Vietcong to fight American soldiers overseas in,Edward: do the Viet Cong have a superhero?Michael: Not yet. Well, there you go. Not yet, but there you go. But you don't think the Chinese might have an interest in this. Have a say in it.Edward: That's, that, that is true. We know the Chinese do have their own superheroes. Radioactive man. Radioactive man. So, you're saying it's an escalation of the conflict. And maybe this means China sends in radioactive man, but China is not like US is directly involved in that war. China is only indirectly involved, right? They have plausible deniability. If they send in radioactive man, there goes their plausible deniability.Michael: Well first of all, there hasn't been a military briefing or any kind of official report in that Thor is going there on the direction or in service of the United States. So, I think the United States is trying to do this if they're doing it under some kind of plausible deniability scenario, and China could do the same thing, like we don't control radioactive man.He's just a guy who believes in our values and that's why he is fighting. He's just showing up and fighting. Showing up and fighting, and that's why he is fighting the Americans in Vietnam.Edward: But there's no Chinese soldiers in the vie, they're supplying them with weapons and stuff, but they're not supplying them with people I don't think. Here's the question. That's an ex escalation though. Here's, here's the question. Was Thor just drafted? Maybe he was just part of the draft.Michael: I don't know. Well, he might have been, but thatEdward: his number came up and he off he went.Michael: He, had to go.Edward: He had to go. He had no choice.Michael: He was gonna fly away to Asgard. But No, but I'm still thinking about deescalation,Edward: other deserters run to. Canada, but not Thor. He heads to a whole intervention, flies to another, another realm, a mystical realm. Yeah. But he knew he wanted to come back to America. So he knew that if he abandoned us, we weren't gonna let him back in.Michael: So if I look at it and you look at it, the Vietnamese will probably look at it and the Chinese look at it that America has sent a superpowered individual to fight a battle on their behalf.Clearly that what has happened. So I would think that the natural response would be that the Vietnamese through some kind of connection have one of their own. And then now we have, are we having our superpowered heroes and villains or people fighting each other?Not just fighting each other, but fighting regular powered humans? Well, I think so. It's like if they think if they we're getting to a different era, I guess,Edward: but I think, these people have powers and they're outta capabilities. It's almost like, if we had a really good tank, let's not use it because the other guys might bring in a big tank.We have airplanes, let's not use airplanes cuz the other guys might have airplanes. We have an advantage over the Vietnamese right now because we have superheroes and they don't. Not using them, I think would be irresponsible. Americans would die if not for Thor. Thor is probably saving American lives right as we speak.Michael: Yeah, but Ed, right now, America could use nuclear bombs in Vietnam, but they're not gonna, they're not, not,Edward: we're not gonna use nuclear. But nuclear bombs have all sorts of like side effects that a lightning bolt from Thor, there's no radiation when he fires a lightning bolt and blows up a, nothing like a depot.Michael: Lightning, basically Radiation?Edward: No, it's, no, it's not radiation any more than the light is radiation.Michael: Not basically, but I'm sure there is radiation that comes off of, there's certainly the light part of it and that part of the spectrum.Edward: Yeah, but there's no radiation. It's not radioactive.When you get hit by lightning, you're not gonna cause cancer when you get hit by lightning. Now you may die when you get hit by lightning, but it's not gonna cause future cancers.Michael: But my point is that America could use nuclear weapons, but they don't because they don't, they know that that could lead to an escalation.So isn't sending a superhero in kind of similar thing?Edward: It's more than an escalation response. Yes. Yes. I think it's a big, we should not be using nuclear weapons. We don't want to go down that route. But a superhero is not a nuclear weapon. We use superheroes all the time. We use superheroes all the time for, we use superheroes when stilt man attacks New York City, we're not gonna drop a nuclear weapon on Stilt Man.Michael: No, but the difference is that there's a difference between fighting crime in the city and then going to another nation. To affect foreign policy through, excessive force similar to a nuclear bomb sending, I think a superpower person's gonna do the, achieve the same result.Edward: I feel that the Vietnam War is already at the excessive force stage. We're, we're not like, this is devastating. Let's have a, let's have a very stern conversation with them. Like there's people shooting at each other there there's war happening, there's helicopters and bombs and Tanks and so why shouldn't Thor be involved to, to help put an end to this thingMichael: But this is a devastating next step. I mean the fact that you say it's irresponsible for them not to use Thor means, cuz you know, he's gonna be particularly effective. Much like individuals are bombed. Yeah, I think so. Why don't, so doesn't this lead to other nations around the world saying like, well better get some more superpowered individuals and then it gets into a bidding war. We've already talked about how the Avengers used to be a bunch of strangers who kind of got together very powerful and they've basically disbanded. And now it's like a bunch of former villains, you know, who are now with Captain America, which is pretty bizarre to say that they,Edward: Maybe this makes even more sense now, right? If you have these people like. Quicksilver and the witch and the Hawkeye. And your choice is, hey, bring them onto the Avengers and make them part of our team. Or let them become free agents and join the Soviets. Maybe that makes the most sense that we brought them onto the team.Michael: Maybe, but are we not getting to an era? Mercenaries, the superheros turning to mercenaries. What keeps them loyal to one particular ideology over another? I don't know, like is the American structure better than, the American democracy better than other forms of political philosophies in governments? You talk to every American I've ever spoken with, they'd say, no, it's the best. But other nations have different approaches to, policy, politics, and governments and structures and say, no.Edward: We had this in World War ii, right? We were the most attractive there was a lot of scientists that said, oh, you know what? Let's help the US build the atomic bomb because we want them to have it not the other guys. And those, a lot of those scientists came from Germany, but they said, no. Mm-hmm We wanna work for America. Or they came from Soviet Russia with, no, we wanna work for America because we think that you guys. We are freedom loving and as problematic as the US has been over the years doing many, many things they probably shouldn't have.The alternatives seem to be a lot worse and superhero superheros are lining up behind that. They're realizing that better to work for America than work for the other guysMichael: for now. But what happens if , For instance, let's just pick our neighbor to the north, let's say in Canada. They just decide to say up the ante to get a superpowered individual that could lead to say, battling other nations. So they became more war monering because you know that America's, you know, mightEdward: Canada becomes the, the war Moner. Yes, the war moner. You can call me either their hockey sticks, you can call me captain. Boring. That'sMichael: not boring captain, but they go. But my point is that, is that any nation.If they for the right price could get a superpowered individual who might think, you know, I like their philosophy too and we know that American might has led to American, financial benefits as well, right? I mean they, people don't just think America's great and that's why America does so well financially.No, we're great because they make great movies. Make great movies and actually use their money and their might to influence world markets. And so who's to say that the long plan might be like, say, great Britain might just start building up their SUPERPOWERED individuals so that they can basically go and effect world affairs through the superheroes.That that would then lead to increasing their financial, um, that's, that'sEdward: okay with that. Take America with that. They're not gonna take out Amer London is gay. This is not the American Revolution. America. If Britain, Britain, Britain is our ally, if Britain is more successful, now's good. That's good.Michael: Thor just, Thor just got sent into Vietnam. I'm just saying that we're on the prey, I think of changing how, international affairs are structured and how disputes are resolved if we're getting into sending superheroes to other nations. To fight on a base, on an ideological basis against other nationsEdward: superheroes, adjust the next technology.I feel like Mike, you'd be against using the airplane in World War I. You'd be like, no. If we use the airplane, maybe they'll use the airplane. Oh no. That'd be terrible. That'll be planes flying everywhere. That'll be the end of world order. No, as long as we make more airplanes than they do, we'll be fine.And we're making more superheroes than everybody else in the world combined.Michael: But I think one of the main things that came out, the difference between World War Well, sorry. World War I, what was a game changer was the machine gun, right? The mechanized instruments of slaughter and death and destruction.Edward: Well, now you're just giving the machine gun a bad name.Michael: I. Who would, right. But like, and it, andEdward: it, it think of all the good the machine gun did, could like, butMichael: it affected the world. It definitely affected the world and you might say, well, it's better. I don't know if it is, but it certainly changed it. I'm saying that we're the press p where we might be getting outta control because now wars are, so, the reason why we don't get into a war with the U S S R right now, is because it'll be so destructive. Because we've evolved our technology to the point that we could just destroy the world many times over.Are we not just pivoting towards superheroes where we could destroy the world many times over through them? Frightened dead. I'm frightened.Edward: All right. Well, I think it is what it is though, Mike. I feels, it feels like, just like we couldn't hold back the machine gun in World War I, I don't think we hold back superheroes anymore.I feel like the cat's outta the bag or the Thor is out of the. Helicopter.Michael: The hammers outta the clasp towards bellsEdward: the hammers outta the clasp. It's the new catchy phrase, and you heard it here first.Michael: Kids. Kids these days and their sayings. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

Thank you for staying with us as we missed another week last week. Edward is traveling with his family this summer, making recording difficult. We still have a half dozen episodes recorded and we will trickle them out over the summer months, but there may be a few weeks this summer without an episode. But we have some fun ones coming! This one made me laugh while I was editing it… Enjoy!In this episode:Mike and Ed discuss Daredevil's recent loss to Stilt-Man. Does Daredevil even have any super powers? If not, is he just a crazy man who swings from building to building with a grapple hook? And what's up with Stilt-Man? Did he choose his own name? Why doesn't he have extendable arms as well? Is this all a joke? And if so, how did the “joke” defeat Daredevil? Behind the issue:This is the first appearance of Stilt-Man, who goes on to try out names like “Stilty” and “Daddy Long Legs”. By the end of the issue, Stilt-Man is defeated and shrunk into nothingness. That does not stop him, though, as he comes back to be active in the Marvel Universe through to the present day (he is killed by the Punisher at one point, but his clone continues to use his stilts for villainy).In this issue:A new villain appears on the scene - Stilt-Man - and he starts his career of villainy by robbing a helicopter mid-flight. Seems complicated for a heist, but there you have it. In any event, Daredevil tries to take Stilt-Man down after the heist, but does not succeed. Back in his civilian guise as Matt Murdock, Daredevil takes on a new client, Wilbur Day, who hires Matt to sue his boss Mr. Kaxton, who has stolen his patent. As the case goes on, Stilt Man continues his crime spree. It is eventually revealed that Wilbur is Stilt-Man. He goes on the run from Daredevil, and eventually, he is hoisted on his own petard when he accidentally turns his shrinking ray on himself, shrinking him to apparent nothingness.This episode takes place:After the short reign of Stilt-Man comes to an end.Assumed before the next episode:People did not really think much about Stilt-Man.Full transcript:Edward: Mike Daredevil is not dead, but he has been pretty badly injured, and I think this is what you get when you have someone who's just a vigilante with no real powers trying to take on super villains.Michael: Well, wait a minute. I don't know if he's spoken about this before, but is he a normal guy?Just in a funny costume, like he seems fine. He define seems similar.Edward: Well, define normal. You say normal to what does normal mean?Michael: Okay, so Spider-Man isn't normal, right? We know Spider-Man. Spiderman isn't normal. Climb balls and he's swinging from building to building. But what do we know about Daredevil? He fights on rooftops and kind of swings down from rooftops. Like, I could not,Edward: but he swings on a grappling hook. You could swing at a grappling hook.Michael: No, there's, there's a, there's a zero chance, even in the best shape of my life, would I use a grappling hook to swing from one building to another without a net?Edward: I'm not saying is something, I'm not saying it's a smart thing to do, but I'm saying you could do it. I think if push came to shove, I have faith in you, Mike. I think you could swing from a building to building. It's in a rope. You could, all you have to is hold onto the rope. Just hold onto the rope.Michael: Ed, have you ever gone to a cottage on a lake in the summer we're gonna a swimming hole and there's a rope? Yeah. And the rope it's tied to a branch overhanging in the water Sure. And the rope. And you grab the rope and you swing out. Yeah.That is still scary. Cause if you don't let go in time and you go back to shore and you let go, then you land on the rocks. Yeah. That's bad. As opposed to the water. So would I swing like that without the water? No,Edward: well, I'm not saying you would do it because you, cuz you have more sense than Daredevil does. Are you saying Daredevil's superpower is he's unafraidMichael: The man with no fear. I mean, he is. Pretty fearless, I suppose. But my point isn't that, that's what you would say is his superpower, is my take is that he, I think he has, he must have a superpower. He can't just be a regular guy in great shape who's like, no, cuz like, it seems like swinging from building to building isn't necessary to do what he's doing either.It's like, you know what I mean? It seems like, it seems like almost like an add-on, like gratus gratuitous s**t. Gratuitous. Yeah. Like, and it would be exhausting, think about Ed. I don't know the last time you tried to do a pull up or a chin up, but imagine that andEdward: I can do pullups and chin-ups.I can do that.Michael: Okay. They're hard cause you're lifting your full body weight up. Now imagine you're doing that a few times through the evening and then you fight. Super villain. I mean, it does seem that's,Edward: I'm saying he's making poor choices with his life.Michael: Okay. Okay. So either he's making poor choices and he has no fear, or he's got some kind of superpower. So anyways, you and I were talking about that, but you mentioned Daredevil andEdward: yeah. And then you went off on how superpowered he is and I don't know if he actually is, I think Thank you. He, he clearly has exceptional abilities, right? Whether those are super abilities or not, it feels like he's in the Captain America style. Then Captain America some sort of super soldier. Yeah. But, but he's not, he can't breathe fire. He can't fly, he can't stick to walls. And I think Daredevil's in the same class, he's Clearly very athletic. But man, is he athletic take on super villains. What's just happened is he was very soundly defeated by, basically a guy in battle armor with really long legs.Michael: You know what? They're calling him, ed,Edward: they're calling him the stilt man. The villain, the stil man.Stil man.Michael: It's just, it, it's just, it's just ridiculous. I don't mind, I love, and you and I, obviously we have, we have a show about this. I do love how humanity is evolving in these new things we're seeing, but, Doesn't it seem like we're scraping the bottle of the barrel for the influences, where you're naming yourself and your whole persona, your super villain persona is based on, in this case, stilts.Edward: Well, did he name himself stilt matter or did the media name him Stilt Man? Well, I don't know, but they, but that's what he has. He wasn't having a press, he wasn't having a press release. He was just going out and robbing things and the poor guy got labeled as a stilt guy. Well, okay, but we got it. It should have . Called him, I don't know. Armor Battle man.Michael: It'd be better, but he's clearly got some kind of body armor. That's fine. Yeah. And bullets, power bullets off him. Right.Edward: And he can got that he stole from a helicopter. He used his well, his stilts to extend upward and then, stole from a helicopter that the helicopter thought they were safe.They're like, nobody can get us up here because there's no such thing as a flying villain. Oh, wait a minute. Or a stilt villain that just came up and sell.Michael: It's just, that's the defining. Feature of it is that whatever you wanna, like stilts is what they are. He has these extendable stilts and it just seems so stupid. It's just, I don't know, for all that technology, first of all, it's impressive. It's an impressive engineering feat to say if a helicopter is 500, a thousand feet in the air, To basically be able to extend your stilts up a thousand feet and not fall over.Edward: And then, and then, yeah, balance.Look at the balance on that guy.Michael: It's incredible. It's incredible technology. It's just thatEdward: I would argue he probably more impressive than a grappling hook.Michael: I would give you that, but The Thing is, but why would you do that? Why would you spend all that engineering, why would you direct your energy towards that engineering feed where he could have created something else?Except, unless he's just going for the sort of the whimsy of, I'm a guy that has stills. I'm like really tall.Edward: He built like these hydraulic extension things that are, I think are really if you built this hydraulic extension technology and you decided you wanted to go and use it for crime? What type of battle suit would you maybe I'd have extending arms too. I'd have like extension arms to go.Michael: The arms are way more practical. Yeah, but the think with the power you'd have. Bam.Edward: But they can do the same thing with his legs. He just kick people with like his big extension. Legs and kicks are more dangerous than arms.Michael: He's not, he's extending the stilt so that he can perfectly time getting in front of a helicopter and hoping the helicopter doesn't just turn around or just,Edward: if it does, he can, can chase after climb. They go fast. He can run, his steps per minute could be very low and he could still achieve very high velocity.Michael: We haven't seen any film of this, and I'd like to because that would be interesting. But anyways, the point I'm making though is I hate it. I hate the idea that we've gotten to the point in this marvelous age of heroes and villains and super scientists and aliens and gods, and it's like, you know what? We've kind of run our course. Let's have. A stilt based hero or villain? Villain. Villain. Like a psychic ladder. Ladder boy. Like any, you know, like tall guy.Edward: I think you can be cynical on his name, but clearly Daredevil has a better name than stilt man, but like this guy defeated Daredevil. And so whatever superpowers you think Daredevil has, apparently they were not powerful enough to defeat this poor villain that you're mocking.Michael: Oh no, I agree with you on that. Even though I think the daredevil must have some powers, powers are not, he's probably exhausted by the time he flipped around and grappled through the city to then fight the stilt guy.Edward: But he has to grapple up the stilt man. You can't even get to him with those grappling hook that grapple is doing a lot of lifting,Michael: silly. Whether you're defeated daredevil or not. I just find it so silly. And I, maybe I'm okay. Don't take this the wrong way, but I feel like you and I put a lot of energy into our show talking about these amazing people, good and bad, and then along comes still, it kind of just undercuts everything we're talking about where that's what it is.It just seems so silly.Edward: He's not undercutting anything. He's way up high in the sky. Everything is below him.Michael: I just like to take his legs out cuz it just bothers me.Edward: Take his legs out. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this episode:Mike and Ed discuss life after being an Avenger. What are the responsibilities? What are the privileges? Do they get top secret briefings? Are they like ex-Presidents? Or like ex-FBI? Who pays for the damage they cause when Giant-Man decides to grow to 35-feet in the middle of the city and starts knocking down buildings? These are unprecedented times, but someone has to figure this out quickly!Behind the comic:This is the first adventure of Giant-Man and the Wasp post-Avengers. The story continues into the next issue, but at that point they “retire” and the title converts to dual stories of Namor and the Hulk. It turns out Giant-Man just wasn't that popular. It didn't help that Tales to Astonish had consistently been one of the weaker titles for the previous few years. Something needed to change. Also in this issue, the Human Top, who was originally introduced as a “normal human” who just happened to be able to spin quickly, has now developed the ability to fly…In this issue:Giant-Man and the Wasp are practicing just outside the city. A plane intentionally flies into Giant-Man, and the pilot, the Human Top, considers killing him but does not have time before Giant-Man wakes up. The Top splits, and Giant-Man returns home. Giant-Man practices his growing ability in downtown Manhattan. The Human Top then returns and battles Giant-Man and the Wasp, and Giant-Man is enraged when the Top leaves with a captured Wasp.In the Hulk story, the Hulk saves Major Talbot from dying during the Leader's attack. Then, when the Hulk has turned back into Bruce Banner, General Ross places him under arrest for treason. The leader sends his humanoid minions to the base where Banner is being held, and while they attack Banner, he turns back into the Hulk and battles them but is knocked out as they steal an invention of Banner's for the Leader's use.Assumed before the next episode:People are fed up with Giant-Man leaning on their buildings, carelessly causing damage.This episode takes place:After Giant-Man has leaned on one too many buildings.Full transcript:Edward: Mike, what do you do when you retire from the Avengers? What's next? What's next on your plate?Michael: I don't know. It's hard to go higher in the superhero community, but it's also harder to get a better job in even the military or that kind of like super diplomacy communityEdward: and super diplomats.Michael: Well, that's what they are, right? Like they're like, I don't know, like Warrior Kings in a way. Right?Edward: Thank you for your service, giant man. I'd not like you to be the diplomat in charge of Poland. Over there with the wasp. You can help us deal with geopolitical situations in the Eastern Republics.Michael: But that's what they've been doing though. They've been acting asEdward: the last time giant man went into the Eastern Europe, he was crashing through the Berlin wall. It's not diplomatic, it's not known for diplomacy.Michael: No, but his actions, whether they're clumsy or not, were actually affecting international relations. So that's what I mean, like the general sense of whatever they are.Edward: Yeah. So causing diplomatic relations is not the same as being a diplomat, just cuz they both have the word diplo in them.Michael: No, no, no. I'm not saying that they're, I'm not saying that that's the job. It's just that what have the Avengers been? They've saved the world. They've battled villains. They have taken upon their self to go to other countries, to act in America's interests.And then at times we've found that they've acted secretively to the same extent, further in the interest and theory of America. So I don't know what you want to call them, but they're not regular. And so you're, they're not regular. And, and your question at the start was like, well, what do you like, what do you do when you retire?Well, it's not unprecedented, but it's unusual. And so it's a good question.Edward: And so what's unusual, you're saying retiring as a superhero is unusual or retiring as an avenger is unusual. What's unusual?Michael: Retired from the Avengers is unusual because, well, yes, it's Avenger.Edward: Avengers have only been around for a couple years. No one has retired until now. But now we've had, now we have three retirements, sorry, four retirements, 1, 2, 3, 4, all at the same time.Michael: Yeah. And my point is that it's unusual. We have an experience where someone with that much power who's had such a fascinating role and influence on world affairs, is now no longer in that position? I think there's a qualitative difference between being on the Avengers and being the go-to team for. Pretty much any big problem to be on their own. Are they still on the payroll or at least getting the status and the influence they had on Avengers?Edward: I wouldn't think so. If you're not, you can't be like, not on the Avengers, but still getting all the Avenger privileges.Michael: That's right. So that's what I mean. Somebody that tied in to International affairs in such a highly visible way and such an influential position, I would think that they don't just retire and, then our intelligence organizations are like, that's cool.I guess you just. Have all this knowledge and this know-how, and you just go off and do what you want. So I'd imagine that there's something that must tie them closer. Oh, I see what you're saying. It's like maintain them and to be still being sort of a post adventure, but still in the family. You know what I mean?Edward: Got it. You're a post, you're not in ave anymore, but now you're a post a event. It's like a presidents. When presidents retire, they still have the secret service. Follow them around everywhere. They still get paid. Right., if you're an ex-president, you still get a salary.Michael: I think so. Or some kind of pension, I don't think they'd wait till like they're, you know, like most of 'em seem to be quite old when they're president, when they retire. I don't think they, they have to wait long before they get the stipend. Right. Which makes a lot of sense as well, cuz you don't want them to Go out and say, I've been the president of the United States for eight years and now I'm interviewing for this job at General Electric.Or I might go, I think I'd like to go work in Hungary. You know what I mean? I don't think that they're gonna be like, what's next for me? As if it's just like anybody in the world. They're just not. And so I think get to pay them enough to keep them on the bench in a way, and still get to know-how and the benefit of the expertise and still have them available to contact them.I would think.Edward: Okay, there's an ex-presidents club. You think there's gonna be an ex Avengers club where they all get together and come back together and talk about, I dunno, I guess the new Avengers can ask the old Avengers for advice the presidents do that sometimes. Yeah.Michael: I think so. I mean, I'd like to think so because the alternative would be that the Avengers, so somebody who's been so tied into our security and the intelligence organizations, but also our military and our political affairs is just suddenly like, huh. Well, I gotta make a living not an Avenger anymore.Edward: Maybe I'll go rob Banks,Michael: right? Or maybe I will go maybe work for, another country. I mean, like they could, and it's unusual, like the adventures started as this voluntary group, but very quickly became integral to our security intelligence organizations, et cetera.but I bet that there are those types of organizations and associations already. I bet they just attach that type of structure over to the Avengers to make sense.Edward: Paul, you're saying there's other structures like the Avengers out there?Michael: You used presidents ex-president, as an example.I think there has to be some kind of process they can follow to say, time.Edward: But the difference is the presidents, like that's part of the constitution, like that's built into the fabric of our country and there are rules and regulations that go back. Hundreds of years. The Avengers are a couple years old.We don't even know exactly how the Avengers are affiliated with their government, how they're affiliated with Stark Corp. They're all part of this military industrial complex, and I don't think we understand what's going on. It's definitely not the way we understand what happens with the president.Michael: Well Ed, I'm not saying I'm cool with it. I find it to be the most weird you know, and people that listen to our show know this. I've always found it to be the weirdest thing that the military, the government, our intelligence organizations are like, I don't know, better get the adventures involved. I've always found it to be strange, but whether it's strange or not, they're tied in and they have this connection and they have this. Powered authority in our society. So just to have them float off and possibly just what, decide that they want to, take what they know and not do anything with it, or,Edward: yes. You're basically say we should bribe them so that they don't do that. We should have tax dollars go towards paying giant man and Thor and Iron Man in the wasp and tell them, Hey, here's a hundred grand. Uh, please don't work for the Russians.Michael: I think, I wouldn't use the word bribe, but I think it's incentivized, I suppose, but's be honest, let's be honest. You, I've had shows where, where your solution is like, I guess we gotta kill them. Or lobotomized them. I'm like, no, I'm just following your well trod path on this one. Like probably need to pay them is the better alternative than like, Like, where I know you want to go on these things where it's like, too dangerous of your life. See you later.Edward: You know, I'm gonna tell your wife about the things you've been doing, unless you give me an incentive to not do thatMichael: well yeah. It's, like, protection, money protection.Edward: I'm not gonna, uh, bust into your shop, but, you know, I need some incentive to make sure that it stands up. Okay.Michael: But Ed, you wouldn't characterize it as bribing that you say, Let's say Kennedy, who's a young president, let's say. He hadn't been assassinated and he continued on, and he retired after, let's say he served two terms. He would've been in his early fifties, you wouldn't have considered bribery to pay him a pretty healthy pension.Edward: No, you're, right. It's not bribery to have to pay someone to do their job.Michael: It's a role.Edward: It's an incentive pay. It's an incentive. So that you go and do The Thing that we we're paying you to do. I think bribe, connotates something illegal, right? Or something underhanded. What's what's going on here though, is, it kind of is underhanded, because it's not public, it's not well-known. Is Stark Corp paying their post avenger salary? Is it the government? That's to me the, big question. And the other thing is that well at least giant man is still active. We haven't heard much from about Thor Iron Man, but, it's Giant man is out there. Experimenting and doing more stuff. Like the latest things on Giant Man is he can now grow to 35 feet tall. He's getting bigger and bigger, so his power levels are increasing. And he's doing it right in the city. He's damaging buildings, he's doing practices. He weighs tons with tons and tons of weight, and he's walking through the city causing damage.And so in the past when that happened, the Avengers had some sort of fun that paid for that stuff. Is there a post Avengers payment fund now too?Michael: That's part of the reason why I was thinking about this, there has to be some kind of structure in there. Not just about the idea that they have information that would be damaging, to our interests if they went somewhere else, for instance.But also if giant man is practicing growing in the cities, and holding onto buildings so he doesn't fall down. He's causing damage. And in the past, it's still irresponsible them to do that. But at least there is some kind of recourse for the regular person or insurance companies. He get some kind of, kind of like, you know, fix, fix the masonry on this. You know, likeEdward: fix, it's like an irresponsibility reading. As an avenger you can have a 10 on irresponsibility, but now that you're post Avengers, let's bring that irresponsibility level down to a six or a seven.Michael: And he hasn't, you know what I mean? Practicing growing around buildings when you wait tons and could knock one over if you just tripped, is not responsible.Edward: And also grabbing, grabbing onto the edges of buildings and like having bricks fall off. It just seems a little dangerous.Michael: It's super dangerous. So that's why I think that there must be something in the way, some process or some similar continuation of coverage.Really. Like I know when lawyers retire, we have mandatory insurance and then when you retire you can have runoff insurance, which would cover you. So you might get a claim, there's only so long you can Sue your former lawyer there's limitation periods and then you'd wanna make sure you cover. So if you did get sued,Edward: the insurance covers you, not for the time that you were a lawyer, but the insurance is covering you for right now. Like, for example, if you stopped your insurance today, And you got sued for something you did yesterday, the insurance wouldn't cover you.Michael: No, so insurance covers terms, so as long as you have occurrence base and claims based policies, but the most common policy would be like if you get into a car accident, you have insurance policy with company A, and then you get sued two years later. B, you no longer are insured you by that company. You're run to another insurance company. It's the company that was on risk that would cover you. And so I'm saying for, Lawyers when they retire, they wanna make sure they've got insurance and coverage, to continue a bit longer. I see I'm diving into stuff. I'm not a hundred percent sure I'm far from retirement, but I just know that there is coverage up.Edward: There's something, there, something, there's something's something there that's a giant man probably has some sort of insurance policy that's covering him post Avengers, some sort of runoff policy that lasts for some period of time.Michael: Or you just have the Avengers have so much money at their disposal. They're either self-insured in a sense, or they just have money to pay. But whatever it is, I think that you don't have these retired Avengers running around causing damage and then not, and then what you're gonna Sue giant man, you're gonna find out where that guy, who he really is. Or do you still follow the process that is in place that we we're aware of where they could make a claim. Because of the damage that the Avengers caused, which I think is a way that's kept people kind of okay with them in general.Edward: So if he has to have this coverage that keeps lasting, like we're kind of paying for giant man for the guess for the rest of his life or for some time period.Does he have responsibility then too? This is like reserves in the military. I think we can call back up giant man if the Hulk was rampaging through the city and we're like, you know what? The Avengers are a little weak right now. We need some, uh, we need some more bench strength.Can he be called in?Michael: I don't know. I mean I would think so. I would think that's part of the deal. Like we said at the beginning, it's unusual and unprecedented about what they are in our society, but they are unusual. They are unprecedented is so, you and I are just trying to speculate about what should make sense.And I think what makes sense is that if they're out there, Having information or abilities that could harm us if they were no longer on our side. I think that there's a built-in incentive to have them close to home, really. But also if they're out there doing activities, and they're more or less government agents, which they have been.I think there should be some kind of recourse for regular people. Otherwise people would not be as keen about Giant man doing his calisthenics in the middle of the city.Edward: Like you're sounding more and more like the Avengers are like the mafia. Once you're in, you can't get out. You think you're out and we pull you back in.Michael: I'm not saying that they're not like that. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this episode:Mike and Ed discuss the shocking loss of scientific skill among the country's top scientists. It clearly seems purposeful, but what is the purpose? Aliens trying to keep humanity from developing new technologies? A domestic test to take away targeted abilities from exceptional people? Will they be able to take away superpowers next? And if so, is it ethical? If we can't keep someone in prison, is the choice really between lobotomizing their abilities or capital punishment? What is the ethical choice? Ed and Mike disagree!Behind the issue:The after-effects of this issue result in Giant-Man unable to shrink smaller than a normal human for the remainder of his time in this title (which is ending soon and will be replaced with Namor. More on that when it happens!). Otherwise, nothing special here. In this issue:A guy is driving around town while being directed by a man in a hidden laboratory in a funny costume named the Supreme One. When the driver sees Giant-Man, he decides to zap him in a green ray, which causes Giant-Man to grow weak. This is because the ray is designed to steal power. The Supreme One becomes obsessed with stealing Giant-Man's power, as he was unable to do that the first time he had someone try. To that end, he has his minion drive around town bathing scientific geniuses in the green ray, stealing their next-level scientific abilities, i.e. a top physicists forgets everything he knows about physics, etc. Giant-Man and the Wasp investigate, eventually tracking down the Supreme One, who escapes in a spaceship (turns out he is an alien).In the second story in this issue, the Hulk fights the army in a foreign nation, and when he turns to Bruce Banner, he is captured by some locals. Major Talbot is sent in to rescue Bruce Banner, and the episode ends on a cliffhanger - will Talbot and Banner fall to their deaths as they escape? Tune in next week!Assumed before the next episode:People are wondering what is happening to all the smart people. They are getting … less smart? How does that make any sense?This episode takes place:After people learn of the de-smartening that is happening.Complete transcript:Edward: All right, Mike, we're gonna change it up this week. We're gonna change it up a little bit because I have a story I think we should be talking about that's not, well, maybe it is superhuman. The scientists around the world are losing their scientific abilitiesMichael: right?Edward: So these are top physicists who are losing the ability to do physics or top geneticists who can't do genetics anymore. Top chemists who can't do chemistry anymore. And their brains can still do everything else. They can still have conversations, they can still love their families, but they're losing their scientific abilities. And so I think this is a super thing. We don't know who's doing it or why, but it sounds superhuman.Michael: Okay, before we get to this superhuman, if they're superhuman. Not saying that what you're saying is thatEdward: No, I'm not saying human. It's a superhuman, some sort of superhuman thing. I don't think we know any scientific way to remove parts of knowledge from someone's brain like that feels like a superhuman thing.Michael: Right. So you're saying that there must be a purpose to it. This phenomena that's only targeting extremely intelligent and highly accomplished and specialized people like physicists. They're being targeted and their abilities are removed, which. Yeah, it doesn't sound normal.Edward: Um, well, it's never happened before, so therefore it is by definition, abnormal. Although it's abnormal, it's happening more and more now. So is it becoming normal? It's becoming normal. It was not normal, but now it is.Michael: It's normalized almost, and so normalized.So I guess the first question is, what's the purpose of it? So your first thing is that you're thinking that there's a super villain possibly, or an alien or something that is doing this for a reason. Right. In that it's making humanity weaker. It's making our ability to defend ourselves worse. Worse. Is that where you're kind of going on it,Edward: it sounds that way. Like, oh, you're right. Maybe it's a villain who's doing blackmail, but it seems purposeful. If it was a virus, That was just spreading around, right? And causing brain damage to people. First of all, that'd be terrifying, but secondly, it feels like that viruses don't work that way. The viruses wouldn't go and attack just the most intelligent top scientists in the world and just attack their scientific knowledge and leave everything else untouched. So you're right, it seems purposeful.Michael: And that's alarming because we know that in the last few years, in addition to what appears to be naturally occurring superhuman abilities and extraterrestrial or, paranormal, superhuman abilities, we have seen that there's been greater advances in technology, in science that have allowed humanity to reach new levels. So Iron, Man and other, you know, giant. Giant man have been able To create things that are just impossible they're fantastical. It's basically modern magic, the science that they've been able to wield so is this a preemptive attack, a taking away the ability of other people to create such modern miracles?Edward: Oh, you're right. Yeah, it could be stopping the creation of new superheroes. We know, if you look at the superheroes that are out there, a handful of them, like the X-Men seem to be that this people who are born with this weird gene that's being activated by something.But for most superheroes out there, or, super villain for that matter. It seems to be either, Some sort of science that science is doing it. That's right. Captain America is experimented on and turned into Captain America, like the Reed. Richards took fantastic four up into space and space stuff turned them into the Fantastic four. Sandman was like atomic research, whatever turned him into Sandman. So it feels, or to your point, Iron, Man and Giant Man was actually, or the porcupine, they're actually building technological wonders. And so if our top minds, the people who can like do the engineering, the people who can understand the atomic science are losing their ability to do that.Hey, maybe it is aliens. Maybe aliens are trying to put humans in their place and say, Hey, stay on the planet Earth. Stop leaving and stop developing powers.Michael: It's wild. It sounds paranoid, but at the same time it's starting to make a lot of sense. This will fundamentally weaken humanity. By taking our top scientists off the board. That's right. Quite frightening. That's right. But then the other part of it is leaving side the motivation which is alarming and I'm hopeful that say the Avengers or the various federal agencies are on top of this, you gotta wonder how they're doing it. Like how is it that they're doing almost micro lobotomies. Is it a technological basis for it or is it magical? How exactly are they doing it at all.Edward: You're right. Clearly, it's not something that anyone has done before, but someone has found a way to go and do, lobotomy is a good word. It's a very, it's like a targeted lobotomy. Because what's fascinating about this is it's not like these scientists are coming in with other brain damage. They're able to continue on their lives. Normally. They are still able to, whole jobs. Not even like they can't do normal stuff. They can do all the normal things. They just, it's like this piece of knowledge. They're cutting edge brain power and I don't even know if their intelligence was affected so much as their knowledge was affected. So if you're a scientist who's like really brilliant and spend 40 years of your life diving deep into physics, you're not gonna be able to spend another 40 years we just don't live long enough.Michael: It's quite a violation of their autonomy too. I don't want to discount that, but, however they're doing it, it's wild. And you gotta wonder if it's not some extraterrestrial kind of thing or some kind of super thing. What if it's actually a, just, it's something more domestic? We talked before about, What do you do with these super villains that you capture and have these amazing abilities? Like say, let's say Sue Storm turned into be a bad person and she has force fields and can turn Invisible. Like how do you deal with that and make, and IM prisoner if she was a villain, is this. Some technology that somehow got into the world where they've been experimenting on how to turn off abilities and it's got into the wrong hands and they're using it to turn off the abilities, for lack of a better term, of regular humans.Edward: If you're right, maybe it is just an experiment then, and they're testing to see if they can turn it on and off before they say, Hey, let's turn off the superpowers of. Sue Storm or Reed richards. Let's turn off the brain power of some physicists and you're right, if it doesn't work and they can't turn it back on again, that would be really bad. But not as bad as if we like turn off the superpowers of the Avengers because hey, that's irreplaceable.Michael: It does lead into to a consideration of like, how if this is like a deliberate thing that might be done by people on our side, say a government kind of project that got the wrong hands, that tells us I guess I've ever thought about the idea that turning off, say, superpowers is akin to a pure violation of a person's autonomy, right? It's more relatable in a way to basically make a very intelligent person, less intelligent in a particular area that is actually, it's so remarkably unethical, cuz it is effectively targeted Phlebotomy.Edward: Clearly whether it's just happening to Random intelligent people, it's unethical. But if we did this to get against the guy who was building the porcupine suit or the wizard who is like notoriously committing crimes and breaking outta prison and committing the frightful fore attacking the Fantastic four, if we just reduced his intelligence and stopped his ability to go and create these fantastic suits, I dunno, is that still unethical?Michael: I think so. Yeah. Yeah. It, definitely is it is a version of lobotomizing those intelligent people. We don't do that right now. There have been super intelligent people in history and if the choice is to build a better prison or to lobotomize somebody, you would choose you should choose to build a better prison.Edward: That's fair. And I guess I feel like we haven't really. On that route, far enough. We still are building these terrible prisons and allowing these criminals to escape again and again. But I guess let's go further. Remember there was the vanish. Do you remember the vanish, right?Yes, I did. So that's, yeah, so the vanger had the ability to teleport and, I'm not sure how he was dealt with, I assume, like we assumed at the time maybe that they just killed him. There was just a extra, judicial murder to take this guy out because otherwise what do you do?You can't put in prison someone who can teleport outta prison. He was teleport into the Oval Office. He was threatening the president. You, can't stop someone like that. And so if we had, if for the vanish or. Let's say what they had this ability to turn off his power. Or, and along the way it also turned off his ability to do complicated differential equations. It feels like that's a better alternative than allowing him to go free or a better alternative than murdering him.Michael: Yeah. But it's the same, you know, The Thing with ethics is that they're not relative. This goes to, the question I suppose, is the ability to have like a superhuman power, and you, if you remove that, is that the same as effectively doing a version of a targeted lobotomy? And I think the answer is yes. I mean, I think that the Vanger, even by basis of just looking at his name, He identifies, that's a core part of who he is.Edward: He enjoys vanishes, and if he stops vanishing, then who is he anymore?Michael: Well, exactly. And so to remove that from him,Edward: it's, I'm the talker. If you take away my, if you make me mute, who am I?I can't, I can't, I can't do The Thing that I do.Michael: But it, but it's the same thing, like, so it is the same thing removing an ability for somebody to solve differential equations as a top physicist is the same as taking away a person's ability to, in this case, do a unique thing, which is the ability to,Edward: so I'll grant you that, but the difference is, is that the guy doing the differential equations isn't trying to murder the president. It feels like that. Like that's the difference. You're right. I don't think we should go and find everybody who can teleport and then go and take away their abilities. That seems like a draconian a totalitarian government that would do something like that. But if there's somebody teleporting around murdering people, I think by all means we should stop that person. And if that means taking away their ability to teleport, I think so. Be it.Michael: I guess the question is, what is a worse and more abominable crime towards an individual or harm that you could cause them? Is it one to give them effectively a brain injury so that they are not the same person as they were before, because that's what you're doing if you turn up abilities. I think it's similar to making somebody less, less intelligent to like solve differential equations either argues the same as turning off their ability to do what they're born to do, which is teleport. So it's a better termEdward: to murder. I was born to murder precedents.Michael: Wait, so you either give them effectively a brain injury, so you actually violate what they are as a human at who they're as a person. Their core being or you killed them, is what you're saying. Or you build a better prison. Yeah. Yeah. And you're saying you handled a better prison. It's only two choices.Edward: That's right. That's right. So I think we are all agreed that if you can build a better prison, you build a better prison that feels like the right thing to do, I think. Mm-hmm. When you can't build a better prison, when you have someone like the vanish or the absorbing man who can, if you put him in a prison, whatever you. Put him in, he can absorb the strength of that thing and bust his way out. And so what do we do? The absorbing man, they set him into space to drift aimlessly for eternity. Like that seems worse. It feels like if you had a choice between, that's the worst one. Drifting through space for all eternity, or losing the ability to absorb the strength of materials around you. I think most of us would give up the ability to absorb, even if our name was the absorbing man. It feels like you can get a new name.Michael: Hey. They sit him down and say, listen, here are the two alternatives. We've been up all night thinking about the options here, and one is that we turn you into a race that'll float through the empty space forever, or we give you, effectively we change your brain chemistry. And I think that, historically, it's a pretty slippery slope when you start messing around with people's brains and changing who they are. I don't know what the right answer is, ed, but I have to say youEdward: really don't know the right answer. You really think that maybe the right answers to have 'em drift through space for all eternity.Michael: I don't know. You're forcing me to say that. I think it'd be better. I think it would probably be better to actually like, uh, And I'm against a death penalty. But that seems to be preferable to actually really lobotomize againstEdward: sin. Bomb the ball. No, no, no, no, no, no. Listen, imagine. So let's put you in that, those shoes. Okay? Now, Mike, you now have the ability to fly. You are flying, man, and you could fly around and so on. But you know what? You used that, you used that flying power for evil, and you started killing presidents. And so now they're like, Mikey, you need to go to jail. Unfortunately. This metaphor is falling apart because we could put a flying guy in jail. You,Michael: you put a, the ceiling solved the problem, ed.Edward: Okay, Mike, you have the ability, we're gonna use this vanish again. You can teleport Mike, you can now teleport everywhere and you're murdering people left, right, and center. Because you know what, maybe the teleporting also meant your brain go, went crazy, and the government comes to you and says, Hey Mike, we have two choices.We can take away your ability to teleport and you'll go back to being old Mike. Or we can murder you. Are you really, are you like, have you given that choice? Like you think the right choice is to murder you?Michael: Uh, it's, it's just such a hard It, it is. It's not hard. Murder. Murder is a problem. The slippery slope stuff is terrible.Eddie, you're actually,Edward: yeah. But one of them, one of them has a slippery slope. The other one is a giant hole of death.Michael: You know what I think because,Edward: you can recover from a slippery slope, you can't recover from a murder.Michael: Eddie, I'm a lawyer. I'm not a judge. I'm not making that call right now. But you're, but clearly I know where it goes with you. You'd be like, take away my ability. Give lobotomize me so that I don't go out and vanish anymore and I'll live the rest of my life.Having you having fundamentally changed what, who I am as a person? Yes. Yes. How is that any different than Lobotomizing people that. The state didn't, consider to be, desirable?Edward: Well, we've already, I think the difference is, is we've agreed that you are only doing this as a last ditch effort. We're not saying, Hey, you're a murderer, a normal murderer who like walks around with knives and guns. We'll just take the knives and guns away from you. Even though you call yourself gunman and you define yourself by using guns, we're gonna take away the guns. And then, and you're like, oh, but I can't be gunman without guns.Well, too bad you're no longer gunman. You are now just man, and we're gonna put you in a jail. And that jail is not gonna give you access to guns and that's the preferred choice. But if you can't, but if you can't put them in the jail, you need another choice. And the second choice should not be killing them indiscriminately.Michael: So I guess the problem and hear me out on the slippery slope, but like if the technology is developed and you can use it on these, in these extreme situations, my fear is that you use them. Even if you could rationalize that, you would use them in more mundane situations where all prisoners, all people convicted of violent crimes are now gonna get, effectively get a lobotomy because it's safer.Because you can't keep them in prison forever. Or if you do, the prisons are unsafe, et cetera. There's gonna be a rationalization for actually using this technology to effectively lobotomize them too. So it won't be limited, I'm afraid to this very unique situation that. The teleporters of the world. I wish we know there's one. And it could extend and it could, it would extend what I consider to be an abomination throughout. Oh, again, you're worried Our society.Edward: Well, maybe we just put in rules in place that the person needs to choose to have this. We just get to a certain point where it's like, Hey, you can choose to be lobotomized or murdered, and if you prefer murder, we can do that for you.The state's really good at murdering people.Michael: I think it's what, I think one of those, that's what they consider to be actually not a real choice. Ed, I thinkEdward: know that's the point is, but like, we're stuck at this point where we have to choose the choice. We don't give them three choices if it's not like we can take away your powers, murder you or put you in a jail that you can escape from in two seconds. Which do you choose now? Well, clearly the guy just escapes from jail and so that's not an acceptable choice for our society. We need to stop the vanger and people like him from murdering people. And so far it seems like what we're doing is we're just murdering. We murdered the vanger and we sent the absorbing man into space. And this molecule, man, we don't know what happened to him. These people who are extremely powerful. They seem to just be disappearing and we're not talking about it. That is the slippery slope. And so this is a way to reduce the murdering this against villains.Michael: Well, if I had to guess. I suppose the murder's been working out. At least that's what's been happening and I think it's unfortunate. I think it's horrific. And so what I hope will happen is that maybe if the government is secretly funding this research into this technology, maybe they should direct their attention. Towards better prisons that would solve the problem and avoid these thorny issues. That, that you're pushing on me.Edward: Teleportation proof prisons. That's the next scientific achievement. Read Richards. Go do it.Michael: Send them to Asgard Ed. We know that they must have their, they're superpowered.God's like Thor. They must have the technology up there to deal with strange, unique powers. Let's, let's, let's start talking about that.Edward: Vanisher, get off Earth. Go murder Odin. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

Next week is our 200th episode! It was fortunate timing that it ended up landing right on our episodes about Avengers #16, which was one of the most important issues of the era. If you are enjoying What If Marvel was Real?, now would be a great time to spread the word! Thanks for your help in getting our little show out there, and for all the listeners who have been here from the beginning.In this episode:Mike and Ed discuss the surprise announcement that Hawkeye, the supervillain, will be joining the Avengers as a new member. The Federal Security Agency has given Hawkeye a thumbs up, but how is that possible? What do they know that we do not? Do we need to talk conspiracies again? The rumors are that Captain America and Thor are out of the organization. If true, we will only be left with heroes with technological powers - have the people behind the technology (and masks) been replaced? Is this the end of an era?Behind the issue:This is one of the key issues of the mid-60s. The Avengers were originally Marvel's answer to the Justice League, whereby the publisher put all the heroes from different titles into one book to get the readers excited and turning over their hard-earned cash for tales of camaraderie and adventure. But the individual hero titles continued, and Stan had to keep his developing Marvel universe consistent. He had to juggle the storylines in, say, the individual title Tales of Suspense with what was happening in the team title Avengers. If Thor had been called away to Asgard, then how would be be around for an Avengers adventure that same month? Making it all make sense every month was challenging for Stan, and he wanted a solution.The answer was to take most of the heroes with their own titles off the team. He kept Captain America, and maybe rationalized it by knowing that the Captain America stand-alone stories could be set back in World War II whenever he wanted them to be. Then he filled in the rest of the team with supporting characters from other titles - characters who did not have their own books (and would not get their own books for many years, i.e. Hawkeye did not get his first solo title until 1983; Scarlet Witch, with Vision, until 1982; and Quicksilver until 1997).In this issue:The issue opens with the Avengers once again emerging victorious over the Masters of Evil in New York, with Captain America defeating Baron Zemo in South America. It continues with Iron Man, Giant-Man, and the Wasp in New York having a team meeting and deciding to take a break from being on the team. At the same time they are having the meeting, Hawkeye breaks into their headquarters and asks to join the Avengers. His beloved Black Widow has been murdered by her employers behind the iron curtain, and he has had a change of heart on his line of work. The team decide to take him up on the offer, and on top of that, seek out new potential teammates, with the papers reporting this initiative. Scarlet Witch and Quicksilver decide to apply to join the team, and they are admitted to the ranks as well. By the time Captain America returns, the team has been completed reconstituted, with Iron Man, Giant-Man, and the Wasp out, and Hawkeye, Quicksilver, and Scarlet Witch in as their replacements.Assumed before the next episode:People are excited, and a little nervous, that the Avengers roster has been changed so completely.This episode takes place:After the announcement that Hawkeye will be on the team, but before Captain America returns from South America.Full transcript:Edward: Mike, I told you that Hawkeye was a superhero. I told you. I told you. You were like, oh no, he's not that good. He can't even fight anybody just as Arrows. Oh, go back to the 14th century. But no. Now Hawkeye is an Avenger. Mike. He's an avenger.Michael: Yeah. I guess the Avengers, they already had a man who's basically a one man rocket and can shoot energy from his fists as an Iron man. They needed to get somebody who could. Arrows on the team.Edward: Hey. The last time Hawkeye faced Iron Man, first of all, last time he faced Iron Man, he was a villain. We should talk about that. But when he did, yes, he defeated Iron Man, right? He blasted him with his energy discharge arrow and took him out. So, hey, this guy is versatile. We've had this debate. We don't need to debate it again. I think you are against Team Hawkeye. I am on Team Hawkeye. I think that it's absolutely fine from a power perspective that he's on the team. I'm not sure from a, ethics perspective, he's the red venture.Michael: Well, okay, let's break into, those two points then. So from a powerless perspective there must be something to him that he brings into the team, right? I can't imagine that it's solely just really good aim. There must be some other, maybe he's got some other ability that like he's, um, some kind of likeEdward: oh, maybe his really, maybe his really good eyesight. HawkeyeMichael: In the name, I mean alone, but he's got, there's some kind of, maybe, I'm just thinking maybe this is a signal that the Avengers are going from less, overt action to be more in the shadows.Edward: And nothing says sneaky like a purple costume carrying a bow and arrow.Michael: It's a dark purple ed. It's a dark, dark purple. No, but there must be something to it. Like he did take on Iron Man. He did seem to defeat him. So in a skills-based contest and maybe he's. Like you notice that Captain America wasn't at the press conference when they announced Hawkeye, so maybe he's a replacement for Captain America's, who's also similarly strategic and stealth based in a lot ways.Edward: There you go. There you go. Cause the rumors are right now that Captain America and Thor are being replaced and Hawkeye is the first edition to the team, but there will be,Michael: and your second point was the ethics. It does strike me as being a little odd that there's a guy who's worked with a known terrorist. The Black Widow. Correct. A Russian agent and he's fought Iron Man a few times. And, I would imagine in the course, Committed some crimes may, maybe he did, maybe technically he didn't commit any crime.He's justEdward: He did. No, I just did. I think they were doing something robbed. They were robbing Stark Corp or something. Yeah. They kidnapping somebody he was doing bad stuff.Michael: They kidnapped, they kidnap people. Yeah. Yeah. That seems a bit much to sweep under the rug.Edward: That's right. Where I come from, kidnapping is a crime, Mike. It's a crime. But come from planet, but not according to the federal security Agency. The federal security agency has approved Hawkeye as a member of the Avengers, says that his record is clean, that he is totally allowed to be on the team.Michael: Well, I know when I became a lawyer there is a requirement of good character to become a lawyer and. I think that there's a lot of lawyers, soEdward: I think the bar should be higher for the Avengers. Shouldn't the bar be higher than the lawyers?Michael: I think it should be. I think it should be. It should be higher than the bar for lawyers. The bar for superhero should be much higher and it turns out that it isn't. And let's be honest, the Avengers are the super team that people are in, are interested in, and it that are called in as the heavy hitters. So this seems like. Quite a promotion for somebody who, as you say, committed the crime of kidnappingEdward: That's interesting. Let's go back and talk about your issue with, Hey, lawyers have a high bar. I think part of the reason why we can hold lawyers to a high bar is that the supply of lawyers is really high. We're graduating more lawyers every year, and if there's an unethical lawyer, we can say, no thank you. We don't need you. We can replace you with an ethical lawyer. I wonder if the problem is, People who are powerful enough, superheroes who are powerful, super people who are powerful enough to be Avengers. There's not an excess supply. There's a handful of these people. Mm-hmm. There's like a few dozen maybe on the planet. And so if you're looking to augment that team and your bar is high from a power perspective, maybe you have to bend a little bit on the ethics perspective.Michael: Or maybe, if you believe in rehabilitation, which I do, maybe there's a steep rehabilitation curve? Because as you say, demand exceeds supply. And so if we need to have, Superpowered or super skilled people either we're willing to turn a blind eye or we're willing to go through the process that hopefully allows him to achieve rehabilitation. So behind the scenes there's been this sped up process. Yeah. Because we need to have this person. I know what you're saying. It does seem a little fu butEdward: it does. I'm stretching a little bit, trying to make sense of the fact that we have a known super villain on the team. And not just on the team, but specifically signed off by the federal government, the federal security agency has come on and said, Hey, this guy is clean. He's totally, totally legit. Now, and maybe the other possibilities that maybe the whole villain thing that Hawkeye was doing before was a misunderstanding, like the, the Avengers declared martial law on America. Turns out it was a mistake. Right? It wasn't actually them maybe and we're okay with that because Avengers do good, Avengers do. We'd say, oh, the bad was a mistake. We're all good. And Hawkeye just didn't do the good part at the beginning. He was just doing much of bad, but then like, oh, nope, we are okay with it. It was a, it was kind of a mistake. It was a misunderstanding. He's actually a good guy and maybe we just have to accept that.Michael: I guess, and the fact that it's Iron Man who he's fought, who's come forward and vouched for him, must mean there's something to the idea thereEdward: that's assuming Iron. Man is Iron Man.Michael: I know it's the Iron Man with whomever that person is has come forward and voast for him? For, for Hawkeye, andEdward: well, no, no. Let's say a Iron Man has come forward and Vos for Hawkeye. Yeah. But that's a whole other point. We've talked about this conspiracy. Do we know that the Iron Man inside the Iron Man suit is the same as the Iron Man who was in the Iron Man suit fighting Hawkeye. Maybe the Iron Man inside the suit. The individual inside the suit has been replaced and now he's like, I was an enemy with the old guy in the suit. Let's bring on some more of the people who are also his enemy onto the main team.Michael: So a hostile takeover, Eddie, like you got. This Iron Man. That's not real. Who's recruiting a villain and who's left on the team? Who are the other people on the team? Ed?Edward: Well, we know that I think giant man in the WASP are still people on the team, and so, hey, we, know that giant man in the wasps, their powers come from technology, right? We know this now too, right? There's some sort of helmet or pills or something they take and they wear masks. We don't know who they are. Maybe they've been replaced at the same.Michael: It's Wild Day, so the three members of the team of the Avengers, who are technology based, Iron Man, giant men in the Wasp are still on there and they could be swapped in. And interchangeable. For all we know. Thor isn't exactly interchangeable.Edward: That's right too. So the two people that are not, that looks like they're being replaced are Captain American Thor and Thor is, that's right. Clear. Like whatever. Thor is magical, powered, mutant. We don't know exactly what he is. We know that he is not an armored suit. He's not taking a pill. And turning to Thor and Captain America we know is some experiment from like the 1940s during World War ii, who is Un aging and like super strong. And he's a super powerful individual. He's physically fit and he's not replaceable either. He's not like, you can just put someone else, put the,Michael: there's footage of him going back to the forties as well, so maybe hard to just replace him. Whereas you have the, you're right, you have the only three members of the Avengers left are one second, easily be swapped out, and now they're. Pac a villain, or at least a criminal.Edward: I think somebody should be taking photos of the lower half of Giant Man's face and matching that up to previous photos. I guess you could still replace him with someone who's lower Jaw looks the same, but maybe they didn't go to that much trouble. I think someone should at least investigate.Michael: Or get his dental records, or photos to get a sense of his teeth and then compare them to old photos and say, aha, aha, I can see that that front tooth is shifted over quite a bit. That's not the same giant man.Edward: He's like, but I was punched in the face. I'm an avenger. I can punch in the face a lot.Michael: Uh, maybe wouldn't be the best one. But the nose, even like noses are pretty distinctive. Or even ears that they pot. Well, I don't think ears pot though, butEdward: his ears are covered. We don't, we don't know what his ears look like,Michael: but this all goes through our fundamental problem is that we, as a public and as the fifth, the state, have a hard time, Getting a sense of who these people are or possibly being fooled because they wear masks. And I guess, if we see that the Avengers as basically a very public facing, paramilitary organization that's to some degree manage or governed by the government say the Federal security agency in this case, then I guess there must be some safeguards. I good, good guess, but it's hard to say.Edward: And even if there are, it feels like, it's not the first time that you can imagine some corruption within the government, right? Maybe it's not even, a giant corrupt thing that we're talking about, but maybe that giant man in the wasp, our agents of the government, Iron Man is an agent of the government and somebody in charge. Whoever we don't know who that is. Someone in charge decides to bring on Hawkeye, and let's say all five members of the team are. Forget it. We don't want this guy on the team and the government guy's like, no, no, no, no, no. We've done the checkup. He's totally fine. He's totally legit. But they're like, no, we, we all quit. And so Captain American Thor are gone. You can't replace them, but you're like, oh, well hey, you three, you can't quit. You can quit if you want, but whatever. Tom Jones and Bob Smith can quit, but a giant man and the Iron Man in the was, they don't quit. They just get replace.Michael: Yeah, this deserves investigation. This deserves further inquiry. There's too many moving parts of the story to just let it sit. It's easy to be distracted by a new member of the adventures for the public, it's the first new member that they've added since they formed,Edward: no, no, no. That's not true. That's not Captain America came on. They, and he joined the team. Wonderman came on and he joined the team. Now, Wonderman died almost before we knew he was on the team. But he was an official Avenger for Okay. Some period of time. So this is the third new member of the team.Michael: Okay. It's still relatively unique though, let's just say that it's a big deal. Like Captain America is a new Yeah, it's a big deal. So it's, but it's distractingly. Interesting. And so other people, other journalists, and if I don't think we would consider ourselves journalists, but maybe we should, in this instance, should be asking these tough questions. And then I would think if they are truly a paramilitary organization, there is an interest, a public interest in perhaps knowing their identities in the same way that you would of any kind of, Government agents, unless they're spies, which the adventures aren't.Edward: Okay. Can we talk a little bit about speculation? We've done this conspiracy stuff, but now we have so it's true the Captain American Thor are off the team. I think your argument is that Hawkeye kind of replaces Captain America and I can buy that, right? Like they're both extremely talented individuals in some way, shape, or form. Both of them have projectiles that they incorporate one arrow and one a shield. I would argue arrows. More effective than shields start in terms of projectiles. But so that leads Thor. How do you replace an as guardian thunder God?Michael: Maybe with a Hulk. I don't know. Like, I mean, like what?Edward: Yeah, that went well last time.Michael: Maybe. The Thing, maybe.Edward: Oh, maybe The. Thing. Oh my gosh. That's a great call. Great call. Maybe it's time to shift things up.Michael: Yeah, I mean like maybe he's tired of being I wouldn't say that the fantastic four second tier, cause they aren't, but they do serve a different niche right, than the Avengers. And maybe that's true. Maybe Ben Grimm who was in the military. His interest might align better with a paramilitary organization rather than a more adventuring kind of organization. Fantastic.Edward: That's a great idea. Now, here's another theory is that Hawkeye was a villain that they got over to the hero side. Why don't we look at the list of villains out there? Radioactive man. Radioactive man from China. They decide to he's gonna defect and join America and join the Avengers. Because I would argue radioactive then wasn't evil. He was just serving the wrong master. And people have defected from China to America all the time.Michael: I mean, it'd be hard to get notice to him over in China, but Sure. He does have a skillset. He is extremely powerful. Similar to, I don't think he's the same strength level as Thor, butEdward: hasn't he battled Thor? Isn't Thor and radioactive man, aren't they arch.Michael: It's hard to tell. How many battles do you have to be an Archie enemy? I think you need a few, but,Edward: Just a regular enemy.Michael: Yeah, he's an enemy. Well, how about, okay, there's two. I'd say if you wanna go straight on, as guardian to as guardian, it would be the executioner. Executioner, yeah. Or Loki. Are the, oh Loki. If you could rehabilitate in the way that they rehabilitated, Hawkeye presumably, but I'd imagine rehabilitating an ancient immortal being that it might be a little tough. Tougher it. A little tougher to serve the interests of America or the world.Edward: No. You've been focus, we've been focused on like strength though too. Mr. Hyde is another strength strong guy. Yeah. Right. Maybe Mr. Hyde. But I wonder Thor is more than just a strong guy. He's more than. Pure muscle, the guy can fly. Remember we talked about how fast he can fly across the ocean?Yep. So do we need a guy who can fly? Like how about the wizard? Can we bring the wizard back?Michael: Yeah. But it's not like he's made a couple mistakes. Like you suggested maybe hot guy. He's a career criminal now. He just broke bad. How about, how about that guy with the, the wings from the x.Edward: Oh, angel Fly. Angel could fly Fly Angel. Yeah. Angel. Angel could fly. Yeah. You know, I think the point is it's gonna be hard to replace Thor cuz there's people who are strong that we could find. There are people who can fly. We could find, but trying to find somebody who can do both, that's a pretty unique spot. I think maybe there, there were, they made a mistake to let Thor go.Michael: Like I say, it's a developing story and I'm still distracted by the idea for lack of a better term, a super villain. Hawkeye is now in the Avengers, seems kind of funny. For a couple reasons. And then longstanding Avengers are just, I just disappeared. The only ones that remain are ones who are basically, are suits, where power suits seems kind of strange. Yeah. Yeah. And I wonder what's happening. You know, we gotta get into this.Edward: There's also the point that we, this is all speculation too, because they did not say the Captain American Thor off the team. There was questions asked, and it was all just no comment. No comment, no comment. We're not gonna talk about it. What did he, he said something about the lives of Avengers are private citizens. We can't comment on them. Like, it was a definitely a very sketchy statement of we're not gonna go there.And so, hey, I guess stay tuned is the answer. More to come. More to come. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

“So we have this issue in this country, that we keep essentially trying to rewrite the past, to make it seem like it wasn't what it was,” says Sam Jean Esq., who returns for another episode of Cuckoo 4 Politics: Raw & Uncut. He references Skip Gates who said that countries that confront their histories of racism do better than countries that don't. Yet, people in positions of power are literally rewriting history to make certain segments of the population feel more comfortable. The hypocrisy of certain Conservatives to promote free speech but to want to censor students' curriculum, or want to decide whether drag shows are fit for other peoples' children to see based on a false equivalency between a style of theater and criminal activity. They believe in free speech as it pertains to their own world view, under the guise of simply “asking questions,” while opposing points of view are forms of indoctrination that needs to be stopped.  People aren't willing to have conversations about the way that slave labor boosted the economy of the South such that it could compete with the industrial North in the Civil War. Africa, the second largest continent in the world is rendered the same size as other continents on the map, is reflective of how much Africa is still not valued beyond the resources it can provide for other parts of the world. In his closing, Michael cites the 25 states across the country that are bidding to ban any curriculum that mentions critical race theory or sexual orientation, reproduction or gender identity. Anyone who opposes this is only allowed to comment on the voting procedure and not the content of the bill itself. Michael agrees with historian Jim Ross at the University of Arkansas at Little Rock that these measures are the same taken by the Old Confederacy and would only serve to resegregate schools.  Quotes “This is the Republican Party that says, individual freedom, they strive for freedom. The people must decide. Yet they're enacting laws that will dictate what you must learn. Are they becoming like North Korea? I mean, is this what's going on?” (22:50-23:09 | Michael)  “It is clear that there are people who believe that the only way that the world could have moved in the way that it moves is if things happened exactly like they happened. They believe that the only way that the West could advance was to be colonizers. And so what they do is they don't see colonization as something that is bad, that is evil, that strips the dignity of peoples who are being colonized. If they do see that, they think, ‘Well, that's a necessary evil for the benefits of what colonization brings.'” (34:47-35:27 | Sam) Links cuckoo4politics.com https://www.instagram.com/cuckoo_4_politics/ https://www.facebook.com/Cuckoo-4-Politics-104093938102793 Podcast production and show notes provided by HiveCast.fm

In this episode:Mike and Ed discuss when it is appropriate for a regular human to get involved in super-conflict. If you can't help, you don't need to show off - just run away and call 911! Also: Are all Asgardians super? If they are, why wouldn't all of them come to Earth where they could be super powerful? Or is that just beneath their dignity?Behind the issue:This is the point where Stan has decided to take Thor “off the table”. He is going to leave the Avengers, and more of his stories will involve stuff happening in Asgard and the politics of the gods, rather than fighting villains of the week on Earth.In this issue:Thor and Loki are engaged in battle in a faraway land, at the behest of Odin to sort out who lied to him. This all came about because of a trick that Loki played on Thor and Odin. Ultimately, Odin realizes that Loki lied to him, and that Loki had put Jane Foster in harms way as part of his scheme. Meanwhile on Earth, the Enchantress and the Executioner kidnap Jane in broad daylight, and a bunch of pedestrians intervene in an ill-fated attempt to rescue her. Back to the faraway land - Loki escapes, leaving Thor stranded.Assumed before the next episode:People watch footage of the pedestrians being unable to take down super-powered Asgardians and realize they probably shouldn't try that.This episode takes place:After Thor is stranded in another dimension.Full transcript:Edward: Mike, it is kidnapping week here on the show, ,Michael: and I didn't even mark it in my calendar, but you're right. Every year it creeps up on me every year. Kidnapping week, you know, I just think really it's kidnapping week. It's been that long. Oh gee.Edward: Yeah. Yeah. It's time for the friends and family of our heroes to be put at risk where the villains come in and, use them as leverage to. I dunno, I guess to get the heroes to fight. Why, they couldn't have just got them to fight before, it feels like most of these heroes won't turn down a chance to fight with these villains. Like I think the kidnapping part is a little unnecessary.Michael: It does seem unnecessary and maybe that's why we're taking a little jaunty view of it, where yes, they're being kidnapped, but it usually works out , no one's really injured. It makes it seem almost like a juvenile game between the super villains and the superheroes.Edward: And in this particular case, two of the top people at, Stark Corp, pepper Pots and Happy, I'm sorry, I don't know Happy's last name. Happy Hogan. Happy Hogan. Yeah. Happy Hogan. We're kidnapped. Everyone can, Breathe easy. They have all been rescued. Iron, Man has rescued them from the kidnapping. So they're back at home. Happy is now happy. And meanwhile, Sue Storm from the Fantastic Four, the actual superhero Sue Storm, has also been kidnapped by the Frightful four. And she's not yet been returned. So that the case is still out. Although with her powers, she's gonna be much easier to protect herself than Pepper and happier.Michael: I guess, we'll see how it all shakes out, but on a more serious note there is a concern about these connections with these superheroes that leave them exposed to risk. You gotta wonder about what they're doing to protect themselves in the case of Iron Man, no one knows who he or she is. It's just that there's a person in a suit of armor and they just associate, butEdward: he's associate, yeah. He's associated with Stark Corp. And so That's right. People know that Iron Man is Tony's Stark's bodyguard more than that. He's like the bodyguard for the company, the face of the company. And so, clearly if one of the top people at the company is kidnapped, Iron Man is gonna come to the rescue. And that's exactly what happened.Michael: But I think sometimes about say a royal of family or a distant relative of say the president,, if your cousins with the president, are you worried about getting kidnapped? And do you get a security detail? And the answer is no. And if you're 20th and line of the throne. Do you need a security detail because somebody kidnapped them, then it would be news. But I guess there, there is some cold comfort for people that work at Star Corp is that they're that far removed and they're not really at risk, but then again, maybe their career's not going so well, if they're not, if they're not exposed to kidnapping.Edward: That's right. This, this, you've been promoted and also kidnapped.Michael: Yeah. And they're like, thank God. Finally, you know what? They gave me a corner office and that was great and all, but it wasn't until I actually was reporting directly to Tony Stark that I was kidnapped. I was kidnapped by a Russian spyEdward: I've made it. I've made it. Mike . My career is finally taking off, and I'm a prisoner in Russia.Michael: Keep my bonus kidnapping and take me Siberia. .Edward: Is that like, I wonder if that's like a bullet on their resume for their next job was kidnapped four times. Therefore, it must be important.Michael: rescued by Iron Man three times and once by Thor. It was great. You know, recommended five stars.Edward: Yeah so this time, I dunno, we should probably cover both these kidnappings, but the first kidnapping of, pepper and Happy, was I guess a former Russian agent called Black Widow. And, someone called Hawkeye. And, Hawkeye apparently dangerous cause he did significant damage to Iron Man's Armors, Iron Man, managed to recover the two kidnappings. Black widow and Hawkeye did escape, but in the process, Iron Man's Armor was severely damaged. So this was a real threat.Michael: It is, but it's super weird, right? So Ironman's basically a living weapon. He's a rocket gun, you know. The way I understand Hawkeye is he fights with a bow and arrow and while I accept the fact that he somehow used the bow and arrow to get acid on costume. I don't think the operative part was the bow and arrow. I think it was the acid that just could eat through the suit. And my question,Edward: The arrow was a delivery vehicle for the.Michael: You could get a water gun for that , you know, especially,Edward: I'm pretty sure the wa like, I dunno if you, so I have some young children and they use water guns. Water guns do not shoot water very far. Okay. Whereas a bow and arrow, you could shoot that very far. Like maybe not as far as a sniper rifle, but a solid bow and arrow. You can shoot that thing a long wave.Michael: I know. Okay, I get that point. But I guess what I'm saying is that it seems like the only thing he's got is a bow and arrow so if he's truly the marksman, why is he not using a gun? Not that I wanted to use a gun cuz he's a bad guy. But wouldn't it be more effective in a fight if you had a gun and an earring? AccuracyEdward: Depends who you're, you're fighting against. I think if someone brought a gun to fight Iron, Man, those bullets would just bounce off his armor. But instead, well, he fired an acid arrow at him that melted his armor and practically took him.Michael: But I guess. Up your game, Hawkeye bring a rocket launcher. You know, or like, it's not gonna get bone arrow. It just the acid arrow. How it seems like the only thing that might've helped again, and in a fight between Hawkeye and Iron Man, like what else, what other arrow could he have?Edward: Maybe he has,, I could imagine many arrows, right? I can imagine. Many imagine he had like an emmp arrow that knocked out electronics. Clearly he didn't have one of those. Cause if he did, he could've taken out Iron Man with one. But he even, but maybe he should get one for next time.Michael: A projectile, like a gun. He could use, he could shoot like a little disc or something.Edward: Don't arrow guns don't. Guns don't have e emmp blockers. They don't have, there's no such arrow bullets. There's no acid bullets. These arrows do. These arrows do. Why not? Why not? ,Michael: I just think it's, Silly. I just think it's silly. It seems like he's committed. He's like, you know what? I like, I like being an archer. And they're like, hold on a second, the 17 hundreds called, they want their weapons back. And they're like, yeah, forget it. I'm sticking with it. No, it's not even the 17 hundreds, like the 14 hundreds, there's been advances in technology Hawkeye. And if you're really good at aiming things and shooting things, invest in a little. You know, gun workEdward: Well, here's my theory is that Hawkeye has some sort of incredible superpowers that'll, that give him the ability to shoot these things the same way we talked about the green goblin being able to balance on that, right? On his, on his hoverboard. I feel like Hawkeye has some sort of advanced superpowers on firing arrows. And he's combined that with incredible technology that provides these arrows that do incredible things. And I think, just because it seems silly to you, Mike, doesn't mean it's not.Michael: No, I, acknowledge that. I just, I guess I'd like to, again, like many of these superheroes I like to talk to and say, just so I understand this, have you thought about something different? Just like, explain to me why this is the process, if it's not just a shtick that you have because you like looking like, a bad Robinhood Halloween costume.Edward: I think, this is a case, Mike, where you are sitting here being the critic, right. Going and arguing against these guys, whereas he's out there risking his life actually doing this stuff and, and like I, the bad guy, I'm, I'm gonna, well he's doing evil, but at least he's doing something. He's, he's stepping up and he's, and he's taking action and he's making things happen in the world. And I, feel like sitting back and critiquing it. We should be trying to understand it and let's understand what he's doing and why he's doing it that way. But to, wave your hands and say what he's doing is dumb and stupid, man. I wanna see you go out there and fight Iron Man with your rocket launcher .Michael: I'm not, but I guess, okay. I guess I was, I just still find it silly. But no, I'm ed you've really made it, you've made some headway in this discussion. Yes. Okay. Iron, Man, keep it up or no, Iron Man haw. Keep it up. Keep it up. See how, see what happens. But I'm just saying to you right now, in a year's time, he is in jail, , and it's like, and I'd be curious. And they take away his arrows. . Yeah. I'd be curious. He says like, yeah, you know what, you know what my mistake was? I used a bow and arrow in a modern world to commit crimes instead, I should have. A gun or a rocket launcher, or a flame thrower, or even a water gun. that shot.Edward: Hey, speak. Speaking of other options, let's, let's move on to our second kidnapping of the week. So Sue Storm, kidnapped by the frightful four. All four of them, I guess, got together and took her out. Usually the fight for four are battling the entire Fantastic four. And this case they focus their efforts on one individual, on the team, kidnapped her, are now demanding the other ones come and fight them. So far nothing really exciting in the news, but I think what's interesting, maybe interesting is that, two of the dreadful four, are, if not new then rebrand.Michael: I think they're definitely rebranded, and I find it, again, I guess the theme I'm having is that it just seems kind of silly. So like, do you know what the name is?Edward: Like we talked about the silliness, . Let's give these guys some credit. They're battling the Fantastic Four. These are not clowns,Michael: not silly people. Okay. Okay, let's go through this. Okay, so we know about what's his, um, what's his real name, the Wizard's real name, uh, bent. Whitman Bentley Bettman? Yes, that's correct. Okay. Okay. So he goes from Bentley Whitman very intelligent person knowing the world over to calling himself the wizard cuz he's like super smart and he wants to out Fox the Human Torch who's a teenager. And then he's rebranded himself as a Wingless wizard cuz he's using is, he's still using his anti-gravity suit, which he had before. And my first. Who are you talking to about the branding? Like boy, the wingless part is not the interesting part of this. We already know you're the wizards so you're flying, but you and I Ed are wingless. This isn't the win the Wingless radio show. You know what I mean? I'm not the wingless lawyer. You're the winless dad of your children. The Thing.Edward: If he was, if he was armless, maybe he should call that out. But you're right, a human who is Wingless doesn't seem to be The Thing that you care about.Michael: No, it's not. It's not like, woo. I'm really intimidated. He's wingless. Watch out. He's wingless. .Edward: You can imagine all these other characteristics he does not have . The claws.Michael: Claws, you know. I don't know, like the finless, like, I guess you wouldn't be good swimming. Like it's just dumb . So it's not just, it's not just silly, it's kind of dumb.The guiltless, the guiltless wizard. , what I hope, what I hope, because he's a bad guy, he's doing bad things and he kidnapped somebody recently is, I hope that he paid a lot of money to some consultant to say, what am I missing? Why, why are people thinking I'm a bad guy, just cause I do bad things? They're like, you know what it is? It's because, you know, the wizard is so intimidating. Let's just say, to soften you up and say like, here are things you, you aren't, you're, you don't have wings, so we're gonna call you wingless and that, and everyone likes alliteration. You're the. You're the wingless wizard now. That'll be $5,000 here. Thank you very much. Goodbye, Lee. I just think it's not very good.Edward: Okay. I think we can agree the Wingless wizard was a misfire when it comes to branding. But. The other member of the team who's come up with a new name for themselves, paste Pot, Pete, which I always have a hard time saying, and yeah. Frankly, might be the worst name in the superhero business, . And it was about, it was about time he changed and he did change to what I like. Well, it's not a worst name.Michael: The Trapster. The Trapster. You know, I think the irony here is that they're on the same team and the Wisher goes to a worst name with alliteration and Pace Pot pete goes to a better name, and eliminates the alliteration. . Yeah. So it's no longer Pace Pot Pete, which is kind of like, again, pace Pot is not like, Ooh. Oh no. They might. Something sticky on me. The trapster is a little more, nefarious, right? And I think it's more intimidating if that's what you're going for as a super villain. And it just seems that maybe. Pete Trapster should go over talk to Wing Wizard and say, you know what, ,Edward: as much as we all love the alliterations, it's, they're unnecessary these days. You can, like, they're, yeah, don't, you don't need to li you don't need to put yourself in that box wizard. You could call yourself the box less wizard.Michael: Yeah, but he should say something like, Hey, I was like you before where I thought what people needed to know was have in my name was have descriptions like Pace Pot. You know, Pete wasn't enough, had to be Pace Pot, and you had to be winless, but you don't need it at all. Just go right to the name, the Wizard, and I'm the Trapster and you're Wizard. So you're smart and you're devious, and I'm. I'm gonna trap you with my pace Pot , but I'm not gonna say that part because it's just gonna happen. It's just like I'm gonna trap 'em,Edward: talk, talk, talk, talk about what you achieve, not how you achieve it.Michael: That's right. And I won't be tied down to the PACE pod cuz I have more than glue, not much, but I have more than glue I might have like genius plans.Edward: I can trap you with whatever methods I choose. .Michael: Yeah. And I might just talk to my friend, the Wizard who's super smart. He's gonna help me figure out how to do these plants and I'll just, I'll do it. Sometimes it'll evolve pace, but I'm not tied down to it. And you know what, you might just float away. But no one needs to know why. just do listen. Just do. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this episode:Mike and Ed discuss two recent kidnappings: Pepper Potts and Happy Hogan by the Black Widow and Hawkeye, and Sue Storm by the Frightful Four. How senior do you need to be at StarkCorp before you are at risk of being kidnapped? Is a bow and arrow an effective weapon in the modern age? Should a wizard be defined by a lack of wings? Isn't lack of wings a common trait we all hold? All this and more - just don't call us silly!Behind the issues:As we get further into 1965, more and more issues are multi-part stories. Tales of Suspense #64 re-introduces Hawkeye as a villain, only to have him switch to being an Avenger next month in Avengers #16. Fantastic Four #38 ends with the heroes being at the epicenter of a nuclear bomb, and the after effects of that conflict continue for the next two issues. This pattern of moving beyond “supervillain of the month” becomes more regular with all of the titles over the next few months.In this issue:Tales of Suspense #64In the first story, Black Widow meets up with Hawkeye again. She explains how she has been pressed into service for the USSR, and that they have designed her fancy new costume replete with weapons and gadgets. She enlists Hawkeye with her task, to destroy Iron Man. To that end, they kidnap Happy and Pepper in an effort to attract Iron Man to their trap. Iron Man shows up, and Hawkeye and Black Widow nearly take him down. Fortunately, Iron Man rescues his friends, as the supervillains (soon to be superheroes) flee.The second story is a Captain America tale from WWII, when he had a secret identify as a first class screwup in the US Army. In this tale, Cap and Bucky battle a team of Nazis who have set up an innocent man who shows American audiences on a large crystal ball showing the awful future that awaits the US if it joins in the war. Cap and Bucky are able to break this propaganda show up. In the course of this story, we meet Agent Thirteen for the first time.Fantastic Four #38The Wingless Wizard (formerly the Wizard) argues with his teammates in the Frightful Four, the Trapster (formerly Paste Pot Pete), Medusa, and Sandman, and ultimately establishes why he is their leader with his mastery of gravity (basically he can fling things around with his anti-gravity tech). The Frightful Four kidnap Sue Storm, and the world takes notice. They take her to a small atoll in the ocean, and the Fantastic Four give chase, tracking them down and attacking the other foursome. The Human Torch is captured but then rescued by Reed and Ben, and the battle between the two foursomes then begins in earnest. Ultimately, the Frightful Four leave the atoll, leaving the Fantastic Four on the island moments before it is to be blown up by a bomb. The bomb detonates, but fortunately Sue protects her teammates in a force field, floating unconscious on the water's surface.Assumed before the next episode:People are wondering what the deal is with these superpowered people and the number 4.This episode takes place:After the Frightful Four have bested the Fantastic Four, and assume they have been blown up.Full Transcript:Edward: Mike, it is kidnapping week here on the show, ,Michael: and I didn't even mark it in my calendar, but you're right. Every year it creeps up on me every year. Kidnapping week, you know, I just think really it's kidnapping week. It's been that long. Oh gee.Edward: Yeah. Yeah. It's time for the friends and family of our heroes to be put at risk where the villains come in and, use them as leverage to. I dunno, I guess to get the heroes to fight. Why, they couldn't have just got them to fight before, it feels like most of these heroes won't turn down a chance to fight with these villains. Like I think the kidnapping part is a little unnecessary.Michael: It does seem unnecessary and maybe that's why we're taking a little jaunty view of it, where yes, they're being kidnapped, but it usually works out , no one's really injured. It makes it seem almost like a juvenile game between the super villains and the superheroes.Edward: And in this particular case, two of the top people at, Stark Corp, pepper Pots and Happy, I'm sorry, I don't know Happy's last name. Happy Hogan. Happy Hogan. Yeah. Happy Hogan. We're kidnapped. Everyone can, Breathe easy. They have all been rescued. Iron, Man has rescued them from the kidnapping. So they're back at home. Happy is now happy. And meanwhile, Sue Storm from the Fantastic Four, the actual superhero Sue Storm, has also been kidnapped by the Frightful four. And she's not yet been returned. So that the case is still out. Although with her powers, she's gonna be much easier to protect herself than Pepper and happier.Michael: I guess, we'll see how it all shakes out, but on a more serious note there is a concern about these connections with these superheroes that leave them exposed to risk. You gotta wonder about what they're doing to protect themselves in the case of Iron Man, no one knows who he or she is. It's just that there's a person in a suit of armor and they just associate, butEdward: he's associate, yeah. He's associated with Stark Corp. And so That's right. People know that Iron Man is Tony's Stark's bodyguard more than that. He's like the bodyguard for the company, the face of the company. And so, clearly if one of the top people at the company is kidnapped, Iron Man is gonna come to the rescue. And that's exactly what happened.Michael: But I think sometimes about say a royal of family or a distant relative of say the president,, if your cousins with the president, are you worried about getting kidnapped? And do you get a security detail? And the answer is no. And if you're 20th and line of the throne. Do you need a security detail because somebody kidnapped them, then it would be news. But I guess there, there is some cold comfort for people that work at Star Corp is that they're that far removed and they're not really at risk, but then again, maybe their career's not going so well, if they're not, if they're not exposed to kidnapping.Edward: That's right. This, this, you've been promoted and also kidnapped.Michael: Yeah. And they're like, thank God. Finally, you know what? They gave me a corner office and that was great and all, but it wasn't until I actually was reporting directly to Tony Stark that I was kidnapped. I was kidnapped by a Russian spyEdward: I've made it. I've made it. Mike . My career is finally taking off, and I'm a prisoner in Russia.Michael: Keep my bonus kidnapping and take me Siberia. .Edward: Is that like, I wonder if that's like a bullet on their resume for their next job was kidnapped four times. Therefore, it must be important.Michael: rescued by Iron Man three times and once by Thor. It was great. You know, recommended five stars.Edward: Yeah so this time, I dunno, we should probably cover both these kidnappings, but the first kidnapping of, pepper and Happy, was I guess a former Russian agent called Black Widow. And, someone called Hawkeye. And, Hawkeye apparently dangerous cause he did significant damage to Iron Man's Armors, Iron Man, managed to recover the two kidnappings. Black widow and Hawkeye did escape, but in the process, Iron Man's Armor was severely damaged. So this was a real threat.Michael: It is, but it's super weird, right? So Ironman's basically a living weapon. He's a rocket gun, you know. The way I understand Hawkeye is he fights with a bow and arrow and while I accept the fact that he somehow used the bow and arrow to get acid on costume. I don't think the operative part was the bow and arrow. I think it was the acid that just could eat through the suit. And my question,Edward: The arrow was a delivery vehicle for the.Michael: You could get a water gun for that , you know, especially,Edward: I'm pretty sure the wa like, I dunno if you, so I have some young children and they use water guns. Water guns do not shoot water very far. Okay. Whereas a bow and arrow, you could shoot that very far. Like maybe not as far as a sniper rifle, but a solid bow and arrow. You can shoot that thing a long wave.Michael: I know. Okay, I get that point. But I guess what I'm saying is that it seems like the only thing he's got is a bow and arrow so if he's truly the marksman, why is he not using a gun? Not that I wanted to use a gun cuz he's a bad guy. But wouldn't it be more effective in a fight if you had a gun and an earring? AccuracyEdward: Depends who you're, you're fighting against. I think if someone brought a gun to fight Iron, Man, those bullets would just bounce off his armor. But instead, well, he fired an acid arrow at him that melted his armor and practically took him.Michael: But I guess. Up your game, Hawkeye bring a rocket launcher. You know, or like, it's not gonna get bone arrow. It just the acid arrow. How it seems like the only thing that might've helped again, and in a fight between Hawkeye and Iron Man, like what else, what other arrow could he have?Edward: Maybe he has,, I could imagine many arrows, right? I can imagine. Many imagine he had like an emmp arrow that knocked out electronics. Clearly he didn't have one of those. Cause if he did, he could've taken out Iron Man with one. But he even, but maybe he should get one for next time.Michael: A projectile, like a gun. He could use, he could shoot like a little disc or something.Edward: Don't arrow guns don't. Guns don't have e emmp blockers. They don't have, there's no such arrow bullets. There's no acid bullets. These arrows do. These arrows do. Why not? Why not? ,Michael: I just think it's, Silly. I just think it's silly. It seems like he's committed. He's like, you know what? I like, I like being an archer. And they're like, hold on a second, the 17 hundreds called, they want their weapons back. And they're like, yeah, forget it. I'm sticking with it. No, it's not even the 17 hundreds, like the 14 hundreds, there's been advances in technology Hawkeye. And if you're really good at aiming things and shooting things, invest in a little. You know, gun workEdward: Well, here's my theory is that Hawkeye has some sort of incredible superpowers that'll, that give him the ability to shoot these things the same way we talked about the green goblin being able to balance on that, right? On his, on his hoverboard. I feel like Hawkeye has some sort of advanced superpowers on firing arrows. And he's combined that with incredible technology that provides these arrows that do incredible things. And I think, just because it seems silly to you, Mike, doesn't mean it's not.Michael: No, I, acknowledge that. I just, I guess I'd like to, again, like many of these superheroes I like to talk to and say, just so I understand this, have you thought about something different? Just like, explain to me why this is the process, if it's not just a shtick that you have because you like looking like, a bad Robinhood Halloween costume.Edward: I think, this is a case, Mike, where you are sitting here being the critic, right. Going and arguing against these guys, whereas he's out there risking his life actually doing this stuff and, and like I, the bad guy, I'm, I'm gonna, well he's doing evil, but at least he's doing something. He's, he's stepping up and he's, and he's taking action and he's making things happen in the world. And I, feel like sitting back and critiquing it. We should be trying to understand it and let's understand what he's doing and why he's doing it that way. But to, wave your hands and say what he's doing is dumb and stupid, man. I wanna see you go out there and fight Iron Man with your rocket launcher .Michael: I'm not, but I guess, okay. I guess I was, I just still find it silly. But no, I'm ed you've really made it, you've made some headway in this discussion. Yes. Okay. Iron, Man, keep it up or no, Iron Man haw. Keep it up. Keep it up. See how, see what happens. But I'm just saying to you right now, in a year's time, he is in jail, , and it's like, and I'd be curious. And they take away his arrows. . Yeah. I'd be curious. He says like, yeah, you know what, you know what my mistake was? I used a bow and arrow in a modern world to commit crimes instead, I should have. A gun or a rocket launcher, or a flame thrower, or even a water gun. that shot.Edward: Hey, speak. Speaking of other options, let's, let's move on to our second kidnapping of the week. So Sue Storm, kidnapped by the frightful four. All four of them, I guess, got together and took her out. Usually the fight for four are battling the entire Fantastic four. And this case they focus their efforts on one individual, on the team, kidnapped her, are now demanding the other ones come and fight them. So far nothing really exciting in the news, but I think what's interesting, maybe interesting is that, two of the dreadful four, are, if not new then rebrand.Michael: I think they're definitely rebranded, and I find it, again, I guess the theme I'm having is that it just seems kind of silly. So like, do you know what the name is?Edward: Like we talked about the silliness, . Let's give these guys some credit. They're battling the Fantastic Four. These are not clowns,Michael: not silly people. Okay. Okay, let's go through this. Okay, so we know about what's his, um, what's his real name, the Wizard's real name, uh, bent. Whitman Bentley Bettman? Yes, that's correct. Okay. Okay. So he goes from Bentley Whitman very intelligent person knowing the world over to calling himself the wizard cuz he's like super smart and he wants to out Fox the Human Torch who's a teenager. And then he's rebranded himself as a Wingless wizard cuz he's using is, he's still using his anti-gravity suit, which he had before. And my first. Who are you talking to about the branding? Like boy, the wingless part is not the interesting part of this. We already know you're the wizards so you're flying, but you and I Ed are wingless. This isn't the win the Wingless radio show. You know what I mean? I'm not the wingless lawyer. You're the winless dad of your children. The Thing.Edward: If he was, if he was armless, maybe he should call that out. But you're right, a human who is Wingless doesn't seem to be The Thing that you care about.Michael: No, it's not. It's not like, woo. I'm really intimidated. He's wingless. Watch out. He's wingless. .Edward: You can imagine all these other characteristics he does not have . The claws.Michael: Claws, you know. I don't know, like the finless, like, I guess you wouldn't be good swimming. Like it's just dumb . So it's not just, it's not just silly, it's kind of dumb.The guiltless, the guiltless wizard. , what I hope, what I hope, because he's a bad guy, he's doing bad things and he kidnapped somebody recently is, I hope that he paid a lot of money to some consultant to say, what am I missing? Why, why are people thinking I'm a bad guy, just cause I do bad things? They're like, you know what it is? It's because, you know, the wizard is so intimidating. Let's just say, to soften you up and say like, here are things you, you aren't, you're, you don't have wings, so we're gonna call you wingless and that, and everyone likes alliteration. You're the. You're the wingless wizard now. That'll be $5,000 here. Thank you very much. Goodbye, Lee. I just think it's not very good.Edward: Okay. I think we can agree the Wingless wizard was a misfire when it comes to branding. But. The other member of the team who's come up with a new name for themselves, paste Pot, Pete, which I always have a hard time saying, and yeah. Frankly, might be the worst name in the superhero business, . And it was about, it was about time he changed and he did change to what I like. Well, it's not a worst name.Michael: The Trapster. The Trapster. You know, I think the irony here is that they're on the same team and the Wisher goes to a worst name with alliteration and Pace Pot pete goes to a better name, and eliminates the alliteration. . Yeah. So it's no longer Pace Pot Pete, which is kind of like, again, pace Pot is not like, Ooh. Oh no. They might. Something sticky on me. The trapster is a little more, nefarious, right? And I think it's more intimidating if that's what you're going for as a super villain. And it just seems that maybe. Pete Trapster should go over talk to Wing Wizard and say, you know what, ,Edward: as much as we all love the alliterations, it's, they're unnecessary these days. You can, like, they're, yeah, don't, you don't need to li you don't need to put yourself in that box wizard. You could call yourself the box less wizard.Michael: Yeah, but he should say something like, Hey, I was like you before where I thought what people needed to know was have in my name was have descriptions like Pace Pot. You know, Pete wasn't enough, had to be Pace Pot, and you had to be winless, but you don't need it at all. Just go right to the name, the Wizard, and I'm the Trapster and you're Wizard. So you're smart and you're devious, and I'm. I'm gonna trap you with my pace Pot , but I'm not gonna say that part because it's just gonna happen. It's just like I'm gonna trap 'em,Edward: talk, talk, talk, talk about what you achieve, not how you achieve it.Michael: That's right. And I won't be tied down to the PACE pod cuz I have more than glue, not much, but I have more than glue I might have like genius plans.Edward: I can trap you with whatever methods I choose. .Michael: Yeah. And I might just talk to my friend, the Wizard who's super smart. He's gonna help me figure out how to do these plants and I'll just, I'll do it. Sometimes it'll evolve pace, but I'm not tied down to it. And you know what, you might just float away. But no one needs to know why. just do listen. Just do. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this episode:Mike and Ed discuss the increased police presence in the city and how that is affecting both real and perceived crime. Is this because police have less to do as a result of the superheroes helping out? Is the presence of superheroes itself causing criminals to give up lives of crime, and maybe even become heroes? More to the point, is that what happened with the Green Goblin - he was inspired to become a hero? If so, why has he not changed his appearance? Does he want to be scary, or is what he truly looks? And how the heck does he balance on that glider - does he have abs of steel?Behind the Issue:This is the third appearance of the Green Goblin. Clearly, he does not become a hero. Steve Ditko and Stan Lee decided to keep the Goblin's identity secret, but behind the scenes they were debating who he should be. Lee wanted him to be someone from Peter's life, but Ditko wanted him to be a stranger. The disagreement meant that the Goblin's identity remained a secret from the readers until Ditko left the title (the Goblin's identity was revealed in the first issue after Ditko was replaced). Oh, the drama!In this issue:The Green Goblin tries to take over the New York City underworld, and while they are not convinced, he is definitely scaring them. Meanwhile, Peter Parker notices that former reporter and criminal Frederick Foswell is back at the Bugle. Apparently, the Bugle's publisher J. Jonah Jameson believes in redemption, or at least the value in giving people a second chance. Peter is not convinced that this is a redemption story, though, and he tails Foswell, whom he notices speaking with a thug. Foswell turns over information to Jameson that the thug had on a crime boss, who in turn provides this information to the police. The Goblin is overjoyed with these pieces falling into place - he has set this whole thing up to help him with his hostile takeover of the world of crime. Peter then changes into his Spider-Man outfit and tracks the Goblin, who tricks him into conflict with a mob boss and his lieutenants. Spider-Man basically does the Goblin's dirty work, taking out the gang and leaving them for the police. Realizing he has been played for the fool, Spider-Man finds and attacks the Goblin, who gets away. It's not all roses for the Goblin, though, who is disappointed to find out that Spider-Man did too good a job when he took down the mob boss and his entire gang, with the result that the Goblin had no gang to take over.Assumed before the next episode:The Green Goblin is going to need to rethink his whole gang takeover strategy.This episode takes place:After Spider-Man took down an entire gang.Full transcript:Edward: Feeling safer these days? Mike?Michael: No. ? No, I wouldn't say so. ,Edward: I feel like, like there's increased police presence on the streets. They're putting some crime bosses away. Is New York not a safer place than it was even a few weeks ago?Michael: Oh, well I guess that's standard than maybe, but I definitely have noticed a greater police presence in the last little while, certainly since the, a. Population of superpowered individuals on the scene. Do I feel safer before buildings could be captured and kidnapped and brought into space? I wouldn't say so in, you know, multiple invasions in New York City, butEdward: so, so, so, so clearly. Life is less safe now than it was in 1960 before.Michael: RightEdward: buildings. Were getting torn away, but I'm just talking about recently, like recently it feels like the superheroes are out on the streets. There's a bunch of them now. It feels like they're covering the ground around the monsters and the super villains, and that's freeing up the police to go and take out the normal villains.Michael: Well, I think so. I have noticed that there's more police for sure. I, don't know what element of that is performative and what element is that the costume vigilantes that we speak about every week have been in addition to attacking gods and monsters and aliens have also been attacking street level crime as well. There is no doubt that Ant-Man and now Giant-Man and Spider-Man and all the insect related heroes, I suppose are trying to deal with some street level justice, which probably is freeing up some time for the police to focus on other things, other elements of society that require policing. That's my guess. Or, is his performatively they're just trying to show that maybe they shouldn't be ignored. Yes, there's people flying through the air, but we're the police, darn it. And we're in the. Keeping you safe, .Edward: Yeah. That, that, that is something, right? If that performativeness makes us feel safer, it could also make the criminals feel less safe and drive the criminals back into the holes they came from.Michael: Maybe. It could, but I still wonder if it's just performative. It's almost just trying to get attention, if you know what I mean. Like it's like everyone's talking about Iron Man, but don't they know we're the real heroes, , and it's likeEdward: the, the every we have, we need more, less kids. Dressing up as Iron Man and more kids dressing up as everyday police officers.Michael: That's right.Edward: Let's have more realistic dreams. Kids. . .Michael: Yeah. Unless you are a super science genius, can invent your own costume, you should probably apply to the police academyEdward: don't expect to be superhero. Just be a regular, everyday hero.Michael: Yeah. And that's good enough. But no, but seriously, I guess I haven't made my mind up. I'd be curious about the statistics. let's just call it regular crime and whether police are being freed up to deal with more of the regular crime that's why we're noticing it. And if they aren't, if there's no real change in how much, in the impact of like regular crime and how it's being policed, then I think it is performative. And it just seems like they're just trying to get some of the attention. I have a mixed mind, not when it comes to the police in general, it's just they're not there to tell me what to do and not to do they're there to investigate crimes and well, and,Edward: and they've, and they, so they've had some successes lately, right? So, lucky Lobos basically says whole criminal enterprise got all swooped up. The Frederick Farwell, a former crime boss himself outta prison now working for the daily bugle, put together a. Basically did investigative reporting figured out where all of Lucky Lobo's financial records were kept and, blew it out to the police. And they shut down, not just the head of the family, but basically shut down the entire operation and that's gotta reduce crime. ?Michael: Well, yeah, it would, I think, I'm not saying that there haven't been some recent successes, it's just that I'd like to see that's more anecdotal. Or at least there's a recency effect here. I'd like to see what has been the impact? I guess I'd express it this way. What has been the impact of having superheroes and super villains out in, say, New York City on the ability of police to police regular crime? If there has been any impact, so is it that the superpowered individuals are taking care of that and a little bit of regular crimes such there's more effort being put into a policing regular crime or if it's just no impact at all. And it's just for show, I don't know.Edward: It's interesting when I was in business school, one of the studies that we looked at was about crime in cities. And clearly like when crime goes down, real estate prices go up. And so we, well, we cared about in business school was money Mike and how forget about safety, but how safety affects money. But the point was, When you could, one way to drive down crime and drive up real estate prices was to basically do us like a spike of policing. Because if crime was at a relatively low level, that meant the police that you had on duty could identify any new crime that happens and shut it down. But if crime is at a really high level, the same number of police can't handle all that crime, and crime goes unenforced, which then encourages more crime, cause you can get away with it. Your chances are getting cock down. And so you need to drive it down to a low level and then keeping. At that low level is a lot easier than getting it there to begin with. And so I wonder if this, like the spike in policing that we've seen, the performative nature of it, the fact that we have these superheroes doing stuff. Has that driven crime down to a level now that it's gonna be easier to maintain at a low level. And it's driving even super villains to become superheroes like so the Green Goblin, for example, now he's gone from being a villain to like apparently being a hero. And maybe that's because crime doesn't pay anymore. let's switch to the other side.Michael: Before we get to the Green Goblin, I understand the point you're making, maybe, I mean, again, but I think as a business person, you would like to see the data as would I, but I'm a little confused. Why are you saying the Green Goblin is, is acting like a hero?Edward: So Green Goblin was involved in this whole shutdown of The lucky Lobo criminal gang, he helped take them on and he was seen battling them and taking out the crime bosses. He's working for the good guys.Michael: Yeah, Goblin's always worked for the good guys.Edward: Are you saying? Saying maybe if he's gonna switch sides, he should change his name too and become like the green? I don't know. Green Elf, .Michael: I don't know. He is got this goblin mask, he looks frightening on purpose. So are you sure he's on the side of the angels now, ed, you don't see that maybe taking out a whole. Might be in the interest of someone who's previously acting like a villain and attacking the city.Edward: Oh, so you're saying that he's just taking out his competition?Michael: Well, I mean that's, yeah, I mean, cuz The Thing is, okay, how about this? Previously he was acting like a villain, dressed up like a goblin, and he's frightening. He's on this glider, he is throwing bombs. at a, I think wasn't at a TV state. At a, at a tvEdward: Wait, at, at, the fan event, the Spider-Man fan event. He was like terrorizing people.Michael: I think it was being filmed too, but whatever it was, it's certainly at a fan event. So that's a criminal? Who should be locked up? And so do we have such a short-term memory that he just is still wearing the same stuff with the same equipment? And he's like, no, no, no, no, no. I'm good now. Well, he reallyEdward: yes and no. So we assumed he was a villain, but we also assumed that Spider-Man was a villain, right? There was a lot of assumptions flying around with these people, and it's not like Spider-Man and the Human, Torch haven't had public battles in Times Square, like the go what did the Goblin really do in his past event? He basically tried to attack Spider-Man, but like, it feels like everybody wants to attack Spider-Man. Maybe he's just like a guy who like has a grief with Spider-Man and now he's like trying to do.Michael: Wasn't he throwing bombs at crowds of people?Edward: Wasn't the Human Torch throwing like fireballs at crowds of people?Michael: I don't think he, no, I don't think he was at crowds of people, but I don't know. But may I assume you're right.Edward: They were in New York City and there were fireballs going around and there were people in New York City. Now nobody got hurt, but I don't think anyone got hurt from the goblins bombs either, did they? .Michael: I don't know off the top of my head, but I think there's a difference between throwing a bomb into a crowd of people and then actually being engaged in a fight. But anyways, I don't wanna make that go down, that so far cuz then we get the whole idea that you're right, they shouldn't be fighting in crowded places, but let's, okay, let's assume he's the go, the green goblins now a hero. You're a business guy. Is this good marketing? Like should he, what if he just got a new costume?Edward: Fair enough.Michael: He's truly on the side of angels and just changed it. So he looks like, I don't know, the,Edward: well, here's the other thing. Do we know it's a costume? Patel? Maybe he's like a Defor. Maybe he's like, that's his face. Like do we know it's like an actual mask? Maybe It's like, like, I dunno, like the Hulk looks kind of weird and stuff like there, there's all sorts of villains.Michael: I think it's a rubber mask. I, I think that the reporting shows it's a rubber mask. It's not like as a skin texture, but,Edward: maybe his, I think he, like Mike, we live in a world of monsters and aliens. Maybe his face just looks like a rubber mask, , and the poor guy can't change his face. The poor guy is like this ugly. Deformed thing that was driven into crime because it was deformity and people were making fun of him, mocking him, people like you. And now he's trying to go to the side of good and we're still mocking his like ugly.Michael: So you heard it here first, folks, ed, nevermind humanitarian, , goblin, goblin, defender,Edward: . I'm just, I'm just saying that not enough people defend the ugly people. People like there are focus groups and there are groups that help all these different people who have a tough time in life, but there's no group of like the Association of Ugly people that helps people like,Michael: Ed, I think that you've got the organizational skills. I think you're the person that should do that. But I wanna talk about one other thing before we go on to your pledge drive to help the criminally ugly people in the world. But what do you think about the green goblin? And I was, I was kind of thinking about this for a while. Like, what do you think about the fact that he is flying around on a glider like technology that doesn't exist? Right? He flies through the air at fantastic speeds. On the one you think, he must be a genius to invent that. But on the other hand, don't you think he would take some special training in order to manage that? Like I as a kid found a skate. Challenging, you know what I mean? as an adult,Edward: many people can use skateboards. Michael , many people use skateboards.Michael: It's, yeah. But to really use it like, to do tricks and whatever and to go down the street. But as an adult, I think I would find it impossible. But what do you think, but what kind of skill level would it take to properly manage that glider? I mean, we've seen it. We've seen it in action. It's incredible what he can do with it.Edward: Clearly, clearly the goblin has some skills.Michael: Some skills, but where do, where does he get the skills? So he gets it from, is he actually a military trained operative who's now broken, bad or good? Depending upon your view of him. Is he like,Edward: maybe, maybe he's just a really skilled skateboarder.Michael: really skills skateboarder . But what if he's a foreign national scent here to just ferment descent? I mean, I don't know, but that's the first things that jump to mind, right?Edward: Yeah. Yeah. So , it's po It's possible maybe I'm a foreign national here to do dissent. Who knows. I think jumping to the conclusion just because this poor man is ugly, that therefore he is a foreign national Michael. Like, like they're, they're ugly people Are, they're ugly Americans as well,Michael: what I'm saying. Forget the, you're the one calling him ugly, by the way. I'm not like, I've never called the,Edward: you said he's so ugly and he must be wearing a mask that no human can look as bad as this poor man looks .Michael: I think he's wearing a mask. I definitely think that, but you're the one that calls it ugly. Anyways, the point I'm trying to make though, is that to talk about what is where do you think the green goblin's from? Right, and I think the ability in and of itself to fly in that glider tells me that he's had some training.Edward: Or, or maybe he has like superpowers, like other people do. Like Spider-Man, I dunno. Like spider, I'm pretty sure Spider-Man doesn't climb walls and fly on webs cuz of training. He's not like some foreign national or military guy. He has like some sort of superpowers that give him like the powers of a spider. Maybe the green goblin has like the powers of a goblin. .Michael: Yeah. He's got like an amazing core, . so strong, and he's like, he's like, his quads are unbelievable. Just like the power of like standing crouched like that and flying at like standing upright, well, flying through the air at 50 miles an hour. The amount of strength that takes.Edward: He's, he's ripped man. The man is ripped. So all you women out there that are worried about his ugly face, but he's a ripped body. You know, this is the trade off that sometimes has have with men. But I think Spider-Man for example without any, I think additional training could be riding that glider, captain America could be riding that glider. Right. We, we have a lot, we have a lot of these superheroes that have special abilities. To me, it makes sense that the goblin has these special abilities too, and the fact that he, and, maybe he didn't invent the glider himself. Maybe Tony Stark invented the glider and gave it to somebody who had the superpowers to be able to use it. .Michael: I'll tell you what I think that the Green Goblin, if he's listening to our show, should feel comfortable coming on our show because , hi,Edward: because it's a radio show and it's no video, so he doesn't have to worry about his ugly appearance.Michael: no, I never said he is ugly and he is clearly gonna offend and Ed, who thinks he's a good guy? So, come on the show Goblin, but leave your goblin pouch outside with the bombs. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

We used a new AI tool to create a “complete episode summary” (see below). Please take a read and see if you find it valuable. If you do, please respond to this email and like the post. If there is enough interest we can generate the summary for all future episodes (and previous ones if there is enough demand). It costs ~$5/episode for the service, so we will only do it if there is demand for it. Let us know!In this episode:Mike and Ed discuss how the Wasp is being treated while she is in critical condition and digress into trying to understand just how fast Thor can fly. He can cross the Atlantic in three minutes. That is faster than any plane, train, or automobile! Is it faster than a rocket? Does he light the air on fire? What would it be like to be saved by Thor at that speed? Do we need to worry about mid-air collisions? Should we apply speed limits to superheroes?Full episode summary (AI generated from audio):The Trouble with Thor's Speed - Controlling Velocity for Protection.1. The Wasp's Critical Condition: An Update2. Uncovering the Mystery Behind Thor's Travels3. Controlling Thor's Speed: A Discussion4. Speed Limits: The Need for Superhuman RegulationThe Wasp in Critical ConditionReports of the Wasp's condition have been grim, but optimistic. She is currently stable but in critical care. With the Avengers involved, it is unclear what sort of medical help she is receiving and what types of injuries she sustains. It could be something as common as a car accident or sports injury, or something more specific to what the Avengers do.The Mystery of Thor's TravelInterestingly, Thor has been reported to have been flying around the world, potentially looking for a specific doctor to help the Wasp. Reports also indicated that he flew across the Atlantic in three minutes, much faster than any plane could go. Whether he is flying suborbital, as some science fiction theories suggest, or following flight paths at a certain altitude to avoid mid-air collisions, it is remarkable to consider the speeds at which Thor is traveling. One aspect of Thor's power that often goes overlooked is his impressive speed. During a podcast discussion, the hosts discussed just how fast Thor can fly. They estimated that Thor can fly at about 80 times the speed of sound - Mach 80 - which is much faster than any mechanical aircraft on Earth, and even faster than a rocket to the moon.Controlling Thor's Speed:The hosts then discussed how Thor's speed might be useful in saving people. They concluded that Thor would need to understand how to control the speed. If he could fly to someone quickly but then decelerate to a stop, he could rescue them before they were injured. They also discussed the amount of power behind his speed, and the air displacement it could cause if Thor flew by someone on the street. All in all, Thor's speed is an extremely impressive part of his power set and is a major factor in why he is considered one of the most powerful superheroes., The speaker highlights the potential problem of an individual traveling at a speed far beyond what humans would normally experience. They discuss the potential damage that could be caused in the wake of someone flying at such a high speed.The speaker questions whether the superhero, Thor, should partake in control testing far away from other people, to see the damage that could be caused by traveling at such a high speed. They point out that although the idea of traveling from one place to another quickly may sound great, it could lead to destruction in his path. The speaker emphasizes the need for speed limits for a reason, to ensure that people are not traveling too fast, resulting in destruction.Behind the issue:This issue deals with the cliffhanger we were left with in issue #13, with the Wasp in critical condition. The story introduces a new alien race, the Kallusians, but they are not revealed to the human race, and they are never mentioned again in the Marvel Universe.In this issue:The Wasp is in critical condition, and with not a moment to spare, Thor flies to Norway to basically kidnap a medical specialist, Dr. Svenson, to hopefully save the Wasp's life. It turns out that Dr. Svenson is an alien in disguise, and when his mask is removed he dies. And so the Avengers are now on the hunt to find the real Dr. Svenson. They do that by tracking down the aliens in the North Pole; they have a futuristic city beneath the Earth's crust! The aliens subdue the Avengers and, being the bad guys, they monologue about themselves and their plans. They're the Kallusians, and they escaped an interplanetary war and hid out on Earth. They have trouble breathing on Earth, and when all looked hopeless, Dr. Svenson stumbled their way, and they kidnapped him, convincing him to help them figure out how to breathe on Earth. Dr. Svenson figured out how to help them, but the Kallusians have refused to release him. The Avengers break free, battle the Kallusians, and then find out that Dr. Svenson does not want to leave, as he has agreed to stay and help them with their breathing issues for as long as they need to hide out from their interplanetary rivals. And after that exposition is provided, the Kallusians' alien enemies locate them on Earth! What are the odds? Anyway, Thor basically scares them to leave the planet and fight their enemies in space, freeing up Dr. Svenson, whom they take to New York City to operate on the Wasp and save her life (he does). The Watcher also shows up at the end of the episode to explain how lucky it was for humanity that the two warring alien races did not duke it out on Earth.Assumed before the next episode:The Avengers are likely wondering what to do with the now-abandoned alien city beneath the North Pole.This episode takes place:After the Wasp's life has been saved!Full transcript:Edward: the wasp, is still in critical condition? Mike? They think she might recover, but we don't know her her state right now.Michael: No, but I suppose good news to find out that she hasn't passed away. She hasn't died in the line of battle. And our thoughts are obviously with her and the rest of the teamEdward: I think they're saying stable but critical. So she's in critical care. Mm-hmm. , but not getting worse. Stable. They're trying to find some sort of doctor to help her, and they're communicating with us. And so I think we're cautiously optimistic, right.Michael: But you gotta wonder, you gotta wonder what is it? We don't know exactly. We know that she was injured injuring battle. But is it something that is a run-of-the-mill medical issue that could happen to any of us if you're in a car accident or you're in a sports event or even in a regular military engagement?Or is there so. Specific to what the Avengers do, and if it is the latter I'd be curious because we've been following the superhero SUPERPOWERED community for so long, is there something unique that's being done for her? .Edward: We don't know. And it's nice of them to share at all. I think at this point, you don't want to give away too much of the secret sauce that makes them superheroes and what could possibly hurt them? What are things that can hurt the wasp? Probably the same things that can hurt you and I only, mm-hmm. , she's just far more athletic and capable and able to change.Michael: Key among them is that she changed the size. I mean, that seems to be, to be an inherently risky thing to do . So I'd be curious about what the injury is, and also it may affect the ability to treat her. I don't wanna speculate too, too much out of respect for the wasp, but I'd imagine that. There could be something complicated about her physiology now.Edward: We don't even know what size she is now. Is she being treated Yeah. As, a wasp or is she being treated as an adult human, or is she like a giant man? She's extra big. We don't know what size she is. And maybe that's part of the complication. Maybe she is mm-hmm. In a very small form and maybe a very special doctor who's able to treat her with special in.Michael: Well, and don't say this analogy too, too far, but it could be a regular surgeon who might be involved, or doctor, it could be a pediatric surgeon if she happened to be, you know, size, smaller size, quite frankly, it could be a veterinarian, you know what I mean? To deal with the idea of no, seriously, she, oh, sheEdward: has wings, , maybe her wings are anything.Michael: She, she has wings, but also she might be super small, like a small animal. Or she could be the size of a horse, you know? And both those were the fields of veterinarians. So I don't wanna, I'm not trying to suggest in any way anything more than she is a mammal who might be a different size and there are specialists that deal with that. And, on we go, good luck to the wasp .Edward: Do you think this is why, Thor is flying around the world? Is he looking for a specific doctor to help her?Michael: That's what I started thinking about, so we heard the news, that Thor was being tracked, flying across the ocean and by the reporting, and this is interesting, I hadn't heard this before. Thor traveled across the Atlantic Ocean within minutes, within minutes and , you know, and, and it's like, I would've thought he could have, if you believe he's is an as guardian, he's a, a Norse God from Asgard. that he would travel in some form of interdimensional, something rather, that we don't know about. But no, he didn't, and he didn't do that to go to Europe and said he just flew across the yo.Edward: We don't, we don't even know what, I think at one point people thought he has his hammer and he is just so strong that he swings his hammer around, throws the hammer and the hammer like, I dunno, the hammer's so powerful. It pulls him in a direction or people thought that he's the, got a thunder. He can control the weather and maybe he's using the winds to pull him around. But neither of those explanations make sense when you can cross the Atlantic in three minutes.Michael: No, and, the first thought I had is okay, number one, so air travel is carefully regulated. There's flight paths between say New York and London and miami and Dublin. And so there's gonna be paths, and the idea is it's very carefully regulated to make sure that you don't run into people. Uh, so planes don't run into each other as they're flying at the required altitude so is Thor flying? I would imagine Thor to be, if he wants to get there quickly, would probably fly to certain altitude, much like the planes to cut through the air as well as you can. Well,Edward: I'm sure again, Thor does not wanna be part of a mid-air collision. Imagine the news when Thor runs into an airplane and Families are destroyed and died because he was blasting through them with his hammer. And it seems like that's a very easy thing to avoid by just flying at a different height than airplanes fly at. I'm not sure what flight, I'm sure there's like certain flight paths and certain flight altitudes and he would just fly either like lower or presumably higher.Michael: Well, but think about this with my point is that I suspect that, and we should talk to an aeronautical engineer we probably could confirm this. There are heights you likely. for maximum, efficiency,Edward: well that depends on how you fly, right? So airplanes fly because they have engines that are shooting off exhaust that are propelling them forward, and then they have wings that are providing lift. So as they propel forward, the wings provide lift and they get lifted up into the air. And then they can control that up and down. There's no exhaust coming from. , at least no visible exhaust. Unless he's no I don't wanna be vulgar here on the radio, but I don't think there's like exhaust coming from his ass, like pushing out, pushing him through the spaceMichael: Too many beans ,Edward: too many beans. . If, if he's, if he's ever gets into shilling for products, he should definitely promote beans. Like Oh, get your, get your Aus Garan beans from Thor.Michael: It's a magical fruit. .Edward: The, the, the more you eat, the more you fly.Michael: fly. no, but, I'm getting a little bit away from what I really wanna talk about, I would think that there is, if you're Thor and you wanna get across the ocean quickly because your teammate. Needs you to do something, which is what Thor was doing, that you would probably do your best to fly the most efficient way across the ocean. But you're right, I don't think he'd irresponsible. So he is likely isn't flying that high.Edward: Or, I think he's flying probably higher. Like higher. Here's The Thing too. If, if he's. Given that he's like the mighty Thor, he probably is able to survive pretty high in the atmosphere. I dunno, can he survive in space? It wouldn't surprise me. He feels like he's like, he feels like he's the type of person who would survive in space, didn't he? He sent the absorbing man. Yeah. Right into space. Maybe Thor can survive in space and so if he can survive, he can go high enough. It depends if he's able to, if he's able to propulsion himself high enough, he doesn't need air to prop, repulse himself off of which he may not, then going higher is actually better for him cause it's, it's less wind, there's less wind resistance, less air resistance.Michael: Could he also, like, could he also break through the atmosphere and spike up and as the earth is, if he's going across to Europe, the earth is moving in his direction and he goes up and then down, that would be. Efficient way of getting, of getting across the earth quickly. Right.Edward: That's true. So instead of flying in a straight line, he could just fly suborbital that. That's, and there's been lots of science fiction written about that. If you wanted to go mm-hmm. to from London to Sydney as fast as possible, and we had the technology to do it, we would fly a suborbital flight that would blast off. It'd be a parabola, we'd basically a parabola from one to the other. Yeah. And so maybe if that's how Thor travels parabolas.Michael: I mean, in my head, I must say, I wasn't thinking of parabolas. I was thinking of Thor, kinda like just flying, just barely above the ocean. And hopefully not hitting a ship, but maybe he's the right height to not hit a ship either. But my thought was if he flies across, and this is what I really wanted to talk about, even though I'm kind of fascinated by the idea he'd fly into Pablo, which so cool. ,Edward: we, we, you, we should, we should have, we should think, talk more about paras. It feels like parabolas are under talked about topic on radio University.Michael: Our listeners love it. They love those parabolas, but if you are getting across the ocean within minutes, let's say it's about three minutes, and it's about over 4,000 kilometers. Well, you tell me are you applying so fast that you're we're gonna light the, like the air on fire. You know what I mean? That, that seems un unfathomably fast.Edward: It is remarkably fast. I, so yeah. Let's, let's, let's run through the math and so, okay. I know we are in America and we should be using, local imperial measurements, but when you start talking about the speed that Thor is flying at, we're gonna use that archaic metric system that the French use and cause the math is a lot easier. And so the ocean is like roughly, I think from North America through to Europe. We're talking at roughly 4,800 kilometers, 4,800 kilometers, 3000 and something miles, right? For the rest of us. And then, He did that in three minutes. So he's doing that at what, 1,200 kilometers per minute? That's, uh, no, no, no, no, no, no. He's doing three times that. So he's doing, yeah, in a minute he's doing 15,000 kilometers or 14,000 kilometers or something like that. Per, per, no, no, no, no. That was right the first time. No, no. He's doing a little over a thousand kilometers in a minute, and then in three minutes he gets all the way to the 5,000 kilometers. But that turns out that flying a thousand kilometers a minute is really, really, really, really fast. And like the speed of sound is about a third of a kilometer per second. . We do some math, dividing, whatever. I think it works out too, that he was flying at roughly 80 times the speed of sound. So, so mock 80. Mock 80. For those who are familiar with the mock termsMichael: And how fast, I mean, what's our fastest plane like, how fast did the rocket to the moon?Edward: Oh, that's a good question. I don't know I should know that to break the orbit, right? But like I know that planes, like passenger planes don't fly that fast. They fly no, significantly slower than the speed of sound. The really, really fast, like breaking the sound barrier, which we did before we went to the moon. Breaking the sound barrier was a big deal. And that by def the sound barriers was what, what we call mock one and I know we have planes that go faster than the speed of sound now, but not a lot. Fast mock two, mock three, something like that. Thor was going mock. It's fast.Michael: I don't think that that's fast. It's fast. And I don't think that when I, when we've seen the footage on, on our, the rockets to the moon. I don't, they don't, I don't think they were going that fast. At least visually didn't seem that they're . You get across the ocean. How high, how high is it to get to get, to break the atmosphere? Right. How, how high is it? It's not, how high is the atmosphere? Four. Yeah, it's not tough. 4,000 kilometers and it takes, it took a few minutes certainly to get above, to break the atmosphere. So they're not going as fast as Thor a Thor can get across the ocean.Edward: No, no. So, so the atmosphere, so I think the atmosphere is bigger than that man. I think the atmosphere is roughly 10,000 kilometers up.Michael: No,Edward: yeah, yeah. Like 6,000 miles or. And depends, depends where, depends where you, it turns out there's not like a line, there's not like a fence where like now you're, now you're in space and it slowly becomes less atmospheric all along. But when you start going the, the high atmosphere, it's like roughly, roughly 10,000 kilometers, 6,000 miles.Michael: Okay. Well, could you get up there in, I guess within 10 minutes? Does it, does the rocket take, did the rocket take 10 minutes to get above there? Which would be kind of similar to Thor flying across the ocean?Edward: Yeah, so he is going, I think faster than rockets. I think Rockets are going, yeah, I think so. Like somewhere under 10 kilometers. Like they, when they get going to speed, they're going about 10 kilometers a second. And what do we say Thor is doing? Thor's doing. 80 times the speed of sound. And the speed of sound is a third of a kilometer per second. So what's that 80 divided by three? He's doing 20 times, 25 times, times the times. 25 kilometers per second, something like that. And our rockets when they're like, when they're really, when they get this really going up there when they're really picking up speed. They're doing about 10 kilometers a second. And so he's roughly two and a half times faster than a rocket . And so that's, but, but as fast, it's fast. It's fast. But as fast as, rockets aren't setting air on fire. I don't think Thor is setting, he's not setting air on fire fast.Michael: No, no. But he's still going fast enough, like faster than any any mechanical device on earth,Edward: he's definitely the fastest human in any form of transportation that's ever happened.Michael: And it's funny because I guess we've always sort of, when we talk about Thor or any of these heroes, we focus on a few things, like for Thor, we've always focused on, he's a p he's very strong he's a God. But I've never thought much about him flying, which is funny because if you started flying, I would think that's incredible Ed. But it's, um,Edward: and, and if I started flying at 80 times a speed of sound, you'd be like that is, that is extra incredible. That is like more incredible.Michael: Yeah. That's worthy of a discussion. But, um,Edward: that could be don't, but your point is that could be a main power. If someone's power was flying 80 times the speed of sound, we would be. Wow. You are definitely one of the best superheroes on the planet. And yeah, the fact that that was Thor's, fourth or fifth power.Michael: Yeah. Like Thor. Let's just break it down. So if Thor, if you're walking across the street and you're carrying a coffee and you're not paying attention and a truck comes barreling at you, Thor could easily grab. You know, maybe that's not the most heroic thing, but move you from the, the crosswalk so you don't get struck. But there's probably something, there must be a better example, but I wouldn't even know who saved, you know what I mean? That fast,Edward: you know, like if he moved that fast on a human, Thor is very solid. He's a very strong human being who bullets bounce off him and that most bolts don't bounce off cars. And so he is big, he is stronger than a car, more solid than a more dense than a car. And if a car was. 80 times the speed of sound and ran into you. You would not be saved. Saving is not The. Thing. That would happen. .Michael: That's right. Well, is there a way to like, you know, when you catch a ball, someone throws you at a ball at you, right? You kind of grab it and you control the momentum of it. We think we talked about this before. Sure. So is there a way that. How about this? Let's slow it down. ,Edward: I think, I think if you were thrown at Thor, if someone like threw you at Thor and Thor, caught you, but then went with the motion, the way you went with a ball. Yeah. Then yeah, I think that he could stop you from, from being squished, but if you were flying at him and he said, you know what? I need to get to you quickly. I'm gonna fly towards you at 80 times a speed of sound. Like you're not gonna have a body left after.Michael: So if Thor is going at 80 times, the speed sound up to you thinking, oh, that person's in a crosswalk he's gonna get struck by that truck that's outta control. And he went up and just touched you. , , his finger would just go right, like right through your body as he just continued on. There must be a way that he could do it.Edward: Would, would you rather hit by a truck going at. 20 miles, 50 miles an hour. Or Thor going at like 1000 miles an hour.Michael: Oh, Thor. Thor. It'd be so much cooler to get blown up that way,Edward: but I guess if you're gonna die, go out in style .Michael: Well, could you do this? How about this? I'm still now thinking about it. What if Thor went very quickly and went. Under the ground and cut the ground out from underneath you and lifted you through or would like, there'd be so much wind resistance you'd be ripped apart by Well,Edward: if you move through the air Yeah. You're telling me what if the ground underneath me started flying upwards? Mm-hmm. Immediately at 80 times the speed of sound. Yeah, that would, that's not like, let's be human. When we, when, when, when we first started trying to break the speed of like, the sound barrier, like people died trying to make their break the sound barrier, and that's mock one. We're talking about mock 80. It's not, there's, there's no scenario, no world where, that is a helpful place for a human to be.Michael: Okay, let me loop back then, ed. I don't know if it's the most useful power then for saving people. Perhaps, but it's useful to get to where you need to go. As long as he's maneuverable and he can stop and maneuver and not run into things, then that part's useful but I was thinking like, what if he'd be a very useful superhero if he could just go really fast and get you outta danger, but if he just blow you up every time he touched you, ?Edward: No. I think the key is using his speed to get to you and he has to. He just, we need to understand how fast Thor can decelerate. That that's the key. If he can, that's critical fly, fly to you very quickly, but stop on a dime and pick you up gently. Fly away slightly faster than the truck is coming towards you.Michael: Here's another question then just think about how fast story. So, he's coming at you. Is air being pushed in your direction? Or is it not? Or is it, or is he cutting through it?Edward: I think generally he's cutting through air. He's moving so fast that I don't think, I think he's moving faster than any air particles getting pushed. I think if he blew pa, if you were like standing on the side of the road and he blew past you, I don't think you would experience anything until he passed you and then all the air he displaced would hit you and it's like a train. When a train comes by, you can feel the train coming after the fact, but it's not coming before the fact.Michael: Okay, so let's say again, using my example of I'm in the street. Flying on the street, what would happen if he's flying through and, then at that speed, or he is even slowing down, would not like, there would be a train, a trail of destruction right behind him. Things, you know what I mean?Edward: I, could see that I could see like a bunch of it. It, yeah I think what we're dealing at with is an order of magnitude of speed that I think us normal humans can't really comprehend. And, we just don't, we don't experience speed like this at any normal time in our lives.Michael: So I, I'd like to, I guess, Thor, I'd like you to maybe do some control testing far away from other people to see, because I mean, just in case you're attempted to like race to the scene of a crime or an incident or some event that you wanted to prevent at first. Seems like a great idea. But in second thought, it sounds like it might be complete, like it'd be fine flying across the ocean it doesn't run into anything. But it wouldn't be that fine if he's flying across North America, if he's getting too low to the ground, causing damage in his, in, in his wake, right.Edward: Yeah. Hey, hey, we have speed limits for a reason. Thor, we have speed limits for a reason.Michael: Yeah. Yeah, that's right. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this episode, we welcome House Canary's Director of Research, Brandon Lwowski to look at what has been happening in the real estate market over the last years and where we are headed as an industry. We discuss the health of the real estate market, the residual effects of the response to COVID-19, and the main challenges facing investors today. Brandon Lwowski built his career after studying Computer Science Mathematics at The University of Texas at San Antonio. In his role at HouseCanary as Director of Research, Brandon distills what is happening in the real estate market through data analytics and machine learning to help investors make more informed decisions about their portfolios. Links: https://www.housecanary.com/ https://www.linkedin.com/in/brandon-lwowski/ --- Transcript Before we get into the episode, here's a quick disclaimer about our content. The SFR show is for informational purposes only, and is not intended as investment advice. The views, opinions, and strategies of the hosts and the guests are their own and should not be considered as guidance, from Roofstock. Make sure to run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to an episode of the SFR show, the place where you get all of your up to date SFR investing information. I'm Michael Albaum, and today my guest is Brandon Lwowski, the director of Research over HouseCanary and he's gonna be talking to us about all of the things that have been going on in the market over the last several years and months, and how we can use that information going forward. So let's get into it.   Hey, Brandon, what's going on? Thanks so much for taking the time to come jump in chat with me today. Appreciate it, man.   Brandon: No, of course, it's good to be here to get an opportunity to discuss the real estate market for sure.   Michael: Yeah, I'm super excited. So you're the director of Research at HouseCanary. Give us all just a quick little bit of insight background on who you are and what house canary is and what they do as a company.   Brandon: Yeah, definitely. So HouseCanary, you know, it's basically a national brokerage and so it's really known for its real estate valuation, technology and accuracy. This company has been around since 2013. It was founded by Jeremy Sicklick, our CEO and our Chief of Research, Chris Stroud, kind of off of the 2008 housing crisis, they did decide to form this company to kind of help speed up the transactions and speed up and really gain knowledge and just competence in the real estate market through using analytics machine learning to provide 100 and 14 million valuations on properties as well as 91 million rental valuations. So if you think of how scary it's built around the analytics and valuations of the United States real estate market.   Michael: It was at $114 million valuations that you said since it since inception.   Brandon: No, that's monthly, we produce 114 million property valuations. Of course, the 114 million is a subset of you know, every property in the United States and that repeated monthly, but we train this very complex machine learning model AI model to produce 114 million property valuations.   Michael: That's incredible. Well, I want to come back to HouseCanary as a company here in a minute. But I want to first start by asking you, Brandon, because it is so analytics and data driven, what is it that HouseCanary as a company and you as an as the director of research are seeing in the numbers in the data with regard to just where we are in the market, there's so much chatter about market cycles and ups and downs and bubbles, give us a little bit of insight to what are the numbers and facts supporting where we are right now, as we're recording this brand new into the new year 2023.   Brandon: I think kind of the one of the biggest headlines to kind of drive home right now, especially in the market, we have this unique combination of these elevated interest rates and you know, the slow buying season that we typically see during the winter months, this has really impacted across the board, our new inventory coming into the market, our new listings, listings going under contract, all of these metrics that we typically look at to understand the health of the market and the health of the real estate market, have really had significant declines year on a year over year basis, that's across the board inventory listings under contract, the Feds kind of you know, their fourth straight 75 basis point interest rate increase, you know, as the thing is, the fourth month straight or the fourth, fourth one straight, has really had that negative impact on net inventory. But this is just providing more evidence that you know, supply of homes is still squeezed and it's remaining negative over time, we've kind of seen this trend since August, right where our supply of affordable housing and actually all housing in the market has really continued to drop and this is basically you know, the biggest driving factor here is that interest rates shot really driving down these new listings volumes to like a multiyear low since pre you know, I don't use the word pre pandemic because you know, we're still in the pandemic, but that pre pandemic peaks we'll call them we're seeing you know, all its multi-year lows in terms of new listings, everything going on the real estate market. The biggest picture here is even as these interest rates come up, our supply just remains extremely negative and still going in a downward trajectory.   Michael: And when you say downward trajectory is that From 12 months prior, or is that from the prior month?   Brandon: We're looking at a year a year basis right now. If you think about the month over month basis, we are still seeing declines. But when we're talking about these multi year lows in terms of net new listings, on the purchase side of the market, we've reached those multi year lows. I think, you know, the reason why this supply crisis is also happening right now is, in this current real estate environment, it's really difficult to convert homeowners and current renters and convert them into future homebuyers, right. In this elevated interest, interest rate market, it just doesn't make sense financially for a lot of people to enter the market, you think of this large group of, of homebuyers that purchase homes at record low interest rates, they refinanced during the peak of a call it the peak of the refinance, boom, that happened during the pandemic and for them to reenter the market, it just doesn't make financial sense for them. So in order to move out of their current home and into a new loan, they're going to be paying a higher premium for the same quality of home. So they're available availability to spend money has definitely decreased and I really don't see this inventory shortage, kind of relieving itself or beginning to increase well into, you know, the first quarter, second half or first half of 2023, the supply just remains super squeezed.   Michael: Okay and so that, like the supply aspect is, I'm guessing one ingredient in the recipe, so to speak, what are some of the other things that you're looking at, and that you're seeing, to give you an indicator of where we're headed and where we are currently.   Brandon: Right. So I think so the supply is, has been squeezed, I think since COVID, there's been a really tight squeeze on the flat supply side of the market. But with those low interest rates that were happening, I mean, 1- 2% interest rates, people were getting their home loans that the demand for property shot up, which is why we really saw that two, three years of just record breaking price growth and the real estate market. Now we're looking at the demand side, and we're actually in the seventh consecutive month of double digit declines in on a year over year basis, we're looking at the listings that are coming under contract in the market. So if you look at inventory as a supply of new listings coming in, if we look at listings of those listings, and the existing market, this existing supply, existing supply, listings under contract is still seven consecutive months of double digit declines since November, are all of our data right now, it's kind of up to that first week of December 2, so we kind of think of it as, as of November. This is this kind of is the driving force behind this is, you know, we've never seen this kind of seventh consecutive month of double digit. So it's kind of driving a lot of fear into homebuyers and home owners and the way we kind of know that this is not normal, it's kind of beyond the typical seasonality we'd expect during the cold winter months to have seven consecutive months, this kind of uncertainty in the market around interest rates, economic downturn, the inflation, they just continue to force homeowners and would be buyers, you know, to play the waiting game, they're, they're gonna sit in the sidelines, they're gonna stay away from the market and so they're a little more competent in in where this kind of roller coaster is going.   Michael: As I'm thinking about such a visual thinker. I'm thinking about this as almost like a race to the bottom in a sense of like supply versus demand once because it sounds like they're almost moving in lockstep negatively, we were having a reduction in supply, but we also have a reduction in demand and once right is that is that the right way to think about it?   Brandon: The demand has definitely began to decrease or is decreasing at a faster rate than supply because supply has been squeezed since the pandemic whenever the shutdowns happened. People just stop selling houses. They stopped listing their home so the supply side of the market has been squeezed since the shutdown the pandemic. The demand side due to the interest rate hikes the economic uncertainty, that's where we're really seeing the decrease on the supply side where the decreases are coming from. So even though you know supply is always been net always been tight. We've been tight recently in recent years. A lot of the continued decrease on supply side is actually coming from net new listings so people aren't putting listings on the market right now. For the reason that we discussed earlier. It's hard to get homeowners back into the game. They're actually down around 25% on a year over year basis, in terms of like how many new listings are coming into the market, but even a bigger piece here is on the supply side is our removals of listings are up 65% on a year over year basis. So houses that were listed last month six are being removed from the market further impacting supply, while supply has been remained squeezed like very, very tight supply of properties over the years, there still is a decrease in net new listings, and also an increase in removal. So in that supply is being affected. But when it's so squeezed already, that that impact in the market will not be as significant as the impact of a decreasing demand side of the market.   Michael: Yeah and that makes total sense and so what are you seeing with regard to sale, as opposed to sale of percent of this price and then also days on market?   Brandon: Yeah. So I think some other key indicators, the market, you kind of just discussed, you know, we have days on market, I think price lists ratio is important, I think, the median price, right, the time series of how is price behaving in this environment, all important and understanding kind of the overall health of the market and I kinda like to go with the big one first, in my opinion, which is the median price, right? Where is the market going? I kind of macro at a national scale. The, if you look at the year over year basis, median price of all single family listings, right, so single family dwellings, that those are actually up 10%, on list prices, and actually up 2% in terms of actual close prices. So even though we're seeing the storyline of these prices really starting to decline and kind of freefall, we're still seeing as a year over year basis, because we hit such a huge peak in the middle of 2022. We're still up year over year, by those two percentage I meant mentioned. On a month over month basis that compared to last month, we are slightly down, but it's very, very small. We're down around one and a half percent on listings and down and less than half a percent on close prices. So we see a lot of the storylines and the headlines across the news, that these prices are falling drastically. We're in a deep decline. The roller coaster rails are off and we're down to 2008 again, but just looking at the data alone without any sort of human interjection or opinions. I'm not an economist, I'm a data scientist. But by heart, I'm just looking at the data because we had such a high peak in the middle of 2022, in terms of the median house prices were still up year over year and on a month over month basis, the declines in price are very, very miniscule, to what we're kind of hearing in the media. So that's one thing, right? The median price is definitely a driving factor. Everyone's concerned about like, what am I going to get for my property? Where's the trend of our nationwide real estate market heading and even though we're in a slight downtick month, over month, if you look at long term, we're still up 10% on listings and up, you know, 2% on closed prices.   Michael: It seems like there has been so much resiliency, if we're seeing such a miniscule price reduction month over month and year over year, there seems to be a lot of resiliency to interest rate increases for folks, and that they're still closing transactions, even at this much higher interest rates, and they're not saving a lot or really anything at all, in terms of the price that they're paying out the door.   Brandon: Right, I think what's causing these prices to, I don't wanna say remain elevated, but kind of not declining at the pace that we would expect is that tight supply. Now, we're still a few months probably away from seeing how this kind of mass layoff and technology could affect the real estate market. Because, in my opinion, what's really going to drive these prices down is when we see supply, increase at levels that the demand has decreased and that imbalance in the market is what will really drive those prices down and the reason why kind of refer to that technology, layoff if that same style, that same volume of layoffs, hits other sectors of employment, then we're going to see defaults and people need to give up their homes because they can't afford it anymore. So unless something in outside of the real estate market really drives the demand. I'm sorry the supply side of the market to escalate at a very fast rate, that safety net is there to kind of keep our prices from really crashing, like we saw in 2008. We don't have the same supply that we saw in 2008. So we're kind of have that safety net there. Unless like I said, something really drives that unemployment up and forces people to default and give up their homes or sell their homes because they can't afford the mortgage anymore.   Michael: But it's interesting, because from all the news that I've been hearing, and correct me if I'm wrong, maybe you've been hearing, the unemployment rate is super low. Like there just doesn't seem to be those mass layoffs that we saw in the tech industry, yet anyhow, affecting so much of the so many other industries. So it doesn't feel as imminent.   Brandon: 100% right, I'm hoping I mean, just for the health of our economy, I'm hoping that that mass layoff doesn't reach other sectors and I hope that we're done with majority of it. But we're probably a month or two away from really understanding did that actually have an impact on our median, price per square foot or median close price of a property and then we can track those defaults, and those the supply over the next few months to see if that really impacted the real estate market or not.   Michael: And that makes total sense. We'll talk this Brandon about those other two factors that you mentioned the price to list ratio, and then the days on market.   Brandon: The price to list ratio has actually been on a pretty big decline. I think back in May 2022, it may have been June or May, I think we're at a multiyear high of around 102%. So most properties, were selling 100 or 2% higher than the list price, which means that it's definitely a seller's market, right. If I if I can list my house for X amount of dollars, I know I'm gonna get 102% return, I mean, I happen to present a 2% return on that is definitely a seller's market. We actually for the first time in about mid-August of last year, we're now down below 100. So that's just an indicator that the markets kind of switched right now buyers kind of have that power and that ratio now stands around 98%, which is kind of the levels before COVID emerged, and actually the lowest number since the first half of 2020. So we're not we went from a high of 102 in May to now we're down to about 98 which is definitely a key indicator that buyers now have more power than the seller's because of you know, just multiple aspects that we've been talking about the high interest rates buyers be a little more choosy. Even though the supply is down sewer buyers, there's not enough buyers in the pool to compete with me anymore. So I have a little bit more pool, which is why we're seeing that sale to list price or price to list ratio, starting to decrease. That kind of in parallel, what we see with that is to kind of tell that same story that we're now entering that buyers' market, even though demand is low, if you look at the volume of price drops, right, think about how many times a listing comes on the market for 100k. It sits there for 30 days, they come back and they say hey, you know what, let's list it for 95 maybe we can get more buyers, those price drops in terms of volume are actually up 142% year over year since the last time. It's just more evidence that buyers now because demand is so is so squeezing this high interest rate environment, they get more power listings are staying on the market longer list to or sale to list price ratio is down and then but yet the because supply still squeezed, we're not really seeing a huge impact that we're kind of seeing in the news right now, on the actual median price of all listings.   Michael: Brandon, just out of curiosity, I think I remember if my memory serves me correctly, which it often doesn't, but like in the height of 2022, the max or the highest median home price in the country was like 395k. But do you happen to recall what that number was and maybe what it is now today?   Brandon: Yeah, so if you look at the peak of 2022. So kind of that halfway mark, I think it was right around the ending of H 122. The actual median price is actually higher, at least according to our data, right? The data that we have availability to our actual median price was actually above 400,000. We're sitting right around like 420,000 was kind of that median price for closed listings for active listings was actually even higher than that. So for closed listings were around that for 120,000 range, right now as of the first week of December is kind of our data cut off. Right now in terms of the data that I'm giving you, we're sitting right around $380,000 as the kind of median price per square foot, I'm sorry, median price of closed listings, it sounds dramatic, and we go from, you know, that 420 ish down to three, it's a pretty big drop. But as you look at the entire time series from, we'll call it the pandemic, the start of the closed downs, all the way to today, if you bought a house, during those pandemic years, you're still doing really well in terms of the amount of equity, it's still in your home prices haven't dropped that drastically to where you're now upside on your loan, you're still well above you know, what you bought the house in, during the bottom of the pandemic years, what's really going to cause kind of some worry, and headaches is these people who kind of bought later in the year, kind of towards the end, or middle of 2022. Now, they're beginning to worry the most because they didn't have that same amount of cushion that these homeowners bought when they don't worry about houses a year or two years ago. So that number does seem like a big decrease. But if you look at the longevity of the time series of the pandemic eight pandemic shutdowns to now, you're still up quite a bit in terms of percent and you have a large cushion before you even have to worry about being upside down in a mortgage or, you know, losing a large amount of equity in your property.   Michael: Does the data give us any indicators as to what's coming down the pike because obviously, data is rear looking. But how can we use that to be forward looking or is there a way to be?   Brandon: Yeah, so I think you're talking about forward looking, you know, the next 6,12,18 months. If you look back slightly, we hit this topic quite a bit. It's a big topic right now in real estate is these large interest rate hikes. If you look at the timeline, the time series of the real estate market in terms of medium price terms of you know, list to sale rate of sale to price ratio, you look at, you know, the days on market, it seems that with the large amount of growth that we experienced in two years, you know, record growth, that was actually able to absorb a lot of the impact that people would assume, continuing to month over month raise this interest rate to higher and higher levels, they assumed that it was going to impact the real estate market at much a much quicker, much faster way. So then they can stop, right, the goal of raising interest rates tend to raise them forever. They're just raising them until they kind of see the market growth kind of settled down and adjust and kind of normalize. But it's kind of shocking when you think about how much and how quickly that interest rate rose and until a few months back. I mean, most of 2022 there was very little impact from those rounds of interest rates. So it's one thing that we can we can learn as, as we saw record growth, even that dramatic increase really did not impact the real estate market as we thought it would. Secondly, what's really kind of driving any sort of kind of negative view of the real estate market right now around this interest rate, is you gotta think of like purchase power of our homebuyers, right?   We didn't see salaries raised at the same rate as the real estate market, we didn't see household income raise at the same rate as real estate. So the really big question here and the kind of the, you know, the driving force here is the purchase power of homebuyers. We actually seeing and this is from Freddie Mac, I believe a 32% decrease in purchase power, based on this 30 year, you know, FRM, that's given the same monthly payments for a loan made at the end of 2021. So we're really seeing a decrease in what homebuyers can afford and that combined with hopefully the Fed has definitely signaled smaller rate hikes in the future. We're hoping that housing fundamentals can hopefully come back to a quote unquote normal seasonality cycle and the expected returns, but into early 2023. I think we're still going to see you know, a real estate market that's just characterized by this continued tight squeeze on supply tight squeeze on demand. With the exception of what we discussed earlier, which was a major economic event causing mass layoffs or firings, then I'm thinking early 2023 is going to be characterized the same kind of, of patterns we're seeing now, which is tight supply, shrinking demand, days on market, increasing. median price is slowly decreasing month over month, until we see hopefully towards the second half of 2023, a market that's brought back to its normal seasonality and its normal housing market fundamentals.   Michael: Brandon, I want to be super respectful of your time and get you out of here, man. But before I do if people want to learn more about you and the research team HouseCanary has a whole services that y'all provide. Where's the best place for them to do that or get a hold of someone?   Brandon: Yeah, I would definitely just go to https://www.housecanary.com/ . From there, you can get a list of all the products services, there's probably people on our company that can explain the better business use cases and appear researcher, I'm all about the data. But if you go to https://www.housecanary.com/, there's plenty of people to contact through there and also, I'll attach my email. I'll pass it on to you, Michael after this. So you can share it with the listeners.   Michael: Thank you so much for taking the time. This was super informative and definitely again, curious to see how things all pan out.   Brandon: Yeah, stay up, same tune. I think next week, our new market pulse comes out as well. So if you're interested in different states and how the market is performing, and also at the national level, it's a free report and that report will be valid all the way up into the end of December. So it will have kind of our December numbers added to that report and you can see those trends going on there as well. So usually is dispersed on our website. Also LinkedIn, if you follow HouseCanary on LinkedIn, that report is shared monthly for free and you can see all those metrics that we talked about updated on a monthly cadence. So you can kind of have competence in your decision making process.   Michael: Love it, love it. We'll definitely check that out as well. Well, thanks again, Brandon. Appreciate you and we'll chat soon.   Brandon: Appreciate it, thanks, Michael.   Michael: All right, everyone. That was our show a big thank you to Brandon for coming on and dropping so much knowledge, facts, data and statistics on us to help us guide our investing through these kind of tumultuous times. As always, if you enjoyed the episode, we would love to hear from you all ratings and reviews are always appreciated as are comments with additional topic ideas that you are interested in learning about. We look forward to seeing on the next one. Happy investing…

Apologies for no episode last week. Here in 2022 we are also shutting down for the Christmas holidays. We should be back the first week of January. Also: Welcome to all the new listeners. If last episode was your first with us, we would love to hear how you heard of us. Apparently we are now the #25 top Marvel podcast, but that was published on December 11th, and we picked up many new listeners on November 30th. Where did you all come from? If you subscribe at www.SuperSerious616.com you can reply to the email we send you and you can tell us. We would appreciate it if only to satisfy our curiosity! See you in the New Year!In this episode:Mike and Ed discuss the mind-bending news that a sabertooth tiger has been found in Antarctica. Does this mean that other previously assumed extinct animals are not actually extinct? What about dinosaurs? Questions abound!Behind the issue:This is the first appearance of Ka-Zar and the Savage Land, which will go on to be a major environment in X-Men comics and the Marvel Universe more generally. There are rumors that the Savage Land and Ka-Zar may make an appearance in the MCU during the Thunderbolts movie due out in a couple of years. This is where it all began.In this issue:The evening news broadcasts a video from Antarctica of a Tarzan-like figure with a sabertooth tiger fighting explorers to the frozen continent. The X-Men suspect that this wild man may be a mutant, and they decide to investigate. They head to Antarctica and find a secret passageway through the frozen environment to a tropical land filled with dinosaurs and other strange creatures. They also encounter warriors fighting with preindustrial weapons. The wild man Ka-Zar and his sabertooth tiger Zabu come to their aid and help turn the tide of the battle. The X-Men leave, having made a potentially valuable ally.Assumed before the next episode:People are still wondering whether the sabertooth tiger is real, and if so, whether other extinct animals may return from the dead.This episode takes place:After the amazing news that a sabertooth tiger has been cited has been somehow lost in the new cycle.Full TranscriptEdward: Mike, when did Sabertooth Tigers go extinct?Michael: I don't know exactly, but I thought they were prehistoric. Did they not go out at the time of the Willie Mammoth? Think so. 2000 years ago.Edward: I feel like, my understanding is that they, ex, number one is they existed. They're not like a unicorn. Unicorns never did exist. I know some people think that unicorns went extinct, but they did not. There was never a unicorn as far as we know. But sabertooth tigers, which kinda. Kinda unicorns. Cause they have giant, huge, giant teeth that kind of stick out. They existed and I think they were North American. I think they existed in North America. Yeah. And then when people came across that the land bridge into Alaska and then came down through the continent, there were all these crazy animals there. And humans just basically killed them all. By the time the Europeans got there, there weren't many of these big animals left. There were still bison and there were cougars, but, things like the mammoths and the sea two tigers were all killed off.Michael: Were they killed off or they just die? I don't know if there's historical record for it being killed off by humanity, but I thought,Edward: I think the record is, they overlapped with humanity. So humanity was there at the same time as they were. And, humanity lasted and they didn't. So they died off at some point after humans were there. And it turns out humans liked to eat animals. So there's a possibility that humans. Them all.Michael: I thought it'd be more temperature. I thought it'd be more temperature related.Edward: It could again, maybe, maybe Was Willie Mammoth ? Well, there's, there's wooly mammoth in Europe I think as well, but they also went extinct. And we know that humans ate those things for sure. Mm-hmm. , I think there's a lion, but regardless Europe, there's a lion in Europe too, and that, that also went extinct and we know that humans kind of wiped that out. I think I was curious what's going a lot of these animals in, in North America, they basically, they didn't have a defense against humans. Like all the animals in Africa. They evolved along with humans and the ones, and so they had defenses against humans. But I think all those animals in North America, we were an invasive species and we showed up and the animals had never seen us before, so they didn't know what.Michael: That's interesting. Well, anyways, you asked me, but going back to the beginning. Yeah. So Saber Tooth Tigers haven't been around for a long, long time.Edward: Except now they are.Michael: Except now they are. Yeah, I mean, likeEdward: they're back baby. They're back.Michael: They're back. They're back. And they're better than ever. So the people, uh, they watch thisEdward: not just as a sports team logo, basketball. No.Michael: Well, like, so what we're talking about,Edward: I feel like there should be though, shouldn't there be, why isn't there a sports team with like the Philadelphia Sabertooth Tiger.Michael: Well, I, support it, but now they could probably get one maybe, but, for people that aren't, that haven't, haven't watching the news lately, what it is, is that there's a recording, a video recording of a man who looks like Tarzan walking with a sabertooth tiger who's attacking people in Antarctica. And it's like, it's so,Edward: can interrupt thatMichael: crazy.Edward: He looks like Tarzan. What does that mean? That means he, that means what does Tarzan even look? You mean like the drawings, the things that were on the covers of his books like a hundred years ago.Michael: Yeah. Like a bear chested, loin, loincloth, guy walking around Antarctica, which is odd with a se tiger.Edward: When you're saying he looks like Tarzan, you're basically saying there was some dude without clothes on.Michael: It's for our younger listeners. I didn't wanna get too graphic, but Yeah. Some, some dude is basically wearing Speedo, walking around Antarctica with a sabertooth tiger.Edward: Mike's gonna go to the next swim meet and he's gonna be like, Tarzan Tarzan's everywhere.Michael: Well, that's what comes to mind when there's a man dress in a loin cloth with a prehistoric animal. Yeah. It kind of makes sense. Or with a big cat, like a saber tooth tiger. But there's a saber tooth tiger.Edward: Yeah. But, Tarzan was never a, didn't have prehistoric animals in those books, did he? He was just, it was a chimpanzee, elephants,Michael: the lord the jungle. No, he's in charge of the jungle and this guy's in charge of, it looks like from the video that he's in charge of the sabertooth tiger. And so, no, that's why, that's my connection, . But anyways, the Tarzana, the tar side. What I'm really getting at is that it's nutty.Edward: Don't get confused by the Tarzan reference. Tarzana is not evolved.Michael: I'm moving on from it. Moving on from bit, but here it is. So a sabertooth tiger. And, 10 years ago we would be, it would've blown our. If there's a video of a saber tooth tiger, that would be the front page of the news. I don't think many people know about this. Number one, and number two, we can't. We, you and I were talking before our show. Neither of us can totally agree on what is the most likely reason. There's a sabertooth tiger right now.Edward: Yeah. There's a couple of things going on. Number one is, there's a sabertooth tiger. They went extinct thousands or tens of thousands of years ago, and now there's one back. So that's weird. Number two is it didn't appear in North America where they were last seen. It appeared in Antarctica. , which is like a weird place for it to be. And then number three is of all the, the weird places for it to appear. How does it survive in Antarctica? Like nothing survives in Antarctica. There's penguins.Michael: And, and then so you say, well, where would it have come from? Because presumably, if there's been a line of savory tooth tigers for thousands and thousands of years that we didn't know about, there would be some evidence of that. And, people that investigate these things and the study of prehistoric animals just got it wrong and missed it and missed the evidence of years and years and years of sabertooth tigers prowling around or, the evidence, their bones or whateverEdward: Be fair fossils if sabertooth tigers were really prowling around Antarctica this whole time, we haven't spent much time in Antarctica. I just think the evidence that any animal could survive in Antarctica is so low. That's the reason why we haven't been exploring Antarctica, is it's not really a place where animals survive.Michael: Well, so that leads, okay, so number one, sabertooth tigers can survive in Antarctica. That's number, that's the first question, but it doesn't make a lot of sense because there are mammals, they're furry mammals that would live in,Edward: they're predators. They have to eat other animals. If this sabertooth tiger is surviving in Antarctica for any period of time, that means there are prey animals living in Antarctica for some period of time. And I don't think it's just penguins. Like I think we've studied penguins in Antarctica as far as we know they do not have lions preying on them.Michael: No, no. And so, it's kind of odd, but that's the most logical thing is that just it, we just happen to have missed it. And that's the conclusion that we'd have to draw if this was 10 years ago. But we have to entertain other possibilities. Could it be that we know time travel exists? So maybe it's a time travel thing.Edward: That sounds a really easy answer, right? Like if, Kang who came here and tried to take over our timeline, take over our world, what would stop him from just going back in time and picking up a caveman in a sabertooth tiger and bringing them into our time. That sounds very reasonable.Michael: It's a possibility or maybe it's another dimension that overlaps with our, we know that there's other dimensions and overlaps with ours and just maybe that. There's a crossover point down there. Maybe,Edward: maybe in that dimension, Antarctica is like hot and bombing because we also know that a long time ago in humanity, Antarctica was hot and bombing, it was a nice warm right place with lush forests and so on. Maybe there's another dimension where that never changed and we got a portal to that dimension and these guys hopped through.Michael: Maybe it's an alien because we know that there have been alien attacks and they seem to be similar. The aliens seem to be relatively similar to how we look, so maybe there's versions of mammals on other planets and this is just an alien either left their sabertooth tiger here, or maybe the sabertooth tiger is an intelligent species from another planet and we just haven't found the spaceship .Edward: And he brought along his prehistoric man as a pet .Michael: That's right. That's what it is and then maybe the other one I was thinking maybe it's from Asgard or something. Maybe it's from where Thor comes from. Because just a magical beast just like Thor's a magical Oh, that's true. God, I don't know.Edward: And then this magical beast might be tens of thousands of years old. It's an un aging magical tiger.Michael: Yeah, but the point is that we don't know. And so,Edward: oh, I have another, I have another possibility.Michael: What's thatEdward: robot? You know what I mean? We've had robots be we're we thought they were aliens. Turns out they were robots or we thought it was Iron man. Turns out it was a robot. It feels like robot impersonators are a thing. Why not just make a robot cat?Michael: How about, and that's a good idea. But how about this also, it came from underneath the earth.Edward: Oh, we, Atlantis is we know there's, there is an Atlantis underneath the earth. That could be a, it's almost like another dimension at this point, but yeah, that makes sense. Totally.Michael: Boy, this all leads though. Is thatEdward: Maybe this old Atlantis kidnapped primitive humans. Mm-hmm. and and, giant cats and mammoths and stuff. And then breeding them underground in zoos. And these ones just escaped from the zoo.Michael: Well, the point is that these are all now equally logical. , right, because it's just because there are of theEdward: broadest sense of the word .Michael: Well, but there are, there, they, we know that there's these are things that are, have happened last few years and so it, it doesn't stretch the imagination to believe that this is that there are sabertooth Tigers through any of these various reasons. So this is why you and I have been doing what I consider to be the hard news Ed, where we've been talking about the real stories. And I do think, these things have to be studied so that people, we, we could turn to, a more scholarly academic source to say, oh no, we've looked into this and turns out the robots who promote it, and now that people can study itEdward: like mad scientist, it's a mad scientist who found ancient DNA and recreated primitive man and and tigers.Michael: Oh my, I love it. I love it.Edward: It's, it's The Thing. It's The Thing for an academic to dive into.Michael: Yeah. Well, you know, Ed, if you and I, if our legacies that we're encouraging scholarship, so be it. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this episode:Mike and Ed discuss whether the Fantastic Four or the Beatles are more famous. The Thing and the Human Torch were recently at a Beatles show and did some damage while capturing thieves who targeted the cashboxes. Who should pay for that damage? Should good samaritans like the Fantastic Four be held responsible? If they are, what type of disincentive does that create for other superheroes to help others? Are there more superpowered people out there who are keeping their abilities secret because they can't afford the insurance?Behind the issue:The Beatles are first mentioned in the Marvel Universe in Fantastic Four #34 (two months prior to this issue's release), but this is the first appearance of the actual band. The Beatles' first comic book appearance was a few months earlier in July 1964 when Dell Giant released a special issue focused on the fabulous foursome. A few days after the Dell book hit the stands, an Archie title also mentioned the Beatles (Archie's Girls Betty and Veronica #105) and the girls shopped for wigs, but the actual musicians did not appear. Perhaps the very first appearance was in the aforementioned Archie series #104, which teased the following issue and had a page of text explaining who the Beatles were (see below). The Beatles are mentioned in Marvel Comics a number of times through the years, but, as far as we are aware, they do not appear again until 2007, when it is revealed that the band had been kidnapped years ago and had been replaced by Skrulls (who were responsible for the majority of their music in the Marvel Universe).In this issue:The Thing and the Human Torch are getting under each others' skin, and likely need a break from each other. No such luck, as their girlfriends convince them to go see the breakout sensation from Britain, the Beatles. The foursome head to the show, but before it begins, they learn that the venue's payroll has been stolen. The Thing and the Torch head out and capture the criminals, but unfortunately miss the entire show.Assumed before the next episode:People are more interested in being entertained by the Beatles than being saved by the Fantastic Four, or so we assumeThis episode takes place:After the Beatles have started their British Invasion!Full transcript:Edward: Mike, who is more popular? The Beatles or the Fantastic Four ?Michael: I think if you listen to our show regularly, you would assume the Fantastic Four. But if you lived in the real world you'd probably say The Beatles people meaning it for a reason, right?Edward: Fantastic Four have clubs, fan clubs, but there's no fantastic mania. How even the four mania how would you even say that?Michael: Yeah, I don't know ff mania, but like, you know, there's, I thinkEdward: we don't swear on the show, Mike. No swearing on the show.Michael: Yeah, . Well, they're certainly popular. They're incredibly popular and they're being followed and there's celebrity magazines that report on them, but, Nothing like the Beatles. Nothing like The Beatles has happened in a superhero superpowered world. Yeah.Edward: And in this particular case, we had the Fantastic Four went to go and see a Beatles show and we've had no incidences, we know about where the Beatles have gone to see a Fantastic four show.Michael: No, they're not showing up the Baxter Building, you know, pen and paper hand asking for autographs. Although, funny about it is maybe it's just a comment on human nature or our society, but like the Fantastic Floor have saved the world more than once.Edward: And Beatles, the Beatles have not, Beatles have never saved the world.Michael: So you think, you'd think that if there's gonna be this adulation, idolatry, of anyone, it would be the fantastic for, but no, it definitely isn't. It definitely is not. The Beatles are far more popular.Edward: Yeah. The, I guess the Beatles have saved music.Michael: Okay, we'll go with that. They definitely struck a nerve in our society and they're making their mark. And so time will tell us whether the Beatles will be remembered. But right now it's hard to avoid them. If you're trying to avoid them, they're everywhere.Edward: There's that question too, a thousand years from. Looking far, very, very far in the future, are we gonna remember the Fantastic four of the Beatles and I think it would be the Fantastic four, the first real superheroes on the planet are I imagine more memorable than any music bandMichael: the Fantastic four are, as we chronicled or the vanguard of this new evolution of almost post humanity then this is a moment in our history, where there's, who knows where we're going to evolve to. So my money would be that the Beatles are a flash in the pan and the Fantastic four are here to stayEdward: and interesting there's four of each of them. I think that's a coincidence?Michael: Oh my, I didn't think about that. So do you think that maybe, do you think that there's a matching principle going on here, we noted in, remember we talked about recently with the frightful four, there's four of them and we're just confused as to why they would limit them.Why wouldn't they be like the hateful eight or something. But instead it's like they pick the four and the beetles are quarted as well. So do you think. Are we? Are the Beatles being influenced by the Fantastic Four? Is music being influenced by superhero culture?Edward: Yeah, maybe. Or maybe the other way around. Maybe the Fantastic Four just search out for groups of four things.Michael: Yeah.Edward: They go to the grocery store and be like, yeah, I know you have a dozen eggs, but do you have like a smaller package, like maybe a third the size?Michael: Or maybe. Or maybe it's just. Things come into four, right? There's the four of food groups, there's four seasons. It kinda just naturally would evolve to where the Fantastic four, who, when you really think about their powers are quite elemental in nature. They have this sort of,Edward: there's four elements. There you go.Michael: There's four elements. Yeah. So maybe there's an inherent connection to the idea of having teams of four. Although maybe I'm just spinning some mirror here. But anyways,Edward: Can you match them? Can you look at the, we talked about this before, the frightful four. There's like a match almost between, Medusa had her stretchy hair. Mr. Fantastic Reed, Richards could stretch his body. There was kind of a rough match betweenMichael: mm-hmm.Edward: the Frightful Four and the Fantastic Four. Can we do the same thing with the Beatles, is there does Paul match to Sue? Like what is the match? The Four Beatles and the four Fantastic. Four.Michael: You know, I just don't know enough about 'em but maybe there might be something there. Maybe that's something that if they stick around, we can we'll explore it a little more and look, maybe they're the first. Maybe the Beatles were the first super. Powered band. Maybe we're gonna find out that they have powers too. Just don't know about, we just know, knowEdward: IF it happens to anybody, it'll happen to the Beatles. I think a couple things to talk about. I think with this encounter with the Beatles and the Fantastic Four, well, I guess the Fantastic Half, the Fantastic four, it was The Thing in the Human. Torch were going to see a show and in the process, I guess someone tried to steal all the money from the show andMichael: mm-hmm.Edward: the Fantastic Four prevented that. So I guess they did, they did their good deed for the day. But in the process of doing that good deed, they did some damage and. I think this is interesting is that the damage that they caused is not being paid for by the theater, not being paid for by the Beatles, not being paid for by the government, not even being paid for by an insurance company. The fantastic for themselves are gonna cover that damage. And I think that's just, it's interesting that it wasn't like The Thing and the Human Torch were being professionally employed by anybody. They went out of their way to help the Beatles or to help the theater anyway with these thieves, and now because of that good deed, they're gonna have to pay. They're taking the money outta their own pocket, and that doesn't seem,Michael: It doesn't, and it, but it's interesting. It probably, it gives us some insight into the institutional nature of the, or at least the institutional connection between the Fantastic Four the society that they live in. So we've talked before about how the Avengers seem to have a pretty direct connection, almost be a separate like military force or arm of the armed forces in America. But the Fantastic Four haven't. You think that Fantastic Four has some kind of formal relationship. As being almost a police force that they would. They'd have an immunity from any kind of possible civil liability or prosecution if they're,Edward: are you saying that they are a police force or they should be a police force?Michael: I'm saying that they aren't, because if they were then if they're acting in the course of their duties, then they would have an immunity from prosecution and civil liability to provide that they were still carry of their duties within their own responsibility. And so then they wouldn't care about paying the damage themselves because if they got sued, they have an insurance policy, they would respond. And they're not, they won't be worried about, say, being arrested for the damage that they caused in the course of exercising their duties.Edward: And that's, I was gonna say that's probably true. If when the US military went and asked the Fantastic four to go and take down the Hulk, they were basically working under the under the authority of the US military, and I'm assuming that any damage caused during that battle with the huk was paid for by the US government, by the military. In this case nobody asked Ben and Johney to go and stop the thieves. They just, they were good Samaritans and they went and did it. That changes the calculation a little bit.Michael: It does up that. I think when they're tasked by the American military, I think that they could be considered to be contractors in that role. But I am saying that here, that they just acted as good Samaritans and did a public good. They acted as if they were, police officers. But the fact that they paid outta pocket tells me that they don't have any kind of special protection or immunity from prosecution or from civil liability. So they did, then they wouldn't have reached into their own pocket. But the fact they reach into their own pocket tells me that they're doing the analysis, which is that it's probably better for us just to pay outta pocket than to get sued by the people that owned the buildings that were damaged or anyone that had a possible liability claim.It's probably just worth their time to pay it out. So they must have number one tons of money. And number two they don't have any kind of protection. So number three, they're gonna use their money to avoid getting sued and have their time being eaten up. It's just worth their time to just pay people rather than having a claim against them.Edward: But I guess why are they doing it at all? So basically these thieves came in, they stole the money, they took off if Ben and Johney just said, oh, you know what, that's not our problem. We're gonna go sit and watch the show.Michael: Mm-hmm. ,Edward: Then number one, they get to see the show, and number two is they're only out of the ticket price. Instead, they went and chased these guys down. They didn't get to see the show, and they had not having to pay a bunch of money outta their pocket. What was the incentive for them to do that?Michael: That's The Thing, right? If there was a, they had immunity from a civil lawsuit, then they would go do it. But here they clearly don't. And so they had to pay out of pocket because they're involved in this incident that caused damage and they pay out pocket cuz it's easier for them to make the claim go away, the potential gifts go away. And I don't know what their incentive is other than to do that other than that they're heroic or because they feel they can solve the problem and they have so much money that it's worth it for them to both be heroic and to also make sure that they don't have their time wasted that they're, after you keep against them,Edward: you keep saying they have so much money. Is that true?Michael: They'd have to, otherwise they wouldn't do it. If they didn't why would they pay out of pocket? Why would they wait and get sued? I guess.Edward: I guess that's my question. So where's that money coming from? I guess they had that one movie that they had a while back. And Reed has some inventions that he's invented. He lost all his inventions that he invented in the past due to that bankruptcy. But he presumably he's invented other things since then but it doesn't seem that that's an unlimited fund of money. I just, I think there's a, from my business world. One of the heroes of the business world was Adam Smith, who invented the whole idea the trade is good. And one of his famous quotes was, it's not the benevolence of the butcher, the baker, or the brewer that we expect our dinner, but it's regards to their self interest. We don't count on the butchers and the bakers to give us their foods for free. Why are we counting on superheroes to do all of their work for free?Michael: We're missing some information then, right? Because it's clearly happening. So number one, the Fantastic Four don't have this protection from being suit for damage that they cause in the course of acting heroically because they're paying out pocket, because that's the only reason that you would pay outta pocket. So why would they continue? Why would they do it?Edward: So let me dive into that cause it's exactly right. It sounds like of there's an incentive to be a butcher, there's an incentive to be a baker.Michael: Mm-hmm.Edward: society incentivizes people to be police officers and salesmen and retail clerks and radio personalities like us, there's all sorts of incentives in the system for these things. It sounds like right now there's a disincentive to be a superhero, and so that's what, okay, go ahead.Michael: I was gonna say that, but that's where I think this is going is that. On its face it doesn't make any sense unless they have so much money and how are they getting so much money? I don't know. Perhaps it's that we are talking about the Fantastic four who have access to space travel and interdimensional travel, right? Based on their recent adventures to our knowledge.Edward: They're just stealing from other dimensions and bringing,Michael: I don't, yeah, I don't know. I do not know if they have access to resources or minerals or something that we don't have access to here and that we're just not made aware of it. Or Reed has been inventing things and selling and profiting off of that.Edward: Yeah. So I guess that could be it, right? So you could be Right. Maybe they're just obscenely wealthy and in order to keep that wealth, in order to keep getting access to these other dimensions and keep the government off their back, they go and do good deeds for good public relations and those good deeds cost them money. But in the same way that, I dunno, Proctor and Gamble donates to clean water in Kenya, they're just like going like they're, it's like the tax on them. The good deed tax is there to keep their good PR so that they can go and make their money some other way that we don't really know.Michael: Yeah but on a personal level I work as a lawyer, so I make my money by going to work and billing and I bill my time. And so if I'm walking to work and I see someone's gonna walk into traffic and I'm gonna stop them because that's a normal human thing to do and it, but on a cost benefit, I guess it costs me time so therefore it costs me money. Cause I don't get to go to work early enough. But, It's on a human level it's what you wanna do. Now if it's now if to save, if I saw someone fall into traffic and for me to save them would require me to, you know, run.Edward: You don't want to skuff your shoes.Michael: No, but if I could lose my life, then I think that it might be more, I'd hope I'd be heroic and chance losing my life to save somebody who's falling into traffic but I don't know, maybe that's where there would be a line. And what I'm saying is that the fantastic core haven't hit that line yet. Yeah, it's still worth their time.Edward: Let's going back to this scenario, it's even worse than that. It's imagine if now you go and you save that guy, he falls down the road and you rush into the road and you save him but in so doing so, you cause a car to swerve and hit another car. And so now they wanna fine you for that car accident because you jumped in the way to save that dude. That doesn't seem right either. It's one thing you've already risked your life, you've already taken your time. Now we're gonna say, Hey, oh, and by the way, now we want your money too.Michael: That analysis only works, that analogy only works, is that I said, whoa, whoa, whoa, whoa, whoa. Okay, hold on a second. Let me pay for everything outta my own pocket. But I have an insurance policy that would respond to it. So likely I'm gonna be okay. So even if I did that quick math in my head, is it worth it for me to go in traffic?Edward: Yeah. But should your insurance company be paying for that? The guy who busted his car up again, not, not his fault, maybe the guy who felt that in traffic, you go after him, but going after the insurance company of the guy who saved the person's life, that doesn't seem right,Michael: It doesn't work like that though. If somebody falls into traffic and I go in and try to save them, as a result, some other car gets into an accident. I guess if they sustained injury, they would sue me. They wouldn't Sue the insurance company. My insurance company would respond on behalf of me. And there are some legitimate legal defenses that would apply to that very scenario where it's there. I didn't do anything wrong. I wasn't negligent. They'd have to establish negligence in order to trigger it. But my point was less about the intricacies of motor vehicle law and claims, and more just to say that my analysis is not gonna be influenced. I wouldn't have to think I take into my pocket and pay this person out rather than pay my deductible so that when I got sued, that my insurance company would respond and defend me. Whereas the Fantastic Four, clearly it's just not worth it for them to. To possibly don't have insurance, which I don't think they do to respond to the claims that would be made them damaging thatEdward: if they did their insurance would be so high ,Michael: they'd be so high.Edward: What insurance?Michael: You're an orange, rocky, monster that could destroy a building. So I think the insurance would be quite high if you had it. But at the same time, they could sued personally. The, Thing would have to, he is paying outta pocket. They must have so much money that it's just like there's, they're not even thinking about being tied up in a potential lawsuit later because so much doughEdward: and so clearly all these disincentives that we're creating haven't stopped the Fantastic Four from existing. But what's I always find interesting is when these disincentives exist, we have to ask what isn't happening because of these disincentives. Are there lots and lots of other superheroes out there that are being like, you know what, I don't wanna be a superhero. Look how much it's gonna cost. It's too expensive to be a superhero, like being a lawyer. I'll just be a lawyer by day and a nothing by night because it's too expensive.Michael: Well, I'm not, nothing by night a cause you know that.No that's why Spider-Man wears a mask. We've been quite critical on Spider-Man, how he wears a mask and doesn't reveal his identity would be super critical of him.Edward: And it's not, it's not afraid of a villain's attacking him. It's not because he's wants to do criminal things. It's because he's not super rich. Everyone who's not super rich wants to be a superhero, has to cover their face.Michael: So maybe, so I think the solution would be if we recognize it being a superhero is public good, much like having volunteer firefighters and police officers and things like that, then there needs to be new legislation passed in order to provide some immunity from civil prosecution civil claims, if he did, it would remove that disincentive if The Thing and the Torch burned down a building or destroy a building, the building owner can't sue them because they were legitimately acting the course of their superhero duties and roles, then I guess I had to put a claim over to their insurance company. But what would, and I think the only way that works is that probably all of our insurance rates are gonna rise to accommodate that but it's pretty fair to spread their risk out of superhero related damageEdward: It does. And then what that should open up is all these other superheroes that are presumably hiding right now and aren't doing anything. Or have they have secret identities or they have no identities at all because they're not super, they're just, well, they're super, but not heroes. If you wanna take, if you want more of your supers to be heroes, fix the insurance laws.Michael: No fix. You know what we need to have, there? Have to be local, state level and federal legislation that's passed in order to have, immunity from prosecution and immunity from civil claims pass. And that the question for us, I guess as a society, is that a better way to go? Or is it better to have them running around with masks and I don't know. I used to be pretty anti masked, but now I'm kind of seeing the value of it.Edward: Yeah. I think these laws, when you create these new laws, don't they have like catchy names and stuff too?Can we call this law the put the hero back in supers?Michael: I like where you're going with this, but what it be like, there's no i n team, but there's I Insurance Act from 1965. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this episode:Mike and Ed discuss Reed and Sue's engagement party. Why were only superheroes invited? Was there another non-superpowered person party that was kept secret? Also: the Wizard has recruited Paste Pot Pete, Sandman and Medusa to become the “Frightful Four”. Why did he stop with four villains? If he really wanted to defeat the Fantastic Four, he should have created the Terrible Twelve or the Amazing Eighteen. Why are the villains fighting fair? At least they waited until the party was over.Behind the issue:This is the first appearance of Medusa, who is clearly tied to Greek Mythology at this point. Later she will be retroactively changed to being the noble Queen of the Inhumans, but there is no sign of that at this point.In this issue:The media are abuzz, and falling over themselves, with the news of Reed and Sue's engagement. Meanwhile, the Wizard has gathered together three other super-powered people to create his own Frightful Four - the Sandman and Paste Pot Pete, who happened to be flying by the Wizard as he floated through the atmosphere weightlessly after his last misadventure, and Medusa. The newly formed Frightful Four attack the Fantastic Four at their headquarters after Reed and Sue's engagement party (which was full of superheroes) and nearly defeat them, although they are ultimately defeated, with the Frightful Four mysteriously disappearing from the fray.Assumed before the next episode:People are more interested in who attended the party than the FF's battle with the other FF.This episode takes place:After the Fantastic Four have seemingly defeated their apparently evil counterparts.Full transcript:Edward: I don't think any journalists were invited to this engagement party. Mike, did you get an invitation?Michael: No, and I was looking for it. But sadly, no.Edward: Reed Richards and Sue Storm are now officially engaged. I think they were unofficially engaged before, but now this is like a, kinda like they're coming out big party and a big, big giant celebration at the Baxter building.And, well I say big, but it was probably more intimate in that it was really only other superheroes that were invited to this party.Michael: It's sort of funny you'd think that they would've parlay, I mean, the superheroes, like the Fantastic Four are the most celebrity focused kind of superhero, I think the most media friendly superheroes.You'd think that that would lead to them parlaying that celebrity into connecting with other celebrities outside of their particular field. Because you look at Hollywood parties, it's not necessarily that rock musicians only hang out with rock musicians when they throw parties. All forms of entertainment types seem to gather. So it's sort of funny that superheroes only invite superheroes for their big party.Edward: Seems that's even weirder than that. You think about if, Reed and Sue, presumably like they've not been superheroes for that long, we're talking about a few years now, four years, did they not have any friends or family from prior to them being superheroes that, maybe would wanna invite to their party? This engagement party was such a publicity event okay, so some rockstar gets, I'm sure like celebrities know celebrities and some rockstar gets married to some other rockstar. They invite a lot of rock stars, but presumably they also invite their brother and their I don't know, their, friend that they had from when they were a kid. These people have these entourages doesn't look like Reed and Sue do it looks like their only real friends to invite to this party were the X-Men and the Avengers.Michael: Shows they have a complete dissociation to their past life. It just seems odd. Maybe this, actually, I've been thinking about this this whole time.We're talking, what if this is just the public one?Edward: Oh, I see. They're having another oneMichael: This is a celebrity one, right? The photos. That's true because the media we're there. I don't know, maybe let's play it out this way. If you are Sue storm's cousin, would you really want to go where there's all these nosy tabloid photographers because there were a ton there, right?Edward: More than that. We know that every time these superheroes have some public event, they're attacked by super villains and see, do you want, do you want your cousin to show up and be attacked by the wizard?Michael: So maybe what they did here was. Okay. At first I thought was just weird, but now it kind of, it makes a little bit of sense. Okay, we're gonna have this, and we know that the tabloids would rather have a picture of say the Human Torch standing next to Thor. You know what I mean? So we'll have, we'll throw that and that that'll give the tabloid. Reporters and photographers a chance to write their story and take their photographs and that's the public one.And then there's more personal and intimate one that's with their friends who aren't in the game. And that way you don't put them at risk. That's true actually, that makes a lot of sense to me.Edward: Does make a ton of sense. It's interesting cause I say there was only superheroes invited, There were, there were two non superheroes invited to the party. One was Professor Xavier, who's an expert. The mutant genes. And how these mutants are happening. And the second was Bruce Banner, who was the, the guy who saved the world , from the alien invasion a couple years back. So I guess when you, save the world from an alien invasion, you're an honorary superhero.Michael: Yeah. And they didn't care about the safety of those two guys, I guess, . Wow. Well, they're very smart. They can, they can figure, they can respond.Edward: I guess the other thing around safety is , we know that, when Spider-Man shows up at his fan club, they, get attacked. And when Reed Richards goes and talks at his alma mater he gets attacked, but in this case, you had to be a pretty ballsy superhero to go and attack the Fantastic Four and the X Man and the Avengers all in the same place at the same time.Michael: So maybe it could have had Aung Pentunia show up, but I don't know. It doesn't seem to make, I think I can see why they split this up.Edward: It's interesting that I talked about, these, villains attacking, the Baxter Building was attacked by super villains, but I guess they waited until the party was over. Let's wait until Thor vacates the building before we attack Reed Richards.Michael: Smart. They're getting smarter Ed. They're just getting smarter. .Edward: Well, the Wizard is one of the, the smartest, villains. Well, one of the smartest people in the world. Right? He was known as well before he became a villain. He was one of the smartest people in the world didn't, he still hasn't been able to defeat the Fantastic Four using, incredible brilliance.But he has been able to recruit, a more substantial team. He's realized that trying to take them on, on his own is not the way to go. And so now he's recruited, uh, pop. Yeah. How Pace pot. Pot pee., yep. Who he's worked with before, but now he's also recruited the Sandman and this new, super villa villains super villainous, named Medusa, at his side.And so, I guess four on four is probably, better odds. And as far as, as far as we know, it was kind of a stalemate, right? So they, they, they did not successfully hurt the Fantastic Four, but they also escaped fairly unharmed.Michael: Well, yeah. It's interesting though, it seems like the wizards figured out, like you say, he might have stand a better chance if he has a team of his own, but it seems like incredibly personal, his whole purpose of his team seems to be to match up perfectly with the Fantastic four, apparently they're called the Frightful Four , and it's justEdward: He's just trolling them now. He's just trolling them with that.Michael: He's trolling them. Like, I mean, like I, I took issue with, there's been some unimaginative team names, like Fantastic Four is one of them. It just seems like it's aEdward: Terrible trio. Remember the terrible trio?Micheal: Yeah, that's right. But they're just trying to like, No, no, no. I'm not looking about world going for world domination anymore. I'm just doing this because I'm a better, smarter person than read Richards, it seems to be what seems to be what the Wizard's trying to go for itEdward: And clearly getting, getting four of them together is, gives them better odds and trying to take him on like one on four. But it's funny that he can go further. Like why? Why stop at four? And then why even limit yourself with your branding, the Frightful Four? Why not be be like the terrible 12 and that that yeah, your odds are gonna be a lot better.Michael: Yeah, exactly. So maybe, maybe the wizard isn't as smart as he thinks. .Edward: He needs a few more. He needs a few more. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

In this final episode with Aaron Chapman, we discuss how adversity can shape your legacy. In this current market environment, many investors will be challenged, but that does not mean they must fail. Your mindset, work ethic, and ability to learn from the external forces that turn your world upside-down will be the deciding factor of your long-term success. Aaron Chapman is a veteran in the finance industry with 25 years of experience helping clients better understand, source, and finance cash-flow positive investment properties. He advises over 100 clients a month in the acquisition and financing of their investment properties and primary residences. Aaron is ranked in the top 1% of mortgage loan processors in the country, in an industry of over 300,000 licensed loan originators, closing in excess of 100 transactions per month. Episode links: https://apps.apple.com/uy/app/qjo-investment-tool/id1533823468 https://www.aaronbchapman.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor Podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the remote real estate investor. I'm Michael Albaum and today with me I have for our third and final episode of this series, Aaron Chapman and Aaron's a lender, and he's gonna be talking to us today about how well you take a beating determines your legacy. So let's get right into it.   Aaron, what's going on, man? Welcome back for part three of our conversation. How are you?   Aaron: What's up, brother. Man, it's looking forward to this one.   Michael: Me too our last few conversations. If you didn't catch them, I highly recommend you go back and give them a listen to Aaron drop some amazing wisdom and knowledge. Today we're talking about how well you take a beating determines your legacy as a theme. But for anyone who didn't catch the first two episodes, give us a quick and dirty who you are. And what is it that you do, Aaron?   Aaron: So I am in the Real Estate Investment Finance space. I'm one of the few conventional lenders that focuses on real estate investments. And I do about 1300 transactions a year for investors, I've been doing that since 1997. Got a great big team of 30 plus people, and we're into heavy into the education and helping people build a business while at the same time getting financing done. And it cost them nothing to have all the experience and the the wisdom, we're trying to give them the guidance while it is getting their financing done like they would do anywhere else.   Michael: Yeah, I love it. And so many lenders, especially conventional lenders, I've come across and you might have shared experience are just trying to push the biggest loan that someone qualifies for on them. And they don't really care what that's gonna be used for. They don't really care what how it's gonna affect the end user. But it sounds like you take a little bit of a different approach.   Aaron: It does bother. Well, there's two things about this industry. You know, I think I may have even referenced it, maybe not among the last two episodes is that humans are the apex predator, we fall prey to no other species except other humans. And I found that our industry is just full of predators. They don't care what you do, as long as you close, they will use every sales technique, everything they've ever been taught to try and find a way to get you to close on that transaction.   Myself, I'm of the mindset is I'm gonna do everything I can to ensure that you close and are successful in that transaction. Because if you're unsuccessful and what you end up doing, you're not going to do deal number 2-3-4-5, I don't care about deal number one I care about deal number 10. Why do I care about deal number 10. Because if you made it to deal number 10, you're a badass, you're getting stuff done, you're achieving your goals, if you get to deal with and pretend that I'm a badass, because I'm getting more deals done, right?   But one, if you have that bad experience, man, I'm never gonna see 10. So we don't when people come to us, and they've got questions that they've never had before. They've got decisions they got to make that they've never had to make before. There's a good chance they've never had to really experience what it's like to make that kind of decision. Well, what I do 1300 transactions a year and I've been doing it as long as I have, I don't answer the question with an answer. I give them stories, what I've seen people do in that same scenario, and then give them the outcome of those decisions. So they're making decisions based on practical data, not speculation, in theory.   And then I also if they're questioning a deal, like, I'm not sure if this is right, if it's wrong is like Well, let's take a look at some things I tell them what to look at, and what questions to ask and who to go get the answers from. Take notes and bring them back to me. And we'll evaluate those answers together. And what I'm doing is helping them to determine whether they move forward or they walk away. And they also got to education about it at it. And they also learned about the other people they're working with are these people that are in it for the closing, or they're in it for them and the longevity of their business. And we get to find that out. And you get to talk to people really, really quickly.   And sometimes it takes time you have to investigate things. You have to spend money on appraisals, you have to spend money on on inspections, and things like that. And it could be costly, but you never stay in the deal because you spent money that you spent the money to walk away from it. And we help them understand that they're their CEO, their real estate investment business, and we're here to support it.   Michael: Yeah, no, I love it. Sunk cost was definitely something I got exposure to early on in his business. And it's could be a very tough concept to wrap your head around. If you're not familiar with it, you know, don't throw good money after bad.   Aaron: And that's a heavy duty sales tactic to get people to follow the sunk cost, thought process and process and get really, really caught up a man have already spent this money. If you understand why you're spending the money. There's never a sunk cost. Yeah.   Michael: Yeah, no, it's so true. It's so true. So let's talk about I mean, where we are today is very different than we were six months ago, a year ago, 18 months ago. And I think people might be in for a little bit of a whirlwind. So let's kind of talked through this concept of determining how well someone takes a beating really determines your legacy, which I think is a really great theme. So why do you think it's pertinent to talk about today, Aaron?   Aaron: Well, we're going into what could be a rarity A very big beating. And the fact that, like you just said, we're coming into something we were this different than what we experienced the last little while. It's different. It's something we've ever experienced. When you go back into the market and started researching what's happened in history of these markets that we that we've been following all the way back in the 1800s, we don't have any data to tell us how the economy and how the market or the world is going to react to the last What is it 12 years, 13 years, since 2009, January 1 2009, we started the quantitative easing, and it's continued to keep going $8.9 trillion $8.9 trillion that put into the market. And now we don't know we have no idea how the markets can respond to that as they're, as they're trying to back off of that 40% of the of the world's currency, or I guess the US currency has been produced in the last 18 months. So for people to tell me, Hey, markets go in cycles, and we can get this particular loan, and we'll just refi later, like, Dude, you can't think that way. Because we're not in any cycle we've ever seen.   The last cycle last tilt since 2009, was really the cycle. Sure, there are some little mini cycles in there. But for the most part, we had extremely low interest rates, never seen before we had a housing market has just been on a tear for 13 years. And now you're thinking that some cycle is gonna come along the next five that you can risk getting a five year loan, and do that. No, I think weren't, it was. And I just know, I think Warren Buffett said the 30 year fix is one of the greatest instruments in the world, because it's a one way bet. If you bet on the 30 year fixed and you're wrong. Worst case scenario is you refinance the house. But if you bet on the 30 year fix, and you're right, you're save yourself 1000s and 1000s, if not hundreds of 1000s of dollars, depending upon the size of your portfolio. So don't get suckered into these short term loans on a long term investment.   So now going into what we're going to be experiencing here, one, I don't know what it's going to be. But if we go back to 2008, here's my own personal story in 2008. You know, I shared my story about coming into the industry and the beatings that I took getting into it, right, and now we're getting into what happened in 2008. Everything starts crashing, everything's falling apart. I at that time, was still doing pretty well. I was making a good six figure income. I had decent clients coming in in 2008. And I was doing kind of a night thing for two throughout two months. I had a buddy of mine I I'm a former fabricator, I've worked on vehicles, I built a hot rods, all kinds of stuff, build jeeps, a lot of things and I have that kind of a background. Well, a buddy of mine says hey, we need you in on this deal. I need another fabricator on this and what we were doing was taking a double decker Bristol bus an English bus. We cut the top off of it, turned it into basically a mobile strip club is what we did. And we did this for a guy that wanted to take it to Burning Man, you guys can look it up. It's called shaggileic. Rapping it's this white bus wrapped in for a cruise ship horn on the front. I mean, it's just it's one of the craziest things you've ever seen. What a trip, I was fabricating everything up top building in the DJ booth. There's a bed going up there places for the poles, all that and that's what I was building.   While I was doing this thing where I was sleeping maybe three hours a night I go to the office, keep working on my lending business. And at night I was fabricating all night long for these guys. Because they were doing during the day and I was doing my part at night. Well then August 8 rolls around am I lucky numbers always been eight. And so as a result that this is August 8 of 2008. I was jumping on the bike, heading out of town for a three day ride through New Mexico just to clear my head. So it's a crazy time in my life and mind that my head was not in the right place. I'll guarantee I just tell you that. Cruising down the highway and right next to this guy is in a black truck and I've been by him for a while so I knew he knew I was there. But Donald suddenly flips on his blinker and he starts coming over to me. Well, I quickly looked over to my right, nobody was there. So I hit my throttle, I leaned that bike. What I didn't realize is somebody just then started to pass me and I clipped her front bumper, and I went flipping. So I don't remember the accident self except for my bike kicking sideways. And then I remember waking up in the hospital and we're looking around and this this really bright light and really quiet area and I remember sitting up and I noticed kind of fuzzy there's somebody sitting in a chair and my lapse my vision got clear is my wife. So I asked her where am I at and what seemed like was kind of an exasperated going to tell me for the 40th time you're in the hospital. You had an accident, and she started explaining things.   Well, what what ended up happening is when I went flipping, I used to race mountain bike so I would instinctively talk I realized this because I had such a massive bruise. This is where I initially hit my my my helmet had big ol crack in it. When I hit it just obliterated my collarbone and a bunch of ribs. It collapsed my right lung when I flipped my legs hit and I shattered my legs and ended up skidding to a stop. So if you've ever been to Arizona in August, but the pavements not nice to lay on in August so I had a lot of burns. A lot of road rash And so I was in there for a couple of weeks in the hospital that a bolt me back together my memory at that point because the head injury we had pinwheel would basically flip every three minutes. I could only remember every three minutes and never reset, but little things would would stand out.   So there's some things I do remember, but a lot of it's gone. And then there's actually some stuff in my history that's gotten my I was with my sister and brother in law, and they showed me some pictures from their wedding. I'm like, I don't remember this. And they showed me pictures of me being there. And then they played the video Like, I have no idea about this night. So there's certain things in my history that are gone because of that accident. So kind of the point behind all that is, I wheeled into that hospital I was I was a mountain climber. I was a marathoner. I was in phenomenal shape, best shape of my life at the time, I weighed in at190 pounds, maybe 12% body fat, worse about on paper, because of my investments worth about three ish million dollars. When I wheeled out of that hospital weeks later, I was 156 pounds at six foot one, and I had a negative net worth of 1.5 million everything was taken from me.   So I had to start over from there. So I had to learn how to walk again. I had to train my memory back. And then I had to negotiate with everybody who is foreclosing on all my rental houses, they're coming after me for all the other debts. And because if it wasn't for the fact now, to me, it was a blessing. There's a lot of people that went through the crash. And they lost everything I know of people that ate bullets, they went back to their office and they shot themselves. I know people who did that. But I had the blessing of being able to negotiate with these creditors, and I'd send them my first week's medical bill for $1.7 million, and then immediately back off. And what I have is a certain amount of money left in the bank, that was all I had to my name. And it was about I think it was like five grand or something I don't remember exactly.   Well I called every creditor up that I owed money to that was calling me and I said here, here's how much I have in my account, you look at my credit report and how many people I owe, I will give you that if you agree to that and wipe the credit clean. So I negotiated that with every single person. And what I did then is then I had an underinsured motorist thing finally kick in months later. And I was able to use that to pay off everybody that one negotiated amount. So I got clear of the whole world and they let me do that because the nature of my accident. Not a lot of people had that. So they didn't have the blessing getting their *** kicked, and be able to leverage an *** whoopin to be able to get out of that right.   The other thing that was real tough about this *** whoopin was I came back to an obliterated business. The lending industry was not doing well and I got back on my feet about eight months later. And all the people I was doing business with before the realtors and people like that they were out of business. They were doing something else. There was two left in the industry, my mom and a gal by the name of Carolyn Irby with Coldwell Banker, they at that point, they were still doing business, they're getting deals done. And they call me up say, Hey, I got a client for you need to call this person, they would got to the point that they'd call me back five minutes later say, Hey, did you call that person like what person they said, Get your pad and write this down. So I got to I was carrying a notepad with me all the time, I'd write down what I do all day long. And the calls are supposed to make the outcomes of those calls. And then if it was crossed off, that means I did it. If it wasn't crossed off, then I would have to make this call. I can't tell you how many people I called that weren't crossed office. We just talked on the phone. Right? It's like well, can you can you tell me what we said.   So talk about earning trust, right? That's a real hard way to earn trust with somebody when five minutes before you don't even remember the conversation by explain the scenario. And people were very, very, very kind to me. Now. There were some saying, Hey, I can't do business with that does have a memory. There's a lot of people that were that did. And I rebuilt my business on that. And because of that notepad, I rebuilt my memory and I read, I was able to reconnect those wires in my head by the grace of God. And by just being very, very religious about maintaining my my pad, I wished I had my stack of pads, I throw them away, oh, I don't know why throw them away. But that was how I lived my life at that point. And I recovered back to a business that I built back up from zero to now. I get I start the the real estate investors coming into Arizona, and they're buying these houses that are undervalued. And so I started to do those loans. They were really little loans. There's like 50,000, or loans. Nobody's making a bunch of money on 50,000 our loans by doing a ton of them. And then I went from there to doing more and more they went from from Arizona to Indiana, Indiana, Missouri, Missouri, to Texas, and then over to Tennessee. And so I started doing more and more loans.   Well, then I had one of my biggest competitors, who was also a guy call and he'll give me pointers on how to do some of these loans are a little bit tougher. He decided in 2015 that we should merge our businesses. So when he flipped, they flew me out to Utah, I sat down with him and some of the executives in the company. Let's do that. So I merged the business with him. But you can only do the loans under one person's name. Well, since we're merging into his company, well, the company he worked for as a loan originator was put on to his name. Six months later, he pulled it all apart, took it off himself and left me at zero again. And it took my entire database.   Well, the executives called me up to say, um, we're probably at the fire your staff, and you're just gonna have to start over like, No, give me 90 days. So me and my staff have two or three, we sat down and we said, what are we going to do when the phone rings is going to ring in 10 minutes? What are we going to do with these deals, now, you don't have our big team anymore. And we mapped out a plan. And within six months, I was ranked number nine in the company. And within a year, I taken over the number one spot within the company. And now years later, that guy's out of the business. Because he I mean, that's what happens when you become selfish you and it's all about you, everybody leaves you he ended up all by himself, he end up not having a business anymore. He's completely out. I haven't heard anything from him, he got away from doing investor loans like three, four years ago. And I would venture to say I'm the number one guy in conventional lending for real estate investors. And last I saw by statistical numbers that was just published in a mortgage originator magazine, if you look at how many trends looking at by how many transactions closed per year, I think I'm right, number six or seven, the United States.   Michael: That's wild Aaron. That's so insane.   Aaron: And to me, a lot of people is like, how did you do all that and I'm like, you just every single day you have an objective and you keep moving forward. And it was actually, to me the noise of the world getting turned down around me and I was stuck to my own thoughts. You have to decide whether or not you agree with the person that you were and I would did not like the person I was at that time. I was a really arrogant, cocky prick before that accident. You know, I was dressing the part and acting department being the man. Now it's like, you know, I decided I'm just gonna be me. And if people don't like me, then then that's fine. I don't need to we don't need to do business. It's not about that I would do whatever I need to do to close a deal before. Now. I just want to make sure I get along with a person. And like one guy told me this last week, I thought it was really interesting. He says, Do you you just collect people? Like what do you mean I collect people because you collect relationships, because that's that's your investment, you invest you invest in things, but you spend money to make sure you have more relationships with people. And that's the truth.   And that came up because we talked about flying first class, one guy said he's really really cheap. The other guy said no, I love first class, I got pampered by it. They say you fly first class all the time. So yeah, I'm Executive Platinum with American Airlines, I spend more time in seat 3D and I do at my house. But it's not for the seat, or for the free drinks. It's for the person next to me. Because you'd be amazed at the kind of people you sit with in that environment and the kind of conversation you get to have. And they're all very, very memorable. If you'll just reach out and say hi.   Michael: Yeah, that's such a different way of approaching it. You know, so many people are going for the drinks or going for the big seat. Sounds like you could care less about that. Aaron: No, I mean, it's comfortable being a sibling I hate sitting in the back, because because of how much Americans have the room. Let me I'm not I'm not a fan. I do have to I do fly Allegiant from Arizona to to Missouri. So it's only one one stop to go to my place out in Missouri. So I still do it. I'm not a fan of it. I don't love it. We in fact, my family is dubbed at low rider of the sky. But when we go to kind of fly American, I'm, it's gonna be a long flight. I need to be comfortable. For two reasons. One, I've just gotten used to it. And I like sitting next to people I sit next to number two, I've lived the last What is it now? 12 years, 14 years in pretty heavy pain. And because of that pain, when we hit the sky, and they start pressurizing. I was doing a lot of pain in my shoulders, a lot of pain in my legs, my ankles are just both my feet were snapped off in that in that accident. So the extreme pain I was dealing with that. It's now gotten a lot less because I really took the time to rehab this last year, I went to rehab to physical therapists like crazy and we had loss and I got back to working out I got in a lot better shape than I've been in a long time in 14 years, honestly. And I feel awesome. But now the reasons I sit up there is not for the same reasons. It's for the it's for the relationships and like yourself, right? Well, I'm collecting people right here now. And now wherever I go. I see you as there's my guy. There's Mike.   Michael: Yeah, no, absolutely, absolutely. So Aaron, I mean, you've been like literally to hell and back again and came out on top. So for people that have maybe been never been through a downturn or a market cycle, if that's what we're headed into. And it sounds like that might not even be the case. I mean, what should people be doing to prepare, if they do find themselves with those shorter term loans coming due now?   Aaron: Well, and they're gonna come to at some point, even if it's not now, I think they need to be on the watch for any opportunity to put themselves into a longer term loan and have to bite the bullet or whatever that expense is. Do I believe, I mean, I think interest rates going to keep climbing to an extent they're gonna have to taper off because I can't see us continuing down this path. Interest rates are just, you know, mortgage backed securities are getting slaughtered, but I also can't see why anybody, anybody want to invest money in the mortgage backed security. Honestly, I don't understand why that money is flowing in there. Because if inflation is as high as it is, and you're going to lend somebody money, potential for 30 years risking it for 30 years, you're not getting your money back, you're losing money. But the marketing engine that is the real estate, the mortgage lending world, for the banking world, the marketing engine has convinced people, if you drop it 1%, you should refinance. And so the majority of people will refi, within the first four to five years, you're looking at an amortization, amortization table, the first four to five years, they're taking advantage of you, because you're all you're doing is paying an interest and then you put you back into a heavy interest period, they're gonna continue to keep them just just sucking money from you is what they're doing.   So they're, I believe, there's going to come a point that we're going to taper off, things might get a little bit better. And if it does that, within the next year or two, I'm going to highly encourage you, if you got suckered into a short term loan on a long term hold, get into a long term loan, get yourself comfortable. I always say control what you can control for as long as you can control it. And you can't do that in a short term loan. It's just not going to work that way. Michael: Yeah. No, I love it. And from a mindset perspective, I mean, it, I could see it so easily where you could have given up when you lost everything in a weight when you woke up from when you came out of the hospital, you know, went from a positive network to several millions and negative net worth overnight, seemingly? I mean, how do you get out of that? Because I think, again, it's so easy to go into despair and poor me. What kind of mindset does it take to lift yourself up from that?   Aaron: Yeah, that that was an interesting question to have to answer. Because not only do you have when you stack it all up, and I have to ask myself several times, how did I get where I'm at? Now, when I look back on that particular thing? It it was, like you said, you get your *** whooped that heavily. You're the everything's taken from you, you can't get you can't walk, you can't think you can't pay for anything. And they're giving you free drugs. And it wasn't just, it wasn't just weak drugs. This was good, good stuff. I don't know if you've ever had a lot of bad stuff. Is that amazing?   Michael: It's not Advil.   Aaron: No, it is definitely not Advil, and they were just willingly handing it to whatever you wanted, I had to get off of that. And I had to point myself in the right way. And I was still in a wheelchair, I was still having to deal with all this intense pain, I still had a lot of rods and stuff, multiple surgeries still being done. And I threw the stuff away and like, I don't want it, I gotta get my mind, right, I gotta get focused on where I needed to go. And what it was, as I've never sat still I just never had in my entire existence. So it was the drive to get up and get moving again. It was also that I always had an objective and a goal and where I was heading in life, even if it was just it was never really defined, but it was just kind of floating out there. I decided I was going to go after that I was going to continue after that. But I don't like to do is what was in front of me that day is day after day after day, day after day after day. But I think to the biggest driver at that point was I did not like the person I was before that accident. So I want to do everything I can to be anything but that man. And I am grateful that he was there to show me the way you shouldn't be doing things. But he was the biggest driver to continue to become something different.   And then after that the next big driver was I had a good friend of mine. His name's Joel. He's like a brother of mine. And it's it's a really long story to tell you how we met because we hate each other first. But now he's basically like my brother. And we went out one night with our wives. And at the end of dinner or after the event, we went to walk into our cars we have the opposite direction goes, Hey, by the way, I'm making a big deal happen right now me and my business partner, and it's going to change your life. Like how's it going to change my life? If you're making a deal, he goes, I can't tell you, he goes, but it's going to close here real soon. But it's going to change your life, believe me, I'm gonna change your life.   And as we parted ways, give him a hug. He turns around and walk in his car with both his hands and he goes, I'm going to change your life. And he yells out to me from like, 50 yards away, not knowing what that is. My colon changed my life, dude. Well, let's see what this is. Well, then, short time after that I found out he closed on the second largest. It's now the second largest real estate brokerage in the state of Arizona. And they'd made a deal with another lender to be their premier lender inside. What he wanted me to do is contact that lender and he told them call this guy, I want this guy in your company to work with us. So they called me and we talked about me coming over there. And to go over and meet with them and went through all the back contracts and everything. I'm like, Okay, well see how this goes. And they said we want you to come meet the CEO of the company, but you can't meet the CEO until you do this exercise and they hand me this five year vision that the CEO had for himself, you know, his five year plan and then they told me gave me the elements of the five year plan.   Cool. So I wrote this out like this is all bullcrap. Nobody does this. None of this crap works as goal setting stuff is stupid. But Fine, I'll do it. Just so I can meet the CEO, Joel opened up the door on going to do a jewel asked me to do like sat down. I wrote out this audacious freaking plan, right? The best month I've had before that was 18 Maybe 18 transaction that due in a month. And I think I closed maybe 20 Some million a year or 25 million, maybe 30 million year my best year. Well, I wrote this thing I was going to do 100 million a year and my staff is gonna grow by this and that in that net over the five year window, no ideas, I set it up as a story. I'm sitting on along Rubicon Trail in my chair with a fire gun. My wife's next to me, we got the Jeep parked there were searing steaks on the on the trail grill, and I'm thinking back on my life or last five years, and I'm writing a letter to myself of everything that happened.   So then I went forward, I met the CEO, he's like, this is the most unique five year plan I've ever seen written, we would love to have you come work for us. Now, incidentally, I didn't go work for those guys. It didn't work out. But I stuck with that five year plan. And I continue to follow that five year plan to go back and look at it look at it. I blew through everything on there and doubled it. Because I wrote it down. And then I discovered a few write things down things happen. So one of the next things that I'm doing, I have a book out there shows people I'm working on another book with Robert Allen, if you know who Robert Allen is, but we're working together on a book. So he wrote the book, no money down in the 80s. The guy was basically   Michael: Oh, yeah. Okay.   Aaron: So he's an absolute bad***. I mean, Robert is awesome. And we're writing this book as if me sitting there talking to an eight year old about how life or 18 year old about how life works. And it's taking a beating. So it's how to take a beating. And that beating is actually how you learn. And explain why believe that. And so on and on be teaching people within the first chapter, then all the way through the book on how to write this out, and then help people come to me will sit you down, I'll take it in an environment. And there's more stories about how that got done. And other ways I've used writing it down to become successful, and show people you write this stuff down. It's amazing how the universe starts to line up to get things done for you.   Now, when it comes to a beating, right, the one thing is that we have noticed that we as humans learn better by getting our butts kicked. And I believe that there's this Bigfoot that wakes up at about 7:30 Every day, this big, ominous invisible foot to kick your *** all day long if you let it. If you so think about this, I wake up at 4:30 in the morning, I get up way before the foot does and I do what I want to do, right I sit down, I send a message to my team, every single morning, I read, I write, I do the stuff that I need to do I have prayer before I get started all that and then I go and I work out every single day. So but if you're a person who wakes up at 7:45, and you got to be the office by eight, the foots already up, right, it's already kicking your *** the second you put your foot on the ground from from the from your bed to try and get to the bathroom, you stumble into this, you stumble into that your day is just wrong from the very beginning.   Get up before the foot does, you got to figure out where your personal foot wakes up. That's out there to kick your butt. And you got to get up before the foot doesn't plan your day and start executing on that. The other things that I've noticed with people, you know, how we learn, we do have to take a beating learn so you need to dissect every beat you've got so what am I learning from this? And how do I need to take from that, and let me illustrate how I know that. That's how that's true. I was six years old. And my parents put me in a Pentecostal school for my first grade year. I didn't go to kindergarten straight to first grade. And it was this Pentecostal church in this small town. And they had everything from first to high school senior all in one church and everybody had their own little thing and you had different teachers for all of it. And I segmented us first graders off for the first three months and we're meeting in the little room and they were teaching us the alphabet and numbers. And as they're going through the alphabet every letter was had a nursery rhyme style Limerick to it and a filmstrip. Now you may be a little too young to remember filmstrips. But it's up…   Michael: No I got it, I got it.   Aaron: Okay, so you got the film strips got the little thing. You'll play the music and here's the beep and you flip it to the next next slide, right? It's basically slides. Well, it was a it was the we got to the letter M. And the letter M was about this mule named Milton. And the way the nursery rhyme when it says Milton the mule he made a mistake as you read a map, you walked in a lake. And as it's going through those filmstrips, you've got this cartoon mule walking down the road, in a suit holding this map, and then you see him falling in this lake. Well me being me, even at six years old, I redid the limerick, and I said it out loud. So instead of having Milton falling out falling in a lake, I had him ******* in a bucket. I know it's stupid. Right? The six year old stuff. The little girl sitting next to me did what you just did, she laughed about it. That didn't go over well with the teacher. Now the teacher happened to be the wife of Noah, who was also the pastor. She heard all this so she grabbed both of your ear lobes. Walk the straight to the principal's office and sat us down in these chairs.   This guy was not a small guy. He was a big man. So he's the pastor. He's the principal. He made me repeat exactly what I said. When I was done. He turns around he picks up this old aircraft aluminum style briefcase, sets it on his desk, puts in the code opens it and very ceremoniously turns it so I can see the contents had a padded interior cut out to houses pattern. So then he pulls the paddle out makes us both stand up and turn around and put our hands on the on the chairs. She got one swap I got two because I'm the one that came up with the limerick. Now it wasn't that hard. My dad's Irish my mom was Spanish Believe me I that way harder buttons for a lot less than what that guy gave me. But it was The gravity of the situation that caused the tears to flow. And then I also knew I had to face my dad that night. He always told me if you go to the principal's office, you're getting an *** whoppin. Well, I did. I got a pretty good one. But ultimately, the main reason I bring that story up is there's how many letters in the English language?   Michael: There's 24   Aaron It's 26?   Michael: That's so embarrassing.   Aaron: I know. I googled that I thought it was 24 as well very recently, and I go, so yeah, there's 26. So 26 letters, which we just established. How many guy remember the limerick for?   Michael: How many did you remember the limerick for? You probably remembered him for all of them. But for sure M.   Aaron; Just one. That's the only one I remember. I remember the letter M. I don't know anything about the other ones. That was 42 years ago, I can only recite the one for letter M I don't remember what the other ones were about. I can't remember you even articulate what the letter A would have said for it be what it stood for. But remember what M step four? Why do I remember it because I got my *** beat. That's why.   So we as humans learn very well through a beating. So what I tell people don't take, don't take a beating is something that's bad, learn whatever you got to do, just don't take the same beating. There's nothing wrong with making mistakes, just make new mistakes. Because you're making new mistakes, you're still advancing. There's nobody, that people who fail to get ahead in life make the same mistake over again. The other there's another thing that they say is there's two types of people never amount to anything. A person that can't do it, they're told, and a person that can do nothing but. I would say take the time, and analyze that to people that will never amount to anything, a person that can't do what they're told, and a person that could do nothing but.   Those are some very, very powerful words to sit and think about. And you have to figure out who am I? What am I getting done? What kind of *** whopping am I taken on a daily basis? And I said the same one over and over again. What do I got to do to make adjustments so I could advance myself and get away from this beating I keep taking.   Michael: Man Mike drop exit stage left Aaron Chapman, everybody. This was so much fun, man. How do people get in touch with you if they need you?   Aaron: Best way is Aaron chapman.com Or just go to Google and type in Aaron chat and you see a bald bearded redneck lender you got the guy.   Michael: That's you awesome, man. This was so much fun. Aaron thank you again for coming on for the third time. This was definitely the one that did it. We'll do it. We'll be in touch man.   Aaron: Thanks, brother. Appreciate you man.   Michael: Likewise, you got it.   Okay, everyone that was our episode A big thank you to Aaron for coming on today and the other two episodes as well. If you didn't catch those, I highly recommend you give those listened to Aaron dropped some really fantastic wisdom, knowledge and thought perspective on where we're headed in the next couple of months and yours with the market.   As always, if you enjoyed the episode, we'd love to hear from you with a rating or review wherever it is get your podcasts and we look forward to seeing on the next one. Happy investing

We are using a new service to edit these episodes. As part of the process it produces a full transcript. The transcript is not perfect, but it's pretty close! And we think we will get better over time. Transcripts will be included below. Enjoy!In this episode:Mike and Ed discuss the ending of martial law and the innocence of the Avengers. They were framed by Count Nefaria, but the events showed just how poorly the country was prepared for our heroes turning on us. And why were we fooled to begin with? Shouldn't there be some method of double-checking when a hero declares war to make sure it really is the hero? We live in a world of mind control, and magical and technological illusions. Some sort of back-up plan should be in place. Why wasn't it? Also: After causing a national state of emergency, why is Count Nefaria being deported rather than charged with the crimes he committed in this country? Do all Counts get diplomatic immunity? Even when they cause the Avengers to battle the U.S. Air Force?Behind the comic:This is the first appearance of Count Nefaria. He will soon battle the X-Men and Iron Man in a solo outing. Eventually, he dies due to his experiments, but is resurrected to join the Legion of the Unliving. While he never achieved iconic status, he is active in the Marvel Universe to this day.In this issue:The Avengers have successfully stymied American crime, and the Maggia is unhappy about it. Their secret leader is Count Nefaria, the most powerful crime lord on earth. He is also the wealthiest European nobleman. He decides to move to America, having his castle rebuild brick by brick in America. He meets with the Avengers and basically creates holograms of them. He sends thr hologram Avengers into the real world and has them basically declare war on the US. The US responds by declaring the Avengers enemies of the state. This all happens while the Avengers are basically kept in suspended animation. They are released from suspended animation and are attacked by American troops. They respond by battling the armed forces, only to find that they are public enemy number one. The Avengers eventually figure out what has happened and they confront Count Nefaria and defeat him. Count Nefaria is deported, and the Avengers are left with one of their own, the Wasp, having been struck down.Assumed before the next episode:People are happy the Avengers did not try to take over America, but they are not exactly comfortable with the idea that they could probably take on the combined U.S. armed forces.This episode takes place:After some major P.R. on behalf of the Avengers, the former, wrongfully accused, enemies of the state.Full transcript of the episode:Edward: All right, Mike. It was not mind control. It was not the chameleon doing an impression of them. But, the Avengers are not actually trying to take over America. It was all a false alarm.Michael: What an alarm. False alarm though. I mean there was conflict between the Avengers and the American militaryEdward: Correct. So the confrontation that happened in New Jersey where the Avengers fought the Air Force, that was the real Avengers fighting the real Air Force. They took down the planes. The Avengers, the real Avengers actually did go into hiding. They were at large. The prior where the Avengers actually threatened the Pentagon, the thing that started the incident that started all of this where the Avengers threatened America's democracy and tried to dismiss the Pentagon. Those were not the real AvengersMichael: is what we're being told. And it's just, but it's. I don't know. There's mistakes and then there's mistakes, right? like, I mean, so if there wasn't mind control and this wasn't, imposters, if this is just a misunderstanding, it's quite the misunderstanding. Cuz it's like if, the Grand Admiral, the Navy has a misunder, there's a misunderstanding about where their loyalties lie and the Navy goes to, gets into a scrap with the rest of the armed forces cuz the adventures are basically part of our armed forces. And it just , it just seems like something you have to be sure about and, you know, and it's like, especially given they have high security clearances.They're granted extraordinary powers. Masked vigilantes, that have effectively turned into an arm of a division of our government. And the idea that you just assume that they turned against you based on a misunderstanding. I dunno. It was blowing my mind, Ed.Edward: It's clear that, that we jumped the gun, right. To be clear this is Count Nefario, who is the, richest nobleman in Europe has admitted to causing all these problems. And what he did is he created some sort of electro images of the Avengers. An illusion effectively, that apparently had the ability to be seen and heard. And he sent these illusions at the Pentagon and made this whole thing start. But I guess the first question is why do we believe that? Why were we fooled by these illusions? is there not some sort of double check, double checking mechanism to be like, Oh, you know what? Captain America just said that he's declaring war in America. Let's call Captain America and make sure that this is the real guy. This is, we're sure about this. like what's the. Hey, Captain, before you declare war on US Captain America please tell us the code that we've given you to verify that you actually are Captain America. What if an illusion of the president comes in and says like, I want to fire a nuclear weapon. We have nuclear codes that he has to type in. So we can't get fooled by a president impersonator. Why are we being fooled by a Captain America Impersonation?Michael: Well, maybe this shows a bit of the naivety on the American military and government that they didn't have those built in redundancies or, backups or fail safes. Right. I'm sure that the American intelligence agencies are always checking to make sure that there aren't any slip-ups with people in high ranking authority, the American military and, government. That's the point of intelligence gathering operations to make sure you're not surprised. And I guess what this shows is that maybe there isn't, there wasn't that level of intelligence operations within the Avengers, which we know is, well, it's only five people. there's more to them than that. I mean, especially given their connections with Star Corp. So maybe it's just shows the naivety And then the next step is interesting competence. I think there's gonna be a crackdown. Well, there should be. There should be. Like, there has to be where you have to make sure. Sorry, but you, It's that the adventures themselves are gonna be like, under greater scrutiny and, they'll know it now because it's for their own benefit as much as anyone else too.Edward: I wonder how much of it was that, first of all, we didn't have the processes in place and we need to have those processes in place. We live in a world where mind control exists, where Mastermind is a criminal that the Xmen shared with us that can create these illusions.We, knew that, the ability to create, We didn't know about Campari's illusions, but we knew that there were villains out there that had the ability to create illusions. We needed to have, measures in place so we're not fooled by them. I also wonder how much of it was That people kind of just believed it without question, as soon as Avengers turned on us, it wasn't a matter of like, this is not possible. It was, Oh, this is happening. Let's deal with it. Like it feels when the top heroes in your country turn against you. Maybe we shouldn't have just like taken it at face value.Michael: I think, ready fire aim is not a good approach to dealing with people who have, you know, been rightly without it for being heroes. I mean, it was shockingly last time we were speaking about this, you know, we were, well, we were in shock, because we couldn't believe what was happening. And I think to be fair to us, it did seem that it was happening because you wouldn't assume that the American military would go to go to war with the ventures over a misunderstanding. So it is quite shocking. It's something that has to, that we have to, I'd imagine there's gonna be congressional hearings in this for years.Edward: A few other things that are worth talking about. So, number two is, when we last spoke, we talked about why weren't the Fantastic four and the X-Men called in to deal with this. Mm-hmm. , I think we've, we've found out now that they were actually specifically asked to step down. Like they, they basically were told to stay back and let the military handle it. And I, I. Number one, whether that, Well, first of all, was, was that a good idea in not, or should they have done that or should the process be in place that the other heroes take charge when that happens? Or number two is were there suspicions already that the Avengers kind of weren't the enemy here and that's why they held back the Fantastic Four as we'll use them if we need them, but let's just keep things under control and not start a superhero war until we're really, really sure that these guys are actually the problem.Michael: I don't know because my thinking was just that if the intelligence operations with respect to the Avengers are so piss poor, then I'd imagine they would be similarly, ine. For the fantastic for the Xmen, such that I don't think the military could really trust what they were seeing or what, or their, their past relationships. So my thing is they wouldn't bring them in because they didn't wanna compound the problem the way we were talking about it in our last broadcast, but who knows? I mean, what's sort of interesting is that there doesn't seem to be any kind of countermeasures set up for the avenger. because we didn't see that in the field. We didn't see, how Dr. Blake had created that Andrea that could effectively respond to Thor. But I didn't hear about that being put into the field.Edward: It just, what you're saying is that this was kind of like, If the Avengers or the Fantastic Four, the X-Men did turn against our country for real, this was the dry run on how we would respond.And like, I dunno, the grade is not a D minus. Do we give them an F? Yeah,Michael: It's terrible. It's terrible. And so, and I think I wouldn't probably chance bringing in other superpower people that might not be on your side. This is a huge deal. It's should shock the world into preparing countermeasures to combat the potential. Of the Avengers turning on us, in a democracy where we're set up with checks and balances, just doesn't seem to be any, for superpowered individuals still, and we've been talking about this for a long time, but there should be.Edward: And if anything I think makes it, it makes it worse because now imagine military recruitment is never easy, right? Recruiting kids to go and join the militaries is hard. You're asking them to potentially sacrifice their life for the country, but now they, number one is you can be called up if you, even if you're a reservist, they were called up in this situation where right reservists are rarely called up in this country. And so they were called up and then they're called to do, they're called up and asked to fight a mythical God. Like, like, like you're, you're talking some, some 18 year old kid and we're saying, Hey, here, here, take this rifle and you are gonna have to fight the God of Thunder. It's one thing to go up against,, Vietcong, or humans. It's another thing to fight a Giant Man.Michael: I know you're gonna fight somebody that can shrink the size of an ant and then grow to the size of, an elephant, in a matter of seconds. Or you might fight against, one of the greatest American heroes, Captain America, like an expert in hand, hand combat that to help bring down the Nazis. I mean, it's a lot. What we're really circling around is the fact that. We have in our emergency preparedness, we get a failing grade. And what's gonna happen now at Imagine is that there's gonna be investigations into why. And I think that all superheroes, no matter. Their past service are gonna be under greater scrutiny, and I would even suggest possibly greater control. At the same time, there's gonna be, a greater investment into countermeasures to combat them. Even though it turns out that it wasn't the emergency. We thought it was, it still wasn't very good. It's not good for anybody it turns out.Edward: And meanwhile, the guy who caused all this is Count Nefario. He's not being charged. He's being deported, but what he did caused, Well, it could have been worse. Right? The battle between the Avengers and the Air Force that happened that was caused because of his, actions. No one was, killed. But million dollar fighter jets were destroyed. And they could have been if it had been successful, if the Air Force had successfully killed Captain America, this guy would be directly responsible for that and we're just deporting him back to EuropeMichael: Well, don't ignore the fact that he potentially destabilized the world order…Edward: …with no consequences. It was just last week that we talked about, Bruce Banner being charged with treason. They charged the Avengers with treason. Now those, both, those charges, all those charges have been pulled away. I guess we can't charge them with, treason if they're not American, so I guess we can't charge count nefario with treason. But what's the equivalent of treason for someone who's not American? It's not being deported. It's, what? He's an enemy combatant now. Like shouldn't we put him into prison?Michael:  I don't think he's, a diplomat or something. He's a rich European and I think a richEdward: He's a count, He's a noble. Do all nobles get diplomatic immunity?Michael: No, they don't. And so he committed crimes in America. So, sending him back to Europe is not what should happen. He should have been arrested. Maybe though, Maybe the American government was just sweeping us under the rug, because there's the reasons we've been discussing that. It was such a catastrophic intelligence military. Political failure, they just wanna forget about it. they wanna just move past it as if we should, which we shouldn't. I mean, this is so bad. He's clearly an enemy of America. We don't know the reason why he did this, but I can't imagine it's because he's got our best interest at heart . So why don't, we shouldn't, shouldn't there be, he should have been arrested or should have been a trial and there should be a further investigation. It's, pretty tough. But we'll see. tough day I guess, but we'll see. Cuz it's interesting for us, cuz we have a show about this, but you know,Edward: Never a dull moment Mike. Never a dull moment.Michael: Nope. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.superserious616.com

Today, we welcome Billy Keels back on the show to discuss how he went from living the corporate life to running his own business. We discuss his motivations, the mindset shift, the challenges, and finally, the rewards of his decision. Before becoming a real estate entrepreneur, KeePon Cashflow's founder Billy Keels worked in the corporate world. In fact, he was one of the best “corporate soldiers” you'd ever want to meet. Billy says that he was happy enough in his J.O.B., but something was missing. An emptiness and longing for a different life chewed on him, pulling him to what he knew he wanted to do more than anything else. Billy wanted to be an entrepreneur who brought two worlds together. So he took steps and kept on the path to his goals. Today, Billy is an international real estate entrepreneur, problem-solver, author, coach and mentor. He sees opportunities where others often don't in real estate. --- Episode Links: https://www.firstgencp.com/ https://www.firstgencp.com/paylesstax https://www.linkedin.com/in/billykeels/?originalSubdomain=es --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum, and today with me I have Billy Keels back on for another episode. For anyone who missed it Billy is an entrepreneur business owner ex former tech sales guy, and he's gonna be sharing with us today about how he started his business, why he started his business, and really the mindset shift around going from employee to entrepreneur. So let's get into it. Billy Keels, welcome back for round two, man. How are you? It's so good to see you. Billy: Michael, what's up man? I, um, super excited to be back. This is nice.   Michael: I'm super excited to have you here. So for those listeners that did not catch our first episode together, give us the quick and dirty who you are, where you come from, and what is it you're doing in real estate.   Billy: Very cool. But you know what? You know what I have to do first man, because you're very kind to welcome me back and I just wanna say everybody, by the way, if you haven't already, Leave Michael a nice, wonderful, honest written review as well as rating. It helps to… Michael: Oh my gosh…   Billy: Bring guests to you, which is phenomenal. No, I mean seriously. I mean.... The energy, you all bring the organization, you bring the structure. Uh, and also I know a lot of the things that you are doing are making positive impact cause you're helping to educate people and also inspiring them to take action. So it's the least I could do also as a fellow podcaster, um, to go out. Uh, and, and, and ask of that. So, um, but yeah, Billy Keels, I'm still the, the same guy from the Midwest, uh, of, uh, of Ohio, who has spent the last 26 years of his life, uh, in corporate up until recently, uh, no longer, uh, in the corporate world. I've also been spending the last 21 years, uh, living in Europe. I know Michael, that's close to your heart as well? Michael: Very much so. Billy: And specifically, yeah, specifically between, uh, France. Italy and most recently Spain. I am someone who really, really had a great corporate experience. I really enjoyed it. It was fantastic. Some personal things happened in life that helped give me some clarity that was time to do some other things. Uh, and now I am very, very fortunate to be living, uh, you know, I'm living my, my best life and, uh, was able to make my nine to five optional and doing that in a point in time where I'm still in my forties and, uh, living between, uh, the US and, and Europe and that was part of my life goal. Uh, very, very fortunate and super excited to be back here and share another conversation with you, man. Michael: Oh my God, I love it, I love it. Billy, before we jump into it, I'm just curious, do you remember the best compliment you've ever received? Just outta curiosity. Billy: The best compliment. So you've kind of putting me, putting me on the spot, man. Um, I don't know. I think that's when you have to ask my parents. I don't know because they're , you know? I don't know. I just, I don't know. I, I, I can't remember. But usually it's, it's probably something that's not related to me, but something that I would've learned from my parents. More than likely. Um, but I don't remember specifically why, Why do you ask? Michael: I love it. I'm just curious, man. I'm curious to know if people remember, like human psychology, if people remember the compliments more, or do they remember the insults more? Billy: I spent 26 years of my life, uh, 20, one of the 26 years in sales and sales leadership roles. So the, the bad stuff I've learned to just kind of let it go. , the good stuff. I try to. Um, but if it, like, one of, part of the process that's happened with me is I try not to internalize too much of this stuff because then I kind of keep that and there's a tendency to say, Well, I've heard this so many times, therefore I am, um, I always try to work and be in the best version of myself, so even if I get a compliment, it's kinda like cool. I appreciate that. I probably learned that from my mom, from my dad. It's something I've seen from my brothers or something that my, my wife is helping me to be better in. Michael: I love that man, I love that. Can we turn back the clock a little bit, Billy, and talk about. Your corporate career, because I think that you have a, a similar story to a lot of folks, especially listening, have an amazing corporate job, are killing it in whatever it is they're doing. Um, and they can see themselves doing that maybe forever you had kind of a life change. I'm just curious, like why did you decide to go into business for yourself? Billy: So, you know what, Michael, this is actually super, um, such a wonderful question and I can tell you, I think the last time I told you that there was something that happened to me when my, um, it didn't actually happen to me. It happened for me when my son turned three, I missed his birthday right and I, because I chose to go to a business meeting that was in Germany because I was chasing the corporate dream. I was, you know, that was the thing that I was supposed to do, I was a really young father in that day. It was, I felt an incongruency in my, like, in my being right. I was, I woke my wife and son up to, you know, wake them up and our one year old just to give a hug to our three year old and kiss and then I was out the door. So that was the thing that made me realize like, hey, look, I've gotta kind of take action. I really like my, my corporate career, but I got lost somewhere along the way and my priorities got outta whack and so that helped me to take, start taking action, stop reading a lot of books. Cause I'd been reading books for probably three or four years, right? I knew all the numbers, all the theory, all the stuff, but I didn't take any action and I'm very, very proud to say that I've just celebrated a decade later, right? A decade later, I was able to accomplish the goal, which was being able to make my nine to five optional and even though I went in probably for the last three years and I didn't actually financially need to, I chose to go because, um, the life balance that I had was much better than it had been the previous years. Um, I was still enjoying the things that I was doing in my role. I was really well recognized. I was, you know, making way more money than I thought I ever should be, Uh, making and a decade later, like I literally just came back from, uh, Ohio, uh, where I was, uh, over visiting some friends, got to go to a, a sporting event, which was fantastic. Saw family members and then was able to be back here. Uh, for my son's 13th birthday. So a decade later, I recognized that the action that I took for a decade while I was working my day job, having this side hustle, like it really, it's paid off and it hasn't been perfect. Michael, Um, not even close to perfect, but the fact of the matter is I got outta my own head. I started taking action. I started seeing results, and then I started multiplying on that action and. Even though I left the corporate, because something also non-financial, and I think we talked about this last time, happened with my dad, and it helped me to realize like, okay, I really like what I'm doing, but there's some other things that I can do now less than a year later and my son's, you know, 10 year, 10 years later, his 13th birthday, I'm at a point where I'm like, wow, you know, all these things that I dreamt and wrote about on my dream board. They actually came to fruition. Um, not perfectly, like I said, but you know, being able to be in this point now is, I, I, you know, I'm glad that I started taking the action and I'm glad that I started that side hustle and I know that I worked through a lot of, you know, a lot of crazy hours during some of that time, but it wasn't all for nothing. Michael: Yeah. That's amazing, man. Well, first off, congratulations. That is super, super exciting to hear and I'm sure your family is super thankful as well. Let's talk about like, I think so many folks get it in their head that they can't have a side hustle, or they can't go build a business of their own either because they don't feel creative enough, they don't feel inspired enough, they don't feel called to do something, or they just feel like they don't have enough time. So talk to us about the mindset around. I'm working my nine to five scraping by or doing really well, not even scraping by just doing really well, but I'm exhausted at the end of the day. How does someone like that even think about doing something else? Billy: Yeah, so, and you know, I, I guess I kind of put it in a, there's a couple different things inside of me. I kind of always knew that I wanted to do something else as well, because I think one of the best things about working in a corporate role is in specifically like I was in the IT sector, right and not only in it, I was in software. So this is like super cutting edge, massive profits, and so it was great place to be every single day and so there are so many, like I realize like for a while, I just wanted to continue to work and be an employee and, and things were great and I was really, really fortunate because I had great salary. Um, you know, I was given opportunities to learn to grow leadership opportunities, great training and so for that period of my life that I didn't really wanna do anything. This was like, this was the most amazing thing ever. But then also as I started getting into the other phases of my life, I realized like, hey, listen, there are other things that are really important to me. I want to be able to be here or be there, or just be nowhere when I want to do it and not have to worry about somebody else telling me when and so when those things started happening for me once again, I started realizing like, okay, well, number one, the things that, because I didn't grow up with money at all, but I got into a point where I actually was not just saving money, but investing money, but then I realized that it was outside of my control. Like the stock market couldn't control that, but that was the only thing that I'd been taught to do, which was buy low, sell high, not really a winning strategy, and I didn't take enough time to get educated on that. That happened in 2000 when the DOT combo will happen, and the same thing happened again in 2008 I lost 33% of my portfolio, so I knew that even though I was in a really great c. Opportunity and create corporate experience inside of me. I needed something else. I wanted something else. I just didn't know what it was and so it wasn't until I came across that little purple book that so many people have read that that started turning like the idea on in my mind. But even with that, my goal, like I said, it took me like three and a half, four years to go from theory to practice and it took me missing my third, my son's third birthday to actually start to take that action and so, once I started, uh, you know, being able to, to take that action, I realized like, hey, listen, as long as I continue to give the outputs, cause I was in sales and sales leadership, like what are the outcomes that are expected In my role, I always performed at a high level. Like I was in the top talent program. I was going to Hawaii every other couple years for, you know, overachievement against quotas and stuff like that. So I felt like it was always important to be able to give everything that I gave during my corporate time because that was also providing me the income to be able to do the investments in the other stuff, which is actually creating my runway for my own life, like the one that I was building for my family. So it was finding that balance between being, a really good sometimes great. Uh, corporate employee, I think even, well, I don't think for on my, for a while on my, um, on my LinkedIn it said, hey, you know, happy corporate employee like that was my moniker. So that, that was like the thing and people were like, You really a happy corporate employee? Like yeah, I mean it's treated me really, really well. Yeah. Um, but it was something more that was inside of me that said, hey listen, it's time to do something else and I was afraid for a really long time because I was a high paid executive who was visible and people, you can't be doing anything else, man. You like, you need to be client facing all the time. You make a lot of money, you're doing this, you're doing that. But I knew that it was, um, it was something that I, I really wanted to do and there was sacrifice that also went on, right? Cuz you, you, you're in that type of role, you're expected to be on. Almost 24 hours a day. So I was waking up really, really early in the morning and I was staying up really, really late at night and fortunately both my, my, my wife and my kids understood that, um, once I got back on track, um, and, and it was about being able to find that balance. So I know it's maybe a little bit of a, kind of a longwinded answer, but I think it was about, you know, recognizing how fortunate I was in the corporate role that I was in and I did like it. Uh, I liked it a lot and at the same time, at a certain point I knew that I wanted something more. I knew that I wanted. The control. Initially it was of the financial, uh, outcomes of my life and what I realized it was, I really wanted to have more control over my time and it manifests itself just a couple days ago, which was a decade later, which was me being able to fly to my hometown, stay there for a week, hang out, and then be back for my son's 13th birthday. So, um, yeah, so that's. Hopefully that answers your question. Michael: Freaking amazing, man. So let's talk about like the next obvious question because you were an executive in it, tech sales. So what did you end up doing? Like what kind of business did you start?   Billy: Yeah, so, um, so the thing that I started to understand was it was a thing that came across. It was really, this is kind of dumb luck. It happened, it just really happened that I read that low purple book. The proof of concept was really simple. He was like, okay. I was working in this intangible world selling software. You can't touch it. You pay multimillions for it and then there was, hey, you pay a couple hundred thousand, then a couple million, and you get this actual, physical, tangible thing that you can touch. People wanna sleep in it, so they'll pay you for it. So that's the revenue line. By the way you've gotta make sure that this place stays in order. So you've got some operating expenses, you know you gotta pay your insurance taxes, maintenance and operations, maintenance, repairs, things like that. Then afterwards you get to this line, which is net operating. Well cool and if you have some debt service or mortgage, you pay that mortgage and everything else you get to keep. I was like tangible, simple business model and there's a need for it. So I went and started investing in real estate and I think we talked about it last time, but here based in Barcelona, Spain, but investing always back in the United States, exclusively in the US. So I started with the, with the smaller multi-family and then I bought a mobile home park and then I opened my mind to thinking about new things and I was like, okay, cool. Once I understood that, I get the education, start to build a network around people and then start to continue to take action on this imperfect information I started seeing my asset base grow and those assets, you know, the smaller multi-family, the mobile home park, the ATM machines, and then I started investing with other people because that made a lot of sense for me because I was a high paid executive. So I started realizing like, this is really, really cool, but it's taken a lot of time. I need to do something where I can actually leverage the e efforts and expertise of other people and I was somebody who was a credit investor. I figured that out later and so then I started giving, or not giving, but investing my capital with other people and things like the ATM machines and things like, um, larger multi-family buildings and some development projects in the hospitality space and then I kept having this one specific problem, which was, I was investing in all of these, and I don't wanna get too technical, but passive streams of income, like IRS definition of passive income and I kept still paying 40 plus percent in income tax, and I was like, this doesn't work. So then I started realizing that I needed to start asking different questions. I got into a specific area within the energy space, and that energy space helped me do a couple things, which was continue to build my asset base. That was generating income. This time it was active income, but it was also helping me out as a high paid executive. It was really helping me on my income tax because there were some specific, um, tax code rules related to energy production that helped me not just generate, you know, income moving forward, but it also helped me keep more of my income through income taxes and income tax deductions. So it was looking at all of these different things. At a certain point when I left my corporate career, I thought, I really like this building the asset base. I like continuing to do it and I'd build a lot of relationships and the one thing that really made the biggest impact on me as a high paid executive was the, the thing that was helping on the generating active income and, and keeping more of my active income. So today I really focus, uh, my company in that area through syndicating capital with accredited investors, uh, for those people that are very similar to the way that I was when I was in my corporate role. Uh, and that's, my business has continued to evolve, uh, today. So hopefully that answers the question as well. Michael: I love it, I love it. And Billy, can you give us, I mean, because you're in the energy sector and if anyone's been paying attention to the news or the world or living not under a rock, the energy sector has gone a little bit haywire over the last couple months, years. So can you walk us through like, what has your business gone through over the last couple years with Covid and the war in Ukraine and this sort of thing? Billy: Yeah, man. So this is, so this is really, really interesting, right and one of the things that I appreciate us as, uh, as investors in real assets, right, is number one, it's just, and whether we start in real estate or we start in something else that's tangible, it, it starts to open up our mind to way of thinking, right? I remember when I was just doing stocks, I just thought about stocks. But then when I started investing in real estate, it was like real estate. Oh my gosh, this is simple. this makes sense and okay and yeah, and then it opened my mind to other things and so I was then open to, uh, doing other things and it's very similar, right? If I think about now what I'm understanding about energy, like energy has always been super important, right? If you think about it at a very high level, every single output that we have, it has two component. The first component is labor and the other is energy and I thought, wow, okay, well yeah, that kind of makes sense and as I start realizing that, and then I started saying because of some of the incentives that are related to energy and energy production specifically, it made it a place that I really wanted to learn more about right and, and it, I've now started learning about a lot of different types of energy. But to your point, because energy is everything and everything is energy regardless of what's happening at, um, at your house down the street or even across the world. There's always something that is going to impact energy and the need for more energy, and so, It's very similar to what I started thinking about from a, um, basic needs perspective. When you need a place to live or you know, you need or want a place to live, the proof of concept already exists and so being able to explain the need for energy, to your point, I don't, you don't, I don't really need to explain it. It's just a matter of how is the energy being produced. That's where more of the, the explanations come. Um, and because of that, because it's something that most of us understand or understand the need for um, that part has made it relatively, uh, easy to have conversations about. Of course, there's always, um, very specific conversations or if I'm speaking to somebody who's in, uh, for instance the energy or oil and gas space, and they may be an expert, I always learn stuff, uh, as well. So, um, so just recognizing all the different things that have happened, uh, in the energy space and also having now a real focus on it. It's something that I've seen my business expand exponentially. Like what do I mean by that? So remember I was, uh, a high pay professional. I was, you know, very visible and at the same time I was, you know, syndicating capital, bringing people together around common goals and common dreams and just to kind of give you an idea from the first year, more or less that I was doing this, or a little bit year and a bit, Um, while I was still working my corporate role, since I've left my corporate role and have now done focus just specifically on helping accredited investors that are looking for these, uh, types of investment opportunities that generate returns and also help with income tax problems, um, our business has multiplied by seven right and so what that means to me is one, I have more of a focus now. Um, I'm understanding the accredited investor base that we are serving because also it helps that I am one of those people. I understand, uh, what it's like to go every single day, all day from early morning to late night and recognize that you're doing a hundred percent of the work, right? I was doing a hundred percent of the work, and many times I would bring home, you know, 50, 55% of the work at a certain point, I didn't like that, especially because I was open to learning about new investment opportunities because the real estate that helped open my mind is now continued to keep my mind wide open and so, now being able to look at new opportunities, evaluate those new opportunities, understanding the teams behind those opportunities, it's just, it's one of the things that's now an extension, uh, of where my business is and how we're serving, uh, those accredit investors and why and the energy spaces is one that's, I think, gonna be around for quite a while, kind of like real estate. Michael: That's great, man. I'm curious, Billy, for yourself, I mean, you're clearly a super bright individual. You're very open, you're very curious for the person that is just getting involved in the investment space or maybe in the real estate space that's new for them. They're high paid professional, they don't understand that world. They don't have maybe the same curiosity that you do. I mean, what's the mindset shift around hey, I know stocks and bonds. This is what I've always done and it's worked for me. Why should I bother with this alternative asset class this, this, something different? Bolly: Yeah. So I'm gonna probably, um, cheat a little bit here because we're asking the question and you are asking the question of me and the person that's listening that had that question. Here's the good part, You're already here listening, so you know that something inside of you knows that something's wrong, knows that there's something more that's out there. So what I would suggest is that you've already taken the first step, right? You're already here listening to Michael. You're learning from the guests that are here. So, you know, continue to go down that path. The curiosity's already there because you're already here, right? Yeah. Um, and the, and the reality find out, listen, um, you know, talked about it before. I mean, you have an opportunity to even leave an honest review and in your review, say, hey look, I would really like to have this question answered. I guess what, somebody's probably gonna respond to you and it's about being able to take the steps that you feel comfortable with, um, as an investor. The curiosity's already there. You're already here you heard the question asked, so give, you know, I would say I would give. The ability to continue down this track. Listen to more of the podcast. Start to read about the things that you believe will help to, um, move you forward, move you closer to whatever your, your goal is, um, because everyone has a, you know, have as an investing goal and allow yourself to get educated, move towards the things that you really want to be able to do and ultimately that's gonna help you. So, um, I only say that because I know that they're listening. If they're here, they're listening to the question that you ask, and they just need to give themselves the, uh, ability to keep going down that path. Michael: I love it, I love it. I'm curious, Billy, for most of the clients that you work with, the credit investors you work with, are you having to sell them on this idea of, of your business model and what it is that you're doing or are they already here coming to you saying, hey, I've already done the research. I know who you are, I know what the asset is, like, let me give you money and, and or throwing money at you. What does that look like Billy: Well, so I'm, I'm pretty particular, right? Like, I don't, um, if our relationship started that way, it wouldn't be a relationship that would last very long and, and what I mean by that is, is yeah. What I mean by that is if someone just wants to throw money, uh, at you, I don't want a transactional relationship right I want to build a long lasting relationship. It, that may be the person's intention. Hey, look, I, I eventually want to invest with you, but the type business culture that we're building is we're building an investor family. And so in the same way that we want to get to know one another, you know, I'm very intentional. Hey, let's you know, let's invest 20 minutes in getting to know one another. At least have a 20 minute conversation, 30 minute conversation, understand a bit more about your goals, your dreams, priorities, and also understand about me and my business, what are our business goals and priorities because if there's an alignment, then it makes it really easy for us to take the next step and say, okay, well listen, you can, I know you have an investment, uh, opportunity. You've probably seen something about me somewhere online, or you've listened to this wonderful podcast and you're thinking, okay, well listen. I think because we sound pretty similarly aligned, so what's the harm in investing 30 minutes to get to know one another, right? I'm doing that multiple, multiple, multiple times a day. Um, and so from there that, that's the first part is to, to be able to, to start the relationship on the right foot. Getting to know one another, getting to, to like one um, you know, one another, you like one another, eventually you trust one another. But also, like, one of the things, and this is probably comes from, you know, the 26 years of, of working in, um, you know, really a relationship based type of roles in the last 21 years in, you know, high value type of, of selling, um, and relationship building.   It's really about like, I wanna always help and I want our company to always help those accredited investors that we're serving to make an informed.  because what we do, like the solution that we offer, it's the solution. Like it does what it does. So you have to be comfortable, you have to be informed, you have to ask all of the questions that you feel uncomfortable asking, and my team and I have to be able to give you the information or the data in the way that makes the most sense to you, so that you ultimately can make an informed decision. Because the worst thing that can happen is you look at something, you're like, Wow, this looks absolutely awesome. The numbers are fantastic. You don't spend time getting to know the person or the company that you are going to invest with. You don't know if you're aligned and you're making a decision just based on some numbers that you saw and when as soon as things don't go according to plan and you haven't done the prep work on the front. That's when things get really, really wild and out of, out of control. Like at least that's what I've seen at least in the last 21 years of my experience and so I do have a lot of focus on, you know, being aligned up front, being able to get to know one another, and then also being able to help someone make an informed decision and then after that, you know, if they're informed decision things go. Hey, listen, at least they were informed, they knew about the risks and you know, we will also wanna protect on the downside and, and talk about risks, because that's something that's also very, very important to helping someone make an informed decision. So, um, I don't know if that's a little bit long winded, but hopefully that answers the question. Michael: No, it's, that's great, man. I mean, as you were saying that, I had this, this question you were saying, you know, we're not transactional. We wanna develop this relationship and in my head, I'm, I'm thinking, why, why, why, right? Because from a, from a growth standpoint, from a revenue standpoint, Yeah. I mean, people could look at, at you and say, well, Billy, you're doing it wrong. You're taking too much time with this person. You're spending too much time there. But I think you've explained the why so eloquently and it is because you're protecting the downside when something, if something, probably when something goes side based when something happens, you've got, you've got that foundational relationship to look back on and say, Hey, this, you know, we trust each other. There's not a finger pointing game going on, I would imagine. Billy: Yeah. Well, that's part of it and then also too, you know, I guess this goes back to the company, is that I've worked, been fortunate enough to work for, a lot of this is about business models. It's like I was talking about earlier, Well, let me, let me put it this way, maybe so, I like food. My kids like food and there are things that, like my son, when he's given the opportunity to go somewhere, well, he chooses to go to McDonald's, right and so that's where he likes to go and he likes to eat McDonald's.  Um, I don't so much, but, um, the, well, sometimes when you used to a lot when I was smart, younger, and then there's other places… Michael: There Mc Flurry outta control, right? Billy: All right, I'll go agnostic, I'll go agnostic. Some people like fast food. I probably should have done it that way. Some people like fast food, right? Um, and there was a point in my life where I like fast food as well. I'll change it up a little bit. Um, there's also another point in my life where I like to be able to sit down and I wanted to have more of a, you know, you wanna sit in the booth and you wanna talk and you, um, you just wanna spend a little bit more time and then there's also a.  in my life where I like to take my wife to. Very nice. Sometimes one, two or three Michelin star restaurants, right? The thing is, each one of those business models work. They can all be profitable. But the thing is the business models are very, very different. Do you like fast food? Do you like slow dining or do you like Michelin restaurants? All of them are profitable and it coming back to… Michael: It's got tingles, man, that's such a… Billy: But it's, but, but it's coming back to the question that you ask. , our business is not a high volume business, right. I would rather invest the time to build a deep, valuable relationship and that also means that the, the, the, the investor base that, that my company is serving, I is the investor base that we've decided to do is a, is an accredited investor, is typically a busy high pay professional. That once they have more control over their time and I recognize that for some people that's gonna be a challenge, but it's also for the person that's willing to invest the time. I know that that person has a much higher probability of getting to the goals that they're, that they're really wanting because they're gonna invest that time outside of the stuff that they're, that's keeping them busy and they're gonna be investing the time on the things that's gonna get them closer to their life priorities. That's our business model. There are other models that pretend that will prefer to go to a high number of, right? It's, but there's no wrong business model. That's just the one that I think works the best for me because I'm kind of that person today. Uh, that's the person that I understand the most. Michael: Yeah, man, I love that I love that so much and, and your analogy, the restaurant, different service types just was like, loved it… Billy: Use it whenever you want. Michael: Yes, Yes. I'm gonna, It's, you know, tm Billy Keels. Um, this has been so much fun as always. For everyone who's stung, who stuck with us this far, and there's like on the edge of their seats, what is the name of your company if they're like, I have to invest with this guy. Billy: Yeah, it's first Generation Capital Partners that you can find it at firstgencp.com and actually for people who are the credit investor, having that challenge around, um, being able to find things that where you can find investment opportunities that are gonna get you closer to your life goals, generate income for you, as well as provide tax benefits earned income side of things. We have a guide for you. You can go to firstgencp.com/payless tax. Um, that's a probably the best way to find out exactly, you know, what we're doing. Have a nice little white paper there and if it makes sense for you to continue to move forward, love to be able to get on the phone call and talk. Uh, have a conversation with you, Michael the other thing is, and this is the kind of, people can find out more about me as well, but they should go. Um, the going Long podcast, episode 2 21, where you absolutely crushed it . So going long, podcast episode 2 21 with your buddy Michael. Uh, and then from there, I, I think I'm the only Billy Keels in Barcelona, Spain. So if you wanna look me up on LinkedIn, you can go there. Uh, like I said, Billy Keels, Barcelona, Spain, just let me know that you heard Michael and I, uh, having a conversation here and it's gonna help us to, uh, keep our conversation going. So, uh, with that, I, you know, I love being able to be back here. I, I feel very, very thankful, grateful, uh, for the, uh, for the ability to be back here and share a little bit more of my story. Uh, Michael team really, really appreciate it. Thank you so much. Michael: Oh no. The pleasure is ours, Billy. Thank you and we will definitely be in touch, man. I'm looking forward to doing this again soon. Billy: Thank you. Michael: Take care. All right, everyone. that was our episode. A big thank you to Billy for coming on again, opening his vest a little bit, showing his cards, being a little bit vulnerable, and sharing some of his mindset and what was going on in his life when he made some of those massive transitions. As always, if you enjoyed the episode, we'd love to hear from you with a rating or review wherever it is to get your podcast, and we look forward to seeing you on the. Happy investing…

“You never know until you try,” explains Michael Melton, Founder and Owner of Under Pressure Power Washing, LLC. Michael has always had an entrepreneurial spirit. After dropping out of high school, Michael started his career as a painter, eventually leading him to find fulfillment in the power washing industry.   Lacking a formal business background, Michael was afraid of failure before launching Under Pressure Power Washing. After realizing that the only way to understand business was to be in it, Michael decided to finally give it a try. Now a proud owner of a successful power-washing company, Michael can provide income for himself and his family while having the flexibility of being his own boss.   Don't let fear or doubt kill your dreams. Learn more about Michael's entrepreneurial journey, getting through the bad and good times, and how you never really know if something will work if you don't try.   Quotes • “There are still a lot of stressful times and a lot of days that you question, even four years in the business, why am I still doing this? Or how can I still do this?”  (13:42-13:53 | Michael) • “It's all on you to wake up every day and provide income for yourself and your family. And there's no one else really doing it.” (14:31-14:41 | Michael) • “You never know until you try it, and you just got to start.” (20:41-20:45 | Michael) • “It's when you're actually out in the field doing it that you'll learn the most.” (21:52-21:56 | Michael)  • “Work on being the best you can possibly be at that one thing.” (25:57-26:01 | Michael)   Links Get in touch with Michael Melton: Website: https://underpressurepowerwashingllc.com/ Follow Michael on Facebook: https://www.facebook.com/mikejmelton Call or text at #608-490-3005 Get in touch with host Jeff Meyer: www.jeffmeyercoaching.com Book a FREE 30-Minute Dream Discovery Call with Jeff: https://calendly.com/d/dk6-mzr-dsq Schedule a Discovery Call with Jeff: https://go.oncehub.com/DreamAcceleratorDiscoveryCall   Podcast production and show notes provided by HiveCast.fm

Mr. Fernandez is President and Chief Executive Officer of 1031 Crowdfunding. Before founding the Company, he was Senior Vice President of Healthcare Real Estate Group in Irvine, California. Since January 2001, Mr. Fernandez has been responsible for researching and compiling accurately verifiable documentation across various industries, including assembling compelling content for marketing materials related to the purchase and acquisition of various real estate holdings. He has over 20 years of inside and outside sales experience. He is personally involved in raising over $800 million of equity from individual and institutional investors through private and public real estate offerings. He hired and trained a national internal wholesaler and external wholesaler sales force. In this episode, he shares how he interprets the current state of the economy and the real estate market; and how his company, 1031 Crowdfunding, creates opportunities to take advantage of during times of uncertainty. Episode Link: https://www.1031crowdfunding.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum, and today I'm joined by Ed Fernandez, President and CEO of 1031 Crowdfunding and he's going to be talking to us today about the state of the economy, the market, and his company, 1031 Crowdfunding, and how we all can take advantage of crowdfunding 1031 exchanges. So let's get into it.   Ed what's going on, man, thanks so much for coming on and hanging out with me today. I appreciate it.   Ed: No problem. Michael, thank you so much for having me.   Michael: No, it's really, really my pleasure, I am super excited to chat with you, because you've got a really cool company doing some pretty cool things. So I know a little bit about it but for all of our listeners who aren't familiar with 1031 Crowdfunding give us a little bit of background, what is it that you all are doing?   Ed: Sure, so what we're doing is we're taking real estate, packaging it up and selling it to investors in little pieces. For those investors that are either tired of the tenants, the toilets in the trash, or they run out of this 45 day Id period that you have to actually do for the IRS and so if you're looking for institutional real estate, but you really don't want to go running around trying to find your own property in this limited period of time, you can come to 1031 Crowdfunding, where we have a slew of institutional property for those investors who are looking to be passive, and defer their taxes through a 1031 exchange.   Michael: Man, I love it, we are definitely going to come dig deeper into that because I was under the assumption that you couldn't turn 1031 into a passive investment. So we've got a lot to talk about. But before we get there, I would love if you could give us a little bit of insight into where you see us currently in today's housing market with all the stuff we got going on. We're recording this towards the latter half of September and 2022. What's going on man?   Ed: Well, as you know, yesterday, the Feds hiked rates again to another 75 basis points and so what's so what they're trying to do, obviously, and it's currently not working, by the way, they're trying to slow down in the housing market. But with money continuing to flood the economy, real estate prices are still exceeding and going up and people can afford real estate or housing, because interest rates are going up. So we're in a weird market today, I can say we can go back to 1991- 1992 and kind of look at that market, very similar type of events that are occurring today.   Michael: Okay, and for all of our listeners that weren't plugged in to the to the real estate market back then what was going on back then.   Ed: So back then it was the tech boom, right? Remember the tech bubble that blew up?   Michael: Yeah.   Ed: Prior to that event occurring, interest rates on loans were double digits 12-14% and people were still borrowing and buying houses and getting involved in real estate. But then the bubble burst in the tech industry and all that money flooded into real estate and that's where you had all this appreciation on the real estate side. So in today's market, even though we're not in double digit interest rates, interest rates are higher than what real estate is producing. So we're not as bad as we were. But we're actually pretty close to where, and who knows, we might get there. If the fence keep doing that. So those are the similarities where interest rates exceeded yields on real estate, and real estate just kept going up.   Michael: Yeah, that's so interesting. I mean, I remember hearing about those double digit interest rates, but I also have to think back and you could go park your money in a bank CD and make 6,7,8, 9%, which now is unheard of. So it's, again, we have these super high interest rates, but you can't make a yield, letting your money sit in the bank. It's getting eroded by the high inflation. So it's a really unique time   Ed: And I'm glad you brought that up. You know, what's very interesting is that Treasury bills now you could buy a federal backed treasury bill, fully liquid and get 4% where real estate is producing three and three and a half percent. So you're kind of seeing what's going on in this market.   Michael: Yeah, yeah. Where do you think we're headed? I want you to break out your crystal ball, change the batteries out put fresh ones in there. What's going on in the next two, three years?   Ed: You know, it's, it's, it's a weird market, you know, I'm not gonna get into the political frying pan of who's doing what?   Michael: Yeah…   Ed: Right. But if money continues to flood this economy, I don't know how you put on the brakes on inflation, if that continues to happen. So what has to happen and what I hope happens is that money tightens up so that the feds can kind of slow down and we can get real estate to a level where people can still buy a home, the millennials, those are the first time homebuyers and investors can still get a yield. I don't see that happening at least for another two years. That's where I think we're headed but we'll wait and see.   Michael: Okay and are you thinking that the interest rate hike is going to continue along that two year frame or are we kind of plateauing and we just have to wait a little bit longer for the effects to take hold?   Ed: Well, if Feds continue to raise interest rates, then now we're gonna go into a recession and how do we come out of that? So it's a fine line of how much to push and how much not to push. So we just got to wait and see, look, if I had a crystal ball, and I can tell you exactly what is going on, I would not be on this call. I'd be on my 200 foot yacht in Monaco watching F1. So I'm just letting you know.   Michael: Totally. Yeah, that's a great point to make. All right. Well, I am very curious to see how it all shakes out, I think, as are many others, but and let's transition here and talk about temporary 1031 Crowdfunding.   So someone has an asset to sell. They've, they've seen the skyrocketing appreciation and let's just walk through it like some numbers as an example. Because I find that makes the conversation a bit more concrete. someone's property is worth a million bucks. They got 400,000 and debt on it and they want to go 1031. The thing, so they sell it for 1,000,000 1031 rule says they got to buy something for at least a million, if not more. Where does sentry one crowdfunding come into play here? Does someone have to bring additional 400k that was in debt to the table to invest in have a proper 1031, how does that work?   Ed: No, no, absolutely not. So one of the one of the biggest things of a 1031 exchange is what we call closing risk, right and so you have 45 days to try to find something and then that's not, you know, there's holidays, weekends, that all counts, right? So you're out there, pounding the pavement, trying to find a replacement property within that 45 day period, which makes it very difficult. So in using your example, if an investor had a million dollar sale with $400,000 of debt, they can invest as long as they're an accredited investor and let me define that either an annual income of $200,000 a year for an individual 300,000 per couple or a million dollar net worth excluding the home you live in, you can come to our website and at any given time, we have anywhere between 30 to 50 different options to choose from and these investments are called Delaware statutory Trust, the term we use is DST been around since 2004, directly on the IRS website, and really what the DST is, is very similar to a living or family trust, where there's a trustee managing a trust for the beneficiaries, you as an investor, or a beneficial owner of a trust that's on title real property. So it could be a $50 million apartment building $100 million Amazon distribution center and for as little as $25,000, you can own a piece of this big property, right off all your expenses, like you're doing today, on your schedule II get paid cash flow on a monthly basis every 15th of the month, and when the property is sold, all the investors get 100% of the upside, and you're still in another 1031 exchange. So that's what we do. We're looking for those investors that are looking for passive investments, tired of the tenants and toilets in the trash or running out of time? Those are the ones that give us a call.   Michael: Yeah, no, that makes total sense and it sounds awesome. So if we go back to our example, of the million bucks in the in the 400k in debt, how does it work because like, my understanding is if I'm if I'm selling something for a million, I gotta go replace that with a million dollars of property. So if I go invest with you all, do I have to bring the extra 100,000, how does that work?   Ed: No, here's how it works. I'll give you an analogy. So let's say I'm a trustee. I'm going to go out and buy a $20 million apartment building. I'm going to create this broader. As the trustee, I'm going to the bank. They're approving me as the warm body, and they're underwriting the real estate, let's say they lend me $10 million. I'm the one that signs on the bad boy carve outs, and I'm the one that signs on the loan. So now the profit, I have 10 million of debt, I need another 10 million in cash. So I write a check for 10 million, and I close the property inside that trust. So to make the numbers easy, let's just call it 50%. LTV or loan to value and so let's say you sold your property for a million dollars, and you paid off the loan, and you got $500,000 in cash, and you got to buy something for a million dollars or greater. Well, when you invest in the DST, the DST already has a 50% loan on it and what happens is that it applies that debt to your position, along with the $500,000 of cash that you invest it. Now at closing, you own $1 million of this $20 million property, which allows you to satisfy your exchange.   Michael: No way. Everyone watching this video just watched my brain explode. That is why that is super cool. All right. All right, I dig it and can people invest using an entity? So like, if I have an LLC that I own this property in that I'm now selling? I need to keep that same entity, right as my purchasing as my up leg for the new property can folks use their entities to invest with you all?   Ed: Shoot, Michael, send me your resume I should be hiring you here quickly… Absolutely. So, so yeah. So you have to use the same tax ID number, right. So one of the one of the things we do in process in talking to investors is we ask them, are you owning this as an individual, an LLC, a trust and based on whatever tax ID number they're using on the sale of the property that tax ID number is the purchaser of this DST. So yes, you have to invest the way you sold.   Michael: I love it, I love it and are you I know you said you're passing on cash flows and 100% of the upside, which is insane. We're gonna talk about that in a minute but are you also passing along depreciation to the investors?   Ed: Absolutely. So whatever remaining basis they have from the sale will carry forward to this investment and based on the asset type, if it's an apartment building or residential 27 and a half years, or commercial 39 years, yes, depreciation will carry forward, in addition to that some of the opportunities have what's called a Cost Segregation analysis done on it, where you accelerated depreciation on the personal property in the first year, which is a huge help to shelter cash flow from tax.   Michael: Yeah, I love it, I love it. I've done several of those ad it's just been amazing to see what my taxes look like postclassic.   Ed: Yeah, It's good stuff…   Michael: And just getting back just for a minute on the accredited investor designation, because the question I'm realizing I've had for a while, and we always joke in the podcasts are super self-serving, I get to get educated here along with all of our listeners, we talked about the requirement having 200k as a single or 300k as a couple for the last two years. Is that adjusted gross income or is that net?   Ed: Adjusted.   Michael: Okay adjusted…   Ed: That's adjusted and here's the here's why that's required. It's because the investments in a DST are illiquid, right? So the regulatory environment wants to make sure that if you do have a financial emergency, that you have other funds to go after, and it doesn't have drastically affect your life, because you are in an investment that's illiquid. So that's why the requirements there.   Michael: Yeah, that makes sense and the alternative way to qualify as having a million dollar net worth or more, right…   Ed: Correct, or let's say you're in the financial services industry, and your securities license, and you don't have the net worth or the income, because of your professionalism and the designations that you hold that also actually qualifies as an accredited investor.   Michael: Okay, good to know. I was gonna say, yeah, because it could be kind of interesting. Speaking about cost segregation studies. If someone's got great income, but also has a great tax strategist, their AGI is probably going to be zero, if they know what they're doing and so that they could get discredited that way. But the net worth piece probably comes into play more often than the income piece, I'd imagine.   Ed: It does. Yeah, because we deal our client profile is anywhere between 55 to 90 years old and so they're always saying that they don't have the income, but they definitely have the net worth.   Michael: Yeah. Okay. Why is that? Why is your target demo in that age bracket?   Ed: It's because if you're younger, you know, I'm a control freak, right? I want to control everything. When you're younger, you want to control your destiny. Though most younger real estate investors go by their own deal, they manage their own deal, and they live or die with their performance. But when you get a little older, and you've already built up your net worth, you get tired of those tenants in those toilets in those trash, right and so you are looking for a passive way to continue to kick that can down the street, i.e. taxes and so normally the demographic is 55 years or older, they're kind of slowing down on their real estate investment portfolios.   Michael: Yeah and that makes total sense and so talk to us a little bit about what the exit looks like on some of your deals, because I was looking at your website, before we hopped on, I noticed you have some triple net stuff. So I'm just curious, you know, how are you exiting those assets?   Ed: Sure. So it's got to be accretive to the to the beneficial owner or the investors, I would say triple net lease stuff. Those are bonds. If you're looking for a Walgreens $1, General and Amazon, you shouldn't expect appreciation on those opportunities, you should just expect that coupon plus getting your money back, right? If you're looking for appreciation, which I would call more like a dividend stock. That would be a multi-tenant asset, apartment senior housing, student housing, self-storage, where you have the ability to mark rents to market which gives you that that appreciation. So the exit really is going to be based on the economics is or are the investors making money. If they're not making money, there's no reason to sell because it's still producing the cash flow, right. So as soon as the property starts appreciation to a point where the sponsor or the trustee feels okay, it's time to sell. That's the exit, you put it on the open market, you got a real estate broker, you get the offers coming in, and then you pick the best offer and you sell the property.   Michael: Love it and are you all targeting value add type of stuff, are you getting stabilized assets? What is the mix look like?   Ed: So the DST cannot use value add assets, meaning it can't move walls, and has to be stabilized assets? Unlike a tenant in common, right. 10 in common, you can do that, right, so the DST is all stabilized assets and when I say stabilized, it's either if it's multi-tenant, that's 90% plus occupancy and if it's single tenant, triple net investment grade tenant corporately guarantee and leases.   Michael: And is that regulated by the DSDM, is that a requirement of the entity structure that you're using?   Ed: That is the structure, yes, sir. That's the structure. Because if you if you disqualify the structure, You disqualify the exchange and now, people pay taxes, because it's not approved by the IRS.   Michael: Interesting. So the IRS is actually dictating what type of asset you can own in order to get this 1031 designation and benefits.   Ed: Yeah, if they're, you know, there's a specific structure and a specific way that needs to be structured. That's why a DST should have a legal tax opinion attached to it, from your securities lawyers to show that the structure is complying with this approved structure, that it should not be challenged if you invest and qualify for the deferral of tax via 1031.   Michael: Interesting, are there other vehicles out there that you could do something similar but have a value add component   Ed: Tenant in common. A tick, we call it a tick, the similarities are very similar to the point where you own a fraction of a piece of property. The differences are huge. Tenant and Commons. The investors make all the investment decisions. A tenant in common can have a capital call, a tenant in common can use non stabilized assets, a tenant in common can leverage the property and so back in 2000, and 4,5,6, and seven, the tenant in common was the most primary way of syndicating 1031 exchanges. But then and so, you know, everyone is going to agree as far as the investors are concerned when real estate goes up but in 2008, great recession, you have savvy investors, not so savvy investors. It's called hurting the cats. They disagreed on everything, right and so about six and a half billion dollars went into receivership by tips and so banks will not lend to a tenant in common structure. So your question and previously of how do I replace the debt would not happen in a tenant in common. That's why more tenant in common deals are all cash and the way they address Sit to investors is, hey, all cash, no foreclosure is owned, by the way, we're going to lever you up, pull the cash out and get it back to you tax free. Well, that's what happened in 2008 and everyone lost their money. So ticks in our business is a four letter word.   Michael: Very interesting. Okay, this is really good to know it. I'm curious and maybe some of our listeners are as well, because the investors are getting the cash flow, the investors are getting 100% of the upside, you're doing all the work, how does 1031 Crowdfunding make money, how do you all get paid?   Ed: So it's aggregating a portfolio. So yeah, we charge an acquisition fee, right anywhere between two to 4%, upfront and then we also get asset management fees, it's anywhere between half a percent to 1% off of the cash flow, but you really don't get rich doing that but the idea as a sponsor is, if you're managing $5 billion worth of assets, and you're charging a 1% asset management fee, you're making $50 million a year just unfortunately, watching paint dry.   Michael: It's not a bad business model.   Ed: It's not a bad business model. But you know, there's a lot of work to it. I'm thinking I'm kind of, you know, dumbing it down, but that's how sponsors make their money.   Michael: Okay, all right. This is great. If someone is considering investing with 1031 Crowdfunding or a different syndication, what are some things that they should be looking for? How do they go and educate themselves about the sponsor and about the deal?   Ed: You know, that's, that's a big deal right there and that's a great question because these deals have an upfront expense, we call it the load, right and even though the load doesn't affect an investor's capital accounts, so if you put a million dollars in, you're getting credit for the whole million in your cash flow is based on that whole million. The problem is, is that you overpay for that property. So let's give you that $20 million example that I used earlier, right? Let's say there's a 10% load on it. Even though I bought it for 20 million, I have to offer it to you for 22 million and even though your capital account is not affected, it's when you sell the real estate when that becomes material and so you need to make sure that the real estate can appreciate above its expenses, before entertaining a sale, right? So that at least you come out at par if you're going to invest in these things, and you're using a financial advisor to advise you to do this, the most important question you should ask is, Mr. Advisor, when does this investment overcome its upfront expenses and if that guy is any good, you should be able to tell you that, that's the most important thing when it comes to investing in these DSPs.   Michael: Yeah, that's super, a super great question to be armed with and so are most folks who are investing with you coming to you all via their advisors or via their team or they individuals. I mean, how do you find most of your clients?   Ed: So I'm, we do a lot of marketing, right. So we do a lot of SEO, a lot of SEM, I do things like this, my PR team is working. So we get anywhere between five to 700 new registrations a month on our website and we currently have about 60,000 registered investors today and so they just Google 1031 exchanges, and we pop up. So we're not, we don't use the financial services industry to distribute these products, even though we are in that service. But people normally just find us on their own or an attorney might say a CPA might say their friends might have used us. We have wonderful Google reviews. They just find us that's how they get to us.   Michael: Yeah. Okay, that makes a lot of sense and I'm wondering if you can shed light on like your worst deal ever, how it went wrong, and what happened?   Ed: That's a great so 2020 on the east coast of Florida, apartment building got hit twice by hurricanes within three weeks. Okay and you probably it's right, that time when Maria was coming and all that stuff. The property got flooded. 50% of the units became uninhabitable. Cash Flow stopped to investors, enough cash flow to pay debt service and then you had to get to the insurance companies and get the catastrophic damage insurance payment and the renter's interruption insurance payment and remember, I told you in a DST you can't do construction, right. So how do you fix the unit, right? So there's a term called a springing LLC. That's an every single DST ppm or private placement memorandum and what that what that means is that you dissolve the DST and now you're a member of an LLC, non-taxable event, your exchange is still good but now in an LLC, you can do construction, you can modify loans, you can do all these things to fix the property, right? So you go and you start fixing the property, you release the property, reinstate cash flow, right. But the issue is, you can't go your separate way anymore. You're in an LLC. So the entire LLC has to do an exchange or not. So they don't want to mess up there at 1031. So the LLC sells the property, does an exchange into another property and then two years later, the terms called Safe Harbor, you can convert it back into a DST and then everyone can go their separate ways when the property sells. That is the worst deal that has happened since I've been doing this.   Michael: And did the insurance proceeds cover all of your expenses enough in your business interruption to kind of make you guys hold in during the process?   Ed: Yeah, absolutely. So even though the timeline was delayed, the investors did very, very well. They just lost cashflow for about a year but then when the property was sold, they did well.   Michael: Yeah, I love it, I love and that's one of the things I really love about real estate investing as a whole is if you understand what you're doing the downside just isn't that scary…   Ed: Yeah, I agree. I mean, dirt is never gonna go to zero, right? It's just not gonna happen.   Michael: Right, right, man twice in three weeks. I mean, the only thing that I've heard of comfortable that I'm doing, I'm in the midst of a develop redevelopment project and I had two fires in the same building a week apart, during the course of construction.   Ed: Wow. Oh, that's not good. It's sucked.   Michael: It sucked, so… Oh, man. This has been super fun, man. If people want to find out more about you, continue the conversation invest with you, or what's the best way for them to do that and get a hold of you.   Ed: So you can go to 1031crowdfunding.com , like a crowd of people not a crown on your head, right or you can dial our number 844-533-1031 and you're absolutely you'll be able to find us.   Michael: Good stuff. Well, hey, thanks again for coming on and sharing and helping educate our folks. We'll definitely chat soon.   Ed: Michael, thank you so much. Looking forward to hearing back from you.   Michael: You got it, take care.   All right, everyone. That was our episode a big thank you to Ed for coming on super interesting stuff. I learned a ton. If you are in the middle of a 1031 or thinking about it definitely an interesting option to take advantage of. As always, if you enjoyed the episode, feel free to leave us a rating or review wherever you get your podcasts and we look forward to seeing on the next one. Happy investing…

About MichaelMichael is the Director of Threat Research at Sysdig, managing a team of experts tasked with discovering and defending against novel security threats. Michael has more than 20 years of industry experience in many different roles, including incident response, threat intelligence, offensive security research, and software development at companies like Rapid7, ThreatQuotient, and Mantech. Prior to joining Sysdig, Michael worked as a Gartner analyst, advising enterprise clients on security operations topics.Links Referenced: Sysdig: https://sysdig.com/ “2022 Sysdig Cloud-Native Threat Report”: https://sysdig.com/threatreport TranscriptAnnouncer: Hello, and welcome to Screaming in the Cloud with your host, Chief Cloud Economist at The Duckbill Group, Corey Quinn. This weekly show features conversations with people doing interesting work in the world of cloud, thoughtful commentary on the state of the technical world, and ridiculous titles for which Corey refuses to apologize. This is Screaming in the Cloud.Corey: Welcome to Screaming in the Cloud. I'm Corey Quinn. Something interesting about this particular promoted guest episode that is brought to us by our friends at Sysdig is that when they reached out to set this up, one of the first things out of their mouth was, “We don't want to sell anything,” which is novel. And I said, “Tell me more,” because I was also slightly skeptical. But based upon the conversations that I've had, and what I've seen, they were being honest. So, my guest today—surprising as though it may be—is Mike Clark, Director of Threat Research at Sysdig. Mike, how are you doing?Michael: I'm doing great. Thanks for having me. How are you doing?Corey: Not dead yet. So, we take what we can get sometimes. You folks have just come out with the “2022 Sysdig Cloud-Native Threat Report”, which on one hand, it feels like it's kind of a wordy title, on the other it actually encompasses everything that it is, and you need every single word of that report. At a very high level, what is that thing?Michael: Sure. So, this is our first threat report we've ever done, and it's kind of a rite of passage, I think for any security company in the space; you have to have a threat report. And the cloud-native part, Sysdig specializes in cloud and containers, so we really wanted to focus in on those areas when we were making this threat report, which talks about, you know, some of the common threats and attacks we were seeing over the past year, and we just wanted to let people know what they are and how they protect themselves.Corey: One thing that I've found about a variety of threat reports is that they tend to excel at living in the fear, uncertainty, and doubt space. And invariably, they paint a very dire picture of the internet about become cascading down. And then at the end, there's always a, “But there is hope. Click here to set up a meeting with us.” It's basically a very thinly- veiled cover around what is fundamentally a fear, uncertainty, and doubt-driven marketing strategy, and then it tries to turn into a sales pitch.This does absolutely none of that. So, I have to ask, did you set out to intentionally make something that added value in that way and have contributed to the body of knowledge, or is it because it's your inaugural report; you didn't realize you were supposed to turn it into a terrible sales pitch.Michael: We definitely went into that on purpose. There's a lot of ways to fix things, especially these days with all the different technologies, so we can easily talk about the solutions without going into specific products. And that's kind of way we went about it. There's a lot of ways to fix each of the things we mentioned in the report. And hopefully, the person reading it finds a good way to do it.Corey: I'd like to unpack a fair bit of what's in the report. And let's be clear, I don't intend to read this report into a microphone; that is generally not a great way of conveying information that I have found. But I want to highlight a few things that leapt out to me that I find interesting. Before I do that, I'm curious to know, most people who write reports, especially ones of this quality, are not sitting there cogitating in their office by themselves, and they set pen to paper and emerge four days later with the finished treatise. There's a team involved, there's more than one person that weighs in. Who was behind this?Michael: Yeah, it was a pretty big team effort across several departments. But mostly, it came to the Sysdig threat research team. It's about ten people right now. It's grown quite a bit through the past year. And, you know, it's made up of all sorts of backgrounds and expertise.So, we have machine learning people, data scientists, data engineers, former pen-testers and red team, a lot of blue team people, people from the NSA, people from other government agencies as well. And we're also a global research team, so we have people in Europe and North America working on all of this. So, we try to get perspectives on how these threats are viewed by multiple areas, not just Silicon Valley, and express fixes that appeal to them, too.Corey: Your executive summary on this report starts off with a cloud adversary analysis of TeamTNT. And my initial throwaway joke on that, it was going to be, “Oh, when you start off talking about any entity that isn't you folks, they must have gotten the platinum sponsorship package.” But then I read the rest of that paragraph and I realized that wait a minute, this is actually interesting and germane to something that I see an awful lot. Specifically, they are—and please correct me if I'm wrong on any of this; you are definitionally the expert whereas I am, obviously the peanut gallery—but you talk about TeamTNT as being a threat actor that focuses on targeting the cloud via cryptojacking, which is a fanciful word for, “Okay, I've gotten access to your cloud environment; what am I going to do with it? Mine Bitcoin and other various cryptocurrencies.” Is that generally accurate or have I missed the boat somewhere fierce on that? Which is entirely possible.Michael: That's pretty accurate. We also think it just one person, actually, and they are very prolific. So, they were pretty hard to get that platinum support package because they are everywhere. And even though it's one person, they can do a lot of damage, especially with all the automation people can make now, one person can appear like a dozen.Corey: There was an old t-shirt that basically encompassed everything that was wrong with the culture of the sysadmin world back in the naughts, that said, “Go away, or I will replace you with a very small shell script.” But, on some level, you can get a surprising amount of work done on computers, just with things like for loops and whatnot. What I found interesting was that you have put numbers and data behind something that I've always taken for granted and just implicitly assumed that everyone knew. This is a common failure mode that we all have. We all have blind spots where we assume the things that we spend our time on is easy and the stuff that other people are good at and you're not good at, those are the hard things.It has always been intuitively obvious to me as a cloud economist, that when you wind up spending $10,000 in cloud resources to mine cryptocurrency, it does not generate $10,000 of cryptocurrency on the other end. In fact, the line I've been using for years is that it's totally economical to mine Bitcoin in the cloud; the only trick is you have to do it in someone else's account. And you've taken that joke and turned it into data. Something that you found was that in one case, that you were able to attribute $8,100 of cryptocurrency that were generated by stealing $430,000 of cloud resources to do it. And oh, my God, we now have a number and a ratio, and I can talk intelligently and sound four times smarter. So, ignoring anything else in this entire report, congratulations, you have successfully turned this into what is beginning to become a talking point of mine. Value unlocked. Good work. Tell me more.Michael: Oh, thank you. Cryptomining is kind of like viruses in the old on-prem environment. Normally it just cleaned up and never thought of again; the antivirus software does its thing, life goes on. And I think cryptominers are kind of treated like that. Oh, there's a miner; let's rebuild the instance or bring a new container online or something like that.So, it's often considered a nuisance rather than a serious threat. It also doesn't have the, you know, the dangerous ransomware connotation to it. So, a lot of people generally just think of as a nuisance, as I said. So, what we wanted to show was, it's not really a nuisance and it can cost you a lot of money if you don't take it seriously. And what we found was for every dollar that they make, it costs you $53. And, you know, as you mentioned, it really puts it into view of what it could cost you by not taking it seriously. And that number can scale very quickly, just like your cloud environment can scale very quickly.Corey: They say this cloud scales infinitely and that is not true. First, tried it; didn't work. Secondly, it scales, but there is an inherent limit, which is your budget, on some level. I promise they can add hard drives to S3 faster than you can stuff data into it. I've checked.One thing that I've seen recently was—speaking of S3—I had someone reach out in what I will charitably refer to as a blind panic because they were using AWS to do something. Their bill was largely $4 a month in S3 charges. Very reasonable. That carries us surprisingly far. And then they had a credential leak and they had a threat actor spin up all the Lambda functions in all of the regions, and it went from $4 a month to $60,000 a day and it wasn't caught for six days.And then AWS as they tend to do, very straight-faced, says, “Yeah, we would like our $360,000, please.” At which point, people start panicking because a lot of the people who experience this are not themselves sophisticated customers; they're students, they're learning how this stuff works. And when I'm paying $4 a month for something, it is logical and intuitive for me to think that, well, if I wind up being sloppy with their credentials, they could run that bill up to possibly $25 a month and that wouldn't be great, so I should keep an eye on it. Yeah, you dropped a whole bunch of zeros off the end of that. Here you go. And as AWS spins up more and more regions and as they spin up more and more services, the ability to exploit this becomes greater and greater. This problem is not getting better, it is only getting worse, by a lot.Michael: Oh, yeah, absolutely. And I feel really bad for those students who do have that happen to them. I've heard on occasion that the cloud providers will forgive some debts, but there's no guarantee of that happening, from breaches. And you know, the more that breaches happen, the less likely they are going to forgive it because they still to pay for it; someone's paying for it in the end. And if you don't improve and fix your environment and it keeps happening, one day, they're just going to stick you with the bill.Corey: To my understanding, they've always done the right thing when I've highlighted something to them. I don't have intimate visibility into it and of course, they have a threat model themselves of, okay, I'm going to spin up a bunch of stuff, mine cryptocurrency for a month—cry and scream and pretend I got hacked because fraud is very much a thing, there is a financial incentive attached to this—and they mostly seem to get it right. But the danger that I see for the cloud provider is not that they're going to stop being nice and giving money away, but assume you're a student who just winds up getting more than your entire college tuition as a surprise bill for this month from a cloud provider. Even assuming at the end of that everything gets wiped and you don't owe anything. I don't know about you, but I've never used that cloud provider again because I've just gotten a firsthand lesson in exactly what those risks are, it's bad for the brand.Michael: Yeah, it really does scare people off of that. Now, some cloud providers try to offer more proactive protections against this, try to shut down instances really quick. And you know, you can take advantage of limits and other things, but they don't make that really easy to do. And setting those up is critical for everybody.Corey: The one cloud provider that I've seen get this right, of all things, has been Oracle Cloud, where they have an always free tier. Until you affirmatively upgrade your account to chargeable, they will not charge you a penny. And I have experimented with this extensively, and they're right, they will not charge you a penny. They do have warnings plastered on the site, as they should, that until you upgrade your account, do understand that if you exceed a threshold, we will stop serving traffic, we will stop servicing your workload. And yeah, for a student learner, that's absolutely what I want. For a big enterprise gearing up for a giant Superbowl commercial or whatnot, it's, “Yeah, don't care what it costs, just make sure you continue serving traffic. We don't get a redo on this.” And without understanding exactly which profile of given customer falls into, whenever the cloud provider tries to make an assumption and a default in either direction, they're wrong.Michael: Yeah, I'm surprised that Oracle Cloud of all clouds. It's good to hear that they actually have a free tier. Now, we've seen attackers have used free tiers quite a bit. It all depends on how people set it up. And it's actually a little outside the threat report, but the CI/CD pipelines in DevOps, anywhere there's free compute, attackers will try to get their miners in because it's all about scale and not quality.Corey: Well, that is something I'd be curious to know. Because you talk about focusing specifically on cloud and containers as a company, which puts you in a position to be authoritative on this. That Lambda story that I mentioned about, surprise $60,000 a day in cryptomining, what struck me about that and caught me by surprise was not what I think would catch most people who didn't swim in this world by surprise of, “You can spend that much?” In my case, what I'm wondering about is, well hang on a minute. I did an article a year or two ago, “17 Ways to Run Containers On AWS” and listed 17 AWS services that you could use to run containers.And a few months later, I wrote another article called “17 More Ways to Run Containers On AWS.” And people thought I was belaboring the point and making a silly joke, and on some level, of course I was. But I was also highlighting very clearly that every one of those containers running in a service could be mining cryptocurrency. So, if you get access to someone else's AWS account, when you see those breaches happen, are people using just the one or two services they have things ready to go for, or are they proliferating as many containers as they can through every service that borderline supports it?Michael: From what we've seen, they usually just go after a compute, like EC2 for example, as it's most well understood, it gets the job done, it's very easy to use, and then get your miner set up. So, if they happen to compromise your credentials versus the other method that cryptominers or cryptojackers do is exploitation, then they'll try to spread throughout their all their EC2 they can and spin up as much as they can. But the other interesting thing is if they get into your system, maybe via an exploit or some other misconfiguration, they'll look for the IAM metadata service as soon as they get in, to try to get your IAM credentials and see if they can leverage them to also spin up things through the API. So, they'll spin up on the thing they compromised and then actively look for other ways to get even more.Corey: Restricting the permissions that anything has in your cloud environment is important. I mean, from my perspective, if I were to have my account breached, yes, they're going to cost me a giant pile of money, but I know the magic incantations to say to AWS and worst case, everyone has a pet or something they don't want to see unfortunate things happen to, so they'll waive my fee; that's fine. The bigger concern I've got—in seriousness—I think most companies do is the data. It is the access to things in the account. In my case, I have a number of my clients' AWS bills, given that that is what they pay me to work on.And I'm not trying to undersell the value of security here, but on the plus side that helps me sleep at night, that's only money. There are datasets that are far more damaging and valuable about that. The worst sleep I ever had in my career came during a very brief stint I had about 12 years ago when I was the director of TechOps at Grindr, the gay dating site. At that scenario, if that data had been breached, people could very well have died. They live in countries where that winds up not being something that is allowed, or their family now winds up shunning them and whatnot. And that's the stuff that keeps me up at night. Compared to that, it's, “Well, you cost us some money and embarrassed a company.” It doesn't really rank on the same scale to me.Michael: Yeah. I guess the interesting part is, data requires a lot of work to do something with for a lot of attackers. Like, it may be opportunistic and come across interesting data, but they need to do something with it, there's a lot more risk once they start trying to sell the data, or like you said, if it turns into something very unfortunate, then there's a lot more risk from law enforcement coming after them. Whereas with cryptomining, there's very little risk from being chased down by the authorities. Like you said, people, they rebuild things and ask AWS for credit, or whoever, and move on with their lives. So, that's one reason I think cryptomining is so popular among threat actors right now. It's just the low risk compared to other ways of doing things.Corey: It feels like it's a nuisance. One thing that I was dreading when I got this copy of the report was that there was going to be what I see so often, which is let's talk about ransomware in the cloud, where people talk about encrypting data in S3 buckets and sneakily polluting the backups that go into different accounts and how your air -gapping and the rest. And I don't see that in the wild. I see that in the fear-driven marketing from companies that have a thing that they say will fix that, but in practice, when you hear about ransomware attacks, it's much more frequently that it is their corporate network, it is on-premises environments, it is servers, perhaps running in AWS, but they're being treated like servers would be on-prem, and that is what winds up getting encrypted. I just don't see the attacks that everyone is warning about. But again, I am not primarily in the security space. What do you see in that area?Michael: You're absolutely right. Like we don't see that at all, either. It's certainly theoretically possible and it may have happened, but there just doesn't seem to be that appetite to do that. Now, the reasoning? I'm not a hundred percent sure why, but I think it's easier to make money with cryptomining, even with the crypto markets the way they are. It's essentially free money, no expenses on your part.So, maybe they're not looking because again, that requires more effort to understand especially if it's not targeted—what data is important. And then it's not exactly the same method to do the attack. There's versioning, there's all this other hoops you have to jump through to do an extortion attack with buckets and things like that.Corey: Oh, it's high risk and feels dirty, too. Whereas if you're just, I guess, on some level, psychologically, if you're just going to spin up a bunch of coin mining somewhere and then some company finds it and turns it off, whatever. You're not, as in some cases, shaking down a children's hospital. Like that's one of those great, I can't imagine how you deal with that as a human being, but I guess it takes all types. This doesn't get us to sort of the second tentpole of the report that you've put together, specifically around the idea of supply chain attacks against containers. There have been such a tremendous number of think pieces—thought pieces, whatever they're called these days—talking about a software bill of materials and supply chain threats. Break it down for me. What are you seeing?Michael: Sure. So, containers are very fun because, you know, you can define things as code about what gets put on it, and they become so popular that sharing sites have popped up, like Docker Hub and other public registries, where you can easily share your container, it has everything built, set up, so other people can use it. But you know, attackers have kind of taken notice of this, too. Where anything's easy, an attacker will be. So, we've seen a lot of malicious containers be uploaded to these systems.A lot of times, they're just hoping for a developer or user to come along and use them because your Docker Hub does have the official designation, so while they can try to pretend to be like Ubuntu, they won't be the official. But instead, they may try to see theirs and links and things like that to entice people to use theirs instead. And then when they do, it's already pre-loaded with a miner or, you know, other malware. So, we see quite a bit of these containers in Docker Hub. And they're disguised as many different popular packages.They don't stand up to too much scrutiny, but enough that, you know, a casual looker, even Docker file may not see it. So yeah, we see a lot of—and embedded credentials and other big part that we see in these containers. That could be an organizational issue, like just a leaked credential, but you can put malicious credentials into Docker files, to0, like, say an SSH private key that, you know, if they start this up, the attacker can now just log—SSH in. Or other API keys or other AWS changing commands you can put in there. You can put really anything in there, and wherever you load it, it's going to run. So, you have to be really careful.[midroll 00:22:15]Corey: Years ago, I gave a talk at the conference circuit called, “Terrible Ideas in Git” that purported to teach people how to get worked through hilarious examples of misadventure. And the demos that I did on that were, well, this was fun and great, but it was really annoying resetting them every time I gave the talk, so I stuffed them all into a Docker image and then pushed that up to Docker Hub. Great. It was awesome. I didn't publicize it and talk about it, but I also just left it as an open repository there because what are you going to do? It's just a few directories in the route that have very specific contrived scenarios with Git, set up and ready to go.There's nothing sensitive there. And the thing is called, “Terrible Ideas.” And I just kept watching the download numbers continue to increment week over week, and I took it down because it's, I don't know what people are going to do with that. Like, you see something on there and it says, “Terrible Ideas.” For all I know, some bank is like, “And that's what we're running in production now.” So, who knows?But the idea o—not that there was necessarily anything wrong with that, but the fact that there's this theoretical possibility someone could use that or put the wrong string in if I give an example, and then wind up running something that is fairly compromisable in a serious environment was just something I didn't want to be a part of. And you see that again, and again, and again. This idea of what Docker unlocks is amazing, but there's such a tremendous risk to it. I mean, I've never understood 15 years ago, how you're going to go and spin up a Linux server on top of EC2 and just grab a community AMI and use that. It's yeah, I used to take provisioning hardware very seriously to make sure that I wasn't inadvertently using something compromised. Here, it's like, “Oh, just grab whatever seems plausible from the catalog and go ahead and run that.” But it feels like there's so much of that, turtles all the way down.Michael: Yeah. And I mean, even if you've looked at the Docker file, with all the dependencies of the things you download, it really gets to be difficult. So, I mean, to protect yourself, it really becomes about, like, you know, you can do the static scanning of it, looking for bad strings in it or bad version numbers for vulnerabilities, but it really comes down to runtime analysis. So, when you start to Docker container, you really need the tools to have visibility to what's going on in the container. That's the only real way to know if it's safe or not in the end because you can't eyeball it and really see all that, and there could be a binary assortment of layers, too, that'll get run and things like that.Corey: Hell is other people's workflows, as I'm sure everyone's experienced themselves, but one of mine has always been that if I'm doing something as a proof of concept to build it up on a developer box—and I do keep my developer environments for these sorts of things isolated—I will absolutely go and grab something that is plausible- looking from Docker Hub as I go down that process. But when it comes time to wind up putting it into a production environment, okay, now we're going to build our own resources. Yeah, I'm sure the Postgres container or whatever it is that you're using is probably fine, but just so I can sleep at night, I'm going to take the public Docker file they have, and I'm going to go ahead and build that myself. And I feel better about doing that rather than trusting some rando user out there and whatever it is that they've put up there. Which on the one hand feels like a somewhat responsible thing to do, but on the other, it feels like I'm only fooling myself because some rando putting things up there is kind of what the entire open-source world is, to a point.Michael: Yeah, that's very true. At some point, you have to trust some product or some foundation to have done the right thing. But what's also true about containers is they're attacked and use for attacks, but they're also used to conduct attacks quite a bit. And we saw a lot of that with the Russian-Ukrainian conflict this year. Containers were released that were preloaded with denial-of-service software that automatically collected target lists from, I think, GitHub they were hosted on.So, all a user to get involved had to do was really just get the container and run it. That's it. And now they're participating in this cyberwar kind of activity. And they could also use this to put on a botnet or if they compromise an organization, they could spin up at all these instances with that Docker container on it. And now that company is implicated in that cyber war. So, they can also be used for evil.Corey: This gets to the third point of your report: “Geopolitical conflict influences attacker behaviors.” Something that happened in the early days of the Russian invasion was that a bunch of open-source maintainers would wind up either disabling what their software did or subverting it into something actively harmful if it detected it was running in the Russian language and/or in a Russian timezone. And I understand the desire to do that, truly I do. I am no Russian apologist. Let's be clear.But the counterpoint to that as well is that, well, to make a reference I made earlier, Russia has children's hospitals, too, and you don't necessarily know the impact of fallout like that, not to mention that you have completely made it untenable to use anything you're doing for a regulated industry or anyone else who gets caught in that and discovers that is now in their production environment. It really sets a lot of stuff back. I've never been a believer in that particular form of vigilantism, for lack of a better term. I'm not sure that I have a better answer, let's be clear. I just, I always knew that, on some level, the risk of opening that Pandora's box were significant.Michael: Yeah. Even if you're doing it for the right reasons. It still erodes trust.Corey: Yeah.Michael: Especially it erodes trust throughout open-source. Like, not just the one project because you'll start thinking, “Oh, how many other projects might do this?” And—Corey: Wait, maybe those dirty hippies did something in our—like, I don't know, they've let those people anywhere near this operating system Linux thing that we use? I don't think they would have done that. Red Hat seems trustworthy and reliable. And it's yo, [laugh] someone needs to crack open a history book, on some level. It's a sticky situation.I do want to call out something here that it might be easy to get the wrong idea from the summary that we just gave. Very few things wind up raising my hackles quite like companies using tragedy to wind up shilling whatever it is they're trying to sell. And I'll admit when I first got this report, and I saw, “Oh, you're talking about geopolitical conflict, great.” I'm not super proud of this, but I was prepared to read you the riot act, more or less when I inevitably got to that. And I never did. Nothing in this entire report even hints in that direction.Michael: Was it you never got to it, or, uh—Corey: Oh, no. I've read the whole thing, let's be clear. You're not using that to sell things in the way that I was afraid you were. And simultaneously I want to say—I want to just point that out because that is laudable. At the same time, I am deeply and bitterly resentful that that even is laudable. That should be the common state.Capitalizing on tragedy is just not something that ever leaves any customer feeling good about one of their vendors, and you've stayed away from that. I just want to call that out is doing the right thing.Michael: Thank you. Yeah, it was actually a big topic about how we should broach this. But we have a good data point on right after it started, there was a huge spike in denial-of-service installs. And that we have a bunch of data collection technology, honeypots and other things, and we saw the day after cryptomining started going down and denial-of-service installs started going up. So, it was just interesting how that community changed their behaviors, at least for a time, to participate in whatever you want to call it, the hacktivism.Over time, though, it kind of has gone back to the norm where maybe they've gotten bored or something or, you know, run out of funds, but they're starting cryptomining again. But these events can cause big changes in the hacktivism community. And like I mentioned, it's very easy to get involved. We saw over 150,000 downloads of those pre-canned denial-of-service containers, so it's definitely something that a lot of people participated in.Corey: It's a truism that war drives innovation and different ways of thinking about things. It's a driver of progress, which says something deeply troubling about us. But it's also clear that it serves as a driver for change, even in this space, where we start to see different applications of things, we see different threat patterns start to emerge. And one thing I do want to call out here that I think often gets overlooked in the larger ecosystem and industry as a whole is, “Well, no one's going to bother to hack my nonsense. I don't have anything interesting for them to look at.”And it's, on some level, an awful lot of people running tools like this aren't sophisticated enough themselves to determine that. And combined with your first point in the report as well that, well, you have an AWS account, don't you? Congratulations. You suddenly have enormous piles of money—from their perspective—sitting there relatively unguarded. Yay. Security has now become everyone's problem, once again.Michael: Right. And it's just easier now. It means, it was always everyone's problem, but now it's even easier for attackers to leverage almost everybody. Like before, you had to get something on your PC. You had to download something. Now, your search of GitHub can find API keys, and then that's it, you know? Things like that will make it game over or your account gets compromised and big bills get run up. And yeah, it's very easy for all that to happen.Corey: Ugh. I do want to ask at some point, and I know you asked me not to do it, but I'm going to do it anyway because I have this sneaking suspicion that given that you've spent this much time on studying this problem space, that you probably, as a company, have some answers around how to address the pain that lives in these problems. What exactly, at a high level, is it that Sysdig does? Like, how would you describe that in an elevator without sabotaging the elevator for 45 minutes to explain it in depth to someone?Michael: So, I would describe it as threat detection and response for cloud containers and workloads in general. And all the other kind of acronyms for cloud, like CSPM, CIEM.Corey: They're inventing new and exciting acronyms all the time. And I honestly at this point, I want to have almost an acronym challenge of, “Is this a cybersecurity acronym or is it an audio cable? Which is it?” Because it winds up going down that path, super easily. I was at RSA walking the expo floor and I had I think 15 different companies I counted pitching XDR, without a single one bothering to explain what that meant. Okay, I guess it's just the thing we've all decided we need. It feels like security people selling to security people, on some level.Michael: I was a Gartner analyst.Corey: Yeah. Oh… that would do it then. Terrific. So, it's partially your fault, then?Michael: No. I was going to say, don't know what it means either.Corey: Yeah.Michael: So, I have no idea [laugh]. I couldn't tell you.Corey: I'm only half kidding when I say in many cases, from the vendor perspective, it seems like what it means is whatever it is they're trying to shoehorn the thing that they built into filling. It's kind of like observability. Observability means what we've been doing for ten years already, just repurposed to catch the next hype wave.Michael: Yeah. The only thing I really understand is: detection and response is a very clear detect things and respond to things. So, that's a lot of what we do.Corey: It's got to beat the default detection mechanism for an awful lot of companies who in years past have found out that they have gotten breached in the headline of The New York Times. Like it's always fun when that, “Wait, what? What? That's u—what? How did we not know this was coming?”It's when a third party tells you that you've been breached, it's never as positive—not that it's a positive experience anyway—than discovering yourself internally. And this stuff is complicated, the entire space is fraught, and it always feels like no matter how far you go, you could always go further, but left to its inevitable conclusion, you'll burn through the entire company budget purely on security without advancing the other things that company does.Michael: Yeah.Corey: It's a balance.Michael: It's tough because it's a lot to know in the security discipline, so you have to balance how much you're spending and how much your people actually know and can use the things you've spent money on.Corey: I really want to thank you for taking the time to go through the findings of the report for me. I had skimmed it before we spoke, but talking to you about this in significantly more depth, every time I start going to cite something from it, I find myself coming away more impressed. This is now actively going on my calendar to see what the 2023 version looks like. Congratulations, you've gotten me hooked. If people want to download a copy of the report for themselves, where should they go to do that?Michael: They could just go to sysdig.com/threatreport. There's no email blocking or gating, so you just download it.Corey: I'm sure someone in your marketing team is twitching at that. Like, why can't we wind up using this as a lead magnet? But ugh. I look at this and my default is, oh, wow, you definitely understand your target market. Because we all hate that stuff. Every mandatory field you put on those things makes it less likely I'm going to download something here. Click it and have a copy that's awesome.Michael: Yep. And thank you for having me. It's a lot of fun.Corey: No, thank you for coming. Thanks for taking so much time to go through this, and thanks for keeping it to the high road, which I did not expect to discover because no one ever seems to. Thanks again for your time. I really appreciate it.Michael: Thanks. Have a great day.Corey: Mike Clark, Director of Threat Research at Sysdig. I'm Cloud Economist Corey Quinn and this is Screaming in the Cloud. If you've enjoyed this podcast, please leave a five-star review on your podcast platform of choice, whereas if you've hated this podcast, please leave a five-star review on your podcast platform of choice along with an angry comment pointing out that I didn't disclose the biggest security risk at all to your AWS bill, an AWS Solutions Architect who is working on commission.Corey: If your AWS bill keeps rising and your blood pressure is doing the same, then you need The Duckbill Group. We help companies fix their AWS bill by making it smaller and less horrifying. The Duckbill Group works for you, not AWS. We tailor recommendations to your business and we get to the point. Visit duckbillgroup.com to get started.Announcer: This has been a HumblePod production. Stay humble.

Neal Bawa is a technologist who is universally known in real estate circles as the Mad Scientist of Multifamily. Besides being one of the most in-demand speakers in commercial real estate, Neal is a data guru, a process freak, and an outsourcing expert. Neal treats his $947 million-dollar portfolio as an ongoing experiment in efficiency and optimization. The Mad Scientist lives by two mantras. His first mantra is that "We can only manage what we can measure". His second mantra is that "Data beats gut feel by a million miles". These mantras and a dozen other disruptive beliefs drive profit for his 700+ investors. In today's episode, Neal gives his take on what is happening in the multi-family market today, the dynamics of the current economy, and what he sees coming over the next year. Episode Links: https://multifamilyu.com/ https://www.linkedin.com/in/neal-bawa/  --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today joining me again is Neal Bawa, who is the founder of MultifamilyU and a big time multifamily syndicator and Neal is gonna be putting his finger on the pulse of the multifamily market and sharing with us some pretty hard hitting facts. So let's strap in, and let's get into it.   Neal, welcome back to the show. Thank you so much for taking the time to hang out with me. I really appreciate you coming on.   Neal: It's great to be back, Michael. Great to be back.   Michael: Thank you, Neal. So last time, on our prior episode, we talked a lot about the single family space and what we saw going on with the market today. I'd love if we could focus our conversation on multifamily, since I know that you do quite a bit in that space as well.   Neal: That's right. I live and breathe multifamily. I started with single family like a lot of you know, the folks that are using your platform did, but multifamily is more scalable. So we currently have about a billion dollars of multifamily 31 projects about 4800 units that are either in construction or in lease up or you know, are stabilize, right. So, you know, a significant portion of them are already stabilized that we're holding, but we're also building a bunch of them, and working on the construction of some of them. So it's you know, what's happening today is so dramatic and so unusual. We you know, one could compare, maybe it's not as dramatic as the first three months of COVID. But otherwise, it's pretty crazy. It's pretty dramatic, dramatic. So it's, it's a great time to talk about multifamily.   Michael: Yeah. So a billion dollars and just turning back the clock a minute. I'm curious, how long did it take you to get to that point from when you started?   Neal: So I you know, ignoring a past company where I was a partner, this particular company has basically gotten to that billion dollars since February 2018. So, so about four and a half years, roughly.   Michael: Holy smoke, I was just interviewing a gentleman who's got a business he wants to scale to a billion dollars over a nine year period. So you mourn cut that in half, that's incredible growth. Neal: Well, keep in mind, I don't want to demean what we've done, because we're very proud of it. But with a when you're purchasing multifamily, the numbers get big, pretty, you know, quickly, right? So 100 unit multifamily today is $20 million. So you do get up there very fast. So I still consider myself to be a mid-level syndicator. There's dozens and dozens and dozens of companies that have bigger portfolios than I do and also, for reference, a billion dollar portfolio usually only equates to about 10 employees in a syndication business. Now, in my case, I have 30 employees, because I've 20 of them in the Philippines and that's helping me scale and so I have 20 full time employees in the Philippines in addition to those 10 people. But I think it's useful to have that frame of reference, I think that you're setting targets in multifamily, a billion is actually not a bad target the set.   Michael: Okay, I will definitely keep that in mind as I as I scale my portfolio. That's, that's really great to know. But Neal, let's transition and I would love to get your thoughts because you are a data scientist, you have so many great analytics to kind of backup your thoughts and opinions and viewpoints. Tell us what like what's going on in the multifamily space as we recording this today late, mid to late September.   Neal: Prices are falling and they will continue to fall. It's a bad time to buy any kind of multifamily in any market in the US and I rarely, I've never actually said that before, maybe with the exception of you know, first month COVID. It's currently right now, no one should be buying anything in the United States. But here's the good news. You don't have to wait very long. The market is now adjusting very rapidly. So I think that I think February March of next year would be a terrific time to buy you know whether it's the one to four units that get listed on Roofstock. By the way, I currently have a triplex listed on roof stock, check it out, it's on Brandon Avenue in Chicago. Whether it's those units or it's the you know, the larger unit we were also selling, you know, a 200 unit property at this point in time not on Roofstock but we're not buying anything. I mean, we've basically told our acquisition people to be pencils down stop looking, stop talking to brokers stop traveling to properties, because we are halfway through a correction. So and I'll explain why. Multifamily is a very different animal from single family. So let's say Michael is buying a single family property and it's next to another one that's identical to it. So there's two row houses and next to it. Well, if somebody last month paid a million dollars for the first one, Michael can get a loan that appraises for 1,000,000 value for his property, he can get that easily, regardless of what really happens in the market, he can get that, you know, and prices take so long to fall that even if the price actually falls, Michael can use a comp from half a mile away to still get that million dollars in value. So the banks on the single family side are really trusting you to do your, you know, to not to overpay, right. So if they're just looking at it, is there a comp that matches it and if it does, we'll just give this guy alone, right and if they feel like the times are hard, they might change their LTVs from 75 to 70 and but that's pretty much as far as the single family market goes. The multifamily market is radically different because a multi one multifamily property is a business. It's like you're buying a Tommy's carwash, or you're buying, you know you're buying a subway or a chain of subways, that's the best way to look at it. It's a business. So your underwriting really doesn't matter. It's the banks underwriting that matters, the bank that's giving you the funding and the moment that we start seeing interest rates go up in the market, the value of the property immediately decreases. Why? Because the bank's underwriting decreases the value of the property, because multifamily properties are based on just two things, something known as a cap rate, which is basically the market's estimate of what the property should be worth and then something else known as net operating income, which is basically rents minus expenses right? Now, the moment and you know, the moment your interest rates increase, and most multifamily today in the US is on floating rate debt. So what that means is, as interest rates go up, your mortgage is going up something a number called DSCR. I won't go into that into detail on that. But there's a number called DSCR, that basically starts to fall. So the higher your mortgage goes, the lower that number is. This means that, you know, let's say I'm a buyer and I'm selling two multi families and they're right next to each other, right. So they're same number of units, same occupancy, same design, so that their net operating income for both of these properties is exactly the same, like down to the last cent right. Now one, let's say one soft sell sold for $30 million. Okay, and I waited a month like 30 days, and the Fed raise interest rates by 100 bits right, but basically 1%. The second property now is worth less. It's worth less, even though there's another property that sold 30 days ago, that's identical with the same number of tenants with the same rents. It's now worth less so multifamily is on a sliding scale and that sliding scale is affected by interest rate hikes much sooner than single family.   Obviously, single family is also affected. We've seen there's 90 bond markets in the US where single family prices are coming down, but they're coming down really slowly, right. Like the I think the average decline in the last six weeks has been 2%, right and I mean, seasonal declines are bigger than 2%. So I don't even know what to make of that 2% yet, but on the multifamily side, depending upon the market, we've seen declines of six to 12% in multifamily prices already and in remember, the Fed only really started raising in May of this year that you know, we're doing this in the middle of September, right. So in five months, the Feds basically raised everything there was a tiny raise back in March, but it was it was so tiny that it really didn't make any difference. So in five months, the Fed has basically affected multifamily prices to the tune of six to 12%. Here's the bad news. That's not the end, because everybody including yours truly was thinking that when last week's inflation report came out, we would see a downward trend, and the Fed would give us some guidance that yeah, okay, well, instead of raising by 75 bits this week that there's a Fed meeting going on this week, we're gonna raise by 50 and then we'll see what happens in November, maybe we'll raise it by 25 and we were like, okay, if that happens, great. You know, where the Fed funds rate is at 2.25. They raised by 50 pips this week, then they raised about 25 pips in November at 3%. We're done with the Fed funds rate, and that means that multifamily doesn't have to drop any further. Well, it sucks but that didn't happen. Inflation didn't drop and so now the Fed this week is definitely going to raise interest rates by 75 bits, maybe they might even do it by 100 and that basically will spike up interest rates by 100 points immediately and then they'll have to do 75 points in November and maybe another 50 points or 25 points in December. So because of that bad news, we now know that we're midway through this drop in multifamily, right. So we think that there's another five or 6% drop coming by February or March. Is this bad? No. If you're not, you know, if you're not buying anything, just wait for five or six months and you get five or 6%. You know, you know benefits. What the heck is wrong about that because the market isn't bad. Rents haven't decreased, rents are continuing to increase nationwide for both single family and multifamily. So this isn't like 2008, where there's 5 million empty homes show me empty homes. I mean, there really aren't any, the market is an amazing occupancy levels. This is just one single factor, the cost of debt. So, if you can, in February, buy a property for 5%, cheaper, you will have had two advantages. Number one, the next six months, you're not paying for that high cost of debt, right? Number two, you would, you know, say 5%. So your property is cheaper, so your debts less right? Number three, you will be within six months of the Fed cutting interest rates. This is the part that most people don't understand. The Federal Reserve is not trying to kill us. They're just doing their job. and their job is to control inflation because if you don't control inflation, really bad shit happens really, really bad should happen. So it's much better to control inflation and obviously the industry that is most affected when you raise interest rates is real estate. No other industry in the US is affected as much as real estate by interest rate hikes. Here's the good news though. If you look at the last 61 years, the Fed raised interest rates nine times sharp up sharp down. So if you buy in Feb, by, I think July or August, the Fed should be dropping interest rates or at least talking about dropping interest rates.   Why is that important? Mortgage rates are guesses. So single family mortgage rates and multifamily mortgage rates in the US are just guesswork where the market tries to guess what the Fed will do next. So if the Fed starts talking about interest rate declines, the market starts to prices in., right and when the Fed says oh, well, we might hold, right the market reacts. So the interest rates basically adjust even before the Fed actually does anything. Perfect example of this: In December, the Fed started talking about interest rate hikes, but didn't actually raise anything. They didn't change anything until March. But in those four months, interest rates went up 100 basis points, they went up an entire 1% because the market was guessing what the Fed would do. So if you buy a multifamily in February and the Feds basically start to lower rates by June, July and August. Now you're in a better environment and as long as your rates are floating, they may float the other way, they may float down and give you a benefit. Where you start high and then you float downwards. That's why I think it makes sense to wait. I've seen a lot of my friends that have larger portfolios and me 2 billion 3 billion send emails to their investor saying we're pencils down. mean, what that means is we're not even underwriting a property we you know, we see 10 properties a day and normally we underwrite three or four of them. Pencils down means you just click the delete button 10 times and you're done with your job for the day.   Michael: Wow, I have so many questions. But I guess the first one is, why are mortgage rate guesses? Why doesn't, why don't banks look at actual data and what the actual borrowing rate is today and not worry about forecasting, but use hindsight. So it takes the guesswork out of it.   Neal: I'm not 100% sure on that. Just so you know, that's what the multifamily market does, right. So the multifamily market has two kinds of loans or I should say three kinds of loans. One of them is the guesswork kind where they try and guess what the Fed is going to do. The other one is one that's based on LIBOR or now called Sofer, these are basically and basically they're based on like treasury bonds and what those numbers are those loans. The moment the Fed hikes the they're going to hike this week, right so that they have a meeting on Wednesday, that we're probably going to hype it by 75 pips. Well, if I have that kind of loan, and I do at some of my properties, guess what, on Thursday, my debt is a lot more expensive. 75 basis points more expensive. So you can see that on the multifamily side. I have never, ever seen a single family loan do that. Every mortgage that I've seen 30 year 15 year five year ARM, they're all guesses forward looking guesses on the Feds rate. Why? I have no freaking clue.   Michael: Okay… We'll have to find someone out there that can give us a definitive answer as to why that is. But I'm also curious now, you mentioned at the beginning of our conversation that in the single family space, the banks are kind of depending on us as borrowers to look at the value of the home and determine hey, this is worth or not, which seems very counterintuitive because the majority of multifamily investors that I know, tend to be able to underwrite really, really well, oftentimes better than the bank and so why is the bank's taking the power away from a multifamily investor and really giving it to a single family owner it seems a little bit backwards now.   Neal: Single Family is considered to be a REIT in the United States and single family lending is encouraged by politicians. The overall banking system believes that even if they go a little it over on the single family side, it's not such a bad thing, obviously 2008 was 2007 was different because it was not a real estate failure. It was a failure of lending standards, you know, they were basically giving gardeners million dollar loans, right. So that's not going to end well. So obviously, I don't see any evidence of that kind of stupidity existing today. So there are lending standards, they're pretty tight on those lending standards, they're not going above them, you have to be, you know, a good, good buyer. But beyond that, they as long as there's an appraised property that similar your property will appraise. I am not in favor of this other countries do not do this. Banks underwrite single family loans in other countries, the way that we underwrite multifamily loans. But because of Americans believe that single family is a very key part of their life. We've seen this appraisal based system for the last 30 or 40 years and every once in a while it blows up a bubble just like it did in 2007. So this is a conscious decision that the people that run this company had a country have made, and it has lots and lots of good sides, because it tends to overall increase the prices of single family appraisal, you know, somebody buys for more, the your property is more than next was more next one's more. So generally, it has a beneficial effect on the real estate market. But it also tends to create more bubbles than other countries.   Michael: Interesting. Okay, that's really good insights. So knowing that this isn't the ideal time to buy multifamily. What should people be doing? Is this the time to get educated, is the time to go get capitals is the time you know, what should folks be doing right now?   Neal: Um, I think that I'll give you some ideas, right? So I'll give you kind of a sense of, Well, what would Neal Bawa be doing and what would maybe somebody that's newer than Neal Bawa, you know, doesn't have a lot of multifamily should be doing. So let's just focus on that piece first, right, because what I do is really different from what you should be doing, depending upon where you are in the process. So let's say you're early in the multifamily process, you should be educating your investors, that an extraordinary opportunity is going to present itself most likely in q2 of next year. So that's, you know, April, May, June and that opportunity is there for the first time since the Great Depression, that in the 2008, depression, we have an unusual thing happening, and that will be multifamily prices, not single family, but multifamily prices will be low in q2 next year, compared to let's say, now, or compared to, especially compared to a year ago, they will be low. But the economy will not be anywhere like 2008, it'll still it'll be weak, it will be in a recession. But this is what is known as an artificial recession. So recessions are of two kinds, they come in two flavors. Number one, a recession that is artificially created by the Fed to cool down inflation, and we're about to go into one of those recessions, those tend to be shallow, and the they don't damage the economy in the long term, they create short term damage, and the economy tends to recover fairly quickly from those unemployment doesn't tend to go down too much. You know, so, so go up too much, I should say, you know, so. So we're about to go into one of those and those are the kinds of recessions where you want to buy multifamily. Why because multifamily prices still decrease as interest rates go up, regardless of the strength of the underlying economy. So the underlying economy right now is amazingly strong, right. So with all the hand grenades that the Fed has thrown at us for over five months, they've managed to move the unemployment rate from a historic 3.5% to a historic 3.7%. In five months, they basically haven't managed to dent the unemployment market at all and even that point, 2% increase has largely been because of being because of more people joining the workforce. So post COVID, a lot of people took a year and two years off, a lot of those people are now returning to the to the workforce because they're running out of that stimulus money and that's really what that point to otherwise, when you see like you might see, you know, news about layoffs in the United States, Google it actually look at the statistics. Anytime at any point in the economy, there's layoffs, right. But there haven't been more layoffs than they were six months ago or 12 months ago. It's just the regular layoffs that happened in a normal economy. So there's the economy is extraordinarily strong, and it's going to get dragged into recession simply because the Fed is going to keep throwing hand grenades until the economy goes into recession. But because the underlying economy will stay pretty strong during this shallow recession, you've got a onetime opportunity to buy cheap multifamily because multifamily is just as affected in terms of price. Whether the economy underlying is weak or strong right and you have a quick chance to come out of it and make a lot of money. You should be educating your investors telling them about this opportunity, because I haven't seen that opportunity at all since 2013.   Michael: Interesting.   Neal: That's what you should be doing, telling every investor about this and telling them, I am not buying anything now. Well, you probably know me, you know, don't have the investor money to buy anything now. But what's the harm in saying it's still true?   Michael: Right, right, right. Do you think though, Neal, that at that time, q2, next year, that folks, sellers, owners are going to see that, hey, there's this dip in prices, and therefore, I'm not going to sell because I don't want to sell at a loss I bought 234 or five years ago, I'm going to hold on to my property and no, there will be an inventory shortage, or do you do not foresee that happening?   Neal: There is already an inventory shortage in multifamily prices have still dropped. So the if you look at the inventory available to sell in the multifamily market, it's half of what we had a year ago. But multifamily is different from single family in single family is shortage of inventory tends to drive prices up. With multifamily a shortage of inventory cannot drive prices up because banks are underwriting and they don't give a flying F about what the inventory is. They just care about your debt cost and your debt cost is going up. So when so the key thing is that the single family and multifamily markets are fundamentally different. One of them is just a business and the business is based on its debt cost, and its net operating income and nothing else right. Whereas single family is based on demand. If there's nothing available on your street to sell whatever appears is going to sell for more. That's not how multifamily works. So even right now, supply is pretty low. But that doesn't mean that people are over able to over bid, because if they over bid, guess what happens, Michael, they can't get a loan for that amount and now they have to raise lots of extra equity, which reduces their returns and so a lot of them are like this is painful, we're just going to sit back for three to four months for the market to adjust. Buyers have sellers have to understand that either they just keep their property off the marketplace, which you know, you can do infinite infinitely, you can do it for some amount of time or they will adjust their pricing as they already have. Remember, we've already seen a six to 12% delta in just six months. That's how quickly multifamily reacts and I think that's why I'm in the multifamily business because I liked the logic of that. If your costs are increasing and your profits are decreasing, you should get a lower price, right.   Michael: It's pretty black and white.   Neal: Yeah, yes and that's how it works in multifamily. With single family, you can very often see costs increasing, but because everyone's holding off, nobody's basically selling their property. Everyone's like I've got lots of equity in the property. Now there's no property in the marketplace and even with costs increasing, you can often see increase in pricing. To me that has no logic and so I don't play in in that in that field.   Michael: Yeah, yeah, no, it makes total sense. Neal, let's talk about multifamily loan products and some of the different ones that are out there. You mentioned there's three different loan types. There's the fix for five 710 years, there's the LIBOR, floating rates, what's the third one?   Neal: So the second one is tied to so I'll go back, right. So the first one straightforward, fixed, usually it's five years and 10 year fixed. The second one is tied to a number called LIBOR or LIBOR or so far, these days, it's called Silver. That's kind of the new version of LIBOR. So it's a number and the loans will be, you know, LIBOR plus something LIBOR plus 2.25, right and what that means is the moment the Fed changes, interest rates, that's gonna change, right? So your, the interest rate, you're paying changes the very next day, right, the bank's gonna send you a letter saying, hey, Sofer has changed, therefore your interest rate is now x, right and boom, you're paying more, the third one is available, that is basically a rate that you it's a floating rate. right, but it's not tied to LIBOR. It's not tied to Sofer. It's speculative in some sort of ways. Now, it does tend to go up as interest rates go up, it's really tied to treasuries. Now, US Treasury bonds are a speculative product, right? So today, something happens in China or something happens in Russia, something happens in Ukraine, and all of a sudden, treasury bonds will shoot up or shoot down and so that particular rate is tied to the treasury bonds. So it's speculative and so, you know, Fannie Mae and Freddie Mac, often these floating off of these floating rates. Now, in the end, the rate is going to end up more or less where the Sofer one is, but it's not immediate. It's not like you don't get that happening the next day after the Fed raises interest rates and I'll tell you why because it's tied to treasuries and treasuries move upward. Are downwards because of 100 different factors. Only one of those are interest rates. So geopolitical situations can often make treasuries move downwards. For example, if the Chinese economy collapses tomorrow and there's blood on the street, treasuries will go downwards, even if the Fed continues to raise interest rates. That makes sense? So, to these sorts of things, these movements can happen so that rates that are tied to the US Treasury bonds tend to move up and down with Treasury bonds. So those are the three kinds.   Michael: Okay, and who is do you think well suited or conversely, not well suited for each type of loan?   Neal: So in terms of who is the lender?   Michael: No, if I'm a buyer, and I'm going to buy … Yeah…   Neal: I think, yeah, yeah. So there's also something known as a bridge rate, when it bridge loans, which no one is getting, I don't know, if a single person that's gotten a bridge loan in the last 30 days, because there are simply very high there are 7%, or even higher in the last, you know, 30 days. So the vast majority of people today that should be buying, let's say you have to buy for whatever reason, you're not stopping you want to buy the key advisors, everyone should today should get a floating rate loan, because if you believe like I do, that the feds job is to raise rates and then drop them and that's what they've done nine times in the last 61 years, then you have to believe at some point in the future 6-12 18, 24 months rates will be lower, because right now, they're pretty darn high, right? So if you believe that locking in your rates doesn't make sense. So the market today, all we have is really Fannie Freddie floating lanes, rate rates, which are similar to what your local bank would provide. So maybe you have a smaller project, you want to go with local bank, those are the same kinds of rates that Fannie Freddie provides, they're probably charging you a quarter point more, but you've got a relationship with them, their points are lower. So lots of people go with local banks. But I think that's the only game in the market for multifamily today and the other thing that's happening in the multifamily market, which is driving prices down as you get multifamily, you might in a really boom time environment, you could get loans that are 75%, loan to value, right and then when the market starts to tighten up, they go to 70. Well, a few weeks ago, most lenders went to 65. So they're giving you a lot less loan to value for the same property forcing you to raise more equity. When you raise more equity, your returns go down, your underwriting suffers. So once again, people are like this not working. I'm not going to make any money. My investors have something known as pref or preferential treatment. So the property underperforms, they're going to make their pref I'm gonna make nothing. So a lot of people are stepping back, pencils down.   Michael: Yeah. Yeah, that makes total sense. That makes total sense.   Neal: And, and none of this has anything to do with a crash, you know, the 2008 scenario. If you believe that that is going to occur in the next 12 months, you're not data driven because the 2008 scenario, if you look at every if you list the top 10 factors that caused it, because it wasn't any one thing, right? None of those factors, not one of those factors exist today, right? What we do have is we pulled demand forward in 2021. In 2021, we basically helicoptered $10 trillion, worldwide, not 10 trillion in the US, luckily, 4 trillion in the US, but 10 trillion worldwide, we helicopter money to people for the first time in modern history. We've done a little bit of it before in 2009. But remember, we were bailing out banks, we were bailing out General Motors, the money wasn't going directly into people's pockets, right. So here we helicopter $10 trillion worldwide, and there's an inflationary effect. It pulled demand forward, everyone, all of a sudden had money, everyone spent money and so we pulled demand forward from let's say, 2023, next year, to 2021 and when we did that, we ended up creating massive amounts of inflation, nothing to do with the economy itself, but it created massive inflation and now we have no choice but to deal with it. I can tell you this if on the one side you said you know will you take 7% single Family interest rates right over the Fed stopping you know their program now just let him stop it I would say don't do that. Hyperinflation is so insanely dangerous, and so insanely destructive, that I would, even though it would really hurt me. I would take 7% interest rates any day, I will take 8% but I wouldn't tell the thread to stop doing what they're doing. 9% inflation if it gets entrenched if everyone believes that two years from now we're going to be at 9% It's astonishingly destructive.   Michael: Wow, wow. Okay and Neal, I'm just curious in based on your research the nine times over the last six to 10 years, the Fed has raised rates and then pretty succinctly thereafter dropped them. How far do you think we're gonna get, how low do you think inch rates are gonna go? I want the Neal Bawa prediction the crystal ball, if you will…   Neal: The federal funds rate, right, the Fed funds rate is what the Fed raises, they don't raise or lower mortgage rates. It's currently at 2.25% and in two days, it's going to go to 3%. We believe currently that the peak is going to be either 3.5 or 3.75% for the Fed funds rate and we think that on the downward path, they'll cut it all the way down to 1.75%. So from their peak, they'll go down 2%. So from the peak, whatever that peak interest rate is, it should go down 2%, right. Now, sometimes they have to go past that 1.75 on the downward leg, because they've hurt the economy so much when they were raising rates that they have to compensate. But we think that the Meet the perfect equilibrium rate for the Fed is around 1.75. Now, in their, in their public, in the public, they talk about it being 2.25. That's where they would like equilibrium to be. But they never seem to ever achieve that. It's always lower than that in a normal market. So they just like to talk it up a little bit to set expectations. So we think that whatever that top interest rate is that you're going to see the highest interest rate, the mortgage rate. Once the Fed is done and brings it down, you should see mortgage rates 2%, lower. So it there's a possibility that sometime in the next 180 days, you'll see a 7% mortgage rate, right. So it might touch that number, but I don't think it goes further beyond that. Okay, but I could be completely wrong, because if the Fed doesn't kill inflation, then all bets are off.   Michael: Right, right. Yeah, this is all under the guise of inflation getting tampered back because of the moves and so just to kind of put that in perspective for people as the end users, 2% reduction of the Fed funds rate will typically constitute a 2% drop on what a borrower is going to pay. So if rates get up to 7%, and then Fed Funds pullback to two by 2%, we would expect mortgage rates to hover on that 5% in the consumer market.   Neal: Yes, exactly four and a half to five and a half going up and down a little bit, you'd remember it's speculative, but you'll have plenty of opportunities to you know, lock something in under 5%. So I think the key message is this, never be afraid of 5%. It's really beyond 5%, that the single family economy starts to you know, it starts to miss heartbeats. That's where it starts to be problematic until five, I've really not seen much of an impact in the marketplace, there'll be a little slow down in price increases and right now a slowdown is healthy, they've gone way too much way too fast and so retrenchment is a very healthy thing.   Michael: Yeah. Okay and just for frame of reference for folks, during COVID, the Fed funds rate was zero, right?   Neal: They dropped it. It was zero, correct. So there were we've gone from zero to 2.25, in five and a half months, right and they were threatening to do it for about four months before that, but they wanted the market to adjust before they actually raise the rate. So we've gone up to 2.25. It was zero for two consecutive years. So two years, in two months, the Fed funds rate was zero.   Michael: And has that ever happened in American history that you know if?   Neal: No, I think that pandemic is very unique. We saw the Fed funds rate fall to about 1% in 2009 2010. But they didn't take it down to zero. So the only time they've ever taken it to zero is this time, I expect all future crisis will go beyond zero now that the eurozone has gone negative and Japan's gone negative. There's no stigma attached to going negative. So I think the next crisis will go below zero.   Michael: Wow and that'll be an interesting time to have a loan tied to LIBOR or Sofer?   Neal: It'll be is it's fantastically interesting. I think what we are, Michael, we're living in the middle of the greatest financial experiment in history and it's, it's an experiment that has no precedent, it doesn't have anything that you can look back to, right. We're doing some truly crazy stuff and we're hoping that it will work out even though we have about three years three or 3000 years of monetary history that says it's never worked out for anyone in the past. So we're just hoping that we are different so right it's all about you know, as long as the musical chairs are going people are you know, people are walking and that's how it's going to be and I don't know when the real challenges happen. I think we're getting closer and closer. I feel like China is just about ready to combust at this point. We'll see what happens.   Michael: Okay, well, I will definitely stay tuned, Neal. This was amazing as always, for people that want to pick your brain more, continue the conversation learn more about you. Where's the best place nice for them to do that,   Neal: Um, you can connect with me simply by typing in my name. I'm the only Neal Bawa on the worldwide web. So just NEAL BAWA, hit enter, there's a couple 100 podcasts that I've appeared on. There's webinars, conference recordings, where I'm on stage. If you'd like to chat with me on LinkedIn, once again, I'm the only Neal Bawa on LinkedIn. So go ahead and connect with me there or go to my website, multifamilyu.com. So that's multifamily, followed by the letter u.com. There's about 30,000 people that attend the webinars that are on that site, we have a new one coming up, which is the impact of interest rates on the economy, and the upcoming recession. So real estate at this point is officially in a recession. The housing market is now in a recession, because it's declining. But I think the rest of the economy is going to follow it and so we have a webinar on that and I think that's going to be in three weeks.   Michael; Okay, fantastic. Well, Neal, thank you. Again, really a pleasure to chat with you and have you on and I'm sure we'll stay in touch.   Neal: Awesome. Thanks for having me on.   Michael: You got it, take care.   All right, everyone. That was our episode a big thank you to Neal for coming on love his data driven approach to his conclusions, which I think we probably all could use another dose of that. As always, if you enjoyed the episode, feel free to leave us a rating or review wherever you get your podcasts and we look forward to seeing the next one. Happy investing…

Garrett Sutton is a corporate attorney, asset protection expert and best selling author who has sold more than a million books to guide entrepreneurs and investors. For more than 30 years, Garrett Sutton has run his practice assisting entrepreneurs and real estate investors in protecting their assets and maximizing their financial goals through sound management and asset protection strategies. The companies he founded, Corporate Direct and Sutton Law Center, currently help more than 13,000 clients protect their assets and incorporate their businesses. Garrett also serves as a member of the elite group of “Rich Dad Advisors” for bestselling author Robert Kiyosaki. A number of the books Garrett Sutton has authored are part of the bestselling Rich Dad, Poor Dad wealth-building book series. There are three types of entities most commonly used to own real estate: Limited Liability Company, S Corporation and Limited Partnership. Tune in for todays episode where Garrett provides a quick summary of the best entities for real estate investment. Episode Link: https://corporatedirect.com/contact/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Garrett Sutton, who is an attorney, investor and author with over 1 million copies of his book sold and today Garrett is gonna be talking to us about all the different entity structures we should be aware of as real estate investors, as well as wherever we might want to think about forming those entities because it plays a big role. So let's get into it.   Garrett, thank you so much for joining me on the show today. I really appreciate you taking the time.   Garrett: Thanks, Michael. It's a pleasure to be with you today.   Michael: No, no, the pleasure is all mine ad I'm super excited to chat with you. I know a little bit about your background and what you do kind of on a day to day basis. But I would love if you could share with our listeners who you are, where you come from, and what is it that you're doing in real estate today?   Garrett: Well, I grew up in the San Francisco Bay Area like you and I moved to Reno in 1989 and Nevada is a great state for setting up LLCs and corporations along with Wyoming. So I practiced corporate law since 1978, and became associated with Robert Kiyosaki and have written a number of books in the rich dad advisor series and you know, have enjoyed talking to people around the country around the world about how to protect your assets. As you start investing in real estate, you need to think about how you're going to protect that real estate because we live in a very litigious society, people sue each other all the time and unfortunately, they don't teach this in school, you have to get this information on your own and so that's what we provide is the information you need and then we offer a service to help you protect your real estate and brokerage and other assets.   Michael: Love it and just right off the bat, I read one of your books for our Roofstock Academy book club, it was a great read, so I can definitely vouch for it. But what are the books that you've written and then what talk to us about your most recent book?   Garrett: Well, I've written a number of books in the rich dad advisor series, including start your own corporation, that's kind of a foundational one, and then run your own corporation, a lot of my clients and I set up a corporation now what do I do, and you have to run it properly. Then I also did loopholes of real estate, which is kind of the tax and legal strategies for investing in real estate and then the newest book is veil not failed and that deals with the corporate veil, you set up an LLC or a corporation to be protected and too many people do this themselves, Michael, they just set it up online, and they don't realize that there are additional steps you have to take to stay protected and so if you don't want your veil to be pierced where someone can sue the company, there are no assets there. They can go through the veil of the company and get it your personal assets, if you don't want that to happen and that's why you set up an LLC.   Michael: That's the point, yeah…   Garrett: It's that you don't want it to happen. You need to follow these corporate formalities and so that's what the book veil not fail is about kind of stories, horror stories of people who didn't follow the rules and then in the latter part of the book, it shows you how to follow the rules so you can stay protected.   Michael: Yeah, great. and where can people find out if they're interested in picking up a copy?   Garrett: Amazon has it the veil not fail. It was supposed to be out in April, but we have this thing called supply chain problems.   Michael: I've heard of that.   Garrett: Not enough paper out there. So it's not out until November but you can go ahead and preorder it.   Michael: Fantastic. Garrett, let's talk about I think a pretty hotly contested and debated topic in the real estate space and that's LLC versus no LLC, I think and it's tough because we're I'm California based. A lot of our listeners are California based and so to have an LLC in California, you're paying at minimum 800 bucks a year and with today's cash flow based on some real estate investments that can eat in to your investment pretty significantly and so I've heard folks say, you know, forget the LLC, go get umbrella policy, go get high liability limit insurance and call it a day. Don't worry about it. What are some risks pros cons associated with doing that, that you've seen folks run into?   Garrett: You know, there's a whole area of law called Bad Faith litigation, and that's when insurance companies collect the premiums and then find a way not to cover you. All right, the insurance companies have acted in bad faith over the years. errors in collecting the premiums and then having exclusions, that little tiny print that you never read and so, you know, the insurance companies, let's face it, they have an economic incentive to not cover every claim and so they're going to find reasons not to cover you and so I always recommend that people have insurance. That's the first line of defense but these LLCs are the second line of defense, in case the insurance company doesn't cover you, or what about a situation where your insurance is, say 2 million, but the judgment is 4 million, right? I mean, you're personally responsible for that extra 2 million. If the property is in an LLC, they can get what's inside the LLC. But if you've done it, right, if you if your veil is strong, they're not going to be able to reach your personal assets for that extra 2 million. So the idea that you're just going to rely on insurance is, in my opinion, quite naive.   Michael: Yeah. Okay, I love it. I'm of the same opinion. I always, I never like to play my hand, though but I love hearing that because I come from the insurance world. So I know how bad things can go and I also have seen how they're supposed to work. But I think you're totally right, there's totally an economic incentive to not pay claims and the insurance industry as a whole gets kind of wrapped in with the folks that are doing the latter, not the former. So I think it makes a ton of sense. But Garrett talked to me about I've heard this concept, and this idea that, okay, there's this, you can be over insured, there is such a point. Now, if I go get a $10 million umbrella, because I really want to be protected. Does that then put a target on my back for a claim or a plaintiff to say, well, hey, he's got a pretty a pretty massive insurance policy, you know, I was only going to sue him for a million, but let's go after the full 10.   Garrett: Well, I mean, there are a number of factors there. I mean, having enough insurance is not a bad thing. If the claim is a million, it doesn't give the attorney the right to try and collect 10 million, you know, I mean, the claim is a million. So you know, the fact that you have extra insurance isn't a bad thing. The attorneys, you know, what we like to do, what we tell our clients is you want to have enough insurance to cover any claim and so you want to have insurance on the property fire casualty, right? You want to have a personal umbrella policy of insurance covering your home and your autos because I think that's the biggest risk out there is a horrific car wreck, right. Do you need that umbrella policy, a commercial umbrella policy over your various rental properties, maybe I had a part such a policy for a while but here in Reno, it got pretty expensive and so I just have regular insurance on the properties. I have regular insurance for my home and autos and I have an umbrella policy for me personally and so you get in that horrific car wreck. There's enough insurance money for the attorneys to get at. They know how to get at insurance monies, they get a percentage of what they collect and then if everything else is held in LLCs you know you'll have a an LLC if you own a property in Oregon, you have an Oregon LLC on title, you own a property in Utah, you'll have a Utah LLC and tie on title and then those two LLCs are owned by one Wyoming LLC. That's how we like to structure things and the attorneys are going to have a tough time collecting from a Wyoming LLC and so they leave you alone on the LLC. Do you have enough insurance to pay the claim and they'll leave you alone on the LLC is that's how we recommend our clients structure things.   Michael: Okay, and why Wyoming LLC because I know you made a very deliberate point of saying where is formed, what's the point?   Garrett: There are three really good states out there and they compete against each other to be the best which is good for us. Instead of having one federal law that applies to every single state. After the American Revolution, each state wanted their own corporate law and so now we have each state with their own corporate law in Delaware, Wyoming and Nevada compete against each other to be the best. You know, the filing fees every year that come in are pretty good. It helps fund the government. So the reason I like Wyoming over Nevada and Delaware is all three protect the owner of the LLC the charging order is the exclusive remedy and all three, but in Nevada and Delaware the annual fee is $350 a year and in Nevada they list your name on the state website. In Wyoming the annual fee is $62 a year and your name does not show up on the State web site. So Wyoming offers lower cost, better privacy and equal protection. So a lot of our clients set up Wyoming LLCs.   Michael: Yeah, okay, well, I'm sold. So being a California guy, though, this is what I've heard and would love your insights. So I've been told that California they want their piece of the pie. So I've got to register any LLC that I own. In California, because I'm a resident here, I live here, even if it has not doing business, because the way California defines doing business is basically me living here. So if I do I own property in Oregon, I own it with an Oregon LLC, that LLC is owned by the Wyoming LLC, but then I gotta register both of those here in California?   Garrett: No, you raise a very good question. So in our example, we had an Oregon LLC and a Utah LLC and if those were owned by you, as a California resident, we'd have to pay 800, twice, once for Oregon, once for Utah, by having the Wyoming parent there, the Wyoming LLC, and we qualify that one to do business in the State of California. You don't have to pay the 800 for Utah, or Oregon. So that's a way to save the $800 for all the title holding LLCs yes, one of them has to pay right $800 to the state of California and you know, California has gotten a little bit looser, you don't have to pay the 800 the first year, that $800 is a credit on the first $50,000 in profits. So it's not like it's wasted. So, you know, I've had people move from California to Nevada, because of that $800 fee. It's just infuriates people. But there is if you love living in California, there's a way to work it so you have protection, and you don't have to pay $800 for every single LLC you own across the country.   Michael: Okay, fantastic and then in going back to that example, if I've got the I've got to register the Wyoming LLC here in California, do I lose out on any of the anonymity that Wyoming affords me because now it's registered here in California?   Garrett: Yeah, you'd have to list your name in California.   Michael: Okay, all right. Yeah, maybe I will think about moving, who knows? All right, Garrett, in your book, and I want to get really nice here for a minute, because I've got you. You talk about quitclaim deeds versus warranty deeds and I think a lot of our listeners out there have utilized this practice, or have heard about this practice because if you go get a conventional loan from a traditional bank, they won't lend to an LLC. So you go get the name the loan in your name, then transfer the property title to an LLC after the fact, right. In the book, you talk about quitclaim deeds versus a warranty deed, can you give us a little bit of insight into what the difference is and why someone should think about using one versus the other?   Garrett: Well, the warranty deed or the grant deed says, I warrant that I own this property and if I don't, if I transfer it to you, and I don't own it, for some reason, you can sue me. All right. So it's a more powerful deed. The grant deed, the quitclaim deed rather, says, I don't know what I own. But I'm transferring whatever I own to you and the title companies go, well, he quit claimed that property and so that severs the title insurance, right because he didn't know what he had and so we're not going to cover him on it on a quitclaim deed and so and too many people pronounce it quick claim.   Michael: I know, I know.   Garrett: You know, and it's the same deed with a couple of different words in it. But you really always want to use the grant deed or the warranty deed because in many cases, you sever the title insurance, when you use a quitclaim deed, okay, and that's….   Michael: Okay and that's even if you're going from yourself as an individual owner to an LLC that you own 100% of?   Garrett: Right, yeah, just ask for the grant deed. Also, if you're buying property from someone, you want to insist on a grant deed or a warranty deed, because if they don't deliver the title that they've promised they are going to deliver, you have the ability to sue them for failure to perform.   Michael: Okay, super good to know, super good to know, Garrett, as people who are just getting started on their investment journey, I mean, what's the appropriate time to set up an entity because I've heard people say, I'll do it later. I'm too small. It's too expensive. You know, what are your thoughts there?   Garrett: Right at the start, you know, it's just not that expensive. We do not charge a lot of money to set up LLCs for people. It's very affordable. It's a business expense, you get to write it off. But I'll give you an example Michael and I I've told this story 1000 times, but I was in San Francisco at an event and I gave a talk about asset protection and this lady comes up to me and she goes, Well, I'd like to transfer title. I just bought a duplex and I'd like to transfer title into the name of an LLC. I go, that's a great idea. I go in California, it's $800 per year per entity and she goes, oh, I can't afford that and so I'm giving a talk in San Francisco again and she comes up to me and says, I've been sued by a tenant, I'd like to set up that LLC now. Well, it's too late, right? You know, the tenant rented from you, in your individual name, UX, they have a claim against you as an individual, and they can reach all of your personal assets as a result and once you've been sued, or even threatened to be sued, it's too late to set up an LLC. I mean, you can't put a seatbelt on after the accident. Yeah, right. So you really want to set this up right at the start and I've heard CPAs say, oh, well, you know, just set it up when you can and that's bad advice. I mean, you know, the joke I tell is that CPA stands for can't protect assets. It's just, you need to set this stuff up right now.   Michael: Yeah, yeah. Okay. I think it makes a ton of sense and I love the seatbelt analogy. I think that really hits home for a lot of folks. So as someone that's getting more sophisticated with their investing strategy, what like tools or strategies should they be aware of as they're starting to scale up and they're investing?   Garrett: Well, I think having that Wyoming, LLC is the parent holding LLC is a good strategy. We talked about an Oregon LLC and a Utah LLC owned by one Wyoming LLC and that Wyoming LLC is passive. It's not going to hold real estate, it's not going to do business with anyone, because if someone sued the Wyoming LLC, they could get at Wyoming at the Oregon and the Utah LLC. That's what the Wyoming LLC owes. So that Wyoming LLC is passive, it doesn't do business with anyone because we don't ever want it to be sued. All right. So that's a key strategy in protection. Now, if your clients are holding brokerage accounts, right, bank accounts, gold and silver stock brokerage accounts, in their individual name, the same rules apply. If they get sued personally, and they have all these assets at a Charles Schwab account in their individual name, someone can very easily get those and so what we do is we set up an LLC for the paper assets for the bullion and if you get sued, and that horrific car wreck, they're in an LLC, it's much different, much more difficult for an attorney to get at those because the exclusive remedy in Nevada and Wyoming is what's called the charging order and that is a lien on distributions in the state of California if you own an LLC that owns a piece of real estate in California, the law in California is that the car wreck victim can go to court and the judge can say yes, you've been injured, you can set forth the sale of the duplex. All right, and that is not good asset protection. So we like Wyoming and Nevada where the court says, okay, you have a claim. But here's the remedy that we offer in our state, you are entitled to distributions that come through the LLC, you can't barge in and force the sale of the real estate, you have to wait for distributions to come and that's not a good use of the attorneys time. You know, monitoring if distributions are made there on a contingency fee, they get paid when they collect on the insurance monies. So their time is better spent going to the next case that has insurance. So that Wyoming LLC that offers the charging order remedy, not where they can barge in and force the sale of the real estate but where they have to wait and monitor distributions that go to you. It's a much better system for protection than choosing a weak state like California, Utah is a really weak state, New York is weak. So we have to understand which states are strong and weak and structure your plan accordingly.   Michael: Yeah, interesting and Garrett, talking through all this kind of makes me beg the question of in our Utah, Oregon, Wyoming, California LLC example where the Wyoming LLC owns the properties. There is a holding company rather, if the tenant in Oregon falls and Sue's sues the owner. I mean how far Is this go and where is the court date held, how does that all work?   Garrett: Well, if you, if the tenant has is renting from the Oregon LLC, that's or they're in contract with, so the claim would be tenant would sue the Oregon LLC, the lawsuit would take place in Oregon, right? That's where the property is. That's where the tenant fell. The action stays within the Oregon LLC, it doesn't give the tenant a right to go down to the Wyoming LLC, which is the parent, it doesn't give the tenant the right to go over to the Utah LLC. That's a separate business entity. So the key here is that if the tenant sues, you want to get notice of that lawsuit as soon as possible, right, you want to turn over this claim to your insurance company, so that they can assist in settling the case. Too many people, Michael have this idea that if they use a land trust, where no one will ever know who the owner is, and no one will ever serve you is just nonsense because you want to get notice of the lawsuit as soon as possible. In the Land Trust scenario, they say, well, geez, no one will ever find out who the owner is. Well, what happens is they go to court and they say, Look, we tried to sue the land trust, we couldn't find out who the owner was and the court says, okay, well published notice in the newspaper. So they published it little two point type in the newspaper that We're suing the Oregon LLC, or the Oregon Land Trust, rather and you don't get notice of that either. They go back to court and say we tried to serve them, we published notice in the newspaper, and no one ever showed up. The court says default judgment, meaning the tenant has won and then when they're trying to collect, you know, you find out that you've been sued, the insurance company can say, Well, look, you should have had notice of this lawsuit, we could have defended you, but we're not covering you now. You didn't give us the proper notice and so this whole idea of a land trust and privacy is just nonsense. You want to get notice of a lawsuit, so you can turn it over to your insurance company.   Michael: Yeah, that makes no sense. I guess it's kind of like the ostrich approach like if I stick my head in the ground, I don't see it. I don't hear about it. It's not a problem.   Garrett: Yeah, it is a problem.   Michael: Interesting, okay and Garrett talked to us about some of the different entity structures that are out there. Because there's the C Corp, the S Corp, the single member LLC, multi member LLC, like should we as real estate investors be thinking about utilizing some of these different corporate structures or is really the LLC that that kind of 45 of structures.   Garrett: Pretty much the LLC is the way to go, if you're going to hold real estate, you in some cases, the limited partnership can work. If you're syndicating real estate and you want to absolute control, the limited partnership can work, you're not going to hold title to real estate in a C Corp or an S Corp or any other kind of corporation, tax wise, it's just not the best way to go. So the LLC is pretty much I mean, 98% of our formations for real estate are LLCs. The other 2% would be LPS for syndication purposes, or, you know, for estate planning purposes where mom and dad with an LP, the general partners, which would be another LLC can own as little as 2% and have absolute control over the property. So mom and dad through their LLC have 2% ownership, the limited partnership has 98% ownership owned by the kids as limited partners, and the kids can't force mom and dad to sell the property. So there are cases where the limited partnership works but in the vast majority of cases, it's the LLC that is on title to the real estate.   Michael: Okay. Good to know, good to know. I had another question for it and it totally escaped my mind.   Garrett: Well, how about fail not fail the new book?   Michael: Yeah…   Garrett: You know, people have these promoters out there just say that most wrongheaded stuff about LLC. I mean, they say that you don't need an operating agreement- wrong. They say that you never have to issue stocks or timber membership interests certificates- wrong. So you you'd need to treat your LLC, like a corporation whereby you have to follow these formalities. You have to have the annual meeting, right and the idea that you never have to have a meeting is when you get into a court of law, you're in front of a judge or a jury. I want you to have a minute book with the minutes of every yearly meeting in it and these promoters say, well, you never have to have a meeting. I want you to walk into court and tell the jury, yeah, I ran this property for 12 years and never had a meeting. It just doesn't work.   Michael: It's not going to fly.   Garrett: It's not going to fly. So you know, the reality is, when you're in a courtroom, the reality is not when you're in office with a promoter telling you don't have to do anything to maintain your LLC. It's just not accurate. Yeah, so that's why I wrote the book, because there's so much misinformation out there about corporate formalities. So with a corporation, you need to follow the corporate formalities and with an LLC, you need to follow the corporate formalities because someone suing can pierce the corporate veil on a corporation, they can pierce the veil on an LLC. It's very, and the rules are not hard to follow. They're really easy. It's just if you don't follow them, they can go through the LLC and reach your personal assets.   Michael: Yeah no, that's such a great point and also, Garrett, I mean, to that point, if someone listening is thinking about reaching out to an attorney for help with forming for entities or restructuring entities, I mean, what are some questions they should be asking and things they should be looking for, with an attorney that they want to put on their team?   Garrett: Well, does the attorney invest in real estate? I mean, I think that's a good question to ask because, you know, I invest in real estate, I've been through the wars and so it just helps you appreciate what the client is going through to have done that yourself. You know, I think some attorneys specialize in personal injury. In contract cases. I mean, you want someone who really knows the ins and outs of LLCs, and appreciates that we have good states and weak states, and that you have to put the combination together to fully protect the client.   Michael: Yeah, that makes total sense and we're recording this, let's see September 2022, what is like the reasonable cost to form an LLC, and then what are any kind of maintenance fees associated with maintaining the LLC?   Garrett: Well, we charge a flat fee of $795, in that, and then the filing fees are on top of that. So Wyoming, for example, is $100. That 795 includes the registered agent for the first year. So you're not paying any extra for that. We also have a system whereby we keep all your documents and if you have lost your operating agreement, we give you a portal where you can go on and download your documents. So we kind of have this backup service for you and then so you pay the 795, the first year, and then the second year, it's already formed, so everything drops down, you only pay 125 to four, the registered agent. Now we give you a book that shows you how to do the minutes because you really should do the minutes every year and even though we give you the book with the forms in it, a lot of people don't do it. So we offer a service where for $150 a year, we'll make sure that your minutes are done and we want to keep you in good standing, we want you to have those annual meeting minutes in your file, just in case you don't want to be in a courtroom and say I never had a meeting.   Michael: Right, it's too late, then like you said, Garrett, this has been super informative and people want to reach out, continue the conversation, take advantage of your services, what's the best way for them to get in touch?   Garrett: Well, they can go to https://corporatedirect.com/schedule/ and set up a free 15 minute consultation with an incorporating specialist that you'll work with this person all the way through the process and they'll give you a quote for what our services entail and you know, just see if there's a fit, we're happy to talk to you and so we set up entities in all 50 states, maybe you're you set up your entity already, it's an LLC, you don't have an operating agreement, you haven't issued the membership certificates. Don't tell anyone but we can clean it up for you. We also offer a registered agent service in all 50 states. So if you've got one company here, one company there we can be your one company to serve as the registered agent in all 50 states. So we'd be happy to help your listeners Michael and you know, have them call corporate direct or go, go visit the website, corporatedirect.com and there's plenty of information and articles there and kind of tells you what we do.   Michael: Amazing. Well, Garrett, thank you so much for that. One final question before I let you out of here. We've said the term a couple times. But for anyone who maybe isn't familiar, can you bring them up to speed on what a Registered Agent is and what the importance is?   Garrett: Well, the Registered Agent is someone in the state where you set up the entity or where you're qualified to do business and the idea is that instead of having someone who's trying to sue you search all over the state of Texas for you, right? The Registered Agent is an address where someone suing, you can go and serve the registered agent with service of process. So it's just it's kind of an efficient way for the justice system to work. It's one place where you can serve an LLC or a corporation, and then they're responsible for forwarding that on to you and so you want to use a reputable registered agent service that knows the importance of a lawsuit, if we get a notice of a service, we're on the phone immediately to our client, because you've only got 30 days to get an attorney and answer that complaint. So you don't want a mom and pop that is going to go out of business or doesn't appreciate the consequences of being served with a lawsuit. So it's an important function and if you fail to pay the Registered Agent, they're going to refuse service a process and then they're, you know, the person suing us is going to go back to court and get, you know, authorization to publish notice in the newspaper, and again, you're not going to get noticed to this cert of the claim. So you want to have that registered agent on your team at all times.   Michael: Yeah, yeah, super great point and the Justice Department looking for efficiencies. That's not something I maybe I've ever heard before. So really exciting stuff.   Garrett: It's something that does exists, so…   Michael: Oh, Garrett, thank you. Again, this was super informative, and I definitely would love to have you back on once your book comes out in November.   Garrett: That sounds great. Thanks, Michael.   Michael: You got it, take care. We'll chat soon.   Garrett: All right.   Michael: All right, everyone, and that was our episode a big thank you to Garrett for coming on. Definitely take advantage of that. 15 minute free consult if you're interested. As always, if you liked the episode, feel free to leave us a rating or review. We'd love to hear from you all and we look forward to seeing on the next one. Happy investing…

Pete Neubig has been investing in real estate since 2001. He has owned and managed 39, 52, and 100-unit apartment complexes. He currently owns single-family homes and a 52-unit apartment complex. Pete created a property management company based on the motto "by investors for investors". His property management company has clients from Houston and all over the world. His technology-based systems allow owners to see everything that is happening at their property without having to be involved. Pete leverages virtual assistants to do more than he can do on his own. A real estate virtual assistant (VA) is a business admin who essentially acts as your right hand. A real estate VA can offer a variety of business services in-person or remotely. The right VA can cover diverse tasks like lead gen and database management, or even finance and marketing. Tune in for today's episode where Pete talks about how he uses virtual assistants and what real estate investors should be aware of when they want to take this step in building a team. Episode Link: https://www.vpmsolutions.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and joining me again today for a recurring visit is Pete Neubig and he is the founder of VPM solutions. He's gonna be talking to us today about virtual assistants and what we as investors should be aware of and how we can utilize them to our advantage. So let's get into it.   Pete Neubig what's going on man, you are back for more didn't have enough the first time we had.   Pete: Man, Michael, thank you so much for bringing me back on. I had we had such a blast. You know, last time just talking about my investor jury and then right at the end, we got to talking about my new venture and so I'm glad, thank you so much for having me back to talking about my new venture.   Michael: Of course, no, super, super excited. So for those who didn't catch the tail end of our conversation from your prior episode, give us a quick and dirty who you are, and what you're doing in real estate and what your company is all about.   Pete: Sure. Well, my name is Pete Neubig. I'm out of Houston, Texas, I started buying properties in 2001. I bought so many that I failed miserably at it that I ended up creating a property management firm in 2012, sold that firm in 2019 and in 2020, I started VPM solutions and we went live with our product in 2021 and VPM solutions is think of it as a dating service. It's like it's an online marketplace that connects people in the United States and Canada, like employers, you know, people in real estate, with contractors in mainly Philippines and Mexico, but we're in about 60 different countries where we have different contractors and so that's you know, so we're like, like dating service, like match.   Michael: I love it, I love it, I love it. Okay, so who are your clients? Kind of on the investor side and then who are your contractors on the contractor side, just random, random people?   Pete: Yeah, that's a great question. So we really try to stick with the real estate industry. So because I'm a property manager by trade, we started with property management and so we targeted property managers in the United States and Canada, right, because in property management, as most of your clients know, especially if they self-manage, is a process oriented and is a people oriented business, right? It there's a lot of things you have to do manually and so you can't automate as you can automate a lot. But there's still a lot that has to be done manually. So we started there. So that's our main clients, we're now breaking into the real estate and brokerage side of things because there's a lot of work, there's a lot of help, they need like transaction coordination, and just generating leads and appointment setting, so we're there, as well and on the contractor side, what we're looking we advertise we do quite a bit of advertising in different countries, just letting people know, hey, you can work from home, you can pretty much make a little bit more money than what you can get, you know, in your environment and we actually build some, it's called LMS. But it's video training, that you can literally take video training for free to learn more about right now is property management. But we're going to be built, we're going to be throwing some other videos out there always well, we'll be adding more video training out there and so are our contractors, somebody who's bilingual, someone who's educated, and somebody who's looking to make a little bit more than what they what they make in their own in their own country, and that they want to get into real estate, mainly property management or in the real estate industry.   Michael: Okay, interesting. So I am like, the whole concept of a VA is I understand it, but it's totally foreign to me, I've never utilized one but I know people who have so give all of our listeners who are listening, a little bit of background or insight like why should someone consider a VA, like what benefits do they bring?   Pete: Yeah, another great question, man. It's like, so, here's the main thing, right. What happens is, you get so much work, that you need to hire somebody, right? Whether it's whether you're self-managing, and like me and Steve, what my business partner, we were self-managing properties and next thing, you know, we had all these maintenance requests, we had all these leases that had been renewed and we had all these resident questions and we have lease marketing, and it gets daunting and all of a sudden your conical passive job becomes very, very active very quickly and so now you have to either A) hire somebody or B) you know, hire a property manager or hire somebody internally, right and so when you start looking at assistants in the United States, what happened was, especially after the pen EMIC with inflation. So what's happening is those low level low enjoyment tasks that that you don't want to do as the you know, as the investor or as the self-manager you want to give to somebody else? Well, if you, you try to hire that person United States, typically what happens is that job role doesn't pay what people want.   So for example, it might be like the job role might only pay 30,000 a year, right? That's a full time, whatever, but the person wants 50,000 a year and if you pay that person, what they wanted, you would make you would be negative cashflow, you will make any money. This happens quite a bit when you're managing your own properties and you're kind of building your portfolio and adding more properties to your portfolio. It's like all of a sudden, you're overwhelmed overworked, to hire somebody, now you're cash negative and so and then what happens is with these folks, what I found in my personal job, my personal company, Empire industries, when we when we started, we manage over 1000 units. When I hire people in the US, they have like a GED, or that you're getting very, like you're getting very low, you know, schooled, low education type people, and what happens is one, they're not appreciative of the opportunity get, and then two, they always want more money, and then three, they always bring in their outside challenges into your business, the car doesn't work, they take more time off, you know, they have family drama, that kind of comes into your business and so in the past, what happened was, you have to be stressed out to make money in property management. So I have I have, I have, I have all these doors are managing, I have all this work that needs to be done, I have to hire somebody. But as soon as I hire somebody, now I'm not profitable. So now I have to go get more properties to manage, so that I can bring the income up and now everybody's stressed again and the reason why everybody's stress is because I'm hiring people in the States, which, you know, demand a much higher hourly rate, if you will and so what I realized is, if I, if I hire if I outsourced, in a second or third world country, I can get educated people, bilingual educated people, that will work for a lot cheaper than somebody in the US and it's not, I'm just going to pay them less because they're in the Philippines or they're in Mexico, it's that in Mexico, $10 an hour goes a lot further than $10 an hour in Houston, or $10 an hour in Northern California. So the way I tell people look at is like this, if I took if I was doing the same job in Northern California, as I do in Houston, Texas, I'd get paid a lot more for that job in Northern California, because the cost of living, right, and then I'd get less money doing the same job in Houston, because of the cost of living and I probably make, I probably even get paid less if I was in like Arkansas, because of the cost of living. The dollar still travels just as far. Well just think of Mexico, as you know, as the next level down of cost of living. Just because you're paying somebody $10 an hour doesn't mean you're taking advantage of them. Matter of fact, $10 an hour in Mexico is a very good hourly wage. It's actually a very good wage and then in Philippines, to give you an idea, Michael $4 an hour is a good wage in the Philippines.   Michael: Wow.   Pete: And you think you save yourself? There's no way we're gonna take advantage these people? No, I mean, $4 an hour is a good wage in the Philippines. So it's, you know, as a criminal getting paid very well here in the States and so, the reason why people are outsourcing is because I can get bilingual and by the way, most of these people are either their high school educated or greater. They have some type of education after high school, whether it be associate's or a college degree. So you're getting educated people that that are bilingual, for a fraction of the costs in the United States that you are in the United States and because these low level jobs can, you can only pay so much. Now you can actually pay what the job role requires, which means now you can make more money in the company, right and then I'll turn this around on how we actually helped our US people, because I had people in Empire that were that were making some money. The ones I hired the virtual team members like oh, Pete, you got rid of jobs. Actually, no, they got rid of themselves because I couldn't afford them anymore. They wouldn't work at the level I needed them for the company make money. But once I hired these other virtual team members in the company started making money, I was able to actually pay my US people more, I was actually able to get better benefits for my US people, right because these are contract workers in the Philippines and Mexico and you know, Costa Rica, wherever you're going to hire them from and so they're contract workers, so they work they get paid, that's great. But your team members in the US once a company starts making more money, you can treat your kids because their employees right so you can treat them better stock options or 401k, whatever it was. So for us, it was bonuses, it was higher salary and we started doing we started we started looking at it we start doing health insurance. So that's how we were able to benefit out team. So the next question is, well, what can a VA do that somebody in the US?   Michael: Yeah, that's exactly where I was gonna go with it.   Pete: What I'll tell people is the VA can do anything that the person in us can do except for two things. One, obviously, if they need to be physically at the property, right, right, they can't they can't do that and then we'll do if they need a license, if they need a license to do something, they can't do license act, right. So give you an example, though. We actually had one of our virtual team members do all of our lease renewals? Well, you say, well, P That's a licensee Act and the you know, you need to be licensed to do lease renewals and the answer is actually, you don't need to be licensed to just create the lease renewal, you need to be licensed to negotiate the lease renewal. So what we would do is 90% of our lease renewals were not negotiated, most people just sign the lease renewal, right, most of our owner clients, or our residents would just sign the lease renewal and the ones that would have questions, that would get escalated to our property manager and so what we did just that one, just that one job role, what we did is we literally took 90% of the work away from the property manager gave it to give it to the virtual team member and then a product manager took the escalations. Now, I'm a big proponent of it, the way you can save your company, so to speak, a lot of a lot of stress and noise is can you automate through policy and can you automate through, you know, computer technology, in this case, what we did in this, you have to look at it but in Houston, we know that the average rate, the average renewal rate would go up about 2% per year over time. Now, some years, it would go up more in other years, it wouldn't go up at all, it actually would go down. But over time we…   Michael: need in terms of like the rent, like how much rent, you're getting rent increase the renewal… Yeah, okay.   Pete: So we did is we just create a policy that our rent increases every 2% every year, and we put that in the lease. So there was no negotiating, right on the residence side...   Michael: It wasn't up for discussion…   Pete: Right, so but if people say, hey, I'm gonna leave unless we do XY and Z, well, that would get escalated but we were able to reduce the escalations because of the part because of the policy we were able to automate and then we on the on the owner side, we would send something 90 days out, hey, do you want to renew your release or not, right like, we didn't ask them what the amount was, we because we built the 2% and so we stopped doing CMAs. So it is a lot of grunt work that we can stop doing, which then allows your virtual team ever to actually do a lot more, we have one person for 1000, doors, doing lease renewals, and, and reviewing inspections.   Michael: one person for all 1000 doors…?   Pete: For lease renewals and inspections. Yeah…   Michael: Holy smokes.   Pete: But then I had one person that did all collections. So I'll kind of go through the whole thing, right. So like, you can have a virtual team member, their whole job literally could be making sure that your collections are being done, your notices are getting sent out and that they can if you have if you have a third party company like we did that handle the evictions, they can actually be the gatekeeper with that third with that third party company and do all that stuff. My property managers did nothing with evictions   Michael: What?   Pete: Yeah, yeah. So we again, we had policies in place, right. So if, if the resident owed less than 50%, we, we wouldn't file evictions, if they owed, you know, 50% or more, we'd file the eviction we like so we just put on a different policy. You teach the VA, what the policies are, and then they just follow the process and what's cool is they actually know the process better than you and they, hey, can I do this or this or this instead, and they tweak the process and you're like, yeah, that sounds so much better and then they own the process. So if you're like an investor listening to this, and you don't like magic companies, for whatever reason, by the way, obviously, I own a magic company, I highly recommend. But let's just say, let's just say that you don't like me had a bad experience, and you're gun shy. But what you're finding is your leases aren't being renewed, right? You're your maintenance is overtime, the phone rings you like, I don't want to deal with this. You hate when somebody moves out, because you want to deal with the turn, your books are a mess, because you don't have time to do the books because you're, you know, a high net worth individual working 70-80 hours a week as it is, then a VA could do all of that stuff for you. They can do everything, you got to train them, of course. So just step back, take two steps forward. But they can do your property accounting, they could be your QuickBooks, they could do your business accounting, they could do your maintenance coordination, they could do your turn coordination, they can do your collections or evictions. So they can do your utility turn on and turn offs, like so all that stuff that you like, oh my god, they could do your onboarding for you. So I was going to get a new property you got to enter all that stuff in the in the computer system. They can do all of that stuff for you.   Michael: If anyone's watching the video here, you see that my jaw is like on the floor. So for anyone listening I just want wanted to bring you up to speed. But okay, so peace on, let me just understand. So they could do, like they could do all of this stuff and literally anything I mean sky's the limit is and with regard to things that they can do other than the two things you mentioned the license act, and then anything that requires them to physically be there. But when it comes to accounting, I mean, one thing that I'm thinking about is, there's very sensitive information, there's banking information, there's pat, you know, credit card information, as part of the accounting process that I do personally. So am I going to need to divulge personal information and sensitive information to the VA or like, how does that work?   Pete: Yeah, so, you know, in most in most instances, like in your QuickBooks, and in any property management software, they have different levels of permissions and even in your banking, like I bank with Chase, and Chase has different levels of permissions. So I can give you all the rights to, to my, my, my VA team, right, which I did, I gave them all the rights, so they can see everything, they can reconcile the bank statements, they can, they can look at everything, they just couldn't make any payments, right, they couldn't make any transactions. So that's, that's what we did. Now, we also had two property accountants that they did probably accounts for our third party folks and so they had access to, you know, sensitive information. So what we did is we did a bet we did a thorough background screening, there's a third party company out there that can do background screening, and they came up, you know, pretty, they came out really good. So we went forward, and then we just had our cyber liability insurance policy just to make sure go again, because we're a property manager firm with over 1000 units that we manage. So we wanted to make sure that we you know, we took care of ourselves. But if you're an individual with a handful of properties, or a small property manager, then you can do all of this through the permissions that your banking and that your that your software allows you to do.   Michael: Okay and so as I'm hearing you, you talk about as a man, I'm getting really excited, I'm trying my the wheels are kind of turning on all of the things that I might be able to outsource. What are some things that you should definitely not have a VA do? I mean, have you seen some things go really sideways or go really south because someone said, oh, well, Pete said, they can only can't do these two things. So I'm gonna give my VA everything else. I mean, what should I be thinking about in terms of limitations?   Pete: Yeah, so I gotta be honest, you, Michael I, at first, I always thought like, okay, I'm just gonna give him a list of things to do. I'm going to scan it to him and we're going to just do this stuff off the list, like a checklist thing. I quickly realized he could do much more. Then I said, hey, I own the process and they own the process and they can and now I do believe that I actually had VA supervise people in the States. So I had somebody in Mexico supervising people in the United States. So I believe they can get to that that supervisory level, what I will say is, they can do everything. So I'm not saying they can't do anything. But the one thing is you need to put in place some escalation paths…   Michael: What do you mean?   Pete: So even though they own so let's say for example, they own maintenance, right? Well, they're going to be able to handle 99 out of 10 maintenance calls, no problem. But then there's that mold call that comes in, right where the resident says they have mold, well, right there, that should be a buzzword that gets escalated to the property manager because they don't like they don't have mold in other areas of the country of the world that were that worried about mold as much as much as we do in the US. So if there's like an emergency, that could that can cause you know, a resident can get sick, right, or anything like that we're property code. So each, each state has their own little different property code, right. So like, for example, in Texas, believe it or not heat, if they have no heat, that's, that's a, that's an emergency. But if they have if they don't have air non-emergency, well, we treat no AC as an emergency in our in our company we did and so there was like three or four things that those got escalated a property manager. Now the property manager, at that point would say, I'm going to take it from here, or here's what you should do. But then the property manager is kind of co-managing that ticket. So I believe that in any business that you run, whether you own a property management firm, or you're a you know, an individual landlord that manages your 10 units, there's got to be certain. I call them taps on the shoulder, there's got to be certain tabs that you realize this is a potential problem, right? So let me deal with it or I call them taps two by fours and then getting run over by a man, right? On over by a Mack truck means that you're in a lawsuit, right? The two by four means somebody moved out because you didn't handle a maintenance request in a certain way and the tap is the maintenance request is 10 days, 15 days old, whatever it is, and no one's looking at it. Right, so how can you run your business through tabs? Well, if you have these vas, the great thing is you're not doing the work anymore, right? You're not creating the lease renewal you're not you know, calling, you know roto rooter to get out to the property. You're not doing that but what you have to do is you have to take a step above, right so you have to instead of being at the ground level, you got to be 2000 feet up, right, not 15 30,000 feet up, but at least 2000 feet up and as report you have to review and so if you see a property that's vacant for over so many days, that's a tap, if you see a maintenance request that's open for so many days, or major quests that hasn't been responded to, in so many days, these are tabs. So if you can identify what the potential problems are, your job now becomes manager, right? So I'm not the doer anymore. So you're getting rid of the task or hat, you put it on your manager hat. So if you hire a VA for him to do everything, and then you don't put your manager hat on, I can tell you, you're gonna, you're gonna get in trouble. Especially if you, especially if you do terrible training, which most people do.   Michael: That was gonna be like my next question and so like, for everyone listening, what what's the expectation around training? How long is it before a VA is really up and running and so as people are thinking about, okay, forecasting, I don't need a VA today, but maybe in 369 12 months, I maybe need one. So what's the runway lead up time to get someone effective?   Pete: You're gonna hit the answer, but it depends.   Michael: That's my favorite answer.   Pete: It depends, okay, so the more like, even if I'm a smaller firm, and only got 20 properties, I'm managing, I'm doing everything, you have to teach that VA, every piece of managing that property, right, from onboarding, to, you know, to utilities, to lease ups to move into maintenance, to collections to eviction, to move out, and you have to teach them everything… Well, just because only one move out happens a month, it doesn't make anything any easier, you have to learn, they have to learn how to do that they have to understand basically, property management. So that's going to take a lot longer than say, like, with me, I had one person like all they do is collections. Well, I can teach collections in less than two weeks. Right, especially if you have processes in place. So the big thing depends. So if I wanted to hire somebody for collections, it'd be about two weeks. But if I want to hire someone to do maintenance, the more I call them, if they analysis, the more decision points there are in the job. In the process, the longer the training, right maintenance, so many things go could happen with lease renewals, it's like there's three things, like you teach them the three things, and then they know, okay, I do these three, if this happens, I do this and if this happens, property manager, right. So to my least your own person, it really was like two weeks of training. My maintenance people, it was about two months to three months of training.   Michael: Wow. Okay, so yeah, you weren't kidding. When you said it depends.   Pete: It depends, yeah.   Michael: And then I guess, like, the next question that comes to mind is, what is the turnover look like if I'm an investor, and I'm investing two months, three months into a person really getting them up to speed, and then doesn't work out or they don't like it or they move on, like, what have you seen in terms of turnover?   Pete: That's a great question as well. So what I saw at Empire, I had 23, virtual team members, 23 different roles that that my virtual team members handled, and I had them for about five years, you know, most of the jobs some jobs were newer, but I had people there for five years and in those five years, I had to get rid of I let go of two and one person left. So I had three people, my churn rate was much lower on the VA side of things than they were on the US side of things…   Michael: I was gonna ask… in the US:::   Pete: Now, I'll tell you why my churn rate was low, though, okay, because I treated these people like team members, not like virtual assistants, right? So the old mentality of a virtual assistant is, I'm just going to throw you here's the work, you go do the work, I'm going to make sure it's done and like, that's it right. My guys that we have day out there on our website, they had videos, they were they were part of all of our company meetings, they had, they had ownership of each of their job roles so that they can, they can modify and do things they had, they had more control over certain things. We went down, I went down there to go visit them, because most of my people were one city in Mexico, so I paid them PTO like I gave them like if they even though there were contractors, if they needed a day off Mike just put the time in, that's okay, I'm gonna give you a day. So we the more you treat people like we can we put them on a bonus structure. So if their key performance indicator was met, they got a pat on the back, but if they exceeded it, they got they got 50 bucks, or something small, but $50 to somebody in California that Michael they're going to take the $50 thing it's critical and throw in your face like this isn't even a gallon of gas. You know, and but in you know, Mexico you give somebody 50 bucks that's like a half a day's work, like so again, you so you can make people happier with a lot less with a lot less money, right? because sometimes it's like, oh, it's not the thought. It's like, wow, man, you only gave me $20 like that's like almost like an insult you know, in the US where it's not a over there. So if you treat the people, right, so what does that mean? It's not just like paying them and treating them, right, make it part of the team, but also manage them correctly. A lot of people think like, I'm just gonna hire this VA, but they have, like, they hire the VA and then you're, you're not ready for the VA, like, you hire them because you like you got excited, you heard this podcast, I'm gonna hire VA, right and then it's like, okay, you don't have a good job description, you're not really sure what they should do, you don't know how to manage if they're doing a good job or not and so you hire somebody, and they don't really know what to do, and then you don't know what to do and then it doesn't work out, right. So I recommend anybody do is make sure like you, you create a job description first. So you can go about it two ways:   One is I want them to take this, this process from end to end or two is like I want to be an executive assistant and I want to do the things that I hate doing. So identify the low level low enjoyment tasks that you don't like, create a job description from that, post it out there, say this is what I'm looking for or say, man, I really want to give somebody collections evictions, you know, like that process? So it depends if you're if you're smaller than you may say, hey, I want them to be a property manager and give me all the things I have to do just understand it's a lot more training. So once you have the once you have the job description, so that you know what they should do they know what they should do. The next thing is what are the key indicators that you know they're doing a good job and the rule of thumb is 123 key indicators they call key performance indicators and every job role in the organization should have at least one if somebody has 14, that's way too many, I know because I live this I had my property manager API's and it's not it was way, way too much. So like, for example, your executive assistant. If that's where they are, you know, maybe they have to answer calls, well, maybe a KPI is answering 94% plus call rate, right or response to any email is in less than one day. Now, you the KPIs, you can pull them out of a hat, but they have you have to have a report that can show that, that they can put the KPI and so they have to get the data, the data has to be available, right? So if I say hey, I want a 90% call rate, but my call, my call software doesn't have call answer rate, I'm not gonna be able to get that number. Does that make sense?   Michael: It makes total sense.   Pete: And so you have to be able to report on it. So just because you want a KPI, but there's no way to report on it, then you have to figure out a way to report it and get that KPI. If not, you have to move to a different KPI. So if I have the job description set up, they know what to do that we have the key indicators, so they know what the scorecard is if they're doing a good job or not, and so to you, because so many of you will say, yeah, I feel like that he's not doing a good job. What the hell is that me show you?   Michael: How do you know?   Pete: Especially if they're, you know, 20,000 miles away for you in the Philippines? Like, yeah, like, so how do you know the key indicators and then if you have good training, and you spend the time with them, and then you should once you have the train, So training is like every day, right? You do every day for two weeks, maybe three weeks, you have training every day, hour a day video so they can rewatch it and they can build, they build the process manual, not us. So they build a process manual. Why is that important because if I had 100 page process manual for maintenance, I did Michael I swear at Empire had 110 page process manual…   Michael: We talk in single space, or double space?   Pete: Single space, I think. Like legit, it was legit. Nobody read it. Nobody knew how to navigate it and nobody learned once I had them build their own manuals, guess what happened, they started retaining stuff and they knew how to navigate their manual. So don't be don't be upset if they like let them create their own manual so they can navigate it. So now you know what they what you want them to do. They know what they know what they're supposed to do. You can you can you can scorecard it with the metrics, you train them, and now you manage them and the way you do that is you have a weekly meeting. Now if you're smaller, you're going to have you're going to meet with them every day, right my IV pm or smaller firm was five of us, I mean, when my VAs every day, because we're just we're so small, we have to talk about what to talk every day when I was at Empire because I have 40 people working for me. I met them once a week and I would meet my maintenance team, separate from my accounting team separate from my resident services teams and for my own services team. But I would go over with them each week and we'd go over, we'd say what's a feel good? Tell me something that's good, right because as humans, we have this habit of going below the line instead of like above the line. So let's start off the meeting really good. Let's go over to metrics, right individual and then the group metrics, the department metrics, then let's go over tasks from last week did they get done? Then let's go over challenges and each one of those a five minutes and challenges like 20 minutes, 25 minutes. You don't you can't solve all them all the time. But you can solve you know, a couple of them and if you could solve a couple of challenges each week, you're doing really, really good and then and then one thing I added was what's your stress level from zero to 10. This was interesting because sometimes they'd be at a 10 and it was because somebody was on vacation or we just got 50 new houses that week, it's worth, you know, 10 yeah, okay. But when it's 10 all the time, and that's the standard, that means you haven't to do too much and if somebody's attend all the time, it means they're ready to punch out. Like anybody in your team, you should literally take the pulse of your team on a weekly or monthly basis, right and but here's sometimes the 10 was because they had something going on personally and then I'd get everybody off the off the phone, and then I would talk to them personally and that gives you an incredible opportunity to create relationships with people who you never met, that working with you that are, you know, 5-10 1000 miles away and that is why they didn't leave me because they knew I cared, right, it wasn't a bonus. It was it was I cared, I want them to grow the company, I want them to, you know, to, to feel like they're wanted, but I also cared about their personal lives, I really did and so if somebody had an issue, you know, Hey, man, you know, we talk about so you get to learn a lot about people when you do that. But I did that each week and if a KPI was read two weeks in a row, and went to the issues list, you know, things and so you, if you have a structure with your business, you're the person you hire, the chances at whether that's in the US, like sitting next to you in the US, that's, you know, a few states away, that's working virtually, or a virtual team member outside the borders of the US. If you have structure, the chances of you hiring somebody successfully becomes great becomes very, you know, most cause much greater. But if you don't have that structure, the chances of hiring anybody is not going to be it's not going to be very, very, very good. It's going to be much lower rate of success.   Michael: Yeah. That makes a ton of sense. Pete, have you ever had a VA hire and train another like another VA?   Pete: Oh, yeah, of course. That's the whole job, right? The whole goal, right? So monkey see monkey do, right? So when I forget Empire, the first round of vas, you're looking at the trainer. I was the guy I trained there. Okay but my maintenance team, once somebody would leave, and somebody would get hired, or they would hire a new person, I was out at a training business.   Michael: I love it.   Pete: They train them. So once you train that first batch, and by the way, here, Michael, here's the secret to at Empire, I was gonna hire two virtual team members. That was that's what was in the budget. I interviewed four people hired all four of them and here's the reason why one figure one person is going to wash out right? Can you figure that and then the second thing is, it's, I was hiring two to three people for one person United States.   Michael: Okay.   Pete: All right. So think about that hourly rate, I would get rid of one person us and I'd hire three people in Mexico and so do you think more stuff gets done with three people?   Michael: I would than one probably guessed.   Pete: So. Yeah. So then I'm like, okay, I'm gonna hire four people. So I was over budget, guess what happened within 30 days, I'm able to grow my business because more tasks are being done and so all of a sudden, it's like, yeah, and if one but I hired four, none of them washed out, I was one of them wasn't a good fit, they were a good fit for the organization, not a good fit for the role. So we moved on to a different role. So another important thing is when you hire and this is probably I mean, your team, your, your listeners probably know this. But every business has core values, that can be a sheet on the wall that you never look at, and they're not going to be any, they're not going to be worth anything for you. But you should have core values that you hire, fire, promote and demote on, and give raises to like, that's your core value. So who are the people you want on the bus with you, right and if you are, if you are an individual landlord, that you know has a bunch of house and you're looking to hire that first person. Well, that's a business, right Michael, would you teach that like, as soon as you're hired, as soon as you buy that first house, you are business…   Michael: Yeah, you are business…   Pete: You are business. So you need to have core values and if you don't, as a business, you should have them as an individual. So who are the people I called the fog. So who do people want to foxhole with you? That gets you the right person in the organization. But that doesn't mean they're the right person in the right seat, right because the right see, for example, like, if somebody's super outgoing, you want them in sales, if they're super outgoing, but not detail. You don't want them in accounting, right? I might have the right person. But if I put that outgoing person, and that's shipping and sales and accounting, he's going to do a terrible job. So I found the people through my core values, I then put them through a personality profile test. I like disk. It's super simple. I don't know what you would use. Do you have one that you use?   Michael: No, not personally, but I'm definitely going to be adopting one as I'm gonna get for virtual assistant, yeah…   Pete: There's, there's a lot of them out there. Disk is super easy. I know it very well. It's easy to learn. So I use disk. So that tells me I get the right person in the organization. I put them in the right seat and through my job description and my key performance indicators. I know they're going in the right direction. So if you do all of that, and then you do the training and then you do the managing the chances of you having somebody washed out or somebody leave, it goes down dramatically. It's not 100%. It's never 100.   Michel: Like anything… Yeah, that makes a ton of sense to me, Pete this has been, this has been super eye opening, really exciting, exciting stuff for people that want to learn more want to take advantage of the cam solutions, like how do they get in touch with you? Where should they be going?   Pete: Yeah, so you can go to https://www.vpmsolutions.com/ , and create a free profile. So that's the other thing, Michael, everything on the company side is free. So creating a profile posting a job, searching for people, finding them is all free. When you thought when you hire somebody, they we charge the virtual team member a percentage, and that's how we make our money. So, it's free to the company. So all you're paying is the hourly rate, and a small processing fee that we pass on from the stripes of the world onto the onto the dude the company, but that's what it should go and if you want to email me directly, it's pete@vpmolutions.com and we have over 14,000 virtual team members in 60 countries on our on our site right now looking for work and we have property management video training that your listeners can actually take for free as well. So we have like, I think we have like 12 courses, it's over about nine hours of content it goes from, it's basically the lifecycle of property management. So if you are a, you know, a self-manager, and you want to learn more about how I can manage my property a little bit more efficiently, I highly recommend taking those courses and then when you post the job, you can actually ask your VA, these are the recommended courses that we recommend that you take and then people would actually take those courses on their time and they're done. So you're getting a little bit of people trained before you actually are paying them.   Michael: That's really slick and it probably helps weed out a little bit more of who's serious versus who's not is who's gonna put in the time in advance.   Pete: Absolutely, 100%...   Michael: Oh, man, I love it. Pete This has been so great. Thank you for coming on with us a second time. Definitely, we'll be in touch man.   Pete: Yeah, Michael, thank you so much for having me. Really appreciate it.   Michael: You got it, take care. All right, everyone. That was our episode a big thank you to Pete for coming on. Super exciting. If you couldn't tell it was pretty giddy throughout the episode. It's something that I'm going to be very much looking into for my personal business. As always, if you enjoyed the episode, we love hearing from you reviews, comments, feedback questions are always welcome in the comment section, and we look forward to seeing on the next one. Happy investing…

Derek Dombeck, a Real Estate Expert hosts and runs the WiscoREIA based out of Wausau, WI. There he coaches and teaches other real estate investors his keys to success. He is currently hosting 3 national Mastermind groups called the R.E. Circle of Trust and puts on an Advanced training and Networking event each winter called The Generations of Wealth Voyage. In the last podcast episode, Derek talked about creative financing solutions for real estate investors. In today's episode he will be tackling the other side of the coin and will share some insights about private capital, lending and how that plays into real estate investing. Episode Link: https://gowvoyage.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today with me, I have Derek Dombeck again on the podcast and for those of you who missed his first episode, I highly recommend you going back and giving that a listen. But Derek is the owner of best REIA funding a private lender, he's also an investor. So today, we're gonna be talking about private lending, and also what we need to know as investors and how to utilize it. So let's get into it.   Derek, what's going on, man? Good to see you. Thanks for coming back on the pod.   Derek: Yeah, absolutely. Glad to be back.   Michael: I'm super excited to have you on. So last time, we talked about creative financing solutions for real estate investors. Now we're going to be tackling kind of the other side of the coin and so talk to us about private capital and lending and how that plays into real estate investing.   Derek: Well, I like to talk to our clients that are coming to us for loans in more along the lines of what how would they want to structure if they were the lender? So it makes more sense to them why are we asking for what we're asking for? We design our company, primarily because we were borrowers ourselves, and we want to do it in a way that would be probed by our borrower, but still safe for our investors. So a couple examples, we don't collect monthly payments, we don't collect interest payments, we let it accrue. Very, very few lenders do that. The methodology is that when you're when you're the lender, and a payment is missed or late, that gives you an indication of something could be going wrong with the loan and that's true. But we don't want to have to collect payments every month on 175 outstanding loans, which is typically what we're carrying at any given point in time. It's another staff member that we would have to have basically just to do that do collections. So as a borrower when I was borrowing the money, that's what I would have wanted, right? As a lender, it's different. So a lot of times I'm trying to have these conversations with our borrowers, as I mentioned, in a way that shows them that we're their ally, we're not just somebody sitting across the big fancy desk with a, you know, a suit and tie on looking down their noses at them. We want them to really realize that we are their business partner, in one way, shape, or form. Most interactions with borrowers if they've never met me before, it just starts out with a brief overview of our loan program and I often tell them, well, if you were going to be the lender, if it was your money, what would you want to see happen, especially if they're, you know, if your listeners are out there trying to apply for loans. There's three things two to three things that I think are super important. First one is whether they're going to a bank, a hard money lender, or a private lender, or their great uncle, have all of your documentation ready to go. At the I mean, at the drop of the phone, right? Like we get off the phone, bam, you can submit it. What drives every lender crazy is when they send stuff in piecemeal. You know, and we always have to ask for it and then we have to remind them and follow up that makes you look so foolish in the eyes of a lender. Okay, another thing for us, we don't require appraisals, but most people do. So, and we don't require appraisals in our loans, because I don't trust appraisers. They have no skin in the game, we have way more experience. But we're in a niche lending market of lending on rehabs and some appraisers may never have picked up a hammer in their life. How do they know what the after repair value is going to be based off of a scope of work? You know, if I get a scope of work that's submitted on an application and they claim they're gonna put a brand new kitchen in for $2,000 I'm gonna call bull ** because I know what it cost to put in a low end, middle end or high end kitchen. But again, as a borrower trying to help your listeners in that regard. If you're going to an appraiser or you're coming to us and we don't require appraisals, but having your data somewhere you had to come up with your numbers, right? When you made your offer to buy the property, I want to see, an appraiser may not want to because some of them don't necessarily like to help. But I want to see, because, you know, some of them are just arrogant. Let's be honest at it.   Michael: It's the ego play, yeah…   Derek: It's an ego play. But for me, it's not for me, it's required. I want to see those comps, or CMA, or a BPO, from a real estate broker, something to show me how did you come up with your valuations? If it's going to be a rental property, where's your cash flow analysis, you wouldn't believe it how many times we get applications in and they want to rent borrow money from our short term to fix the property, get a tenant in there and then refinance. But yet they have not talked to any long term lenders, typically banks to even know what their refinance terms would be or if they'd be able to get refinanced. They haven't done a cash flow analysis. Again, have everything ready for your lender as much as possible, right? Gosh, what else as a borrower, you know, coming in with a backup plan, a plan B, is so crucial. Our job as the lender is to expect you to fail and every question we ask is, is asked, because we want to know, if something goes wrong? Can we either take the property back or lien against the, you know, the borrower to get our money back? I mean, that's what it's all about. We are asset based lenders, banks are gonna look at the asset and their income, every lender is a little different.   But the bottom line is, can we protect our investors' money? Can we protect our money and if that borrower walked out of closing, sign the papers and got hit by a bus and died? Can we recoup our money, right? Borrowers don't think that way. Borrowers think sun shines, and sunshine and unicorns, right. Nothing's ever gonna go wrong, the project is going to be on time on budget, we're gonna get under budget. You know, it's total bul****. But that's, that's our jobs to explain that to them in a way that's, you know, we're not trying to drive them from our business, we want to do business with everybody, that's got to legit good deal. But they've also got to be realistic and the number one, two spots that most borrowers come in sunshine and unicorns, their budget is too low on their renovations, and their comps are too high. So they want to use the top comps and we don't, why don't we because the markets shift. Now, if they came in on evaluation, I'm going to use Wisconsin numbers, you know, because that's what I'm used to, if they come in with an after repair value of $200,000 and I look at the comps that they submitted to me and there was one house that sold for 200,000. But the majority of them sold for 175. Which one do you think is the lender want to use?   Michael: Yeah, the 175.   Derek: Right, so we're going to lend based on 175. Now, that means they're going to have to put some of their own or more of their own money into the deal. If they sell for 200 bonus for them. That's great, I hope they can. But as the lender, we can't live on hopes and dreams, we got to live on reality and what happens most of the time is they're trying to come in with as little money out of their pocket as possible by using the highest comps, the lender takes on all the risk, which is why we use the middle of the road comps and I don't go to the very low end either. But we're using the middle and again, if they have to put in 10 20,000 extra dollars, and they're confident in their numbers, they shouldn't have a problem putting in 10 to 20,000 extra because according to them, it's going to sell for 200 they should get their money back and then some but when you start changing that or having that conversation with them. Boy, it's amazing when they have to use their own money, how they start to sing a little bit different tune.   Michael: Yeah. Interesting. So it's almost like you have to protect them from themselves.   Derek: Absolutely and we will tell them that I mean, there's plenty of times where we have just flat out told people you should walk away from this deal. Like we want to do business with you in the future. We want to give you a loan, but you are setting yourself up for failure on this deal and most lenders wouldn't typically do that most lenders will just say, we're only comfortable lending up to x, go ahead and do the deal and then when they fail, the lender will take the property back and the lender is in good position depending on loan to value. But we don't, I don't really like that model. I mean, it's certainly not our model and at the end of the day, if I take care of that investor, and I save them from themselves this time, hopefully when they come back around, they're more educated, and they bring us a really great loan, they've got a really great project. That's what it's supposed to be all about.   Michael: Yeah, yeah. Well, let's talk about that for a minute, Derek. So it sounds like the things that you asked for, from your borrowers. It's really an opportunity for them to showcase their experience level that they've taught, crossed, the T's dotted the eyes and really thought about it and in very proactive in that, what if someone's just getting started? I mean, how much hand holding should someone expect from their lender or can they expect from their lender to help them get to a point where they're feeling confident or do you tell people hey, you know, go kind of skin, your knees somewhere else, and then come back to us when you're a little bit more polished?   Derek: So the answer is, it depends. There's, most lenders out there do not want to deal with brand new people. I mean, it's just a reality of life. We are different in that regard, too because we may say to the applicant, alright, we want you to partner with somebody, and that person has to have, you know, we'd like to see at least three deals worth of experience. Now, I don't care if they get mentored for free, or if they split the deal 50-50. I don't care what that partnership looks like. But we would like to see somebody with experience that is backing this deal and if they can't do that, or they don't want to do that, then we typically would say sorry, but we can't lend on this deal right now and if they don't know anyone else, which happens, we have an extensive network throughout the state. So we can pretty much in any market, we can line them up with somebody that would be willing to, to mentor them and get some feedback from them. So but I don't think there's a whole lot of lenders that would do that much hand holding… Yeah, you know.   Michael: And that makes sense to walk us through because you're a private money lender. So you are kind of this middle person where you take investor money, and then lend it out to other investors that are that buying real estate. So when the Fed talks about interest rate hikes are this sort of thing? Like, how do you set your pricing and what should listeners be expecting if they're going to private lenders in terms of rates, right now, we're recording this almost near early September and August 2022. What are you seeing an image of you'll be expecting.   Derek: So it's very volatile, depending on where you are in the country, and how much competition there is, we certainly have national, hard money lenders that are that are, you know, advertising, much cheaper rates than we offer. But they sell off their loans. Almost many before the ink was even dry. They're white labeling almost everything, which means that there's a hedge fund or another note buyer, that is fronting the cash to close the loan and at the closing table, that loan gets transferred and you know, the person that you signed the paperwork with may still be the servicer of the loan. So you may not even realize it's been sold off. But most of the national lending companies, that's what they do. The challenge with that is, when the borrower gets to any kind of a challenge, we'll call it with their loan, maybe they need an extension, or something's just going terribly bad. Those lenders are not going to be willing to work with them because they don't own the loan anymore. It's gone. It's in some hedge fund on Wall Street, and it's just a number. It's just a loan number, they don't care. They just okay, you failed, get out, we'll take your property. As private lenders, we don't currently we don't sell off any of our loans.   We are 100% privately backed, so I don't have any institutional money at all. That has their thumb on us telling us what we can and can't do and our investors are all individual people there, some are mom and pop. Some are, you know, a little bit higher net worth individuals, but we can have conversations with them. So for example, let's just assume that the markets crashed and 20% of our portfolio defaulted and we had to go take these properties back well, if the market isn't really viable, viable option to sell them off and be made whole, we can go to our investors and we've done this with all of our investors. Prior to them even getting started with us, we have this conversation, but we can go to them say, okay, you know, we still myself, my business partner still run a full time real estate acquisition company, we have rentals, we have everything in place. So we're gonna have to take these, you know, whatever it is 20, 30, 40 properties, and we're going to lease them out and we're going to just collect rents until the market comes back and our investors are, that's not their first choice, but they're okay with it, because they know it's a Plan B, I mentioned that before, you know, the, the borrower's don't want to come in with a plan B or Plan C, we've got that in place with all of our investors upfront and, you know, we pay our investors 9% currently, maybe they would have to agree to go down to 7% or 8%, it would have to look at the cash flow numbers. But that's still better than the alternative of losing money.   Michael: At zero, yeah, zero or negative.   Derek: As far as rates are concerned with us, what we pay our investors dictates what we charge and at 9%, we've got a three to four point spread on interest rate. So we charge 12%, throughout the bulk of the state of Wisconsin, and we charge 13%, currently in Milwaukee and it's really just to be 100% honest with you and your listeners, Milwaukee, we could probably charge more, because our competition is charging 15%. So we don't really have any intentions of increasing our rates, we don't have a lot of junk fees, that's another thing your listeners really should consider looking at when we're looking at any lender, the interest rates might be much, much better, but their junk fees, I know of a lender within my state, who charged something like $3,500 to get paid off. In order for you to pay the loan off, you had to pay a payoff fee, which is asinine. We see a lot of lenders that are charging several $100 to do a construction draw, or a loan or an escrow draw for your construction proceeds, that's your money as the borrower and you now have to pay three, four or $500 to get your money out of escrow. It's crazy, you know…   Michael: I've seen that.   Derek: All these fees are they're nuts. We do charge an extension fee if they go past our six month term and it's equal equals to what if we weren't able to redeploy that money and another 12% in three origination points. So for an extension fee, for us, it's a point per month, up to three more months. Why because we want that money back to redeploy it. So we could charge three more points, right? So but it's not some 10 points in some crazy, crazy astronomical numbers, it's really just trying to get our same level return on our money, whether it's extended or redeployed to a new loan.   Michael: Okay and people listening might be getting excited about using private money, because it sounds like so much more flexible, and just investor friendly. Other people might be a little bit scared hearing this and so I'm wondering if you can talk to if those people are listening, can they get involved on the investor side of things where they're funding other people's deals, and just clipping that 9% coupon or whatever the return is?   Derek: Yeah, absolutely. I mean, if whether it's with me or with somebody else, I'm more than happy to talk to anybody about it and if you invest with us, you do if you don't, I don't, that's fine. But I would say there's some very important things that everyone should know if you went and borrowed money from your family. Okay, so maybe they're talking about a private lender being an individual that they have relationship with, or they might be using somebody's retirement account. I've seen this happen so many times, it makes me cringe. There was a couple young couple, I mentored them years ago, now they're, they're super successful, but they were just getting into the business and they were, they bought a flip house and they said, We borrow the money from my uncle at 2% and we can pay it back when we sell the house. So that's fantastic. That you know, this was back before 2% was popular, right? Yeah and I said, okay, did you put a note and a mortgage in place to protect your uncle and they said, no, he didn't care. He just said, pay me back when you get it, you know, when you get the money? I said, okay, do you have the property insurance? You know, the listing them? In case the place burns to the ground? Nope. Did you get them title insurance? Nope. All these things like they did not protect their family at all. So picture them getting sued by a contractor or anybody. Here's a free and clear property without a recorded mortgage against it and not and they lose it. Let's say we lose a lawsuit property gets taken away from them. Now they still owe their uncle all this money, and he had nothing to protect himself or we go back to the they get hit by a bus walking out of the title company, right?   Property, the money's gone, the money went to whoever they bought the property from, how does that family member collect or get their money back, if they don't have a mortgage in place, they can't foreclose on the property... So I just caution, anybody that's, you know, on the borrower side, that's going to borrow money from friends or family, make sure you always get title insurance to protect your lender. You know, the property insurance, the lender should be listed as a lender, not as an additional insured, there's a big difference and, you know, go through a title company, go through a closing attorney, make sure everything's aboveboard note mortgage in place, or deed of trust, depending on your state because you're just, I mean, you're hurting your family if you don't do it the right way. So always, always, always protect your lender, no matter what and if you're going to take a loss on a property or a project, I don't care what it takes, you make sure your lender is made whole, because we've lent money to people that screwed up their deals, but they took care of us and next time around, we lent the money again but you got to take care of your lenders. On the other side of it, if you want to be a lender, there's a lot that you have to consider just the whole underwriting of the deal. Is it a good deal? Is it not a good deal and how are you going to make sure that you get paid back are you going to have third party that goes there and make sure that the property is being managed, right, or if it's rehab, or you're gonna have somebody that's checking on the project and releasing money on construction escrow drawers. If you do want to collect monthly payments, who's going to do that who's going to service the loan. So there's a lot of things that it don't get me wrong, it's a great business, but there's a lot of things that people don't necessarily think about and I've seen it happen enough times where, you know, somebody has 100 200 $300,000 sitting around, and they just do a handshake deal, and lend the money to somebody, again, not getting the proper documentation in place. We had one ***hole and I say that, because he really was an ***hole, he took money out of his disabled brothers, IRA, to fund a rehab project and he had three other lenders on that project and he never he told his lenders, he was going to record all their mortgages for them and he never recorded the mortgages and it turned into this in this really nasty lawsuit. But he lost his disabled brothers IRA in that transaction and he's just the snake, you know, and they're out there. But you got to protect yourself. You know, I still believe in taking somebody at their word and believing the handshake. But that doesn't mean you don't write down and memorialize what you just shook hands about.   Michael: Right and if someone wants to get involved in the lending side of things, but you know what, you just said, what you just shared kind of makes them a little bit gun shy, or they want to have someone else take care of the day to day operations. I mean, are there businesses that they can plug into it? So here, take my money, pay me a return, I don't want to hear about it or know about what you're doing with it.   Derek: I mean, there is there's a lot of crowdfunding companies that you know, that became very popular. It seems to have died off here lately. You know, I don't hear as much or see as much marketing about crowdfunding. I would say the best way to do it is either find somebody in your local market at a RIA meeting, or, you know, a meetup group or even online, Bigger Pockets or something like that. But you got to spend some time getting to know who you're doing business with and, you know, Google the hell out of them, do background checks, all that kind of stuff. I invite anybody to Google me I have nothing to hide. You know, I'm never I just, I never tried to screw anybody over you know, and I mean, yeah, and it shows. But at the end of the day, you've got to know, this is I don't think this will ever circle back around. But I was invited to be on somebody else's podcast and I won't say the name. But then that gentleman was having a four day online conference and he asked me to speak for 90 minutes on this conference and I said, yeah, absolutely, I'd love to do it. He was expecting, you know, four or 500 people and so I was gonna send it out to my email list and help advertise it for him and it wasn't out there for 30 minutes, and two of my closest friends, one being a really good attorney were emailing me saying, Have you lost your fricking marbles? Like this guy is the biggest con artist and scammer there is and he actually the attorney sent me case studies of actual cases that this guy lost, and how he's not in jail, I don't know and I was just, you know, took and took him at his word. He's got a reputable podcast, right? So I'll go and speak on his conference. Well, who will you associate with can reflect very horribly on you, especially on social media. So I didn't mark it to anybody at that point, I still, I still spoke because I said I would and I believe in you know, I gave my word and I and there was a lot of other speakers at that event that were good. But I would never do business with that man and so that's the same thing. If you're going to lend money, or you're going to borrow money. Do you want to borrow money from a lender that doesn't want to be flexible if you run into trouble? Yeah, for us, we've only had to foreclose on nine properties in the last 10 or 11 years of lending, which is, is very, very, very low as far as the default rate. That's not to say we haven't had other people that had problems because we have, we have borrowers that have problems every week. But we're there to help them work through it, versus the lender, that's lending money as a backdoor way of getting properties.   Michael: It's a much more adversarial relationship.   Derek: Right, so you got to vet your lender, no different than if you were vetting somebody that you're going to invest with, we have a very clear in writing no ***holes policy within our company. I swear to God! Michael: I love it.   Derek: If I have somebody that and this has happened, I've had people that had several million dollars that approached us and said, We want to invest in your company and after half an hour, 45 minutes of talking with them, we just knew they were going to be the biggest pain in our *** and we turned them down. Same thing with our borrowers. If our borrowers stopped communicating with us, and stop doing what we agreed for them to do, then the ***holes  policy kicks in and we will have to default we will have to foreclose or at least we're not going to give them a loan next time. But the life is a lot better when you wake up in the morning and enjoy doing what you're doing and dealing with people that are not fun to deal with takes away from that. Yeah, we just don't do it. You just avoid it entirely. So I'd love to work with any of your listeners, unless they're an  *hole. Don't call me.   Michael: Okay, fair enough. Fair enough. Derek, on that note for people that do want to reach out that do want to work with you that have more questions about private lending, what's the best way for them to do so?   Derek: My, my personal email address is Derek spelled DEREK, @ bestreifunding.com (Derek@bestreifunding.com)  and I keep an eye on my own emails, my if I miss something, my assistant will grab it. But I'd love to chat with anybody that's got questions and again, it's this isn't a sales pitch. I mean, if somebody just says legit questions about lending, and they have no intentions of wanting to work with me as an investor, whatever, that's totally fine. I don't it's not about that for me and then the other thing I'm writing a book right now about lending in from start to finish. What happens when an application comes in all the way through closing and servicing after the fact and that's going to be coming out towards the tail end of the year, November December it'll be published. So I'd love to give your listeners that for free the electronic version for free.   Michael: Awesome.   Derek: So they just send me an email that same email address (Derek@bestreifunding.com) , and say, hey, I heard you on this podcast and put you on the list when the books published we'll get it out to you.   Michael: Fantastic. Thank you so much and I just have an ask for all of our listeners that do reach out to Derek if you wouldn't mind please referencing that you heard him on the Remote Real Estate Investor in the subject line. So he knows where you're coming to him from. That would be super helpful.   Derek: Absolutely.   Michael: Well, Derek, this was great, man. Thank you again for coming on the show. Really appreciate it and I'm sure we'll be chatting soon. Can't wait, can't wait to read the book.   Derek: Yeah, I can't wait to finish the book because it's great when you're writing a book, except some weeks are more stressful than others trying to hit deadlines and stuff. So I'm looking forward to it, but I'm really looking forward to it being done, too.   Michael: I can imagine I can imagine. Well, hey, man, we'll definitely be in touch soon.   Derek: Awesome. Thanks so much for having me.   Michael: You got it, take care.   All right, everyone. That was our episode, a big thank you to Derek for coming on again and sharing his time and knowledge with us. As always, if you enjoyed the episode, feel free to give us a rating or review wherever it is eat your podcasts, and we look forward to seeing in the next one. Happy investing…

Raising finance for new real estate projects is difficult. Property development firms face interest rates as high as 29% when working with banking institutions as single source loan providers. They also face challenges with multiple loan sources as crowd financing can be difficult to administer. Blockchain simplifies access to alternative financing models by facilitating investor management for developers and ensuring investment transparency and continuous ROI tracking for investors. In today's episode Goeffrey Thompson, Chief Blockchain Officer of Roofstock, and Sanjay Raghavan, Head of Structured Securities and Co-head of Digital Securities Initiative, walk us through what blockchain technology is and how they are tokenizing properties in a revolutionary way to buy and sell property.   Episode Links: https://onchain.roofstock.com/ https://twitter.com/rsonchain --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Geoffrey Thompson, who's the chief blockchain Officer here at Roofstock and Sanjay Raghavan, who's the head of web three initiatives here at Roofstock and we're gonna be talking today about what blockchain is, and how it applies to us as real estate investors. So let's get into it.   Goeff, and Sanjay, thank you so much for hanging out with me today. I am super excited to chat with you both.   Sanjay: Likewise.   Goeff: Thank you for having us, thank you.   Michael: No, absolutely, absolutely. So I know a little bit, obviously, who you guys are because we work together. But for anyone who isn't familiar with you. Give us a quick and dirty description who you are, and what is it that you're doing at Roofstock? Goeff, I'll kick it over to you first.   Goeff: Sure. So I'm Goeffrey Thompson. I currently have the title of Chief blockchain Officer at Roofstock. Previously, I was General Counsel and I've been a lawyer for by training for a long time and now heading up the blockchain initiative at rootstock together with Sanjay.   Michael: Awesome, great.   Sanjay: I'm Sanjay, head of web three initiatives. Previously, I was leading securities initiatives at roof stock coming up on actually three years this week. So super exciting tomorrow, I think.   Michael: Right on, so really quick follow up questions for you both. Jeff. Were you just like a crypto guy in your everyday life? I mean, how does a real out as a lawyer turn into a blockchain official at a company at the C suite level? I mean, that's incredible.   Goeff: Yeah, I kind of backed into it. That wasn't a plan but I had been advising friends. Since 2017, during the ICO boom, the initial coin offering boom, and I started hearing people in my network, talk about it and say things like, oh, well, it's not a security because it's a coin. So you don't have to follow the securities laws, you know, and I thought, I don't get a lot of the technical stuff that talking about, but I know I can help them with the legal stuff. So then I just I was acting as legal advisor for a couple of years and, and then Gary, our CEO knew that and last year, maybe 12 months ago or a little bit more, our board came to our CEO and said, you guys, Roofstock, you need to get smart on blockchain. We're not saying you have to do it. But you know, we want you to have an idea of whether there's something there and so he asked me and Sanjay, because he knew I had some crypto background and there's a lot of legal and obviously, the financial structure is critical as well, so we kind of got into it together.   Michael: Awesome and Sanjay, at the risk of sounding like a total rookie, what the hell is web three man, I hear so much about it. Break it down for us.   Sanjay: All right. So I know it's so web low. So let's take a step back, right. So web one, which was kind of the first incarnation of the internet, right? There were sites that had static information, you could like type a URL, URL and go and, like, consume that information. But that's all you could do is just a read only type of a platform and then a few years later, the internet evolved to kind of web two, which widely is known as the read write version of the internet. So not only could you consume information, but you could go and, you know, provide information and content to the internet as well as a consumer and what happened with web two was it you know, that ability to read and write created all kinds of new interactions, and that allowed a lot of kind of the internet economy to bloom around it, where the Googles and the apples and eBays and other large companies were able to curate a lot of the content and manage a lot of the traffic. But you know, with social media and stuff, you are providing content as well, and you are consuming content, there was ecommerce, so a lot of these things came about, but the power resided with a very few large corporations that kind of controlled all of these transactions and the when, when web one started, the kind of original vision behind it was a more collaborative environment, where the consumers and the creators and consumers could actually work with each other and use a token economy and share you know, revenue and monetization. So that idea of you know, read, write and then adding on to it at the end. So it's a read write own type of economy that's decentralized. permissionless trustless has its own native payment rails, where the content creators and con Then consumers are all working together and you know, there's no power resting with large corporations, but it's, you know, giving power back to the people. So that's how that's how I would sort of succinctly describe, three and it's so it's a sort of a new way of thinking about things and it's super exciting.   Michael: Yeah it does sound super exciting and so give us all like a background again, treat me like a third grader, because that's probably my IQ level when it comes to the crypto and blockchain world. Give us all an idea of like, what is blockchain and what is cryptocurrency and then we'll get in maybe on how to be thinking about it. With regard to the real estate space and why it even belongs here you don't think this…   Goeff: Yep, sure, so the core concept for blockchain is that it's a network that can be validated the data that's recorded onto the network, which is the chain can be validated by an a limitless number of third parties who aren't organized or connected in any other way. So these are called validators I could have when you could have when they just computers that read the information that's coming in from the blockchain, they perform some mathematical calculations, and then they verify that the data that's been submitted is, is what it says it is and then at that point, it's formalized and recorded to the block and then, so these blocks are really just pieces of data, data that had been put together and then as you form one block after another, that becomes the chain. So it's really just a chain of data that's been validated by third parties that are completely decentralized. So why is that important because it means that there's no third party, a corporation or government, whoever it might be, that can intervene in the functioning of the blockchain, once it's up and running, and you have enough people who are validating and writing to the to the system, it goes infinitely, and it can't be shut down and so the first use case that really grabbed a lot of attention was payments, right? That's what Sanjay was alluding to, in the early you know, the current web two universe, you don't have an easy way to send value to another person without going through a bank or a financial services company, Blockchain, Bitcoin allows you to do that, it's just simply on the on the chain, if you have value in the in the form of Bitcoin, you can send it to any other address anywhere in the world, instantaneously and no one can stop you from doing that. So this really arose from kind of an idealistic perception, like, we have to be able to have to guarantee our own freedom, you know, the government can't intervene and prevent me from sending money to you and that's where, you know, it came from, like the sophisticated cryptographers mathematicians who had an idealistic view, and that's where Bitcoin came from and then since then, it's expanded to a lot more utility, where you can do much, many more things other than just send payments. You can, you know, NFT, you can have lending platforms, you can have social media companies that are effectively on a blockchain and can't be shut down or controlled by third party. So that's, you know, that's the overview of kind of where it came from and why it's important today. Sanjay, anything to add?   Sanjay: Yeah, no, taking a step from there right and that's exactly right, Geoffrey, the original idea was, you know, this all came about during the great financial crisis of 2008 2000, you know, 10 or so, where people thought that these, you know, financial intermediaries are, you know, in control of our lives and so Bitcoin kind of, you know, that was the reason why it came about as a peer to peer system where you can exchange value without involving these intermediaries. But then over the years, we've kind of seen that world expand rapidly and there's other cryptocurrencies now and one of the notable ones is Ethereum and on the Ethereum network, there's actually the ability to create what's known as a smart contract and a smart contract is essentially a piece of computer code that will execute based on a certain event occurring and why that is important is if you think about it from a disintermediation perspective, you know, in a transaction where two parties are involved, and party A needs to provide a good or service and party B needs to make a payment for that. You need a way to make sure that both parties are adhering to their portion of the agreement, or contract, right and so oftentimes, what happens in the financial services world is, in order to make sure that both parties are compliant with their aspects of the contract. You create an intermediary in the middle that takes that position of collecting information or payment from both parties and sending it across and a very common example of this in real estate. Michael, you as a, an owner of, you know, dozens of properties, you've gone through this process many, many times. But you there's an escrow agent involved exactly what I was thinking sure that, you know, right, the property title moves over to, you know, the buyer and the money goes to the seller, right. But imagine you had a piece of computer software that executed on a sale, and it made sure that the two parties were both appropriately receiving what they were expected to receive and there was no intermediary involved in this process. So this, this all executed, basically on the click of a button, right? Like that would be game changing in the real estate world and that's what we're trying to do now with through stock on chain.   Michael: Holy crap. For anybody who's not watching this video, I just didn't pick up my jaw up off the floor, because that was totally a game. So I have so many questions, I want to take just a step back and so Goeff, you were talking about this, these validations that can be done by any number of people. So I'm thinking about like a real world example. So if I go to the store, and I buy something with my credit card, I put down my credit card, they give me the goods and then in this case, would the validator be like the credit card company that says, look, this is the charge that like how do I think about that from like a traditional example.   Goeff: That's exactly right, the validator or usually there are multiple, but they'll they play the function of the credit card company. But instead of sending your data and the transaction data to the credit card company, where the credit, you know, the data goes to the credit card company, the credit card company says okay, this person has credit and the transaction is now going to be posted on their account, and then they send the okay back to the merchant. Instead, the merchant would send the data to a blockchain, the blockchain validators would pick up that transaction, they would validate that, you know, all of the details are the same. Usually, it's a small number of validators that have to agree on the transaction details to make sure that there aren't, you know, nothing's been missed and then once they've reached that consensus, whether that's five or 10, validators, or whatever it may be at that point, then it goes back to the merchant and as it says, The Merton now the blockchain has been updated to show that this transaction occurred, Goeff, or you or whoever was spending the money now no longer has that money. So I had that money in Bitcoin. I gave it to the merchant, the merchant side of the blockchain and said, hey, guys, can you verify that you're debiting Goeff's account and you're adding it to my account? Everyone said, okay, verified, validated, coming back. Now, I can't spend that money, I don't have it anymore and it's in your account. So that's, you know, a high level how that would work.   Michael: Okay   Sanjay: And a couple of more things there, right. Like, if you, you know, credit card transactions for small dollar values is one example. But if you look at larger dollar values, and there's ACH transactions that take three or four days to get validated through the banking system, a wire transaction, if you're trying to buy a house, and you need to make a wire payment, you're rushing to the nearest retail brand, scheduling an appointment to go into the wire, right?   Michael: It's such a pain.     Sanjay: It is all such a pain and like, imagine you had a way 24/7, right, like, you're looking at, you're browsing a site today, you find a property you really like, you want to buy that property, it's Sunday night at 10pm. You just click the button, and you know, your wallet says you have enough money and the smart contract validates that you have the money transfer property over to you, right, like imagine a world that's like that, where you don't have to worry about waiting three or four days for an ACH or running to your bank and getting an appointment waiting in line to get a wire done and it's all literally you're doing all this from your computer, click of a button 24/7 AMS and payments do anywhere in the world.   Goeff: And the cost is in most cases, negligible. You know, the wire fee is whatever 35 $50 It takes a day, you know, some amount of time to process ACH could be clawed back. The claw back concept that exists with ACH that doesn't happen in blockchain that doesn't exist. Like once it's final, it's validated, it's done and you could, you know, a simple payment transaction might cost from a few cents to a few bucks, but it's not going to be anywhere near the cost of a wire transfer.   Sanjay: And the transaction is immutably recorded on the blockchain, nobody can contest it, because you can go and open up that transaction on the blockchain and say, these two parties agreed to this transaction and it's hot, you know, it was hashed on the blockchain and there's this unique hash that represents this transaction, right. So there's no disputing later on. The parties agree that transaction gets done, it's instantaneously recorded and so that that makes this platform as a technology choice. You have innumerable number of possibilities because once you have those types of payment rails, you can build all kinds of applications around it.   Michael: This is insane, you guys. So like, we were talking about the validators and Goeff, you were saying, whatever, four or five or 10 validation points and people are doing it. So is it literally like people on their computer going, like watching their screen for these payments going back and forth or is this happening automatically?   Goeff: No, it can happen. It happens, it's automatic. Yeah, you set up a server that has the right hardware, there are different hardware and software requirements for different blockchains. But it runs silently in the background, or in some cases, it's, it's loud, because there are a lot of fans this morning.   Michael: I heard that, yeah…   Goeff: Yeah, but it's happening 24/7 In the background, and, and in most cases, it's just set or forget, set and forget, you don't have to be online all the time, doing anything manually.   Sanjay: And one other thing I wanted to point out was, you know, obviously, with banks, you can go there on weekends, after hours bank holidays and such, but even a MasterCard or Visa, if they're having a problem with their servers or something, you can have outages where you know, for a couple of hours, you're not able to do any credit card transactions, right? Whereas on the blockchain, that doesn't happen, right because there's blocks can be like, even if my computer was one of the validators, but for whatever reason, it's not working right now there are hundreds of other computers that are doing the same thing that are waiting to pick up the next block and compute it and solve the puzzle and so, you know, as Goeff was saying earlier, once the blockchain is up and running, and there's, you know, enough infrastructure in terms of validators that support that blockchain, you know, it's then it's permanently out there, and it's you can shut it down.   Michael: So that kind of brings to my next question and so you both are talking about this decentralization aspect and I think I've heard so much about the crypto world, it's like getting away from big banks and government and that sort of thing. But if this information is, I mean, it's public at this point, right? When I, Goeff, when I send you money or buy a service from you, it's now public information.   Sanjay: Just to just to clarify on that, right, the part of the information that's public is that this wallet address transacted with this other wallet address. But it's not necessarily public that, you know, Michael transacted with Goeff, right. So what's publicly stored is just the, you know, so, you know, when we talk about privacy, oftentimes, people use the words privacy and anonymity interchangeably, but they're two different things, right? You know, in one example, where there's just two wallets transacting with each other, you both still have full anonymity but the privacy concerning the fact that the transaction occurred between two wallets, that may be public information, but that's the kind of subtle.   Michael: Got it, yeah okay. Okay, that makes total sense, because, well, I was going with the question is, if I send Jeff money for a service, I mean, that could be a taxable event on the traditional world, like, if you were a credit card company, or you were a merchant, I send you that you have sales tax to pay. So I'm imagining government's point to the me sending you money and say, well, now we're going to tax it. But Sanjay, what you're saying is that the actual dollar amount, or what it was for, might not be available to them, all they could see was, someone sent money to someone else, end of story…   Sanjay: We use you the amount of money that went from a to b, but you don't like people don't automatically know who a and who B where the US are going as far as…   Michael: Or what it's for…   Sanjay: Right, in the US people are required, basically to report their own earnings and that's, you know, whether it's on the in the crypto side or non-crypto side, but, you know, you're required to report your earnings and in other countries and jurisdictions, they've passed laws where crypto transactions are not necessarily taxable. So, like, if you bought Bitcoin for, you know, $5,000 and sold it for $20,000, you may not have capital gains taxes in other jurisdictions in the US we do and that's, you know, self-reported, for the most part,   Michael: This is so nuts. Okay, so, taking one more step forward, we're talking about these coins. We talked about Bitcoin, and we mentioned Ethereum, as well, what gives these things of value? Is it just that we have generally I mean, the same thing can be said for the dollar, it's enough people have accepted or any currency have enough people have bought into this idea that this piece of paper that has an old president's face on it is worth what we've decided it's worth, same thing for Bitcoin and Ethereum.   Goeff: Exactly the same. All right, yeah. Nothing else. There's nothing else to we, you know, we all agree today that Bitcoin is worth 20,000. If it goes up, then you know, that's literally the market price. It's set by the people in the market who are transacting on a you know, every second and so it's a very clear pricing mechanism.   Sanjay: In a way you know, it's pure demand and supply that drive pricing for the these types of alternative currencies or crypto currencies, the dollar, for example, you know, we price $1 bill to be worth $1, right and so you will always be able to redeem $1 for $1. But, you know, inflation and other characteristics might make it less valuable to you, right like if a loaf of bread was 50 cents, and now it's $1, you know, you're paying more money to get it, but you know, you're not paying more bills necessarily, you know, like, the dollar bill is always $1 Bill, right? Whereas, one, one Bitcoin or one Ethereum, its value can go up over time, almost like the stock market, right? If you're looking at a share of Microsoft, it's $100 today, but because we all think Microsoft is very valuable, or Apple is very valuable, and the next iPhone is the most sexiest thing that's come out, and therefore, you know, we think we should, you know, put more value to the Apple stock, right? So the concept is similar with Bitcoin and Ethereum. It's simply people that are there are people who are, you know, buyers, and then there's their long on Bitcoin and then there are people who are short on Bitcoin and if there are more people long than short, then the price is going to go up. If there are more people short at a particular point in time price will come down. There's fewer demand.   Michael: Cool and so we mentioned, I think you both mentioned a couple of different use cases for the blockchain and for crypto. What, like, where do you see this going and for Roofstock, specifically, maybe you could talk about what we're doing as a company with regards to blockchain and where do you see it evolving from here?   Goeff: Sure, so, the, you know, the easiest use case for the blockchain technology is for something that is entirely on chain right payment is a perfect example, right? The you know, I give you send you something of value, call it Bitcoin, you accept that, and that's all on the blockchain and that's pretty easy. What we're doing is, we think taking the next step forward for blockchain and we're not the only ones. But we think that we do have something to add here, which is to bridge blockchain to real world assets and that's where things start to get a little bit tricky because let's say that you have a home, you call it a home on chain, a tokenized, home, whatever it is, and you have a token, a blockchain representation of a home, but it's a real world home and so you know, you say, oh, I go to my blockchain wallet, my crypto wallet, and I see I have this home token. That's great but let's say it's not the home that I live in and in fact, it's a home somewhere else in the country and I haven't been there for a while. How do I even know that there's still a home there, right and if I want to sell it to you, you know, you like the idea of using a smart contract to buy and sell this home? You like the idea of having a one click transaction of having certainty that you're going to get what you know, the home token in exchange for your money. That's all great. But how do you know that you're actually buying a real home and not just something that is called a home on a blockchain, whatever that even means, right.   And so that's where we've spent all of the last nine months and the better part of the last 12 months, diving into the nitty gritty legal details to understand and practical implications to understand how we can put this together in a system that works and the answer is, you have to have some type of validation from the real world as well, obviously, you know, the scenarios that I just mentioned, we can't allow that to happen where someone purchases a home token, and finds out that the home burned down three months ago. So you know, you just got nothing and so the way that I think what Roofstock can bring to this equation is the deep, detailed knowledge about how real estate transactions work, plus the blockchain, the blockchain, structuring the legal implementation and that's the value add that we have. I think there are a lot of others in the space and we encourage everyone to get out there and try, you know, try to build, but we do see others who don't have the real estate experience and even though they have a beautiful blockchain strategy, they don't know how to connect that and that you end up with something that's not useful. So what we're doing is designing a system that ensures that before any home is transacted, it's gone through all of the usual checks and balances that are necessary for real estate transaction and inspection has been done recently. We've done you know, made sure that taxes are paid, made sure that insurance is in place, make sure that the title is you know, unencumbered. We do all of that, because you have to do all of that no one's gonna buy it, if you doubt, but we do that behind the scenes, and so went by the time that you as the buyer come to see our site and you see the home, the home tokens that are listed there, you know that you have a data room that shows all of the documents that I just mentioned and more. So your diligence is already done for you. You don't need an inspection contingency, because you have an inspection report sitting right there, you know, you don't need on the on the on the flip side, you know, you don't need an escrow agent, because the smart contract simply it won't execute, it won't perform its function unless the buyer has the funds that it says it has. So you know, this smart contract at the time that you as the buyer purchase, you click, I want to buy this home, the smart contract checks, do you have money, the right amount of funds in your wallet? You know, they check the other side. Does the seller have a home, which is already been approved by Roofstock to be sold? Yes, yes, the transaction happens, and it's not and if one of those isn't true, then it fails and you know, we have to go back to the drawing board and fix whatever was wrong.   Sanjay: Right and then to add to that, right, the kind of the first version of smart contracts and NF T's and all these things that came about on web three, you know, a lot of those assets themselves had the value in it, right. So you might have heard about projects like board a, or crypto punks, these are well known NFT projects where people are spending Saturday 98 to buy, you know, a JPEG image of you know, this popcorn ape. But in those cases, that image itself has that value embedded in it and when people get that image when they buy that they've already exchanged value, right. But the example Goeff is giving us with a real life, real world asset, the NFT is a representation of that real world asset, but it's that real world asset that has the value in it and so when people are transacting these NF t's on the marketplace, Roofstock has to make sure that you know what they're buying and selling corresponds to that real world asset that has that value and we've gone through the inspection and other diligence process to make sure that is still true, right. So that's the sort of the next leap in the web three world where you go beyond just the you know, cryptocurrencies and crypto Native Assets getting traded and now you start looking at real world applications.   Michael: Goeff, I'm thinking about is like, so if I'm trying to understand this, I'm I buy this token, which the underlying asset kind of backing the token up, if you will, is the home, right? So I then own the home as well. How does that work for like, insurance purposes? If I gotta go get insurance on his home? Am I Michael, like going out to my traditional insurance people and saying, okay, well, I own this home, or like, who's on title of the home? How does that all work, is the token on the title?   Goeff: All the right questions. So the way that we're setting this up, each home is titled in its own LLC. So we have a limited liability company where the home is titled and so that really facilitates the transfer between different parties, because you don't have to record title, every time that home token is sold. The title obviously has to be recorded the traditional way at the county recorder's office, the first time that it's transferred into the LLC and then from that moment on, it doesn't need to be retitled because the only thing that's changing hands is the LLC, the ownership of the LLC, the membership interest, it's called like the share of the LLC. So that's, that's how we unlock that. So that when I sell you my home token, I'm selling you an LLC that owns the home and you as the owner of the LLC, you have full control of the LLC, and thereby full control of the underlying home. So you can do whatever you want with the home. If you want to rent it, you can rent it, if you want it to be a long term rental, a short term rental, you get to decide all of that you get to decide when you put a new roof on or if you want to repair the roof instead of replace it. You make all those decisions. As far as the insurance question that you asked, we do have an agreement with an existing insurance company that's tech forward, and they're interested in working on this project. So we've already set that up. The first time you buy a home from us, it will come with one year of property insurance, it's prepaid. If you want to change that you can you can change it if you want to cancel it and replace it with a different insurer. You can what we found is that a lot of intermediates in the space are not necessarily comfortable and dealing with this type of transaction. So we've spent a fair amount of time diligence seen a lot of, you know, providers in the market and we think the ones that we have are very good, but it's up to you as the owner, if you want to have a specific insurer, or a specific title company, you can do that. But otherwise, it's already in place and it's really as easy as just paying your annual premiums you can, you don't have to think about it, if you don't want to.   Michael: Okay, so the follow up what popped in my mind immediately, and then we're going to get you guys out of here, but we live in California. So Roofstock obviously doesn't have a very big footprint here, because there's not a lot of cash flow potential, or it's much more difficult to make the numbers work as compared to a lot of other parts of the country. So, Sanjay, if you buy a home for a million bucks, tokenize it and now you your property taxes in California are based on your purchase price. So if five years down the road, you sell it to me for 2 million bucks. Traditionally, my new property tax value is going based on that 2 million bucks. But are you saying that because this trent this sale isn't getting recorded, as it would traditionally that my property taxes are still gonna be based on your original sale price of a million bucks.   Sanjay: In many state that's, that would be true. But in California, unfortunately, prop 13 would pick that sale up. That's it's a state by state analysis and in most of the states, you know, the transaction would be fine. You individually report any capital gain on your taxes, of course. But in California, the transfer does get picked up.   Michael: Damn it. They always get you somehow but maybe in some states, it sounds like that might not get picked up, right. There's less of an issue…   Sanjay: That's right, in many cases…Yeah.   Michael: Interesting. Okay, man, I thought I had this huge unlock but clearly you guys have already thought of, of all this. So this is this is super exciting, guys. We definitely need to continue the conversation, got a lot more questions, a lot more information. I would love to disseminate to our listeners. But thank you both so much for joining me. If people want to learn more about web three and blockchain and crypto in general, is there are there good resources out there that we can point people to?   Sanjay: Yeah, I mean, definitely come to our website to learn about real estate tokenization. That's https://onchain.roofstock.com/ and also, you know, follow us on crypto Twitter. It's at @rsonchain and then individually, like Goeff and I do contribute in Twitter and LinkedIn and other areas as well. So, you know, look us up and follow us as well, on those platforms.   Goeff: And don't feel don't hesitate to reach out. Like you know, we're happy to talk we're here. We're you know, we're doing something new. We know a lot of people have a lot of questions, and we're happy to answer the questions and then he conversation. So ping us, we're happy to chat.   Michael: Amazing, amazing. Well, thank you both again, for coming on and super looking forward to doing this again soon.   Sanjay: Thank you. Thanks for having us.   Goeff: Likewise. Thanks.   Michael: Alright, anyway, that was our episode. A huge thank you to Goeff and Sanjay for coming on. We're gonna definitely be having them back on again soon. So if you have additional questions about things you just heard, or blockchain things in general, we'd love for you to see those in the comment section. Wherever it is, you get your podcasts, and we will try to get to them on the next episode with Goeff and Sanjay. As always, if you liked the episode, feel free to leave us just traditional rating or review. We love those as well and we look forward to see you in the next one. Happy investing…

Raising finance for new real estate projects is difficult. Property development firms face interest rates as high as 29% when working with banking institutions as single-source loan providers. They also face challenges with multiple loan sources as crowd financing can be difficult to administer. Blockchain simplifies access to alternative financing models by facilitating investor management for developers and ensuring investment transparency and continuous ROI tracking for investors. In today's episode Goeffrey Thompson, Chief Blockchain Officer of Roofstock, and Sanjay Raghavan, Head of Structured Securities and Co-head of Digital Securities Initiative, walk us through what blockchain technology is and how they are tokenizing properties in a revolutionary way to buy and sell property.     Episode Link: https://onchain.roofstock.com/ https://twitter.com/rsonchain --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Geoffrey Thompson, who's the chief blockchain Officer here at Roofstock and Sanjay Raghavan, who's the head of web three initiatives here at Roofstock and we're gonna be talking today about what blockchain is, and how it applies to us as real estate investors. So let's get into it.   Goeff, and Sanjay, thank you so much for hanging out with me today. I am super excited to chat with you both.   Sanjay: Likewise.   Goeff: Thank you for having us, thank you.   Michael: No, absolutely, absolutely. So I know a little bit, obviously, who you guys are because we work together. But for anyone who isn't familiar with you. Give us a quick and dirty description who you are, and what is it that you're doing at Roofstock? Goeff, I'll kick it over to you first.   Goeff: Sure. So I'm Goeffrey Thompson. I currently have the title of Chief blockchain Officer at Roofstock. Previously, I was General Counsel and I've been a lawyer for by training for a long time and now heading up the blockchain initiative at rootstock together with Sanjay.   Michael: Awesome, great.   Sanjay: I'm Sanjay, head of web three initiatives. Previously, I was leading securities initiatives at roof stock coming up on actually three years this week. So super exciting tomorrow, I think.   Michael: Right on, so really quick follow up questions for you both. Jeff. Were you just like a crypto guy in your everyday life? I mean, how does a real out as a lawyer turn into a blockchain official at a company at the C suite level? I mean, that's incredible.   Goeff: Yeah, I kind of backed into it. That wasn't a plan but I had been advising friends. Since 2017, during the ICO boom, the initial coin offering boom, and I started hearing people in my network, talk about it and say things like, oh, well, it's not a security because it's a coin. So you don't have to follow the securities laws, you know, and I thought, I don't get a lot of the technical stuff that talking about, but I know I can help them with the legal stuff. So then I just I was acting as legal advisor for a couple of years and, and then Gary, our CEO knew that and last year, maybe 12 months ago or a little bit more, our board came to our CEO and said, you guys, Roofstock, you need to get smart on blockchain. We're not saying you have to do it. But you know, we want you to have an idea of whether there's something there and so he asked me and Sanjay, because he knew I had some crypto background and there's a lot of legal and obviously, the financial structure is critical as well, so we kind of got into it together.   Michael: Awesome and Sanjay, at the risk of sounding like a total rookie, what the hell is web three man, I hear so much about it. Break it down for us.   Sanjay: All right. So I know it's so web low. So let's take a step back, right. So web one, which was kind of the first incarnation of the internet, right? There were sites that had static information, you could like type a URL, URL and go and, like, consume that information. But that's all you could do is just a read only type of a platform and then a few years later, the internet evolved to kind of web two, which widely is known as the read write version of the internet. So not only could you consume information, but you could go and, you know, provide information and content to the internet as well as a consumer and what happened with web two was it you know, that ability to read and write created all kinds of new interactions, and that allowed a lot of kind of the internet economy to bloom around it, where the Googles and the apples and eBays and other large companies were able to curate a lot of the content and manage a lot of the traffic. But you know, with social media and stuff, you are providing content as well, and you are consuming content, there was ecommerce, so a lot of these things came about, but the power resided with a very few large corporations that kind of controlled all of these transactions and the when, when web one started, the kind of original vision behind it was a more collaborative environment, where the consumers and the creators and consumers could actually work with each other and use a token economy and share you know, revenue and monetization. So that idea of you know, read, write and then adding on to it at the end. So it's a read write own type of economy that's decentralized. permissionless trustless has its own native payment rails, where the content creators and con Then consumers are all working together and you know, there's no power resting with large corporations, but it's, you know, giving power back to the people. So that's how that's how I would sort of succinctly describe, three and it's so it's a sort of a new way of thinking about things and it's super exciting.   Michael: Yeah it does sound super exciting and so give us all like a background again, treat me like a third grader, because that's probably my IQ level when it comes to the crypto and blockchain world. Give us all an idea of like, what is blockchain and what is cryptocurrency and then we'll get in maybe on how to be thinking about it. With regard to the real estate space and why it even belongs here you don't think this…   Goeff: Yep, sure, so the core concept for blockchain is that it's a network that can be validated the data that's recorded onto the network, which is the chain can be validated by an a limitless number of third parties who aren't organized or connected in any other way. So these are called validators I could have when you could have when they just computers that read the information that's coming in from the blockchain, they perform some mathematical calculations, and then they verify that the data that's been submitted is, is what it says it is and then at that point, it's formalized and recorded to the block and then, so these blocks are really just pieces of data, data that had been put together and then as you form one block after another, that becomes the chain. So it's really just a chain of data that's been validated by third parties that are completely decentralized. So why is that important because it means that there's no third party, a corporation or government, whoever it might be, that can intervene in the functioning of the blockchain, once it's up and running, and you have enough people who are validating and writing to the to the system, it goes infinitely, and it can't be shut down and so the first use case that really grabbed a lot of attention was payments, right? That's what Sanjay was alluding to, in the early you know, the current web two universe, you don't have an easy way to send value to another person without going through a bank or a financial services company, Blockchain, Bitcoin allows you to do that, it's just simply on the on the chain, if you have value in the in the form of Bitcoin, you can send it to any other address anywhere in the world, instantaneously and no one can stop you from doing that. So this really arose from kind of an idealistic perception, like, we have to be able to have to guarantee our own freedom, you know, the government can't intervene and prevent me from sending money to you and that's where, you know, it came from, like the sophisticated cryptographers mathematicians who had an idealistic view, and that's where Bitcoin came from and then since then, it's expanded to a lot more utility, where you can do much, many more things other than just send payments. You can, you know, NFT, you can have lending platforms, you can have social media companies that are effectively on a blockchain and can't be shut down or controlled by third party. So that's, you know, that's the overview of kind of where it came from and why it's important today. Sanjay, anything to add?   Sanjay: Yeah, no, taking a step from there right and that's exactly right, Geoffrey, the original idea was, you know, this all came about during the great financial crisis of 2008 2000, you know, 10 or so, where people thought that these, you know, financial intermediaries are, you know, in control of our lives and so Bitcoin kind of, you know, that was the reason why it came about as a peer to peer system where you can exchange value without involving these intermediaries. But then over the years, we've kind of seen that world expand rapidly and there's other cryptocurrencies now and one of the notable ones is Ethereum and on the Ethereum network, there's actually the ability to create what's known as a smart contract and a smart contract is essentially a piece of computer code that will execute based on a certain event occurring and why that is important is if you think about it from a disintermediation perspective, you know, in a transaction where two parties are involved, and party A needs to provide a good or service and party B needs to make a payment for that. You need a way to make sure that both parties are adhering to their portion of the agreement, or contract, right and so oftentimes, what happens in the financial services world is, in order to make sure that both parties are compliant with their aspects of the contract. You create an intermediary in the middle that takes that position of collecting information or payment from both parties and sending it across and a very common example of this in real estate. Michael, you as a, an owner of, you know, dozens of properties, you've gone through this process many, many times. But you there's an escrow agent involved exactly what I was thinking sure that, you know, right, the property title moves over to, you know, the buyer and the money goes to the seller, right. But imagine you had a piece of computer software that executed on a sale, and it made sure that the two parties were both appropriately receiving what they were expected to receive and there was no intermediary involved in this process. So this, this all executed, basically on the click of a button, right? Like that would be game changing in the real estate world and that's what we're trying to do now with through stock on chain.   Michael: Holy crap. For anybody who's not watching this video, I just didn't pick up my jaw up off the floor, because that was totally a game. So I have so many questions, I want to take just a step back and so Goeff, you were talking about this, these validations that can be done by any number of people. So I'm thinking about like a real world example. So if I go to the store, and I buy something with my credit card, I put down my credit card, they give me the goods and then in this case, would the validator be like the credit card company that says, look, this is the charge that like how do I think about that from like a traditional example.   Goeff: That's exactly right, the validator or usually there are multiple, but they'll they play the function of the credit card company. But instead of sending your data and the transaction data to the credit card company, where the credit, you know, the data goes to the credit card company, the credit card company says okay, this person has credit and the transaction is now going to be posted on their account, and then they send the okay back to the merchant. Instead, the merchant would send the data to a blockchain, the blockchain validators would pick up that transaction, they would validate that, you know, all of the details are the same. Usually, it's a small number of validators that have to agree on the transaction details to make sure that there aren't, you know, nothing's been missed and then once they've reached that consensus, whether that's five or 10, validators, or whatever it may be at that point, then it goes back to the merchant and as it says, The Merton now the blockchain has been updated to show that this transaction occurred, Goeff, or you or whoever was spending the money now no longer has that money. So I had that money in Bitcoin. I gave it to the merchant, the merchant side of the blockchain and said, hey, guys, can you verify that you're debiting Goeff's account and you're adding it to my account? Everyone said, okay, verified, validated, coming back. Now, I can't spend that money, I don't have it anymore and it's in your account. So that's, you know, a high level how that would work.   Michael: Okay   Sanjay: And a couple of more things there, right. Like, if you, you know, credit card transactions for small dollar values is one example. But if you look at larger dollar values, and there's ACH transactions that take three or four days to get validated through the banking system, a wire transaction, if you're trying to buy a house, and you need to make a wire payment, you're rushing to the nearest retail brand, scheduling an appointment to go into the wire, right?   Michael: It's such a pain.     Sanjay: It is all such a pain and like, imagine you had a way 24/7, right, like, you're looking at, you're browsing a site today, you find a property you really like, you want to buy that property, it's Sunday night at 10pm. You just click the button, and you know, your wallet says you have enough money and the smart contract validates that you have the money transfer property over to you, right, like imagine a world that's like that, where you don't have to worry about waiting three or four days for an ACH or running to your bank and getting an appointment waiting in line to get a wire done and it's all literally you're doing all this from your computer, click of a button 24/7 AMS and payments do anywhere in the world.   Goeff: And the cost is in most cases, negligible. You know, the wire fee is whatever 35 $50 It takes a day, you know, some amount of time to process ACH could be clawed back. The claw back concept that exists with ACH that doesn't happen in blockchain that doesn't exist. Like once it's final, it's validated, it's done and you could, you know, a simple payment transaction might cost from a few cents to a few bucks, but it's not going to be anywhere near the cost of a wire transfer.   Sanjay: And the transaction is immutably recorded on the blockchain, nobody can contest it, because you can go and open up that transaction on the blockchain and say, these two parties agreed to this transaction and it's hot, you know, it was hashed on the blockchain and there's this unique hash that represents this transaction, right. So there's no disputing later on. The parties agree that transaction gets done, it's instantaneously recorded and so that that makes this platform as a technology choice. You have innumerable number of possibilities because once you have those types of payment rails, you can build all kinds of applications around it.   Michael: This is insane, you guys. So like, we were talking about the validators and Goeff, you were saying, whatever, four or five or 10 validation points and people are doing it. So is it literally like people on their computer going, like watching their screen for these payments going back and forth or is this happening automatically?   Goeff: No, it can happen. It happens, it's automatic. Yeah, you set up a server that has the right hardware, there are different hardware and software requirements for different blockchains. But it runs silently in the background, or in some cases, it's, it's loud, because there are a lot of fans this morning.   Michael: I heard that, yeah…   Goeff: Yeah, but it's happening 24/7 In the background, and, and in most cases, it's just set or forget, set and forget, you don't have to be online all the time, doing anything manually.   Sanjay: And one other thing I wanted to point out was, you know, obviously, with banks, you can go there on weekends, after hours bank holidays and such, but even a MasterCard or Visa, if they're having a problem with their servers or something, you can have outages where you know, for a couple of hours, you're not able to do any credit card transactions, right? Whereas on the blockchain, that doesn't happen, right because there's blocks can be like, even if my computer was one of the validators, but for whatever reason, it's not working right now there are hundreds of other computers that are doing the same thing that are waiting to pick up the next block and compute it and solve the puzzle and so, you know, as Goeff was saying earlier, once the blockchain is up and running, and there's, you know, enough infrastructure in terms of validators that support that blockchain, you know, it's then it's permanently out there, and it's you can shut it down.   Michael: So that kind of brings to my next question and so you both are talking about this decentralization aspect and I think I've heard so much about the crypto world, it's like getting away from big banks and government and that sort of thing. But if this information is, I mean, it's public at this point, right? When I, Goeff, when I send you money or buy a service from you, it's now public information.   Sanjay: Just to just to clarify on that, right, the part of the information that's public is that this wallet address transacted with this other wallet address. But it's not necessarily public that, you know, Michael transacted with Goeff, right. So what's publicly stored is just the, you know, so, you know, when we talk about privacy, oftentimes, people use the words privacy and anonymity interchangeably, but they're two different things, right? You know, in one example, where there's just two wallets transacting with each other, you both still have full anonymity but the privacy concerning the fact that the transaction occurred between two wallets, that may be public information, but that's the kind of subtle.   Michael: Got it, yeah okay. Okay, that makes total sense, because, well, I was going with the question is, if I send Jeff money for a service, I mean, that could be a taxable event on the traditional world, like, if you were a credit card company, or you were a merchant, I send you that you have sales tax to pay. So I'm imagining government's point to the me sending you money and say, well, now we're going to tax it. But Sanjay, what you're saying is that the actual dollar amount, or what it was for, might not be available to them, all they could see was, someone sent money to someone else, end of story…   Sanjay: We use you the amount of money that went from a to b, but you don't like people don't automatically know who a and who B where the US are going as far as…   Michael: Or what it's for…   Sanjay: Right, in the US people are required, basically to report their own earnings and that's, you know, whether it's on the in the crypto side or non-crypto side, but, you know, you're required to report your earnings and in other countries and jurisdictions, they've passed laws where crypto transactions are not necessarily taxable. So, like, if you bought Bitcoin for, you know, $5,000 and sold it for $20,000, you may not have capital gains taxes in other jurisdictions in the US we do and that's, you know, self-reported, for the most part,   Michael: This is so nuts. Okay, so, taking one more step forward, we're talking about these coins. We talked about Bitcoin, and we mentioned Ethereum, as well, what gives these things of value? Is it just that we have generally I mean, the same thing can be said for the dollar, it's enough people have accepted or any currency have enough people have bought into this idea that this piece of paper that has an old president's face on it is worth what we've decided it's worth, same thing for Bitcoin and Ethereum.   Goeff: Exactly the same. All right, yeah. Nothing else. There's nothing else to we, you know, we all agree today that Bitcoin is worth 20,000. If it goes up, then you know, that's literally the market price. It's set by the people in the market who are transacting on a you know, every second and so it's a very clear pricing mechanism.   Sanjay: In a way you know, it's pure demand and supply that drive pricing for the these types of alternative currencies or crypto currencies, the dollar, for example, you know, we price $1 bill to be worth $1, right and so you will always be able to redeem $1 for $1. But, you know, inflation and other characteristics might make it less valuable to you, right like if a loaf of bread was 50 cents, and now it's $1, you know, you're paying more money to get it, but you know, you're not paying more bills necessarily, you know, like, the dollar bill is always $1 Bill, right? Whereas, one, one Bitcoin or one Ethereum, its value can go up over time, almost like the stock market, right? If you're looking at a share of Microsoft, it's $100 today, but because we all think Microsoft is very valuable, or Apple is very valuable, and the next iPhone is the most sexiest thing that's come out, and therefore, you know, we think we should, you know, put more value to the Apple stock, right? So the concept is similar with Bitcoin and Ethereum. It's simply people that are there are people who are, you know, buyers, and then there's their long on Bitcoin and then there are people who are short on Bitcoin and if there are more people long than short, then the price is going to go up. If there are more people short at a particular point in time price will come down. There's fewer demand.   Michael: Cool and so we mentioned, I think you both mentioned a couple of different use cases for the blockchain and for crypto. What, like, where do you see this going and for Roofstock, specifically, maybe you could talk about what we're doing as a company with regards to blockchain and where do you see it evolving from here?   Goeff: Sure, so, the, you know, the easiest use case for the blockchain technology is for something that is entirely on chain right payment is a perfect example, right? The you know, I give you send you something of value, call it Bitcoin, you accept that, and that's all on the blockchain and that's pretty easy. What we're doing is, we think taking the next step forward for blockchain and we're not the only ones. But we think that we do have something to add here, which is to bridge blockchain to real world assets and that's where things start to get a little bit tricky because let's say that you have a home, you call it a home on chain, a tokenized, home, whatever it is, and you have a token, a blockchain representation of a home, but it's a real world home and so you know, you say, oh, I go to my blockchain wallet, my crypto wallet, and I see I have this home token. That's great but let's say it's not the home that I live in and in fact, it's a home somewhere else in the country and I haven't been there for a while. How do I even know that there's still a home there, right and if I want to sell it to you, you know, you like the idea of using a smart contract to buy and sell this home? You like the idea of having a one click transaction of having certainty that you're going to get what you know, the home token in exchange for your money. That's all great. But how do you know that you're actually buying a real home and not just something that is called a home on a blockchain, whatever that even means, right.   And so that's where we've spent all of the last nine months and the better part of the last 12 months, diving into the nitty gritty legal details to understand and practical implications to understand how we can put this together in a system that works and the answer is, you have to have some type of validation from the real world as well, obviously, you know, the scenarios that I just mentioned, we can't allow that to happen where someone purchases a home token, and finds out that the home burned down three months ago. So you know, you just got nothing and so the way that I think what Roofstock can bring to this equation is the deep, detailed knowledge about how real estate transactions work, plus the blockchain, the blockchain, structuring the legal implementation and that's the value add that we have. I think there are a lot of others in the space and we encourage everyone to get out there and try, you know, try to build, but we do see others who don't have the real estate experience and even though they have a beautiful blockchain strategy, they don't know how to connect that and that you end up with something that's not useful. So what we're doing is designing a system that ensures that before any home is transacted, it's gone through all of the usual checks and balances that are necessary for real estate transaction and inspection has been done recently. We've done you know, made sure that taxes are paid, made sure that insurance is in place, make sure that the title is you know, unencumbered. We do all of that, because you have to do all of that no one's gonna buy it, if you doubt, but we do that behind the scenes, and so went by the time that you as the buyer come to see our site and you see the home, the home tokens that are listed there, you know that you have a data room that shows all of the documents that I just mentioned and more. So your diligence is already done for you. You don't need an inspection contingency, because you have an inspection report sitting right there, you know, you don't need on the on the on the flip side, you know, you don't need an escrow agent, because the smart contract simply it won't execute, it won't perform its function unless the buyer has the funds that it says it has. So you know, this smart contract at the time that you as the buyer purchase, you click, I want to buy this home, the smart contract checks, do you have money, the right amount of funds in your wallet? You know, they check the other side. Does the seller have a home, which is already been approved by Roofstock to be sold? Yes, yes, the transaction happens, and it's not and if one of those isn't true, then it fails and you know, we have to go back to the drawing board and fix whatever was wrong.   Sanjay: Right and then to add to that, right, the kind of the first version of smart contracts and NF T's and all these things that came about on web three, you know, a lot of those assets themselves had the value in it, right. So you might have heard about projects like board a, or crypto punks, these are well known NFT projects where people are spending Saturday 98 to buy, you know, a JPEG image of you know, this popcorn ape. But in those cases, that image itself has that value embedded in it and when people get that image when they buy that they've already exchanged value, right. But the example Goeff is giving us with a real life, real world asset, the NFT is a representation of that real world asset, but it's that real world asset that has the value in it and so when people are transacting these NF t's on the marketplace, Roofstock has to make sure that you know what they're buying and selling corresponds to that real world asset that has that value and we've gone through the inspection and other diligence process to make sure that is still true, right. So that's the sort of the next leap in the web three world where you go beyond just the you know, cryptocurrencies and crypto Native Assets getting traded and now you start looking at real world applications.   Michael: Goeff, I'm thinking about is like, so if I'm trying to understand this, I'm I buy this token, which the underlying asset kind of backing the token up, if you will, is the home, right? So I then own the home as well. How does that work for like, insurance purposes? If I gotta go get insurance on his home? Am I Michael, like going out to my traditional insurance people and saying, okay, well, I own this home, or like, who's on title of the home? How does that all work, is the token on the title?   Goeff: All the right questions. So the way that we're setting this up, each home is titled in its own LLC. So we have a limited liability company where the home is titled and so that really facilitates the transfer between different parties, because you don't have to record title, every time that home token is sold. The title obviously has to be recorded the traditional way at the county recorder's office, the first time that it's transferred into the LLC and then from that moment on, it doesn't need to be retitled because the only thing that's changing hands is the LLC, the ownership of the LLC, the membership interest, it's called like the share of the LLC. So that's, that's how we unlock that. So that when I sell you my home token, I'm selling you an LLC that owns the home and you as the owner of the LLC, you have full control of the LLC, and thereby full control of the underlying home. So you can do whatever you want with the home. If you want to rent it, you can rent it, if you want it to be a long term rental, a short term rental, you get to decide all of that you get to decide when you put a new roof on or if you want to repair the roof instead of replace it. You make all those decisions. As far as the insurance question that you asked, we do have an agreement with an existing insurance company that's tech forward, and they're interested in working on this project. So we've already set that up. The first time you buy a home from us, it will come with one year of property insurance, it's prepaid. If you want to change that you can you can change it if you want to cancel it and replace it with a different insurer. You can what we found is that a lot of intermediates in the space are not necessarily comfortable and dealing with this type of transaction. So we've spent a fair amount of time diligence seen a lot of, you know, providers in the market and we think the ones that we have are very good, but it's up to you as the owner, if you want to have a specific insurer, or a specific title company, you can do that. But otherwise, it's already in place and it's really as easy as just paying your annual premiums you can, you don't have to think about it, if you don't want to.   Michael: Okay, so the follow up what popped in my mind immediately, and then we're going to get you guys out of here, but we live in California. So Roofstock obviously doesn't have a very big footprint here, because there's not a lot of cash flow potential, or it's much more difficult to make the numbers work as compared to a lot of other parts of the country. So, Sanjay, if you buy a home for a million bucks, tokenize it and now you your property taxes in California are based on your purchase price. So if five years down the road, you sell it to me for 2 million bucks. Traditionally, my new property tax value is going based on that 2 million bucks. But are you saying that because this trent this sale isn't getting recorded, as it would traditionally that my property taxes are still gonna be based on your original sale price of a million bucks.   Sanjay: In many state that's, that would be true. But in California, unfortunately, prop 13 would pick that sale up. That's it's a state by state analysis and in most of the states, you know, the transaction would be fine. You individually report any capital gain on your taxes, of course. But in California, the transfer does get picked up.   Michael: Damn it. They always get you somehow but maybe in some states, it sounds like that might not get picked up, right. There's less of an issue…   Sanjay: That's right, in many cases…Yeah.   Michael: Interesting. Okay, man, I thought I had this huge unlock but clearly you guys have already thought of, of all this. So this is this is super exciting, guys. We definitely need to continue the conversation, got a lot more questions, a lot more information. I would love to disseminate to our listeners. But thank you both so much for joining me. If people want to learn more about web three and blockchain and crypto in general, is there are there good resources out there that we can point people to?   Sanjay: Yeah, I mean, definitely come to our website to learn about real estate tokenization. That's https://onchain.roofstock.com/ and also, you know, follow us on crypto Twitter. It's at @rsonchain and then individually, like Goeff and I do contribute in Twitter and LinkedIn and other areas as well. So, you know, look us up and follow us as well, on those platforms.   Goeff: And don't feel don't hesitate to reach out. Like you know, we're happy to talk we're here. We're you know, we're doing something new. We know a lot of people have a lot of questions, and we're happy to answer the questions and then he conversation. So ping us, we're happy to chat.   Michael: Amazing, amazing. Well, thank you both again, for coming on and super looking forward to doing this again soon.   Sanjay: Thank you. Thanks for having us.   Goeff: Likewise. Thanks.   Michael: Alright, anyway, that was our episode. A huge thank you to Goeff and Sanjay for coming on. We're gonna definitely be having them back on again soon. So if you have additional questions about things you just heard, or blockchain things in general, we'd love for you to see those in the comment section. Wherever it is, you get your podcasts, and we will try to get to them on the next episode with Goeff and Sanjay. As always, if you liked the episode, feel free to leave us just traditional rating or review. We love those as well and we look forward to see you in the next one. Happy investing…

Michael Bungay Stanier is the founder of Box of Crayons and author of The Coaching Habit who also recently published his latest book called How to Begin: Start Doing Something That Matters. He discusses his process in writing this book and discovering that a worthy goal has three characteristics; it is thrilling, important, and daunting. Michael shares his insights on the steps to finding your worthy goal and challenging yourself to unlock your greatness.  HIGHLIGHTS A worthy goal is thrilling, important, and daunting Draft your goals: Name the prizes and punishments Change: Fix what's broken or amplify what's working? Get motivation by understanding your worthy goal   QUOTES Michael: "We unlock our greatness by working on the hard things. It's not by winning. It's by working on the hard things. And so, the daunting is the work that's needed where you step out your edge and you're like, look, I'm pretty accomplished and I'm okay with my talents, and I know some stuff, but this is making me sweat a little bit." Michael: "It's better when you draft it. The first draft is not going to be as good as the second draft is not going to be as good as the third draft. Don't get seduced into thinking your first goal is the real goal." Michael: "If your brain spends too much time focused just on the outcome, it's actually demotivating because your brain is just not that good at telling the difference between what's happening and what you're imagining is happening. So if you spend your whole time visualizing hitting your quota or buying your house or whatever, at a certain point your brain goes, well, done. It feels like you've actually got this and you lose some of your motivation. It's bizarre but powerful." Find out more about Michael in the links below: LinkedIn: https://www.linkedin.com/in/michaelbungaystanier/ Personal website: https://www.mbs.works/ Corporate website: https://boxofcrayons.com/ More on Andy: Connect on LinkedIn Get Andy's new book "Sell Without Selling Out" on Amazon Learn more at AndyPaul.com Sponsored by: Revenue.io | Unlock exponential growth with an AI-powered RevOps platform | Revenue.io Scratchpad | The fastest way to update Salesforce, take sales notes, and stay on top of to-dos | Scratchpad.com Blueboard | World's leading experiential rewards & recognition platform | Blueboard.com Explore the Revenue.io Podcast Universe: Sales Enablement Podcast RevOps Podcast Selling with Purpose Podcast

Brandon Schwab is based in Chicago where he specializes in boutique assisted living. Brandon who is, founder, and CEO of Shepherd Premier Senior Living and Boutique Senior Living Fund had experienced first-hand the deficient care of his grandfather at a large, industrial-type senior living facility, he vowed to make improvements in the industry by starting his own senior living company that provides better, quality care to the elderly. It seems that parts of the US are significantly under-served with this class of product. To learn more or to connect with Brandon tune in to today's podcast and you can set up a time to speak with him directly. Brandon talks about his unique business model of syndicating small senior living assets. Episode Link: https://boutiqueseniorlivingfund.com/ wwww.shepherdpremierseriorliving.com www.brandonschwab.com   Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum, and today I'm joined by Brandon Schwab, who is going to be talking to us about how he's turning the senior living facility industry upside down. So let's get into it…   Brandon Schwab, what's going on, man? Thanks so much for taking the time to hang out with me today. I appreciate you coming on.   Brandon: Hey, man, this year is awesome, man. Thank you for having me.   Michael: Oh, of course and I think we're gonna have a lot of fun today, talking about senior living, which is I don't think we've ever covered this topic on the show before. So I'm super excited.   Brandon: Never…?   Michael: I don't think ever I don't think ever and shame. I know, I know, I know. Shame on us, that's our bad but give us the quick and dirty. We're gonna get into senior living in just a minute. Give us we can do it, who you are, where do you come from and what is it that you're doing in real estate today?   Brandon: Down and dirty… I've been in Crystal Lake Illinois. For 35 years, I am 40. I've got two kids I got in real estate in 2010. But back before that, I actually opened up our own company at the age of about 15 years old. I did that for 14 years, until I figured out quickly that I didn't actually own anything. I thought I owned something the whole time. But I found out at the end, I didn't actually own any assets. So therefore, I  didn't actually have anything to own to actually have up for sale. So I got into this industry in 2010. After I got crushed after 2008 happened. I at the age of 15. I was cleaning cars in RVs for 14 years and I thought I was crushing it doing there. I was taking home 200 220,000 per year but I was probably working 7080 hours per week. So like wholesaling back in 2010. Because I was like dude, I got paid like $200 for each car and probably about 500 for each RV. So like wholesaling in our first deal was like $1,000 I was like, do you know that would take me like 40 hours just to like, even come close to that and I said I have to get into that business. So that's it, man, it's awesome. Fast forward to today I am changing the industry for how the elderly are taking care of totally upside down.   Michael: That's wait. So you're putting elders on their head? I don't think is that is that good for them?   Brandon: We obtained we are changing the whole and we're changing the whole industry of how everyone thinks of it because typically, if you think of the older industry, right? You think of 100 to 200 type with a ton of elderly in there, right? Tons of them, right and they typically have a pretty terrible odor and the odor isn't very good. It's the odor because people don't get any help and then there's also the atmosphere of everyone asking for help because the average caregiver has to care for 20 to 30 people. I don't know on you, but we are in the top country in this whole entire and if that's how we care for the elderly, I feel like we didn't do things properly and they have to be totally turned upside down because how they're currently doing it isn't able to operate. I had a thing happen in our family back in 2004 where there was a person in our family who was 85 who ended up in a place for 200 beds and we pulled the pull cord to have people come in there to help them and it took them 10 minutes 15 minutes by 20 minutes like I'm getting like pretty irritated by 25 minutes like I just lose my shit and I go out to get a them to help them and I can't say I handled it all that well because I kind of exploded but like that's how I was first exposed and it turns out that's actually common to how the industry is able to operate and I said that's terrible. I hate this industry, hate it, hate it hate it.   They bought 10 years after that I was down in Florida and I got exposed to a five a home that had five people in it and I was like what is this? You know at the time I had 23 homes in our total I began build In our portfolio in 2012, and by the end of 12, I had 23 homes and I had, I thought I kind of had everything figured out. Well, at the end of 14, I'm in this house down in Florida and I'm doing each one of these like arms kind of crossed, because I'm just looking at the place and I go, What is this? I haven't ever seen a home before that is it was probably a 2800 foot house. There was houses on each side, probably 10 or 12 feet from the house and I was just like, What is this because typically as I would go down to Florida, Kelly's dad would play his piano in the old folks home 328 times per year for 35 bucks and I hated going because it was typically in these huge in the elderly in the odor was just terrible and I was just like, if we can get out of that, is there anything that I can do that I don't have to actually, and I would offer to like cook to clean all of that just so I didn't have to go? Thank God, I didn't I didn't have any option because I was ill put this house and I was like, What is this? This is cool. It's it didn't have any odor. It had this awesome atmosphere and I was just like, how have I been in?   How have I been investing in assets and I don't have any clue what this is and I asked the girl in charge, and I said, hey, how much do these people pay to be here and I threw out a figure of like 1500 or $2,000 in this girl did this hurt? Like her eyes came down here and like this girl's answer was like, and just kind of kept on walking and I was like, Kelly, what the hell was that answer? She didn't even answer me. So I ended up calling her and the girl goes, Brandon, I am sorry, I thought that you were only kidding because they begin at $5,200 a month, what times five people I'm like, that's $26,000 and every home that I had all 23 Our highest was like $2,200 per month and our average was like 18 and I said holy crap that one house with five people in it was outperforming every house that I had two times each month. And I was like, I'm in the I have to get into that business and by the time I was able to come home, I found a house in a town of 832 people and it was the house was 4880 feet on three acres. So like we bought it for 250 and put $550,000 into it right over the top. I got this house full by February of 17 and we were gross and 55,000 of income within a cost of the expenses of like 30 to 32,000 a month. So this house was jam on month, one month, one house, we were changing the industry to and offered this cool option that people have never heard of.   Michael: So you're netting like 20 grand a month on this place.   Brandon: Per house, yes and I have homes that are 1015 and 20 each home. So that's the that's the entry level for us, is 10, so…   Michael: I mean, okay, I've like speeches, I have so many questions. So I've got to imagine caring for the elderly. This is a very medically intensive, medically heavy industry and so talk to us a little bit about how do you how do you get into this industry because I think there's so many barriers to medical and then care and I could go on but tell us how you how you got started.   Brandon: So when I got going, I had everything in the to open up the house, right, I was able to open it. I even got the first two or three people in there, right and when I quickly got past like two or three people, I quickly figured out that I didn't really have the experience to operate them, right. So I was doing what I was trying to do to get the house full was I was calling on churches, in particularly wanting to talk to the head of each church. Now, I found out quickly that churches are hard to call on because they don't ever answer and they don't tend to call you back but I finally got one and I called in I was talking to the church pastor and honestly, I think he felt terrible for me because he's like, Brandon, you aren't so good at this like this is this isn't going to be your thing, right? So like he goes Brandon, hi god, their closest friend was in health care for 38 years. She just retired in in. She was getting kind of anxious to like go in to do things. So they introduced me and she was in health care industry for 38 years I ended up taking You're out to eat every Tuesday for about six months and I finally got her on our team, I got her to invest, but I had her in charge of operations and that was back in 2015. So I basically was able to open up homes, but I quickly figured out that I needed a team of experts to actually operate them. So after I had her in, it was in 2015, I kind of had her handle the ops and I focus on opening up homes.   Michael: That is wild. So at the beginning, before you brought her up, where I mean, were you there at the home, cooking, cleaning, doing all that kind of stuff yourself?   Brandon: No, I only had to go there when people didn't come in. So there was a handful of times where a person called in, and I had to go in there. That wasn't very fun and I quickly figured out I need to have things in place that that isn't going to ever happen over because I found out quickly that I am not very good when it comes to cleaning and taking care of people I quickly said, you know, I had to get out early. So I found people, I did have to cover a handful of shifts and I did call in for help because there were some things I just couldn't do.   Michael: I can imagine, I can imagine. So when you're looking at properties, I mean, this first property, what about it kind of jumped out at you and said, Hey, this, this is a good candidate or a good prospect to purchase, you know, for this type of business.   Brandon: So when I was down in Florida, I saw a five bed house in the five bed house was great. But the five bed house wasn't. It was geared for like an owner operator, a person that was in a health care field and I quickly figured out that that wasn't going to be us that I couldn't do that personally. So I decided to exercise. So I was looking for a first floor house, it was like 5000 feet, first floor 5000 feet. That's hard to find. So when I came back home, I thought that they'd be everywhere because down in Florida, there's 1800 of these homes. California has 2800 out there close to you, I think Arizona has 3000, Texas has 15,000 back by us. There's 55 by five, so I said…   Michael: And when you say when you say these homes, you mean like single family homes in neighborhoods that are being used for senior care facilities.   Brandon: So I am talking about homes that are caring for the elderly under 10 people. It is under 15 people per home.   Michael: Okay, All right. So you had 55 in your market…?   Brandon: 55 not in and there's 18 in all of Florida, and there was only 55 here, right and I said, that's bingo. Perfect I'm in, so that's how I first jumped in but a thing a thing that happened is when I first got in, there wasn't a ton of other people out there doing this. So I had to kind of go teach people this concept. So the healthcare part was definitely challenging but the houses that I was trying to find where four to 5000 feet, first floor only our first house, it was on three acres. It was a financial planner that I purchased that bought our debt built in office on to his house. So I had to open things up, I ended up putting 550,000 into the first house. So I had four private bedrooms, and I had three bedrooms for two people each. So for privates, and then I had three for two. So I had a total of 10. Did I go over, did I go overboard? Absolutely but I feel like if you're going to do anything, you have to do it how it ought to and I put three ADA A's on the inside for people to go to the psych bathroom, I only had to have only one and I had 380 access points to get into the house and out of the house and we just did everything over the top. So that's how I first got in and then beyond that house, it was harder to find that type of house over. So fast forward to today I've got five homes up and operating. I got two homes opening up in quarter three this year. And then in 2000 are in I also have 7.2 acres of land that I bought before COVID that I was going to put our own homes on.   Michael: This is incredible. So what is the financing look like for these homes? I mean, can you go to a bank and say hey, I want the purchase. I want to purchase it at 20 and I want you to give me a line of credit for the construction for the rehab. I mean who's financing this type of stuff…   Brandon: I had a chance, dude when I went in there to talk to these guys, they thought I had like, they couldn't get it. These guys are used to like, easy, typical type deals, when I told them that, that I was going to 10 people each paying 5000 to 5500. Each month, their heads literally exploded. They're like, Hey, man, why don't you come back after you do your first house? Then I'll talk to you and I was able to do that and they're like, hey, why don't you come back when you have two houses and then at that, at that part, I am like, you know, I don't think I'm going to actually go ask him for anything anymore. But like, that's how it happens. So a thing that I do for financing is I actually brought in private capital, from investors on a per L for each home and that's, that is how we did, I had to offer some pretty high IRR hours. But when you're first getting things going, that is your only option and a thing that I found that I was really good at is when I was buying properties, I was buying like oddball type properties, not the typical like three to 2200.   So I was buying houses that were on properties that the typical family at the time weren't trying to buy, right. So I was buying houses that were on the app on the MLS for 200 days, 400 days, 500 days and what I would do is I would give them an offer for them to carry back financing at the full asking price. Or I would give them an offer for cash but the cash offer was like so like 50% and a lot of times I was just using that cash offer to help prop up the other offer but I've had a handful of times where when I was putting in those two offers, they would take the other one. So I bought one house off the MLS one time that was on for 2.4 million. I bought that for 750 cash and other time I bought one in Connecticut that was on the MLS for 2.1 million. I bought that one for 700,000.   Michael: Okay, you are not kidding, those cash offers 30, that's incredible a budget you're solving for someone's like, that's…   Brandon: Yeah, those are offers that as I was able to have them in I thought no ways anyone can ever take this off or like they are going to be like, click just kiss but they took him because our other offer was 1.8 million owner carry back financing and they just didn't take but that was probably only 30% of our upfront portfolio. The other ones, I've had them take the owner offer carrying back financing. So that so that is how we did hazing.   Michael: And then you bring in investor capital to do the rehab, whatever upgrades you need. Yep, amazing.   Brandon: Yes, sir.   Michael: So like, when you're looking at properties, there's got to be at Imagine zoning limitations or requirements or local licensures that you need to get what, like, what should people be on the lookout for or how should someone be thinking about those?   Brandon: Well, anyone that's thinking of getting into this themselves and having people operate it themselves, I would tell you don't do it. It is something that I casually got into it thinking that I could just figure it out and it's been one of the most challenging things I've done, where it's taken me eight years, open up five houses and it's challenging. But as I would look for houses, I would look for houses in an area where the household income, the average was over 80,000 and then one of the things that I would do is I would go to the population and I would look for a population of in each town over 65 years of age, I would look for like 10 to 12% plus, anything that was up over hire, that was awesome. I did buy the 7.2 acres of land, all of our first five homes, they're in towns where it's like, you know, 10 to 20 or 10 to 18% over the age right. And then the town that I bought this dirt in for 7.2 acres, we paid 220,000 per acre but it is located directly next to a Dell property.   That's that is 5500 homes that are all 55 plus. So our percentage of over 65 in this town of 26,000 people is 32% Wow. Let's go. All of us purchase that. Before COVID. We were finishing that we got through entitlements, we were going to build six homes, 20 beds each and in office, it was gonna cost us $15.5 million. We had the all of that done, we even had a closing in place for a family office down in Florida, actually to give us a 10 $10.86 million at 12% and they were going to close March 13 2020. We were going to begin pushing dirt April 1, 2020. If you think back to the time, a little COVID pandemic entered into this plan, and the family office were two guys that were probably in their 70s or 80s themselves that earned a bulk of their family office capital from offices and they were in the class a office industry, right and they were trying to take cash out of that inputted into any other asset class and they ended up pulling out two days before closing. Yeah, because they were having tenants that GSA weren't paying. So it wasn't ideal, the overall timing of it, but our things have changed where we aren't building today because cost the build is just too high, where we are holding off until that cost comes back down and we are doing other things today that that fit what is going on.   Michael: Okay, you should have told those guys look, you'll get a free room and board. Just give me the money. I'll build you a spot.   Brandon: I was trying. It just wasn't great timing. I was like, what COVID? Come on. That's fine. It was just too early for us to have any clue. So yeah, unfortunately, they passed but I'm gearing things today now to try to build those connections up with those guys, because a ton of those guys have capital galore. So much dry powder that's just sitting, where if they can find an asset class that is out there that can help the elderly that can help give them awesome IRR that's going to top inflation and also help have a tangible asset. That's what they are looking for today. I think the days where people earn in 200% 300% Kryptos those days are kind of over for some time now, where people are looking for tangible assets today and I have this, so…   Michael: That is amazing and so these houses, I would imagine they serve three meals a day, and they've got all the medical care and there's like it's like a proper business like you would expect to see if you went to a traditional elder care facility, you would have all those same amenities and sounds like and then more, right…   Brandon: So a thing that's different for us for a for every home that has 10 Total people in it, I have a caregiver to every five to eight, five to eight total people compared to the other. The other competition has a caregiver every 1520 to 30 people. That's the thing that causes the old the overall odor. So in a home for 10 total people, I've got two caregivers in there from 7am till 10pm and then I've got a RN that comes in in the am and in the evening just to have eyes on everybody and then I have… that comes each week or as he has to write. So I offer everything in a home that is very cozy that other places have in 100 to 200 type building. Now, with that being said, it's actually harder for us to be as efficient as everyone else. As I only have 458 homes, I actually need like 1020 3040 80 homes to actually have things be efficient. So I'll tell you 10 Plus, under 10, it's hard to be efficient and that's a thing that keeps other people from being able to get into this overall industry or if they do get in there.   They're the owner operator that owns a home or to homes but they're in it every day going 80 hours per week probably profiting 250 to 400,000 per year, but they're busy and I said you know I can't do that I'm going to operate a company that I can expand, to have time to go do other things. You know, I've our oldest is 14 years old and I openness that I could have time to coach him, right and I have been able to coach him playing baseball just since he was eight years old and that's only possible because everything here so time free is…   Michael: That's amazing, Brandon. I think my last question for you. I mean, I have a million more, let's be honest but we gotta keep this within time. How do you insure the thing, is it like us traditional long term rental? Is it insured like a medical office? I mean, what does that look like?   Brandon: Yeah, so the insurance is going to, you're going to have insurance on the overall asset but then you also have to have extra, the extra insurance for operating it for E and O for if anything is able to happen, if anyone's able to get hurt all of that. That's typically about $800 Each house each month but a thing for us, though, is because I haven't had any issues. Over the past eight years, we haven't had any, any type claims, whereas you're in a home with only 10 people, if you offer on if you offer awesome care, they don't tend to have any issues and that's what's awesome on this because typically at the other places for 100 to 200. They have a they've got a caregiver to every 20 to 30 people because the owners are trying to get it to earn extra money. The only avenue to do that is either to push up your income or to cut your expenses. That's the only thing to change the actual NOI. So what they typically do is they cut the care giver item, which is going to an increase the NOI. However, when people are able to have issues and they are able to pass, then you have their families, a attorneys after you and they're pissed, telling everyone how terrible you are. I always feel that it is better to do things how they ought to be done upfront, even if it's harder, because everything that I'm able to do is harder. Like this isn't easy by any means I would tell you, it takes you getting to like home tend to like really cover the overhead. The overhead I found to truly operate this properly, is over 500,000 per year and in order to pay for that you need enough houses paying towards that, to don't have each house covered in too much expenses that they just can't cover, so…   Michael: That makes total sense. Big numbers…   Brandon: Big numbers.   Michael: Yeah, awesome Brandon, this was so much fun, man. If people want to learn more about you reach out with additional questions. What's the best way for them to do that?   Brandon: They can they can call me or text me. So on my phone, you can call me at 815-790-2330 or else you can call our office of 847-380-8624, yes, 847-380-8624.   Michael: Amazing and do you have a website that people can check out as well?   Brandon: I do for our fund but our fund isn't for everyone or funds only for a for investors that are a core they are qualified purchasers. So it's a tear a BB it's a 506 C they can check that out their shepherd, our operating company, I can get you the page to put in there. So it is well just for anyone to put eyeballs on our actual homes or our fund is https://boutiqueseniorlivingfund.com/   Michael: Awesome.   Brandon: That is that as well, man. Thanks for taking time to talk with us today, man. This has been awesome!   Michael: It has been a pleasure, I am sure we'll be in touch soon and take care.   Okay, everyone, that was our show a big thank you to Brandon for coming on super, super interesting topic that like I showed at the beginning of the show. I don't think we've ever had someone on the show talking about this topic, so really interesting. Definitely go check out Brandon's fund, and it's an interesting asset class. See where it goes from here. As always, thanks so much for watching or listening, and we look forward to seeing the next one. Happy investing…

Rich Fettke has a passion for helping people improve their businesses, grow their wealth, and live more fulfilling lives. He is the author of The Wise Investor, Extreme Success, and the audio program Momentum. Rich is also a co-founder of RealWealth®. Since 2003, the company has helped over 60,000 members improve their financial intelligence and acquire cash-flowing income properties — so they can live life on their own terms. As a licensed real estate broker and an active investor, Rich was selected as a Rich Dad Author for his expertise as a Wealth Mindset Expert.   The real estate industry is not easy for everyone to jump into. If you have just gotten your real estate license and feel you need extra support before getting your feet wet, or if you are an experienced agent looking to take it to the next level, you may decide to get a real estate coach. Rich who is a coaching mentor and investor will discuss the value of having a coach and mentor and what you can expect to find in his new book.   Episode Links: https://realwealth.com/ https://realwealth.com/the-wise-investor-book/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Rich Fettke, who is an author, investor, coaching mentor, surfer, among many other things, and Rich is going to be talking to us today about some of the mistakes he seen investors make the value of having a coach and mentor as well as what you can expect to find in his book, which is soon to be released. So let's get into it.   Rich, what's going on, man? Welcome to the Remote Real Estate Investor. Thanks for hanging out with me.   Rich: Good to be here. Great hanging out with you.   Michael: Super excited. So before we hit record here, you and I were chatting a little bit about some sports where you both share in common, but I would love if you could give our listeners a little bit of insight into who you are, where you come from and what it is that you're doing in real estate today.   Rich: Sure, absolutely. My name is Rich Fettke and yeah, interesting. The way we got into real estate investing, I'm an I'm an investor and my wife and I also have a company that helps investors but that was what really got us into it was despair. It was about it was exactly 20 years ago, I was on top of my game, I had a book deal, just signed with Simon and Schuster. I was a business and personal coach had a thriving coaching practice, I was giving keynote speeches all over the country. It was like I was just crushing it and I felt so good. I was 37 years old and then I was diagnosed with melanoma, which is an advanced skin cancer but that's not the biggest deal is that they thought it spread to my liver.   So they had me do a CT scan and ultrasound and it kept showing these masses on my liver and so I met with an oncologist and he said, you know, it looks like you got about six months to live and we had a 10 year old daughter. Yeah, it just rocked my world, I had a 10 year old daughter, a three year old daughter. My wife is amazing but she was a stay at home mom and so she was freaking in the sense of what am I going to do financially if Rich dies and so she started to she had a as a coach, we were doing things together, she was also a trained coach and so she had this small radio station in San Francisco that she used to do a radio show on about all areas of life being your best self and personal development and all and she said I gotta figure this out. So she started to help people on that were financially successful, and was interviewing them about how do they create wealth and how do they create financial success and most of them turned out to be real estate investors. No surprise, so she came home all excited. One of them was a mortgage broker and he said, if you get your license, you can come become a mortgage broker. This is about 2003. So you know, things were still the mortgage world is pretty easy back then. So she went and did that. In the meantime, we figured out I had a PET scan, which is the most advanced scan for cancer, and it showed me cancer free. So it was just it was a false diagnosis. It was just hemangiomas little clusters of blood vessels on my liver but that was enough for me to go for those three months of not knowing if I was going to be alive, it was enough to give us the kick in the butt to get out and, and make things happen. So Kathy, and I see after that after I was healed, we started to invest together. We bought a bunch of properties in the Dallas, Texas area and it just took off from there and then Kathy started to help other investors with their mortgages. We had a bunch of friends and family saying, tell us how are you doing this? We you know, how are you doing this out of state investing and so we started we formed a group that we thought would be just a small group of family and friends and people that listen to the radio show. We thought it'd be a couple 100 people and today it's over 64,000 members now at real wealth that we're helping invest.   Michael: It's pretty amazing. Richard, good for you guys, so I I'm curious in your coaching business before you got diagnosed, did you ever come across real estate investors?   Rich: That I coached? Yes. Yeah and my mindset was, I want to invest in real estate someday when I have enough money and so and I was thinking I needed, you know, several $100,000 you know, to buy that first rental property or first investment, not realizing the power of leverage and how much banks love to lend money on real estate and so that was that was the eye opener for us.   Michael: Okay, I love it and what made you go remote? I mean, you're in California and your wife live in in San Francisco. Why did you pick to invest outside California?   Rich: Actually Robert Kiyosaki. It was she because Kathy was on the San Francisco radio station she was and it got bigger and bigger or she was able to attract some pretty big names and then this guy who had just written a book called Rich Dad, Poor Dad, not long before that, and he had this cashflow game that he was promoting and we had a friend who was his distributor for crypto cash flow game back in the day and so he was on the radio show, and he warned Kathy's listeners to sell their overpriced California properties and to invest in Texas and so we took his advice. Not we didn't sell all our expensive property, sadly, because 2008 crushed us with our California properties but it was, you know, he just saying for cash flow and what's going to happen, he was currently kind of calling out what was going to happen in 2008-2007. That's what sent us out of state.   Michael: Love it. So you also recently have written a book, haven't you?   Rich: Yeah, I just finished my second book. 20 years later, well, I have an audio program back then, too but yeah, it took me 20 years to write my second book and it's called the wise investor and it's a lot different than my first book that was mostly coaching focused. It was a nonfiction, basically a personal development book and this book is a modern parable. So it's story forum, and it tells a story of creating financial freedom and but also living your best life.   Michael: That's awesome and why did you decide to write it?   Rich: Interesting process, you know, I've had my own coach, to walk the talk to over the last 25 years now, I started coaching 25 years ago, and this coach that I that I still talk to every week, or every other week, now, he kept kind of he had read my first book, so he's always kind of knocking on me saying, when are you going to write your next book? When are you going to write your next book and I was like, I'm too busy running this company, you know, we have 27 employees and but then what we did is we applied story branding to our company. Are you familiar with that story branding?   It's a guy named Don Miller. He wrote a book called Building a story brand and it's all about basically telling the hero's journey, Joseph Campbell's work, using the hero's journey, just like great movies, do great books do weaving a story where your customer is the hero, and you are the guide. So the company is the guide, you help your customers and so we changed everything on our marketing around that, and how we served our members as being the heroes and I just got into this whole storytelling thing. I'm like, this is fascinating the structure of how to write a story, a compelling story that engages people that elicits an emotional change all that and so one day when in a coaching session, I said, you know, if I was going to write a book, I'd probably tell a story and then he heard that and you just like, What do you mean, tell me more and then that was the spark. So then then I get obsessed with it and I'm like, I could write a parable about what I've learned over the last 20 years as an investor, what I've learned in the last 25 years as a coach, yeah, and kind of weave them together into a story.   Michael: How cool and without giving away too much of the book. I mean, what could people what should people expect to find when they when they get a copy?   Rich: Basically, it's about this family, man, his name is Ryan Brooks and he's like a hard worker. He's got a wife, he's got a couple kids, and he's making a decent six figure income maxing out his 401k but he has no time for his wife or his kids or even his life and he's not investing. He's basically what we call today, Henry, right? A high earner, not rich yet. So he's…   Michael: I love it.   Rich: Yeah, they're out there does a lot of people you know, especially in California, where I'm based, and that make a lot of money, make a good income, but they're not rich, they're not wealthy, and they're not investing their money. They're spending it on things and so this guy is, is in that same trap. So he just starts to learn from he meets this new friend and mentor, who takes him out on adventures. Of course, it takes him out climbing takes him out mountain biking in in the sessions, when they're having fun together. He teaches him about investing about how wealthy people think, how rich people operate, and how and how poor people operate and think and he really goes over the difference between, you know, truly wealthy people, and people with a lot of money. He even says, you know, I know some people who are so poor, all they have is money and I see that in Malibu, you know, where I live there's a lot of has a lot of money and some of the people are really stoked and really happy and getting the most out of life and investing their money at some of the people are grumpy and miserable and, you know, that's rich in money but not in life.   So there's a lot of lessons about helping Ryan Brooks and his mentor walks them through this on how to invest how to how to really look at life through a different lens. One of my favorite things a mentor says to his mentor is about assets and he just kind of puts it in a different frame. He's like, you know, assets is are anything that will provide you income, or better health or happiness or two time and liability is anything that detracts from your income, or your health or your happiness or your time. So it's kind of a cool that type of perspective is this mentor is like, he's the me I hope to be in the future. He's that in that wise investor who's you know, he's got it all together, he's got this sage advice. He's very stoic, but he shares these lessons. So it covers the journey of five years of when they first met, and Ryan Brooks is struggling and just doesn't know what to do and it shows five years later, what happens and how he becomes wealthy in more ways than just money. I love it in money, too.   Michael: I love it. I love it enrich. Where can people find the book?   Rich: It's on Amazon, all major booksellers, published through Rich Dad advisors. So Robert Kiyosaki wrote the foreword for me, which I'm very grateful for… Come full, full circle, right.   Michael: Totally.   Rich: Yeah. So it's on Amazon. It's called the wise investor. Subtitle is a modern parable about creating financial freedom and living your best life. I got the cover right here. So it's out on eBook. This is what the cover looks like. Perfect. So it's out on eBook. But the printed version, the hardcover and the audio book won't be out until August and it's because of just like real estate supply chain issues. There's not enough paper at the printers, so it's a long wait six, seven months now to get a book printed.   Michael: Holy smokes…   Rich: Isn't it wild?   Michael: Yeah, okay. Well, I'm interested, get your order in now, because it might be a while.   Rich: Right, yeah. So hopefully it all comes out in August. Hopefully it comes out earlier in August but yeah, and the audio book was, that was a fun challenge for me. Big goal, because, you know, it's a story and there's 10 different characters, females, older people, young kids, so I had to become, I had to learn some voice acting skills over the period of a couple of months and really practice it. Oh, how can I think I pulled it off, we'll see how the reviews are.   Michael: Right on. That's great. Well, Rich, I'm curious to get your opinion on something because you're a coach, I will also work as a coach and there are folks out there that say you can take the horse to water, but you can't make him drink and so thinking about kind of the Henry's out there, and I think a lot of our listeners might find themselves in this boat, too. They have friends, family, folks around them that don't get real estate investing, right? I have a six figure job, I got a great job, why would I bother investing, I can make more money at my job. So what do you say to all those people and really, how do you position investing in general or real estate investing specifically to the people that think they haven't really good as things stand?   Rich: Yeah, I mean, first of all, you know, as a coach, I'm going to help point out what is good first, you know, this is the way I coach, the gratefulness piece and, you know, it's like, well, you know, be stoked on that six figure job, or whatever it is and it's about creating freedom and so many people don't have that freedom and that's what the Henry's don't have. If they have a short runway, if they stopped if they lost their job, which we've seen happen, they don't have many months left of cash flow, to be able to live their lifestyle, or any type of lifestyle. So that's the biggest thing would be that, do you want to create freedom for yourself, and not have the stress of losing your job, or wanting to move to a different job, if you're not loving what you're doing, a lot of people stay trapped, struggling, just trapped in their jobs, because it's like, this is my income, this is the way this is what I need to make ends meet. So that's the biggest thing, it's really about having your money, make money, so you can create freedom in the future freedom of time and everything. I think that's the biggest one and then so then flipping on the other side, there's something too about America, in the world that we are preprogrammed.   When we think invest, we think stock market and you know, I have nothing against it and Kathy and I are and my wife and I are invested in the stock market, but our major focus and the big aha, back through that story is, you know, we were doing that we were contributing to our IRAs and, you know, doing everything we were supposed to do investing in the stock market. But when we learned about leverage the power of leverage and how you can like 5x your money, just through the power of leverage. I mean, that's a standout and that's one of the lessons the mentor goes over in the book. He, he has Ryan compared to say, say you have $200,000 to invest and you invest 200,000, and gold, you put 200,000 and you buy, you buy maybe 400,000 in the stock market on that, you just leverage it and then you invest that same amount into real estate and then he kind of plays it out over five years, and over 10 years, sorry. So he's like 10 years later, and he said, so how much would the gold be worth at the same appreciation that's gold has been at and they look at that outcome and he said, oh, now let's look at your stocks and he looks at that. It's like good, he's got a decent return. Another investment, you know, he's got home and he's like, almost tripled his money but then the real estate, he looks at it, and he's 5x his money and more and then he's like, and that doesn't include the cash flow. It doesn't appreciate all the depreciation write offs and the tax benefits. So it's kind of like an eye opener to be like, oh, wait a minute. Now I see the, you know that the angels sing about investing in real estate and all those amazing, amazing benefits.   Michael: Totally, totally. Yeah, that makes that makes complete sense and curious, rich to get your thoughts on when looking for a coach because I think that that's something that some people have trouble wrapping their head around, it's like, oh, I you know, I don't have a coach in life and so I would never be inclined to go get a coach or pay for coaching and so if people are inclined to do so if people are okay, accepting that, what are some things they should be looking for when selecting a coach, or a mentor or whatever, you'd have someone to help walk them through their journey?   Rich: Yeah and that's a great question. It's like, I'd actually like to start step back a little bit, because you said what if they want to coach I would even go as far as there's a lot of people that I meet who say, Why do I need a coach, you know, I can hold myself accountable. I, I know how to set goals. I know how to go after what I want and everything in so why would I… Yeah, like you said, Why would I even pay someone or do anything like that and it's, you know, it's that age old metaphor or an analogy of an Olympic athlete, right? Did they get to the Olympics without a coach? No, you need someone to point things out. So for me, I know the power of coaching has been incredibly amazing because I have a coach to basically hold up the mirror to ask me the questions that I'm not asking myself, to help me look at myself and be like, you know, asking those tough questions. How are you operating? Are you being your best self? Are you, where are you getting in your own way? What's that inner Gremlin in your head saying to you? What's your limiting beliefs and what are you going to do here, what and look at new perspectives, new ideas. So there's a power in that, that it's called, I'm certified in CO active coaching, which is two people, you know, when you come together, you come up with ideas that you neither would have thought about their own? So that's another powerful piece of coaching. So that's, that's the first part of my answer and then the second part is, when you're looking for a coach, I think it's really what you're looking for.   So are you looking for a mentor, which is I think, different than a coach, a mentor has kind of been there, done that, just like the mentor, and in the book I wrote, he's been there and done that. So he can say, if you just do what I did, you will be where I am, which is awesome, and very valuable and that's a mentor and I think some people are looking for training and consulting, where they sign up for a coaching program. But it's more about teaching to learn a specific skill and that's very valuable to so and then the third one would be looking for a coach who's more like that coactive approach where it's someone who I first shared, and what I've gotten from coaching is someone to ask the most powerful questions, someone who's intuitive, someone who can really help you shift your mindset and be your best self and operate at your best self. So that would be a another type of coach or a peer coach in my eyes and sometimes it comes together, you know, I'll say to my clients, do you mind if I throw on my consulting hat right now or my mentoring hat? So they know that I'm stepping out of that coat peer coaching role and be like, you know, I've invested in real estate for a while I can give you some advice here, I'm not going to have you, you know, go and search it and try to learn it elsewhere when I've got it right here, and I can share it with you. So I think that's it, it's like looking for what is it that you want? What are you looking for and that would be the first thing and when I was interviewing for a coach and looking for I've had several coaches over the past 25 years, when I interview a coach, I'm always coming from the place of like, what's the vibe? What's it feel like to be coached by this person?   Do they? Do they ask powerful questions? Are they really hearing me and are they into my vision? You know, I think the biggest thing would be connecting with that coach, and really, really noticing, like, is this coach, really seeing my vision? Do they really get me who I am and what I want what's going to help me be fulfilled in my life, and in my career, and it's just a sense thing. So you can get that sometimes you you're talking to a coach, it's like, oh, this guy's or gals just coaching for the money, you know, just looking for another client. Sometimes you talk to a coach, it's like, wow, this person is really like, wants to coach me on their ideal client and so you can sense that   Michael: Interesting and how should people be thinking about it for themselves? If maybe they're not sure if someone is just getting started out in this journey, they know they want to invest in real estate, that's the goal but they don't know how to approach it to the to coaching and mentoring a consultant. I mean, what are some questions that they could be asking or things they could be thinking about, as they're starting?   Rich: That process gets great, I mean, experience, I would ask for experience and you know, I think it's great, you can find you can definitely find a coach, you know, or whatever they call themselves. They might call themselves a mentor, but it's like asking those questions. and talking to that person, just you know. So here are some of my goals. I know that you invest in real estate, can you tell me about your real estate background? What's your investment, investment philosophy? What have you invested in and I would even ask the coach, you know, what's been your biggest challenge your biggest failure as a real estate investor, you know, get see how vulnerable and real they are and if they're willing to, you know, to share that, and what's been your biggest, you know, what's been your biggest win as a real estate investor and what's your greatest strength? So I would ask some of those questions of a coach and then also like, what's, where do you I mean, real estate investing so broad, right and so it's like, what do you specialize in? What do you know best? When it comes to real estate investing?   Michael: Yeah, I love that. You mentioned tell me your biggest failure, biggest flop. I had a mentor back in the day, and he said, I don't trust anybody without a limp. Yeah, because like the people that have only had successes don't know how to do save no right to ship when things go sideways, and they will go sideways.   Rich: They will, they will. Yeah, I know that people who got into real estate in 2010-2015, who are just, you know, knock it out of the park, and they think they're, you know, superheroes. Sometimes I'm like, oh, careful, careful   Michael: We are all superheroes in this, you know, the last decade.   Rich: Exactly. Yeah, yeah.   Michael: So Rich, talk to us a little bit about what you've seen. Some of your coaching students or mentees get right and what have they gotten wrong because you really we have the beauty of hindsight now…   Rich: When it comes to investing, specifically?   Michael: When it comes to investing specifically…   Rich: Yeah, wrong and it's the same mistakes that Kathy and I made too. And it's that you try to talk people out of it and it's like buying an overpriced property in a non-landlord friendly state that is maybe slightly negative cashflow, or just breakeven, and they're looking at and say, but look at how this is appreciating in five years, it's going to be worth this much and it's like, no, so honestly, that's the biggest mistake I can see and I can see it in single family all the way up to multifamily. You know, just speaking at these conferences and meeting with a lot of people are doing multifamily. They think they're superheroes. They're doing this short term, short term lending short term loans, and bridge loans and really dangerous stuff at this time in the market because it's what's worked in the past and they think that they just like, Well, yeah, it's like, I know, this is a I know, it's only a you know, 2% cap rate, but that's okay because, yeah, just a one in three years… Yeah, exactly, so there's something there's something about, there's something about that. Yeah, it's just it's fundamentals, I think that's what it is, is comes down to investing fundamentals and that's what we preach at our company. It's how we help our investors, it's just really coming back to the fundamentals. Make sure you're doing it right.   Michael: Yeah, that makes sense and what about the other side of that coin for the folks that you've really just seen knock it out of the park? What are they doing and you can't say the fundamentals, you have to pick a different answer go?   Rich: That's great. I love that. Agreed, yeah, what value is that? Really, it's the people who, what I've seen, it's the people who take the long term game plan to the boring investors, the ones who are not trying to do this rapid growth, and trying to 10x their portfolio or 20, exit, or whatever it is. So it's keeping that long term perspective and just, you know, making sure that you can control the properties through any type of downturn and so the lessons learned that that, you know, being going through the whole recession, the Great Recession, and the whole mortgage meltdown, and all that big lessons came from that and so that it's the people who take out long term, continuously reinvesting to so it's like, you start this small, small portfolio, whether it's passive or active, and then you just start expanding and expanding and expanding it and I would say, it's the people who focus on the overall cash flow, not just I mean, brink weaving into appreciation, but looking at it, like five years from now, this is what my portfolio will most likely be doing based on everything, even if there's a recession, or whatever and then looking out 10 years and looking at it 15 years.   So it's that big picture and then reinvesting. The opposite of that would be someone who's I have some friends who were only flipping, so very transactional, and they had to find the properties either flip it and that's where their income was coming through into constantly flipping it and they adjusted the wise ones and the smart ones adjusted and switch to the bur stead strategy and so they started to find these properties, fix them up, but then they would hold them and rent them out and now they're the ones that have amassed a good amount of wealth, whereas the other people who are flipping are still in the transaction game.   Michael: Yeah. Ah, that makes sense, that makes sense. Okay. We've had a pretty good debate on the show over episodes about something called an alligator, which I don't know if you know Michael Zuber at all he's an author of one rental at a time. He's a good friend of the podcast, but in his definition alligators any property, that's negative cashflow, you have to feed it every month to keep continue owning it. So as you're talking about big picture, are you okay? If you say for instance, take out a cash out refinance a property to make that property a go negative, but to buy property B and now your global cumulative cash flow is greater than that a property a alone.   Rich: I'm in the camp of no, don't, do not no, no negative cashflow and negative cash flow and I'll be completely honest and transparent that the house at Kathy and I were in in Malibu before this, we bought it, we fix it up, we bought it for $747,000 in Malibu, which is rare, hard to find, it's like unheard of. Yeah, it was like it was a one bedroom, one bath built in 1927 and we had to completely gutted it and rehab and we put about 300,000 into it and then we didn't get permits. So we got busted in that process and now there's still a lien on title from LA county building department and so we can't sell that place and we can't even get a refi until we get those liens off title and get it all permanent everything which is a, that's a whole different stories…   Michael: Trying to get us to do an entire podcast series…     Rich: Coastal Commission and all that stuff. So oh my gosh, so we have a tenant in there and it's slightly cash negative cash flow. So that's like 150 to 200 a month negative cash flow.   So being completely honest, we do have a negative cash flow, it drives me crazy and that house has gone up probably $400,000 over the last couple of years in value. So we could look at it that way. But we can beyond that everything that we hold is positive cash flow, even if it's just like $100 a month positive. That's fine and if we're going to do a cash out refi we make sure that it's appreciated enough where we can do that cash out refi and not have the loan payment, PTI go over what we're gonna get for rental income.   Michael: Yeah, makes sense. Well, I appreciate you sharing the misstep and the vulnerability here on the show but it wasn't intentional, that was just a series of consequences. That hadn't be negative. You wouldn't you would intentionally do that.   Rich: Yeah, we did bring it on ourselves and but yeah, wasn't intentional. We didn't want to get caught.   Michael: I've played that game before, too. It's a risky one.   Rich: It is. Yeah, so you're always looking out the window and yeah…   Michael: Who is coming in, roday gonna be the day get caught o maybe tomorrow?   Rich: Exactly. When we were almost done. We were building the final deck in the back and all of a sudden, this building inspector shows I'm investigating you because one of your neighbors called…   Michael: I was gonna say but it's probably one of your neighbors.   Rich: Yeah, because it would make the cut and concrete and it was so loud or for the whole week. I think it just drove this neighbor crazy and so it is what it is.   Michael: As soon as a quick aside one of the other hosts on the show with me, Tom he, one of his neighbors called on him he was adding an offer a small prefab office in the backyard of his property. neighbor called he gets in trouble. Same thing didn't pull permits. So now he's going through that whole rigmarole. But the funny part is the neighbor that called Tom found out that their fence is on Tom's property, it's on the wrong side of the property. He's like, thanks for calling and alerting me to that little fact.   Michael: Unbelievable.   Rich: So he's, he's playing that game. How do I how do I want to you know, play my next hand?   Rich: The revenge game…   Michael: That's it, that's it, best served cold on ice. Okay, Rich. Let's wrap up here. I'm curious to get your thoughts. We are in this very unique time in our economy in our market in this country and I'm just curious to kind of get your thoughts on what are you doing, personally as an investor and what are you doing in your business and what are you telling your students to do, as well?   Rich: Absolutely, yeah. I have the benefit of being married to Kathy Fettke, who has been around for a while she's on the on the market podcast on Bigger Pockets and so she's constantly doing her market updates every year, she does predictions and has done that for the last 15 years and then at the every quarter, she doesn't investor update and at the end of the year, she puts herself on the line says okay, here's what I predicted back in January. Let's see how accurate I am and yeah, and she's been really good. She's like almost 95% on her predictions, which is awesome. So I just listened to her. You know, she's always interviewing experts and she's connected with like John Chang from Marcus and Millichap and so many just, you know, experts, as I said, with Kiyosaki and all that. So what she's saying I'll just speak, you know, because I get to hear through her office door when she's doing all her interviews and everything she think He said interest rates are not going to go up that much more, maybe even dip a tiny bit for mortgages, and then maybe level off.   But even though the Feds gonna keep raising the rate, the lender and great mortgage rates can't kind of withstand that going up too much. So she thinks mortgage rates are going to hold around where they are and then there's such a glut in such a need for properties and not enough inventory. It's like a whole different world than 2008-2009. So yeah, I think we're, it's estimates are between three and 5 million homes shy right now, for housing units. So inventory still low and also, there's that whole thing where people are locked into these amazing interest rates, so they don't want to sell. So they just, it doesn't make sense to sell something and when you got a 3% mortgage or lower and go into a higher mortgage, so the real estate is gonna hold strong is what she's predicting, it's even going to increase a little bit rents are even going to increase a little bit surprisingly, even with, with the economy and inflation, rents are still gonna go up a little bit, that's her prediction and then a recession will hit well, most likely, sometime around late 2023, early 2024 but it will be a mild one, just kind of more of a correction that that's needed.   Michael: Okay. Okay and does either her or you think that there will be any kind of pullback in demand as folks go back into the office or are we going to be seeing remote work kind of indefinitely, which I think was a big driver of that single family rental demand?   Rich: Yeah, that's a big one. Yeah and the cool thing is like, we have teams that are like the boots on the ground. So there's different 15 different property teams in our company that find properties and so and we just did a mastermind with them in Tampa, Florida and we spent two days and we really talked about all this exact same stuff. So it's, it's something around not like a big hit on it. There still will be some availability, but not much different than if you look at today's current market right now is not going to be a lot different than that over the next year and a half.   Michael: So for instance, we don't expect there to be much pullback in terms of demand. Dude, because we're expecting people to continue remote working basically…   Rich: There's definitely a return to the office. There's there are definitely companies that are saying no, it's time to come back now that we want to look over your shoulder, we want to hold you accountable and all that stuff. It's so funny, because it's like the surfing lineups are getting a little bit lighter thinning. So funny. Go Oh, it's like why are so many people surfing? Oh, they're supposed to be orange. They think they're working. Their bosses think they're at work right now. Yeah. So I'm seeing a pullback there. So that's my gauge.   Michael: So funny.   Rich: Yeah, but not as much. There's definitely, with so many people how they've learned to use Zoom and GoTo Meeting and being remote and all that stuff. It's we're in a new world, there's no doubt about it. So I think there's going to be a slight pullback on buyers and transactions and all that. As far as the rate, but it's still not going to it's not going to drop to like dismal levels.   Michael: Okay, sweet. Well, we will definitely have to stay in touch and see how you do how you and your wife do on those percentages. Rich, this has been so much fun, man. Thank you again, if people want to learn more about you want to learn more about real wealth, where can they do that?   Rich: For the book? Like I said, it's on Amazon or if people want to learn more, before they buy it, just go to https://realwealth.com/the-wise-investor-book/  and then our website is just simple, real wealth: https://realwealth.com/   Michael: Perfect. Alright, thank you again and I'm sure we'll be chatting soon.   Rich: All right, man. Thank you, it was fun.   Michael: All right, everyone a big thank you to Rich for coming on. Super, super insightful. I know I learned a ton as a coach myself in what to look for in a coach and mentor going forward as well. So as always, thank you so much for listening, and we look forward to seeing the next one. Happy investing…

Dana Dunford is the CEO of Hemlane Property Management and a real estate investor. In today's episode we discuss market conditions, interest rates, what is happening in the stock market, and what the current moment means for real estate investors. If you are wondering if it is the right time to purchase an investment property, you will want to listen to this episode. Links: Hemlane.com --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The remote real estate investor podcast is for informational purposes only and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of The Remote Real Estate Investor. I'm Michael Albaum, and today I'm joined by Dana Dunford, co founder and CEO of Hemlane Property Management. And today Dana is gonna be talking to us about the state of the economy and some things that investors should be aware of and thinking about as we move forward in today's market. So let's get into it.   Dana Dunford, welcome back again to The Remote Real Estate Investor. Thanks for coming on and hanging out with me.   Dana: Great. Thanks for having me. Again, Michael.   Michael: Oh, my gosh, it is such a pleasure. You are great friend of the pod. Great friend of Roofstock. For those who might not be familiar with you give us the Quick, quick and dirty background of who you are. And background on yourself.   Dana: Yeah, so I'm Dana Dunford. I'm here in San Francisco. So just right across the bridge from rootstock. I have been in technology for gosh, now we're going on 18 years. So I'm a tech veteran, which we'll be talking about tonight, today, which I'm excited about. And on top of that, I'm in property management. So we're a tech platform for property management, and partner of Roofstock's. And we've seen what has been going on since q1, the market softening things changing in technology. So I think this is going to be a great call, because both Roofstock and Hemlane have seen it firsthand. And hopefully this gives some insight into what, what the upcoming year is going to look like for all real estate investors out there.   Michael: Totally. And just to give some people, some additional color, you are CEO, co founder of Hemlane, and you just did your series A, what was it q3 of 2021 or q4 of 2021?   Dana: Q4, so we raised at the perfect timing, those who are not in venture and the tech world of Silicon Valley. We couldn't have timed it better. You know, right now, and we'll talk about this today. Right now, the market is really softening. There's just less capital going into startups. We can't say this was people were already predicting this. So back in q3, and q4 venture capitalists were already saying, Ooh, there's a lot of money pouring into this valuations are really high. And some had already started pulling back. But it wasn't until what happened in the public markets, where you know, trillions of dollars were taken out of these Sass companies, valuations are overall the market cap, that suddenly the venture world that trickled down and people really started to pull back capital. So yeah, we raised back then roofstock, when was your guys's last raise? Because you guys are at a later stage. And so obviously, also impacted by this and quite, potentially, more significantly than us.   Michael: I think we got our term sheet squared away in in q4, as well. So right around that same perfect timing with money getting wired in coming in and in q1.   Dana: Yeah, perfect. So you guys will be able to weather the storm with that what we're going to be talking about soon here.   Michael: Yep, absolutely. I'm thinking so. Okay, so let's talk about how, like, how did we get here, because you're mentioning that trillions of dollars have been essentially taken off the table in terms of market cap. But for those people that aren't familiar with the space that haven't maybe been following along as closely, what like, where are we today? And can you give us some insight and background as to how you think we got here?   Dana: Yeah, so first of all, I believe most people on this podcast today listening are real estate investors. And so all of you hopefully got in when interest rates were super low, just artificially low, right? We never seen interest rates below 3% for so long. And one that was fantastic for real estate, right? You could get a rental properties at afford a higher price because your interest rate is much lower your loan. And then for startups and for companies money was much more free it was much more flowing. What we ended up seeing happen which most people predicted this would happen. But no one knew when or at least I haven't heard of any economists who knew this was going to happen exactly. We're in March, but we started seeing the inflation go through the roof, you know, 8.6%. And it's been consistent where we have seen the inflation rate really, really high.   And so the only way for the Fed to essentially combat that was obviously, to increase interest rates, which we are all seeing now are all seen in our real estate itself, doesn't mean there aren't great deals out there. So Mike, like, do you want us to talk about that, because I still think there's great deals out there that you guys have on the platform, and now could be a really good time to buy. So don't let that taint your decision of whether or not you should go into real estate.   But with that, as you know, when the Fed raises interest rates, consumer spending just goes down, that will probably people will spend less, and also things are more expensive. And so once you have that happen, the stock market's inversely correlated to interest rates. And so once interest rates went up, there was a correction in the stock market. Why it affects us on the private company side so much is Roofstock and Hemlane are both considered growth companies. And what happened was essentially, in the public markets, so any public company, there's basically two different types, there's growth, just like us, companies like Roofstock, that have gone public. And then there are value companies and the value companies are much more stable. They're based on their cash flow. They're typically larger, older companies, and their price is based on their sales. So their price is relatively low relative to sales, in companies like that, or like Bank of America, if you think about it, and RG like gas companies like very stable, steady businesses, where you're not going to see   Michael: Blue chip companies.   Dana: Yeah, your blue chip companies where you're not going to see, you know, 500% growth year over year. But what ends up happening is when the interest rates go up like that, and stocks go down, the ones that get devalued, the most are the growth stage companies. And the growth stage companies are companies like Roofstock, and heavily that are public. And so what we basically saw happen was this huge, huge cut in market cap in the public markets. And so for SAS company software as a service where you go, you pay a subscription every month to use a service, the market cap cap got cut by $1 trillion dollars from November of 2021. Until today, and so what that did was essentially, these companies thought they were worth a lot more.   And you know, some of them, like the stripes of the world, in the snowflakes had these really high revenue multiples, and suddenly, those just deteriorated. And the multiple based of what their valuation is versus their, their revenue went down. And that essentially trickled down to private companies like us as well. And so now when a company goes out to raise capital in q1, q2, primarily, now it's even, it's even worse. And what we're foreseeing in q3 is that you might have had a 10x, revenue multiple, so your valuation, it's 10x, what your revenue is, that's how it used to be.   Now you go out to a venture capitalist, and they're like, great, you're worth 3x, or 5x. So much lower valuation. And so what they're, they're expecting is a lot of down rounds, a lot of startup saying, If I can, let me just hold on to my cash, let me cut my bird, let me try to raise later and better times. And all of this impacts the economy, because it was the public markets that were hit. And now it's also the private companies where we are in Silicon Valley. And I do think this, this trickles a bit to real estate. It's it's a different type of market correction that we saw in 2008. In 2008, it was housing right and the mortgage crisis today, I think this is a lot more like the.com bubble. This is very similar to the.com bubble of these really high tech valuations that need to be corrected. And so when you think about purchasing real estate, I actually think that's why Roofstock is such a fantastic place to go. Because you're getting out of the tech scene, you're going to other markets and purchasing there.   Michael: It's so interesting. But then so I'm curious, we talk so often about in real estate that the price is only a factor, or it's only important if you're doing something with the property if you're buying selling refinancing, because otherwise you're just having a cash flow, and that often is independent of what the value is of the company, or excuse me, the property. So why does that matter? or for companies like the fact that there's the company is now worth less, unless they're trying to do something buy, sell, or refinance or raise, raise, raise capital, like, why does that matter?   Dana: So it doesn't matter for Roofstock. And it doesn't matter for Hemlane, because we just raised, we have enough capital to weather this storm. But imagine a company that raised and they had a, let's just give the case of like the stripes of the world 100x Multiple. And let's just say it's a private company, with 100x, multiple, and now they're going back out, and they're now getting a 10x. Multiple, they could have what we call a down round, where suddenly they are worth less than they were before. And that gives a lot less confidence. One the company itself, right? The amount that you're giving up as a founder, as an employee, as an existing investor, it's a lot more just to get in the same amount of capital you wanted to historically, in so what you're seeing is these companies really, really tighten the ship, and just say, Okay, we're going to stop hiring as many people, we're really going to look at our expenses. And that means there's not more money pouring into, you know, hiring 100 people every week, they're suddenly going back and thinking about who are the strategic hires, we really need? Should we be letting go? You've seen the massive tech layoffs where it's, you know, 20% of the workforce. And now suddenly, they're really tightening their books, because cash is king right? Now, you want to hold on to that cash? Because the last thing you want to do is go out and have a lower valuation.   Michael: Yeah. Okay. Well, that makes sense. And so talk to us a little bit about why this is affecting real estate investors or why real estate investors should even care about this that's going on?   Dana: Yeah. So I always think there's a huge opportunity when there's like the Warren Buffett, quote, right? be fearful when others are greedy and be greedy when others are fearful. I think right now everyone's scared. And there's a lot of real estate investors, like we actually just did a survey at Hemlane, where majority were saying we're not going to purchase in the next 12 months, because interest rates have gone up we should have gotten any year ago. Well, you know, the best time to get into real estate was 10 years ago, and the next best time is today, I think there's going to be a lot of great deals out there. I think that while others are tightening up, other investors are scared, this is a time for you to be really aggressive. I mean, still looking at your pro forma and and follow your numbers. But you'll be able to find some some great deals out there.   Michael: I've heard a lot of sentiment around, you can always change your interest rate, but you can never change your purchase price. So if someone is getting into a deal today, at an interest rate that's a little bit higher than they're comfortable with. But they anticipate interest rates to come down at some point down the road. What are your thoughts there?   Dana: Yeah, you can always refinance. I mean, don't do a deal hoping that interest rates go down, and you can refinance it or fudge the numbers on your spreadsheet. This is why   Michael: I was hoping that's what you were gonna say.   Dana: Yeah, like this is I mean, this is why I'm, I'm more conservative than most in every property purchases had a fixed rate. I don't do adjustable. But I can refinance, right? So I can always refinance. But I want to know what I'm getting into. So when you do your pro forma, do it with whatever the interest rate is now and consider it a huge advantage and just like increased cash flow, if you can refinance in the future, will interest rates go back to this like artificially low rate that we saw over the past five years, maybe not. But I don't think that is a reason not to purchase now. You do your numbers, and you look at it just because you might say property values are really high interest rates are going up, now's not a good time to buy. That's just laziness. Like, honestly, that's just you being lazy and not wanting to do the work.   There's always great deals out there. You just have to do the work, find them look at the numbers and say even with this increased interest rate, it's still a great deal. I'm still cash flowing and I've got a great cap rate, and you can go ahead and purchase. So I don't think of this as the time really to, to change your decisions on real estate. And part of that has to do with I think, you know, some markets will soften. Some markets may remain flat for a while but that doesn't mean that you're not getting the cash flow and having a great investment that by the way, with inflation where it is If it continues, having an asset where the value goes up with inflation, so I still think now's a great time to purchase real estate. And you might be able to get some fantastic deals as other investors are pulling out, you can really, really go in and get those great deals.   Michael; Love it. And Dana, I'm curious if because we've seen prices go through the roof, and interest rates have also gone up significantly, there might be a bit of a lead lag measure until we see prices come down. So in in terms of looking for different markets, I mean, are you targeting markets that are continuing to grow? Are you targeting markets that maybe are seeing some of that softening in terms of pricing?   Dana: So for us, we go where the real estate investors are. So if there's a real estate investor there, right, we're going to do the property management for them. I think when you're when you're thinking about the lag, that is definitely true. I've heard this with other real estate investors, I've seen it myself, where you see a price. And with interest rates up, the seller puts one price out there, because that's what it was two weeks ago. And suddenly, it's not worth that much. It's worth like 10% 20%. Last, but it's actually really good to put yourself into the position of the seller, and of the real estate agent, because you can actually get some really, really good deals off of that.   And what I mean by it is real estate investors have always told historically, have told their buyers in the past couple of years. If your mark, if your property is on market for over two weeks, people might think there's something wrong with that. And so, you know, we're going to ask for offers on X date, right, like X date and two weeks, or maybe we'll do one week, we're going to ask for offers. Well, if they've missed priced the property, you might be able to go in and you don't know this, but you might be the only offer because they priced it way too high, because we priced it from a purchase price from two weeks ago. And now that has suddenly changed like the market changes every two weeks, it really is. And you could go in and get a great deal. And so I think from from that perspective, there are still fantastic deals out there. But you have to be patient. And some of it will be that luck, where you get the right deal, though what else has gone into, and you can go ahead and purchase that.   So if you put yourself in the other shoes, you might see that you also see a lot of people you know why I don't think it's like 2008 and 2009 is people have a lot more equity in their properties because one value values have gone up. And then two, the interest rates were really low, people could afford more put more money in the market was booming. And so what we're seeing is that more people have equity in them. And at some point, it's emotional for someone, they're like, I just want to get rid of this asset, because I'm gonna go buy another one, or I just really want to move out of the city and move somewhere else. And, you know, to them, maybe 20 To 50 to $70,000 is not a lot depending on what it is. But that is a lot to you. And that changes, changes the numbers on your spreadsheet significantly.   And so I mean, with that purchase price, obviously that matters. But just because the price is out on the market for a property doesn't mean that the price is going to sell for. And so it would be a really good time to go out and experiment with that you will know your market better than anyone else, whatever market you're in, because it will take you bidding on like five properties. And maybe people will laugh at you like your first one, you go like 20% under and they laugh at you. But maybe you get lucky on the fifth one, and you'll get a great deal. But yeah, just follow the numbers in your spreadsheet don't have a purchase price, that doesn't make sense and you're not cash flowing. Or don't change the interest rate hoping that it will go down to that to that amount.   Michael: Yeah, that makes total sense. And speaking of spreadsheet numbers, are you seeing a lot of your investor clients that you work with adjusting their expectations around cash on cash returns? Now that prices and interest rates are up?   Dana: So not really I think most investors like most of the savvy ones we work with, we work with his sort of two different types of of customers, those who had properties just handed to them. And they actually never did the analysis like pan downs from parents and things like that. And then others   Michael: Accidental landlords.   Dana: Accidental Yes. And then others who are very strategic real estate investors and what we have found with them as they have the capital and they might not be they might be with inflation to your point Michael being like, Oh, maybe I should just go buy something because the dollar today is worth less On tomorrow, but no, I actually think most real estate investors are still saying, this is the deal that I got, historically, I want to get something like that. And so they're not changing those expectations on cash on cash return, but they might be going somewhere else. So they go to Roofstock, and they say, Okay, I, you know, couldn't find this property, you know, in my backyard, but on Roofstock, they do have the cash on cash return that I that I that I targeting. And so I do think they're not changing their expectations. But they are going out and finding alternative ways to get the numbers they need.   There's one case, Michael, where I find people change their expectations. And it's first time real estate investors to just get their foot in the door. And I'm actually okay with that. I think that there's too many people who, and for anyone who's listening to this, who doesn't have a real estate investment, you kind of sit there and you kind of fantasize about getting one and then you put so much like anxiety into getting your first property. And once you have your first you're like, oh, okay, that's what I got, here's what it is. And it makes it easier, where then you can go and purchase more properties and more properties. And you know, what you're looking for, and you know what the return was, and you have this process set up.   But the first one is really difficult to get into. So I find that those people today are changing their expectations, for certain metrics just to get into the market, before it's too late. Interest rates go up more, or you know, they're kind of kicking themselves that they didn't get in, you know, four years ago, five years ago. So I only think it's first time real estate investors where that's happening. And I'm actually okay with that. Because I think if you can get more people into real estate investing, and more people to just get their foot in the door, you're going to learn so much off of that first property, that then you're going to say, Okay, this was my cap rate for my first property. My next one, I have to at least have that or better and you kind of improve, you know, it's kind of like dating, you never like you don't date someone who's great. And then like the next person is like a downgrade, you kind of have the standard. And you're like, I can only go up from there. It's the same exact thing with real estate investing. So I really think it's only first time homebuyers where that happens are real estate investors for rental properties?   Michael: Yep, I think and I think that makes tons of sense. It's something that I hear all the time. It's Michael, I'm trying to get my first deal done and has to be amazing. And you know, it has to be a Grand Slam? Like? Don't worry about the grand slams, let's practice getting on base first. And then you'll know how to swing for   Dana: Exactly, exactly. And it makes it a lot easier when you have one property in that area. You know your market a bit more, and then you can kind of purchase some more around at.   Michael: Yep. Yeah, I think it makes him think that's totally right. And so Dana, we're kind of at this like crossroads where we're talking about, some investors are pressing pause on their acquisitions. And then this whole other cohort of investors are like, Oh, crap, I gotta get into the market before interest rates go up further before prices go up further. So it does feel like there's this pressure to buy or there's frenzy to buy, on the one hand, and then there's this whole other group, that's again, kind of taking a step back and saying, let's, let's wait and see what happens. How do you square those two?   Dana: Well, to me, I'm like a pretty unemotional real estate investor. And I feel like for anyone, whatever segment you fall into, you still have to go back to the numbers and see what makes sense. And so I mean, is there a right way to go? I think one people who are not going out, and they're using this as an excuse not to purchase properties, or just being lazy, honestly. And for those who are out there saying, I gotta get in and get my next deal. I think they're almost too emotional. Where they might go in and change the numbers to your point of saying, like, oh, it's not, you know, my last deal was was better than this, but I just need to get my foot in the door. Maybe that's not the right approach to have, it's, Hey, there's gonna be a deal out there. I might have to be a little bit more patient during this the for the next three to six months, I have to be patient, I have to understand what's going on.   But yeah, I just kind of go back to the numbers. I think in both cases, they're they're taking emotion and what's happening in the market and using that, like the macro for the micro. And instead of saying, You know what, I know what is a good deal, here's what it looks like on paper. Let me continue to go search until I find that and it might take you a little bit longer to find it. Or you might find a process like oh, wow, I can, you know, go 20% under and get lucky on a deal off of this, whatever the home price is, I could, you know, undercut them and give them an offer and maybe they'll take it to get that great deal.   Um, But I don't I think both categories are bad. I think someone who says I have to get my foot in the door. Before interest rates go up is emotional. I think someone who says there are no great deals out there are just lazy. And so I kind of fall somewhere in between of saying, yeah, just be financially prudent as you always should be with your real estate investment investments, know your market, know what numbers numbers you need, and make sure you're a little bit more conservative. Like, I know, a couple investors with adjustable rate mortgages that did them, you know, back when interest rates were really low. And I bet they feel pretty stupid right now. So   Michael: we won't name names,   Dana: Won't name names here.   Michael: Well, I'd be very interested to meet the the emotionally lazy person, because it sounds like those are two opposite ends of the spectrum. Yeah, I have to see. Okay. And last thing that I want to ask you about is around expectations. If someone is newer to the investment space, they may be looking to get their first deal done. Everyone around them, their sister, their brother, aunts, uncles in this market are making 10% cash on cash. Yeah, pick a number. Nice round number 10%. And they're like their expectation was was 15%. Right, for whatever reason, that's what makes them tick. That's what gets them excited about an investment. Everyone around them is making 10%. So how the how should investors be thinking about not looking at other people, and just focusing on what's good for them, but also not being blind and naive to what a market is really able to produce? In terms of In other words, like, they I want someone to be excited about the returns that they're getting, but I also want them to be realistic. How do you kind of how do you?   Dana: So the biggest thing I would say to throttle that is, most likely you've sort of selected a market because you've looked at, okay, where is and I mean, Roofstock does this for you, and you guys, I think have some great shows from like every single market of why why you guys are looking at a certain market. So that helps. But you as a real estate investor are gonna say worse population growth? And why like, is more industry going there? Like maybe an Amazon facility was just put into place? Does it have fed, ed's and meds? Like, is it stable, even recession proof, especially now? So you kind of go through and figure out why am I excited about this market? And you just start there? And like, don't forget about your, I mean, 15% cash on cash return? Like, let's just forget about all of that and just go through? What looking at macro, and now we're kind of going to micro to like city level?   Why do I think this is going to be a lot a good market in five to 10 years, because you're going to hold on to these properties and purchase more, right? Do that first, then you say, Okay, this is my market, then what you're going to do is for two to three months, you're going to look at all the deals there, go on Roofstock, I think you could set up alerts because I have those that go to my email that essentially like tell you here's a new property in that market, great purchase. Um, you're gonna go through and you might the first couple of properties, say you know what? Those, those don't really hit my cash on cash return expectations, but now you're starting to know your market and you're gonna see a trend, are they going up? Are they going down? And you can look at that over time to make an unemotional decision that is based on data.   I think that is the most important thing to do. When someone gets in this frenzy of I need this cash on cash return shoot, I'm not going to get it. So I'm just going to slash it. And I'm going to say now I need, you know, seven or 8% I and you're just becoming emotional. But if you go through look at the numbers and you say okay, great, I wanted 15% You know, my friends are getting 10% I'm and you're you change those expectations. And suddenly you say, Okay, I made this decision, and here's my cash on cash return. But I knew at that time, that was the best I could do. Because I looked at the data, then suddenly you never go back and wish you had done it differently. Because you have something that is non non emotional to back you up. And don't compare yourself to other real estate investors. I've seen real estate investors in the past four to five years who've been super successful, who are super stupid.   And the reason they were successful and I hate to say that but like there's so many people out there because basically it was free money like there was so much investment it was there was so much easy money from investors that I saw way too many people also going into real estate. A lot of actually on the fix and flip side that just got lucky because yeah, money was basically free to do a fix and flip and a The home prices were going up astronomically. And they feel like they're the smartest people in the room.   Well, maybe they were at that time, but like, give it two to three months, maybe six months, and the story might change. And so that's why I think it's hard at like one point in time, if you're just getting started to compare yourself to those around you, I don't think you should do that. I think you should just be financially prudent, and make sure that you're not overextending yourself. And you know, your market. And you know why you made the decision, you see you did, and it's all based off those numbers. And it's based off the numbers, but also you need to know the market, like you need to know you guys have neighborhood scores and ratings, that kind of stuff of like, here's why I only invest in neighborhoods that have three stars, or greater, or whatever it may be like it, write all of this stuff out, and take a really methodical approach to your assets, your real estate investing, and I don't think you'll regret it. Like, I don't think you're gonna go back and say, Oh, I really wish I would have gotten that 15% I targeted?   Michael; I think that is like spot on. Thank you so much. And if you missed it, if you missed any part of that, go back, rewind the last three minutes, and listen to that again, cuz I think that's a lot of gold in there. Then this was super fun. As always, if people want to reach out more, find out more about you or hemline. Where's the best place for them to do that?   Dana: Yeah, you can go on to Roofstock when you purchase a property, how many will be listed as a property manager? So go go ahead and do that. You can also go to Hemlane.com. And my email is dana@hemlane.com. So I love hearing from people.   Michael: Awesome. Well, thank you again, and very much looking forward to having you on. Again, I'm sure take care of we'll chat soon.   Dana: Great. Yeah, I'm excited in six months for us to see if we were if we stand corrected on what's going on in the market.   Michael: I know it'd be very interesting. Well keep close tabs on it.   Dana: Great. Thanks so much for having me.   Michael: You got it, take care.   Okay, everyone, and that was our episode A big thank you to Dana for coming on as always big friend of the pod as we were saying at the beginning of the show. As always, if you liked the episode, we'd love to hear from you all with a rating and review and we look forward to seeing the next one. Happy investing

Dana Dunford is the CEO of Hemlane Property Management and a real estate investor. In today's episode we discuss market conditions, interest rates, what is happening in the stock market, and what the current moment means for real estate investors. If you are wondering if it is the right time to purchase an investment property, you will want to listen to this episode. Links: Hemlane.com --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The remote real estate investor podcast is for informational purposes only and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of The Remote Real Estate Investor. I'm Michael Albaum, and today I'm joined by Dana Dunford, co founder and CEO of Hemlane Property Management. And today Dana is gonna be talking to us about the state of the economy and some things that investors should be aware of and thinking about as we move forward in today's market. So let's get into it.   Dana Dunford, welcome back again to The Remote Real Estate Investor. Thanks for coming on and hanging out with me.   Dana: Great. Thanks for having me. Again, Michael.   Michael: Oh, my gosh, it is such a pleasure. You are great friend of the pod. Great friend of Roofstock. For those who might not be familiar with you give us the Quick, quick and dirty background of who you are. And background on yourself.   Dana: Yeah, so I'm Dana Dunford. I'm here in San Francisco. So just right across the bridge from rootstock. I have been in technology for gosh, now we're going on 18 years. So I'm a tech veteran, which we'll be talking about tonight, today, which I'm excited about. And on top of that, I'm in property management. So we're a tech platform for property management, and partner of Roofstock's. And we've seen what has been going on since q1, the market softening things changing in technology. So I think this is going to be a great call, because both Roofstock and Hemlane have seen it firsthand. And hopefully this gives some insight into what, what the upcoming year is going to look like for all real estate investors out there.   Michael: Totally. And just to give some people, some additional color, you are CEO, co founder of Hemlane, and you just did your series A, what was it q3 of 2021 or q4 of 2021?   Dana: Q4, so we raised at the perfect timing, those who are not in venture and the tech world of Silicon Valley. We couldn't have timed it better. You know, right now, and we'll talk about this today. Right now, the market is really softening. There's just less capital going into startups. We can't say this was people were already predicting this. So back in q3, and q4 venture capitalists were already saying, Ooh, there's a lot of money pouring into this valuations are really high. And some had already started pulling back. But it wasn't until what happened in the public markets, where you know, trillions of dollars were taken out of these Sass companies, valuations are overall the market cap, that suddenly the venture world that trickled down and people really started to pull back capital. So yeah, we raised back then roofstock, when was your guys's last raise? Because you guys are at a later stage. And so obviously, also impacted by this and quite, potentially, more significantly than us.   Michael: I think we got our term sheet squared away in in q4, as well. So right around that same perfect timing with money getting wired in coming in and in q1.   Dana: Yeah, perfect. So you guys will be able to weather the storm with that what we're going to be talking about soon here.   Michael: Yep, absolutely. I'm thinking so. Okay, so let's talk about how, like, how did we get here, because you're mentioning that trillions of dollars have been essentially taken off the table in terms of market cap. But for those people that aren't familiar with the space that haven't maybe been following along as closely, what like, where are we today? And can you give us some insight and background as to how you think we got here?   Dana: Yeah, so first of all, I believe most people on this podcast today listening are real estate investors. And so all of you hopefully got in when interest rates were super low, just artificially low, right? We never seen interest rates below 3% for so long. And one that was fantastic for real estate, right? You could get a rental properties at afford a higher price because your interest rate is much lower your loan. And then for startups and for companies money was much more free it was much more flowing. What we ended up seeing happen which most people predicted this would happen. But no one knew when or at least I haven't heard of any economists who knew this was going to happen exactly. We're in March, but we started seeing the inflation go through the roof, you know, 8.6%. And it's been consistent where we have seen the inflation rate really, really high.   And so the only way for the Fed to essentially combat that was obviously, to increase interest rates, which we are all seeing now are all seen in our real estate itself, doesn't mean there aren't great deals out there. So Mike, like, do you want us to talk about that, because I still think there's great deals out there that you guys have on the platform, and now could be a really good time to buy. So don't let that taint your decision of whether or not you should go into real estate.   But with that, as you know, when the Fed raises interest rates, consumer spending just goes down, that will probably people will spend less, and also things are more expensive. And so once you have that happen, the stock market's inversely correlated to interest rates. And so once interest rates went up, there was a correction in the stock market. Why it affects us on the private company side so much is Roofstock and Hemlane are both considered growth companies. And what happened was essentially, in the public markets, so any public company, there's basically two different types, there's growth, just like us, companies like Roofstock, that have gone public. And then there are value companies and the value companies are much more stable. They're based on their cash flow. They're typically larger, older companies, and their price is based on their sales. So their price is relatively low relative to sales, in companies like that, or like Bank of America, if you think about it, and RG like gas companies like very stable, steady businesses, where you're not going to see   Michael: Blue chip companies.   Dana: Yeah, your blue chip companies where you're not going to see, you know, 500% growth year over year. But what ends up happening is when the interest rates go up like that, and stocks go down, the ones that get devalued, the most are the growth stage companies. And the growth stage companies are companies like Roofstock, and heavily that are public. And so what we basically saw happen was this huge, huge cut in market cap in the public markets. And so for SAS company software as a service where you go, you pay a subscription every month to use a service, the market cap cap got cut by $1 trillion dollars from November of 2021. Until today, and so what that did was essentially, these companies thought they were worth a lot more.   And you know, some of them, like the stripes of the world, in the snowflakes had these really high revenue multiples, and suddenly, those just deteriorated. And the multiple based of what their valuation is versus their, their revenue went down. And that essentially trickled down to private companies like us as well. And so now when a company goes out to raise capital in q1, q2, primarily, now it's even, it's even worse. And what we're foreseeing in q3 is that you might have had a 10x, revenue multiple, so your valuation, it's 10x, what your revenue is, that's how it used to be.   Now you go out to a venture capitalist, and they're like, great, you're worth 3x, or 5x. So much lower valuation. And so what they're, they're expecting is a lot of down rounds, a lot of startup saying, If I can, let me just hold on to my cash, let me cut my bird, let me try to raise later and better times. And all of this impacts the economy, because it was the public markets that were hit. And now it's also the private companies where we are in Silicon Valley. And I do think this, this trickles a bit to real estate. It's it's a different type of market correction that we saw in 2008. In 2008, it was housing right and the mortgage crisis today, I think this is a lot more like the.com bubble. This is very similar to the.com bubble of these really high tech valuations that need to be corrected. And so when you think about purchasing real estate, I actually think that's why Roofstock is such a fantastic place to go. Because you're getting out of the tech scene, you're going to other markets and purchasing there.   Michael: It's so interesting. But then so I'm curious, we talk so often about in real estate that the price is only a factor, or it's only important if you're doing something with the property if you're buying selling refinancing, because otherwise you're just having a cash flow, and that often is independent of what the value is of the company, or excuse me, the property. So why does that matter? or for companies like the fact that there's the company is now worth less, unless they're trying to do something buy, sell, or refinance or raise, raise, raise capital, like, why does that matter?   Dana: So it doesn't matter for Roofstock. And it doesn't matter for Hemlane, because we just raised, we have enough capital to weather this storm. But imagine a company that raised and they had a, let's just give the case of like the stripes of the world 100x Multiple. And let's just say it's a private company, with 100x, multiple, and now they're going back out, and they're now getting a 10x. Multiple, they could have what we call a down round, where suddenly they are worth less than they were before. And that gives a lot less confidence. One the company itself, right? The amount that you're giving up as a founder, as an employee, as an existing investor, it's a lot more just to get in the same amount of capital you wanted to historically, in so what you're seeing is these companies really, really tighten the ship, and just say, Okay, we're going to stop hiring as many people, we're really going to look at our expenses. And that means there's not more money pouring into, you know, hiring 100 people every week, they're suddenly going back and thinking about who are the strategic hires, we really need? Should we be letting go? You've seen the massive tech layoffs where it's, you know, 20% of the workforce. And now suddenly, they're really tightening their books, because cash is king right? Now, you want to hold on to that cash? Because the last thing you want to do is go out and have a lower valuation.   Michael: Yeah. Okay. Well, that makes sense. And so talk to us a little bit about why this is affecting real estate investors or why real estate investors should even care about this that's going on?   Dana: Yeah. So I always think there's a huge opportunity when there's like the Warren Buffett, quote, right? be fearful when others are greedy and be greedy when others are fearful. I think right now everyone's scared. And there's a lot of real estate investors, like we actually just did a survey at Hemlane, where majority were saying we're not going to purchase in the next 12 months, because interest rates have gone up we should have gotten any year ago. Well, you know, the best time to get into real estate was 10 years ago, and the next best time is today, I think there's going to be a lot of great deals out there. I think that while others are tightening up, other investors are scared, this is a time for you to be really aggressive. I mean, still looking at your pro forma and and follow your numbers. But you'll be able to find some some great deals out there.   Michael: I've heard a lot of sentiment around, you can always change your interest rate, but you can never change your purchase price. So if someone is getting into a deal today, at an interest rate that's a little bit higher than they're comfortable with. But they anticipate interest rates to come down at some point down the road. What are your thoughts there?   Dana: Yeah, you can always refinance. I mean, don't do a deal hoping that interest rates go down, and you can refinance it or fudge the numbers on your spreadsheet. This is why   Michael: I was hoping that's what you were gonna say.   Dana: Yeah, like this is I mean, this is why I'm, I'm more conservative than most in every property purchases had a fixed rate. I don't do adjustable. But I can refinance, right? So I can always refinance. But I want to know what I'm getting into. So when you do your pro forma, do it with whatever the interest rate is now and consider it a huge advantage and just like increased cash flow, if you can refinance in the future, will interest rates go back to this like artificially low rate that we saw over the past five years, maybe not. But I don't think that is a reason not to purchase now. You do your numbers, and you look at it just because you might say property values are really high interest rates are going up, now's not a good time to buy. That's just laziness. Like, honestly, that's just you being lazy and not wanting to do the work.   There's always great deals out there. You just have to do the work, find them look at the numbers and say even with this increased interest rate, it's still a great deal. I'm still cash flowing and I've got a great cap rate, and you can go ahead and purchase. So I don't think of this as the time really to, to change your decisions on real estate. And part of that has to do with I think, you know, some markets will soften. Some markets may remain flat for a while but that doesn't mean that you're not getting the cash flow and having a great investment that by the way, with inflation where it is If it continues, having an asset where the value goes up with inflation, so I still think now's a great time to purchase real estate. And you might be able to get some fantastic deals as other investors are pulling out, you can really, really go in and get those great deals.   Michael; Love it. And Dana, I'm curious if because we've seen prices go through the roof, and interest rates have also gone up significantly, there might be a bit of a lead lag measure until we see prices come down. So in in terms of looking for different markets, I mean, are you targeting markets that are continuing to grow? Are you targeting markets that maybe are seeing some of that softening in terms of pricing?   Dana: So for us, we go where the real estate investors are. So if there's a real estate investor there, right, we're going to do the property management for them. I think when you're when you're thinking about the lag, that is definitely true. I've heard this with other real estate investors, I've seen it myself, where you see a price. And with interest rates up, the seller puts one price out there, because that's what it was two weeks ago. And suddenly, it's not worth that much. It's worth like 10% 20%. Last, but it's actually really good to put yourself into the position of the seller, and of the real estate agent, because you can actually get some really, really good deals off of that.   And what I mean by it is real estate investors have always told historically, have told their buyers in the past couple of years. If your mark, if your property is on market for over two weeks, people might think there's something wrong with that. And so, you know, we're going to ask for offers on X date, right, like X date and two weeks, or maybe we'll do one week, we're going to ask for offers. Well, if they've missed priced the property, you might be able to go in and you don't know this, but you might be the only offer because they priced it way too high, because we priced it from a purchase price from two weeks ago. And now that has suddenly changed like the market changes every two weeks, it really is. And you could go in and get a great deal. And so I think from from that perspective, there are still fantastic deals out there. But you have to be patient. And some of it will be that luck, where you get the right deal, though what else has gone into, and you can go ahead and purchase that.   So if you put yourself in the other shoes, you might see that you also see a lot of people you know why I don't think it's like 2008 and 2009 is people have a lot more equity in their properties because one value values have gone up. And then two, the interest rates were really low, people could afford more put more money in the market was booming. And so what we're seeing is that more people have equity in them. And at some point, it's emotional for someone, they're like, I just want to get rid of this asset, because I'm gonna go buy another one, or I just really want to move out of the city and move somewhere else. And, you know, to them, maybe 20 To 50 to $70,000 is not a lot depending on what it is. But that is a lot to you. And that changes, changes the numbers on your spreadsheet significantly.   And so I mean, with that purchase price, obviously that matters. But just because the price is out on the market for a property doesn't mean that the price is going to sell for. And so it would be a really good time to go out and experiment with that you will know your market better than anyone else, whatever market you're in, because it will take you bidding on like five properties. And maybe people will laugh at you like your first one, you go like 20% under and they laugh at you. But maybe you get lucky on the fifth one, and you'll get a great deal. But yeah, just follow the numbers in your spreadsheet don't have a purchase price, that doesn't make sense and you're not cash flowing. Or don't change the interest rate hoping that it will go down to that to that amount.   Michael: Yeah, that makes total sense. And speaking of spreadsheet numbers, are you seeing a lot of your investor clients that you work with adjusting their expectations around cash on cash returns? Now that prices and interest rates are up?   Dana: So not really I think most investors like most of the savvy ones we work with, we work with his sort of two different types of of customers, those who had properties just handed to them. And they actually never did the analysis like pan downs from parents and things like that. And then others   Michael: Accidental landlords.   Dana: Accidental Yes. And then others who are very strategic real estate investors and what we have found with them as they have the capital and they might not be they might be with inflation to your point Michael being like, Oh, maybe I should just go buy something because the dollar today is worth less On tomorrow, but no, I actually think most real estate investors are still saying, this is the deal that I got, historically, I want to get something like that. And so they're not changing those expectations on cash on cash return, but they might be going somewhere else. So they go to Roofstock, and they say, Okay, I, you know, couldn't find this property, you know, in my backyard, but on Roofstock, they do have the cash on cash return that I that I that I targeting. And so I do think they're not changing their expectations. But they are going out and finding alternative ways to get the numbers they need.   There's one case, Michael, where I find people change their expectations. And it's first time real estate investors to just get their foot in the door. And I'm actually okay with that. I think that there's too many people who, and for anyone who's listening to this, who doesn't have a real estate investment, you kind of sit there and you kind of fantasize about getting one and then you put so much like anxiety into getting your first property. And once you have your first you're like, oh, okay, that's what I got, here's what it is. And it makes it easier, where then you can go and purchase more properties and more properties. And you know, what you're looking for, and you know what the return was, and you have this process set up.   But the first one is really difficult to get into. So I find that those people today are changing their expectations, for certain metrics just to get into the market, before it's too late. Interest rates go up more, or you know, they're kind of kicking themselves that they didn't get in, you know, four years ago, five years ago. So I only think it's first time real estate investors where that's happening. And I'm actually okay with that. Because I think if you can get more people into real estate investing, and more people to just get their foot in the door, you're going to learn so much off of that first property, that then you're going to say, Okay, this was my cap rate for my first property. My next one, I have to at least have that or better and you kind of improve, you know, it's kind of like dating, you never like you don't date someone who's great. And then like the next person is like a downgrade, you kind of have the standard. And you're like, I can only go up from there. It's the same exact thing with real estate investing. So I really think it's only first time homebuyers where that happens are real estate investors for rental properties?   Michael: Yep, I think and I think that makes tons of sense. It's something that I hear all the time. It's Michael, I'm trying to get my first deal done and has to be amazing. And you know, it has to be a Grand Slam? Like? Don't worry about the grand slams, let's practice getting on base first. And then you'll know how to swing for   Dana: Exactly, exactly. And it makes it a lot easier when you have one property in that area. You know your market a bit more, and then you can kind of purchase some more around at.   Michael: Yep. Yeah, I think it makes him think that's totally right. And so Dana, we're kind of at this like crossroads where we're talking about, some investors are pressing pause on their acquisitions. And then this whole other cohort of investors are like, Oh, crap, I gotta get into the market before interest rates go up further before prices go up further. So it does feel like there's this pressure to buy or there's frenzy to buy, on the one hand, and then there's this whole other group, that's again, kind of taking a step back and saying, let's, let's wait and see what happens. How do you square those two?   Dana: Well, to me, I'm like a pretty unemotional real estate investor. And I feel like for anyone, whatever segment you fall into, you still have to go back to the numbers and see what makes sense. And so I mean, is there a right way to go? I think one people who are not going out, and they're using this as an excuse not to purchase properties, or just being lazy, honestly. And for those who are out there saying, I gotta get in and get my next deal. I think they're almost too emotional. Where they might go in and change the numbers to your point of saying, like, oh, it's not, you know, my last deal was was better than this, but I just need to get my foot in the door. Maybe that's not the right approach to have, it's, Hey, there's gonna be a deal out there. I might have to be a little bit more patient during this the for the next three to six months, I have to be patient, I have to understand what's going on.   But yeah, I just kind of go back to the numbers. I think in both cases, they're they're taking emotion and what's happening in the market and using that, like the macro for the micro. And instead of saying, You know what, I know what is a good deal, here's what it looks like on paper. Let me continue to go search until I find that and it might take you a little bit longer to find it. Or you might find a process like oh, wow, I can, you know, go 20% under and get lucky on a deal off of this, whatever the home price is, I could, you know, undercut them and give them an offer and maybe they'll take it to get that great deal.   Um, But I don't I think both categories are bad. I think someone who says I have to get my foot in the door. Before interest rates go up is emotional. I think someone who says there are no great deals out there are just lazy. And so I kind of fall somewhere in between of saying, yeah, just be financially prudent as you always should be with your real estate investment investments, know your market, know what numbers numbers you need, and make sure you're a little bit more conservative. Like, I know, a couple investors with adjustable rate mortgages that did them, you know, back when interest rates were really low. And I bet they feel pretty stupid right now. So   Michael: we won't name names,   Dana: Won't name names here.   Michael: Well, I'd be very interested to meet the the emotionally lazy person, because it sounds like those are two opposite ends of the spectrum. Yeah, I have to see. Okay. And last thing that I want to ask you about is around expectations. If someone is newer to the investment space, they may be looking to get their first deal done. Everyone around them, their sister, their brother, aunts, uncles in this market are making 10% cash on cash. Yeah, pick a number. Nice round number 10%. And they're like their expectation was was 15%. Right, for whatever reason, that's what makes them tick. That's what gets them excited about an investment. Everyone around them is making 10%. So how the how should investors be thinking about not looking at other people, and just focusing on what's good for them, but also not being blind and naive to what a market is really able to produce? In terms of In other words, like, they I want someone to be excited about the returns that they're getting, but I also want them to be realistic. How do you kind of how do you?   Dana: So the biggest thing I would say to throttle that is, most likely you've sort of selected a market because you've looked at, okay, where is and I mean, Roofstock does this for you, and you guys, I think have some great shows from like every single market of why why you guys are looking at a certain market. So that helps. But you as a real estate investor are gonna say worse population growth? And why like, is more industry going there? Like maybe an Amazon facility was just put into place? Does it have fed, ed's and meds? Like, is it stable, even recession proof, especially now? So you kind of go through and figure out why am I excited about this market? And you just start there? And like, don't forget about your, I mean, 15% cash on cash return? Like, let's just forget about all of that and just go through? What looking at macro, and now we're kind of going to micro to like city level?   Why do I think this is going to be a lot a good market in five to 10 years, because you're going to hold on to these properties and purchase more, right? Do that first, then you say, Okay, this is my market, then what you're going to do is for two to three months, you're going to look at all the deals there, go on Roofstock, I think you could set up alerts because I have those that go to my email that essentially like tell you here's a new property in that market, great purchase. Um, you're gonna go through and you might the first couple of properties, say you know what? Those, those don't really hit my cash on cash return expectations, but now you're starting to know your market and you're gonna see a trend, are they going up? Are they going down? And you can look at that over time to make an unemotional decision that is based on data.   I think that is the most important thing to do. When someone gets in this frenzy of I need this cash on cash return shoot, I'm not going to get it. So I'm just going to slash it. And I'm going to say now I need, you know, seven or 8% I and you're just becoming emotional. But if you go through look at the numbers and you say okay, great, I wanted 15% You know, my friends are getting 10% I'm and you're you change those expectations. And suddenly you say, Okay, I made this decision, and here's my cash on cash return. But I knew at that time, that was the best I could do. Because I looked at the data, then suddenly you never go back and wish you had done it differently. Because you have something that is non non emotional to back you up. And don't compare yourself to other real estate investors. I've seen real estate investors in the past four to five years who've been super successful, who are super stupid.   And the reason they were successful and I hate to say that but like there's so many people out there because basically it was free money like there was so much investment it was there was so much easy money from investors that I saw way too many people also going into real estate. A lot of actually on the fix and flip side that just got lucky because yeah, money was basically free to do a fix and flip and a The home prices were going up astronomically. And they feel like they're the smartest people in the room.   Well, maybe they were at that time, but like, give it two to three months, maybe six months, and the story might change. And so that's why I think it's hard at like one point in time, if you're just getting started to compare yourself to those around you, I don't think you should do that. I think you should just be financially prudent, and make sure that you're not overextending yourself. And you know, your market. And you know why you made the decision, you see you did, and it's all based off those numbers. And it's based off the numbers, but also you need to know the market, like you need to know you guys have neighborhood scores and ratings, that kind of stuff of like, here's why I only invest in neighborhoods that have three stars, or greater, or whatever it may be like it, write all of this stuff out, and take a really methodical approach to your assets, your real estate investing, and I don't think you'll regret it. Like, I don't think you're gonna go back and say, Oh, I really wish I would have gotten that 15% I targeted?   Michael; I think that is like spot on. Thank you so much. And if you missed it, if you missed any part of that, go back, rewind the last three minutes, and listen to that again, cuz I think that's a lot of gold in there. Then this was super fun. As always, if people want to reach out more, find out more about you or hemline. Where's the best place for them to do that?   Dana: Yeah, you can go on to Roofstock when you purchase a property, how many will be listed as a property manager? So go go ahead and do that. You can also go to Hemlane.com. And my email is dana@hemlane.com. So I love hearing from people.   Michael: Awesome. Well, thank you again, and very much looking forward to having you on. Again, I'm sure take care of we'll chat soon.   Dana: Great. Yeah, I'm excited in six months for us to see if we were if we stand corrected on what's going on in the market.   Michael: I know it'd be very interesting. Well keep close tabs on it.   Dana: Great. Thanks so much for having me.   Michael: You got it, take care.   Okay, everyone, and that was our episode A big thank you to Dana for coming on as always big friend of the pod as we were saying at the beginning of the show. As always, if you liked the episode, we'd love to hear from you all with a rating and review and we look forward to seeing the next one. Happy investing

Kori Covrigaru is the Co-Founder and CEO of PlanOmatic. PlanOmatic provides quality photos, floor plans, and 3D to the single-family rental industry with speed and at scale, nationwide. With an unwavering determination for client success, he has created a team that thrives on the core value of together we win. With a national network of 200+ contractors and more than 40 employees, Kori has met the moment with the unique value proposition PlanOmatic offers through technology combined with data to support their clients' goals. Today, Kori shares what he's doing as a remote investor in the single-family rental space with a fund that he started with some of his colleagues.  Episode Link: https://www.linkedin.com/in/koric/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Kori Covrigaru with planOmatic and he's returning to the podcast not talking about planOmatic, but actually to talk about what he's doing as a remote investor in the single family rental space with his fund that he started with some buddies. So let's get into it.   Kori, what's going on, man? Welcome back to the podcast, thanks for taking the time to hang out with me.   Kori: Always, always excited, Michael.   Michael: This is gonna be a lot of fun. So the last time we had you on we were talking about your company planOmatic and for anyone who missed the episode, give us the quick and dirty, what is it that you all do and how you're disrupting the industry?   Kori: We helped at the beginning of this industry. So back in 2012, we started out with the SFR industry but we've been playing thematic creates professional photos for plans in 3D for the single family industry at speed and scale nationwide. So that's what we do plain and simple, we are the boots on the ground that go out, take professional photos, do 3D scans, export floor plans from that, and then deliver that media to our customers. We try to do it under two and a half days and we're pretty damn close to it. So that's what we've been doing, we help these REITs institutional investors in smaller companies scale from 5000 properties all the way up to hundreds of 1000s. That's our business, that's what we're here for.   Michael: Amazing and today, you and I are here to talk about something a little bit different kind of related. Yeah, but really, it's about your journey in the SFR space as a remote investor.   Kori: Yes, sir. So, you know, just being in this industry for so long. I'm surprised it took me so long to decide to get involved on a higher level. But yeah, I've been just watching, you know, myself and some people that I work with here and some family and friends outside of here have been watching this SFR industry grow to the level that it has and never really gotten involved on the investor side. I mean, I had rentals on my own. I've had a rental, you know, my first rental I bought with my business partners. I want to say it was 2006 I think it was October 2006 or 2005 and we bought a rental out in Grand Rapids, Michigan. Since then we exited that then I had a couple rentals here in Denver, but nothing remote and nothing to the level of what we're building right now with SFR Emo, that's the name of the partnership, the group that we've established with 13 partners, and we all threw in some cash and have been acquiring homes, single family homes, for, you know, residents to live in and Alabama, of all places Birmingham, Alabama. So that's what we've been doing, yeah.   Michael: Interesting. So you've done the local investing local with you in Colorado, so what I mean, what did you eat? What did you drink that decided, hey, I'm gonna go do this crazy thing and invest where I don't live.   Kori: I ate and drank reports for where our customers are buying real estate and where it made sense and just reading articles. I mean, there's so many great content distributors, you guys included in terms of what markets make the most sense what to look for in a market and so I had been immersed in all of this data and all of this information for so long, that I finally pulled the trigger and said, hey, time to form a partnership. You know, we started out with five partners, that was the deal was gonna be five partners no more and then, you know, I don't know if you've ever been involved swings. But what happens is you start getting phone calls from random people saying, hey, I want this thing going on, like I want and why didn't you invite me? It's like, well, hold on a second, like, first of all, I don't I don't know how you found out within second. Like, it's this really small thing we're doing and so it went from like five partners to 13 and we had to like, we had to cut the investor pool out at that point and build with what we've had what we have right now, because we still haven't, you know, deployed all the capital. So it started, I'm starting to understand why we see billions of dollars come into the industry committed to buying SFR is, but it's very slow to deploy and so we're experiencing that right now. I mean, we're not slow to deploy, but it takes some time and so that's kind of how the idea started. Yeah, just get involved eat your own dog food, as they say, I think right, that's the term.   Michael: That's it, that's it. So Kori, I mean, you just went through, I think what so many newer investors really struggle with, and that's picking a market and talk to us how I mean, what are these reports showing? What were they telling you and also like, how did you settle on Birmingham because I'm sure the reports show that there were really a lot of other great markets to invest in, too, yeah.   Kori: Yeah. I mean, we landed on a cut to the chase, then I'll kind of backtrack a little bit but we went with Birmingham because this is a small partnership, and we really didn't want to have to continue to put money in so we wanted to pick a market that could cash flow. We wanted to pick a market that was cashflow positive, had great cap rates, relatively speaking hearing coverage are being compressed everywhere right now as we know, cost of capital is going up, prices of homes are going up, that's actually going to reverse here pretty soon, in my opinion, we can get into that later. But so we picked Birmingham, there was a lot of economic opportunity being created there, jobs being created there but also, we knew we were going to be cashflow positive with the cap rates, and there was a room for appreciation. Plus, we found a really great property management company partner that we work with down there that can not only serve us in that market, but we can also expand to other markets, you know, with their with their support. So that those are the reasons the main reasons why I mean, we apply nomadic had the advantage, we have a critical mass of single family rentals that come in through our pipeline to shoot photos, create floor plans, you know, 3D and so we kind of have like this, this holistic view and indicator of what markets might pop off next and, you know, we use that data to make decisions for us farm on where to invest, it's a bit of an advantage that not most have, but I'll tell you what, all that data is public, I mean, we can go out there and see and look at county records and see where all the institutional landlords are the professionally managed properties are being bought and so if you dig data or like to, you know, you can always go on Upwork or Fiverr, and say, hey, please go find me this set of data, those are kind of hacks that you can do to figure out where companies are buying. Now, just because professionally managed companies are buying there doesn't necessarily mean it's a homerun, you have to do your own research, figure out what your goals are with your portfolio where you want to start. So that's kind of been our trajectory on the direction and where, where to own and operate for us.   Michael: Yeah and that makes a ton of sense and I love that you said that to like, go find someone else who can kind of help aggregate the data or figure out the data for you because like, you can, like you don't have to be the person to do all of the due diligence, you don't have to be the person to do all of like the research and also you can leverage other companies paid employees, like you were just mentioning, if an Amazon fulfillment center is going in there, or like Whole Foods is setting up a new headquarters there. They've done the research, so of course, don't reinvent yourself. The wheel, right… Yeah, it's, I love it.   Kori: It's out there.   Michael: Okay, so Birmingham was the target. Yeah. What did you all do next? I mean, how are you executing there? I know, you said you had a great property manager, but like, yeah, the, from the physical like property acquisition to due diligence. There's so much more involved before you even own the property. How did you get that accomplished?   Kori: Yeah, so we this idea came about at some point in 2020, when, you know, shit hit the fan and COVID was on the way and in my mind, and I've always been fairly wrong, when it comes to trying to predict the market. The only thing that's, that's, ya know, I mean, the only thing that's going to be successful is that there is no bad time to buy, that's just my mentality. Like, there is no bad time to buy, it's just a matter of how you go about finding those properties and what you do during negotiation, and due diligence. But um, you know, back in 2020, you said, oh, the real estate buyer is going to absolutely flop right now, everybody's, nobody's got jobs, unemployment is gonna be crazy, we're headed into this, you know, doom and gloom period, which is, of course, very wrong and we said, you know, it's a good time to buy single family rentals, rentals, they perform, regardless of economic conditions, typically, in recessionary periods, they still grow not as fast, but they do grow, that's a hedge against inflation, so on so forth and so we decided to form the entity again, went from five to 13 very quickly. But between, you know, between mid-2020, and mid-2021, I don't think we purchased a single property and so you know, we had to go through all kinds of processes, right, you have to have a good operating agreement, you have to establish a an EIN number, you have to select a property management company, you have to make sure you're finding the right tax forms, you need to find a broker, you need to do research and figure out where you want to go. I mean, that was a big chunk of our time was we didn't know in 2020, exactly where we wanted to go. So we had to do that research, we had to have, you know, make sure that everybody all the partners were kind of on board and then at some point in time, we decided to, hey, these three partners or five partners are actually gonna make the decisions. Okay, now we have to amend the operating agreement that requires lawyers again, I mean, we kind of did a lot of stuff makeshift but, but there's a there's a lot to do, and a lot of time to be had between the moment where you decide, hey, I'm gonna get into this, especially if you're remote and we just closed on our first property, right. So it's, you know, it's, it's more than you expect, but doing it right is the most important thing and I think we've done it right. So far we learned a lot along the way. But we're on the right track. I mean, we're almost at will be at 28 single family homes and that's only that's the course of a year right. So from 20, mid 2020 to 21. We didn't purchase a single home in the last 12 months we've purchased approximately 28-20 single family homes.   Michael: Wow, that's so killer. So Kori I mean, I'm curious to know too. Why did you not just do this alone, a lot of people would argue well, wow, 30 people like that's way too many cooks in the kitchen or five people making decisions like it can get very convoluted very quickly are very quickly. Wouldn't a single operator be more lean and be able to move quicker?   Kori: Yes, yes. I mean, well, so the short answer that is, I can't really do anything. I have a lot of really good ideas but I can't do much. So that's why I didn't go at it. Yeah, I'm the idea guy, right, and the people around me to do things. So, but no, I mean, you know, what, one big reason why we went with more just to have more capital, to be able to diversify more, you know, it's, it's risky as an individual to go out and buy one or two rentals. But if you go out with a group and buy, you know, our goal is to hit 60. That's a pretty diverse portfolio and minimizes risk and there are a lot of great minds in our partnership. I mean, we have a finance guy, right, we have a data guy, we have consultant who's seen many different organizations, we have myself, who's kind of like, overall, seeing the organization from a high level and helping with the financing part of things. So I think it helps to have different people plus, this is all you know, passive for us, right? Everybody's got a full time job and so, you know, if, if I were to do this alone, this would be a full time job, no doubt, but spreading it across having the right property management company, but this person doing, you know, diligence in this person negotiating offers in this person, making sure our bookkeeping and finances and taxes are all in line, it just helps kind of spread that out…. It's fun, man. It's more fun to succeed with partners, like I, you know, I have two business partners here at planOmatic and I couldn't imagine being a sole proprietor, it just doesn't seem as fun to me. Like, for us, it's always been the game in the chase and like winning the game, and it's, if you're by yourself winning and celebrating, that's not fun and the same goes with, you know, the lows. I mean, 2020 was a tough year right and so having a supportive business partners help. So I just think it's more fun.   Michael: Yeah, that makes a ton of sense. That makes a ton of sense. I'm curious, quite, how did you figure out like, who does what, and when you were picking your partners and picking your team? What was the process that you went through to do that because I think a lot of people like, oh, my best friend, we're so uh, like, we're so similar. We think the same, we should be partners, we should be business partners. Was that kind of the case for you?   Kori: You know, for me, I mean, I kind of surround myself with people that are like minded and sort of see things, you know, in a certain lens when it comes to opportunity, right? So it was actually it was pretty simple. It was more like who do we, who do we not tell, you know, and ask versus who, because a lot of people came to us a lot of really good friends. So it was just who's willing to take an opportunity who trust I think trust is the number one thing when it comes to partnerships is like, is there trust, we had to make sure there was trust there and then, and then different specialties from different people, again, like I said, like one guy is a full time controller, you know, big company, that's really helpful. Another guy is an operations guy who's operating, you know, we're shooting five to 700 listings a day, right. So like that, that really helps play into one of our guys, Tim Rose, he heads Planet Labs and we analyze and optimize workflows and analyze and optimize reports and data just based on what's coming in and so having him on board to help us decide which market to go with, or what cap rates to focus on, I mean, that was helpful. So it kind of this one all came together and then the people that wanted to be involved, they kind of like stepped forward said, hey, I'd like to be more involved those that didn't, are just passive for this particular partnership. I mean, one of the, I don't want to call them mistake, but it was a rookie move was like 13 partners all equally invested right and so that creates challenges for two things. One, every time we close a loan or refinance, we have to get 13 signatures and that's like, probably the biggest pain in the ass that we've got as a group. The other is like, we're putting in a lot of work on the side, especially, there's one person in particular in the partnership that puts a significant amount of work in, and his return is the same as everybody else's and so this was really like a search and destroy mission for us. Let's figure it out, figure this out, figure out a proof of concept, see if it can work and then in the next round, we're a little more educated, we'll structure the company a little bit differently, make things happen and move a little bit quicker. So yeah, that's kind of where we're at today.   Michael: Okay, like with regard to that signature, and then the equity piece where what else? What else would you do differently for anyone listening? It's like, I want to do this, like, what should they be thinking about?   Kori: When owning and operating and SFR funds, you want to separate out the management company from the fund that owns the properties and we didn't do that it's all one thing. So when you've got one entity that manage manages the portfolio, you know, that's where all the work is. Capital, putting in capital to buy homes is simple. You read a check and then there's typically somebody at the fund but the management company, you know, in today's world, and so far, they're helping acquire the properties on behalf of the fund and so creating an entity for the fun with limited partners, and then a property management company or management company that owns an app rates the portfolio separately, it just makes a whole lot more sense and that's really, you know, shame on me, like I've seen this, I know this, but we just wanted to get going and again, at first it was five, right. So we weren't going to separate those two out as simple as like, we can get five signatures. But when it grew with 13, it became challenging and so we'll look at that a little bit differently.   Michael: Okay and have a separate management company, even though you all are leveraging a local property manager.   Kori: Yeah, because there's much more that you have to communicate with the management company, you have to go through the process of buying the homes and through due diligence, and you have to make offers, and you have to make sure your books are in order, you have to file taxes, and you have to sometimes raise more capital, you have to open up a line of credit, so you can buy in cash and turn on refinance, we can talk about that, that as well. But there are a number of things hidden, hidden chores, let's call them that have to happen when you manage a portfolio, even if you have a property management coming up property management companies can help you place tenants and make sure your tenants are happy and having residents are having a positive experience. Outside of that, they're not doing a whole lot. They might help you find homes, they might help you negotiate, they might help you with renovation, but everything around organizing the company there, that's just you know, that's one vendor that you have as a part of the organization, you have your CPA, you have a bunch of different things that are you have your banker that you have to manage property manager company is not going to deal with your banker, it's not going to happen, they're not going to go find a line of credit for you like that doesn't work that way. So there are a lot of hidden chores that are in there that I strongly recommend, like thinking ahead, because it doesn't take very many homes, very many investments to need to put a significant amount of time even if it's distributed amongst partners into the operation. It doesn't it's not a set it and forget it. This is not George Foreman grill, this is like there's a lot there's a lot going on.   Michael: I don't think I've heard a George Foreman grill reference.   Kori: Now you have or maybe it wasn't George Foreman, maybe it was. What was that? No, it was a different one. It was an infomercial, set it and set it and forget it.   Michael: Oh, that's too funny. Well, Kori talk about like the strategy because you mentioned it just briefly about like line of credit, purchasing and cash and then going turning around and doing a cash out refi. So how are you purchasing properties and how are you structuring your deals?   Kori: So up until now, and oh, boy, are we headed for some news on Mays real estate market, like people aren't going to believe what they what they read in terms of percentage swings. But up until now, it's been a very competitive market for buyers. I mean, like, you know, you had to show up with cash you had to show up with, with no contingencies, waive the inspection, right. All of these things that everybody in a healthy market will tell you don't ever, ever do this you had to do over the last two years to buy real estate in some markets, you've had to do that since 2011, or 12. I mean, in Denver, for example, you know, and this is one of the reasons why we didn't we didn't come to Denver, but in 2012, we went my wife and I visited a home and we had to put an offer in same day and we thought we were crazy, right and we ended up closing about houses, it's now a rental above, you know, closing at 332 is it's probably worth 900,000 and there's a reason why because Denver has been nuts, right. So the markets been like that since then. So what we decided to do is utilize a lot of the cash that the partners put in to buy the homes in cash, make cash offers, you know, promise a quick close, because we had to win the properties and then we would turn around and take the portfolio, once it got to a certain size and refinance it with a bank, we have a great banking partner down in the southeast, and they've been fantastic. But we've always historically bought in cash and around refi pull the money out. Oftentimes, it'll appraise much higher than, you know, we initially bought it for and I'm scared to say this because it sounds so 2009. But the bank is paying us at this point to buy these homes because we're able to leverage 85% and so if they've appreciated more than 15%, right? They're like giving us cash to close on these homes that we bought in cash. Again, sort of scary to say but in terms of rentals, like we're not in danger, like they've performed fine and as long as you as long as you cash flow through ups and downs in the market and interest rates, ups and downs, it's you know, you'll end up on top, but like Denver is a crazy market.   I mean, I remember I was talking about getting a single family home to rent like separately outside of SFR I think it was like two months ago, maybe a month and a half ago and I took my kids to the open house and I showed up about 10 minutes early because I had to be like a birthday party or some bullshit like that and I get there 10 minutes before and there are already eight like, like a groups touring and I'm just like, still really like in in this neighborhood frankly, like, really and so I it took me one open house so you know, I'm out of this market. I mean, I know this right and a lot of the advantage that that people will have is they'll understand the local market and understand the neighborhoods understand where are they putting, you know, new light rail estate in where's their economic opportunity. But Denver was just too competitive, you know, to stick around for. So, yeah, yeah, it's been amazing. So we buying cash, turn around refi, pull cash out, rinse and repeat sort of deal and as long as properties are appreciating, you know, it's a, it's a pretty good model, especially when it comes to rentals, you know, fix and flip, I'm not a big fan, I think, you know, someone gets caught with their hand, that cookie jar at the end of the day of fixing flips, but as long as you're keeping in cash flowing, I think you're fine. And that's, that's kind of been that's been our model and we're able to now take out a line of credit. That's, that's, you know, securitized by our portfolio. So even better, we're able to use cash and a line of credit, make sure that there's good cash flow, turn around the bank, you know, refi it, pull the cash out, and rinse and repeat and that's, that's sort of what we've been up to and you can keep doing this, depending on how the market performs and how interest rates look. I mean, you can keep doing this for a while, right. Our goal, we're at 28. Now, our goal is 60. But depending if, if things continue to appreciate, then we could be even higher than 60, depending on how much the bank will pay us to buy these homes, basically, I'm afraid to say that, should I be saying that?   Michael: It sounds it sounds terrifying. But that's what I wanted to ask you. So you say they're financing 85% loan to value?   Kori: Yeah, yeah…   Michael: That's, like, unheard of in the investment property space it.   Kori: You know, usually, here's 7525, we find a bank, that's pretty aggressive. I mean, it's not like a small lender, it's a bank, it's a legitimate bank and they've been, they've been a great partner for us, and they see the opportunity, and they're a little bit of a risk taker. You know, they're keeping these loans or not, obviously, not selling them to Fannie and Freddie, I don't think, but we've also got so many partners to fall back on, like, it's, it's not risky for them, you know what I mean, when you have, yeah, that much that much wealth behind the partnership, and I'm not talking about the individual employment as a group, like you've got 13 households, where if something goes wrong, for some reason, with the majority of the portfolio, like, they'll be fine, you know. So I think that's also potentially why they're able to leverage so much. But they also are bullish on the rental market and SFR and they understand, you know, as far as you go to a bank, let's say up in upstate New York, they just haven't been around so far, very long. So they might not be as accommodating and as flexible. But boy in the Sunbelt, I mean, banks are trying to try to monetize this just like every other individual investor and so finding the right banking partner has been, you know, really great for us and strongly recommended. I mean, that's, you know, one of the most important things, we've gone through two banks. Now, we were with the credit union before, they didn't really see the vision that we had, but now with private bank, and it makes a lot more sense.   Michael: Okay. Well, that's great to know and I'm curious, when you started putting this all together on paper that was 2020-2021 and the interest rates were at three, four, maybe sometimes even in the twos. Now they're up in the five, six sevens. Has that changed your model much or really changed the performance of what you were expecting return wise?   Kori: Well, yes, of course, right. Cost of capital is it's real, it's real thing for individual investors who are buying their primary home, it's a real thing for smaller investors, family office all the way up to up to the REITs and the institutional landlords. So everybody's feeling a squeeze with those interest rates, cost of capital, obviously, going up, cap rates being compressed. I think what we'll see and what we've seen, historically, is that rents keep up with interest rates, right? So we'll see, you know, rents have gone up, I think, year over year 16%, I believe, and so far, we'll see those continued fact check that before you post it, but I think I saw it in the Wall Street Journal and so rents kind of keep up and so that's, you know, we have that to look forward to in terms of paying more for capital. But also, you know, the goal is to cash flow through the periods through the ups and downs, right through the different markets and so foreign investors, you'll see, you know, we borrow at five and seven year, seven year loans, right, so we're not in it for the 30 year fixed and so that should take us through any sort of period, right? We should be able to refinance within the next seven years, again, hearing things from 2008, kind of reverberate in my head. But that's the idea is that if as long as you can cash flow through interest rate periods, you should be fine and as long as rents hold up, which we don't see any reason why they shouldn't. I mean, we're again, four and a half million homes short of supply right now supply is not going away. Now, home values have gotten to a point now where buyers have said I've we've had enough, we're not we're not doing this anymore. Besides the fact that we can't afford it, right. Like between the interest rate hikes and the appreciation of home values over the last two years, we're seeing about a 43% increase in cost to pay a mortgage. Okay, like that's insane, so…   Michael: Compared to when?   Kori: Two years ago, that's compared to like beginning of 2020. I mean, between the appreciation and the interest rate increase, going from like three on average to five whatever and a half, one would be 43% more expensive to make mortgage payments today. Now, the good thing for SFR and for rentals is people are still there's a high demand for spacious, professionally managed homes, right single family rentals, and that demand isn't going away. So when people can't necessarily afford today to buy a home, or maybe say, hey, I'm going to sit on the sidelines for a couple of years, because this is batshit crazy, they're going to rent, right and so the demands keeps up, the rents keep up inflation continues to go up and hopefully we'll see that slow down here, due to the increase in interest rates. But you know, cash flow is important, I think it's been proven over time and history that rents will keep us cash flowing and that's why the industry is so attractive and so, you know, so new still, we're only a decade into this being professionally managed, right landlord has been around for before we can remember.   But there's an appetite for professionally managed properties, so that the experience that I'm gonna have, as a renter as a resident is on par with if I own my own home, and was able to do whatever I wanted to do to my home. Now I can have that luxury of having that home, but having it professionally managed. So if things go bad, I can just call someone, they'll be here soon to fix it right or if I want to move, it's not it's not that big of a deal on my lease ends, I go find another lease, right. So that demand isn't going away and that's what's keeping us so strong as an industry and I was just at the National rental home Council conference in DC and that's kind of the theme is that, you know, everybody's cautiously optimistic, because it's a weird time. There's a lot of uncertainty right now in the economy. But there isn't a whole lot when it comes to our industry and so I think, you know, again, when is it a good time to buy, in my opinion, always. So what's happening right now is interest rates are going up, prices are still like going up. We are seeing I think a Redfin report came out today that prices are starting to come down, actually and so there's a huge opportunity for investors to get into the market right now and buy, and investors don't have to buy at this price. Like it's been only a month, but the whole thing has been flipped upside down. So what I'm telling my acquisitions team, right, my expositions team, is, this is a time where, frankly, you go in and you offer 15 to 20%, less than what it's listed for, and you offer on volume all of a sudden, and then those that are willing to get out with a cash offer today, those are the deals to be had and yes, you are paying a higher interest rate right now for that. But you know, what, if you get the deals, and I'm not saying you'll get them at 20 or 15% discount, but you'll get them, you don't have to pay this price today, because the market just hasn't adjusted down to the interest rates that we're at. There are some steals out there and so it's a volume game, right? It's like, it's like going to a bar and meeting men or women, right. The more the more you ask, the better chance you're gonna have to succeed and it's the same with real estate today, like the more offers you throw out there that might be less than what they're wanting or hoping for a price. Some are in a situation where they need to exit or want to exit and so there are opportunities out there more right now than ever so far, which is crazy to think about.   Michael: That is crazy to think about and so you mentioned there's some big news coming out was that was that the Redfin report about where you think prices are going for the May report?   Kori: No, well, I mean, there was there was some information out but we're still they're still reporting on April, my mind, this is just, you know, my prediction is crystal ball, my crystal ball tells me based on very, you know, various different data points that may will be the biggest drop in transactions we've ever seen the biggest drop, the biggest drop in transactions month over month that we've ever seen, I'm predicting, I'm putting it for…   Michael: May 2020.   Kori: To May over April and may year over year, also that will be the biggest drop in in housing starts as a percentage and let's say close transactions will be in May, that'll continue into June because there's always a lag housing starts we get at the beginning contracts to buy new construction, we get the beginning. So that's always an indicator, a leading indicator of where the markets headed. But we'll see that as built, you know, are already built on existing home sales. They're just going to plummet right now and that's because there's pretty much gonna be a standoff between buyers and sellers right now. I mean, when do you remember seeing homes drop in price in Denver like, right, I don't remember when that happened. Yeah, you know, so I think that I think the buyers are fed up. I think that affordability has gone through the roof and I think that the Fed is going to succeed and installing the economy and stalling you know, the housing market, which has a trickledown effect to the rest of the economy, right. I mean, think about movers, Comcast, right, any sort of cable television, Home Depot and Lowe's, right, all these all these companies that we don't really think about. or Amazon people buy stuff for their new home like the Fed wants to slow the economy down, they're definitely going to succeed. We're going to see some job loss from it. But at the same point in time, this is an OK, adjustment to the overall market and the housing market. We know that this is not sustainable. We said that a year ago, a year into this crazy Rock chip ride. So we'll see a slowdown and it's healthy, it's okay and that also creates these deals that I think are definitely still out there. You know, there are still motivated people that need to sell for one reason or another. Maybe they have to move, maybe they are they're adjustable rate mortgages off, right, maybe they set it seven years ago, and all of a sudden, they're having to refinance and it doesn't make sense. Maybe they just feel like they want to cash out and it's time and so, you know, those who went under contract, let's say a month ago, kind of probably hit the top. But for the short term, but there's still a lot of opportunity out there to get some good deals right now.   Michael: You heard it here first, folks. That's awesome, that's awesome. All right. Well, Kori, we got to get you out of here, man. Thank you so much for coming on again. For people that want to reach out to you connect with you learn more about planOmatic where's the best place for them to do that?   Kori: LinkedIn is great. Although my name is hard to find K O R I C O V R I G A R U, I'm sure it's in the in the post, LinkedIn is great. My email kori@planomatic.com, I'm always fielding emails. So send me an email and otherwise I'm not I'm not really on Facebook or Instagram or any of those, so email and LinkedIn is probably best for me.   Michael: Right on that'll have to do. Well, Kori thanks so much, man. Appreciate you coming on again. We'll chat soon, all right.   Kori: Thanks, Michael. Great to be here.   Michael: All right, everyone. That was our episode, a big thank you to Kori for coming on and sharing with us what he's been doing in the space. As always, if you'd liked the episode, please feel free to leave us a rating or review wherever they as you get your podcasts, and we look forward to seeing on the next one. Happy investing…

Pam Hill is a Harvard and Dartmouth-educated entrepreneur and CEO of a multi-million dollar real estate company, a business and money expert, a former Fortune-500 executive, and the founder of My Smart Cousin.  Her main goal is to help people understand money, increase their accountability and build generational wealth. Today, Pam shares her story of how she became a professional real estate business owner, how she purchases homes for the price of a car and how you can start your real estate business. Episode Link: https://mysmartcousin.com/tag/pam-hill/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by a very special guest, Pam Hill, who's talking to us about my smart cousin, and how she purchases homes for the price of a car, or maybe sometimes even an expensive bike. So let's get into it.   Hey, Pam, thank you so much for taking the time to come hang out with me today. I really appreciate you coming on.   Pam: Thanks so much, Michael, really looking forward to engaging conversation.   Michael: Oh, my gosh, me too. So, Pam, so excited to have you here. If you could give us a quick intro bio about who are you? Where do you come from and what is it you're doing in real estate today?   Pam: Absolutely. So I'm Pam Hill with my smart cousin. The nifty name comes really from family coining that for me, because I am that smart cousin at family reunion to always follows up make sure that folks do what they say they're going to do on their finances on their real estate and that, of course, is now brought in to my clients as well. How I got into real estate was about 10 years ago. So during the Great Recession, my husband at the time we were dating, he was looking for his first home and he was looking in Wilmington, Delaware, and we were stupefied at just how cheap there's, there's not a better word inexpensive to the wrong word, cheap houses were in Wilmington, Delaware to the tune of 20,000-25,000. In perfectly rock solid working class neighborhoods. Once I saw it, I definitely could not unsee it and that's what led me down the real estate rabbit hole since then I've bought 21 houses totaling 25 houses totaling 31 units, and have loved every step of the journey.   Michael: That is so cool and so Pam, were you living in Wilmington, Delaware or was this something that you were doing from afar?   Pam: No, so I was living not too far from Wilmington, Delaware in a suburb and so I was used to six figures and not 100,000 as in six figures. But in fact, what the average price of real estate is in the United States, some 321,000, I think I've read is the average price of real estate across all 50 states. So I was used to seeing those kinds of numbers. I had already owned real estate before as a homeowner and I really couldn't believe that there was this whole other world and once I saw it, I became committed to helping others who are looking to start their real estate investment journey and feel like they just don't have enough coin to get there. Or those who are aspiring homeowners and thinking the same thing that it's got to be a generation, three decades, 30 years slog My goal is the number of fingers you've got on your hands, 10 fingers 10 years or less. That's when the house should be paid for and everything is cream after that.   Michael: I love it, I love it. So was it just a function of where the economy was at that point in time that you and your husband were able to find houses for that price point or were you doing something different or looking in a different way than everyone else?   Pam: Yeah, no, it's a great question, because it kind of begs whether that opportunity is still there and very much still is. There are hundreds of houses listed on any given day that are maybe not as cheap as what I got them for that takes a little bit of digging, although they are that cheap still to just not in Wilmington, Delaware. So my cheapest house was 2500 in Jersey that included the all four walls.   Michael: …a roof....   Pam: Yeah, absolutely. Goal number one is don't buy anything that is best addressed through the services of a wrecking ball company. So only things that maybe they're going to take a new furnace, okay, a new furnace, but not a new every single thing you can think of and my most expensive house was 35,000 and that includes I'm really kind of a an adherent of eating your own cooking. So that includes the house of my husband and I live in the house we bought in a suburb of Philly was $35,000. So and that was in 2016. So it's still there and there are many homes in states like certainly New York, Wisconsin, Michigan, quite a number of homes that are in that 60-50-40 neighborhood and even multi families and small commercial, that price point.   Michael: And so I mean, I've got to imagine at that price point the homes are in really rough areas or need tons of rehab. Are you finding that to be the case or is there something there's something that you know that that we don't?   Pam: Right, so the homes are in areas, how would I think about it. areas that aren't so rough that no one at all lives there, I've yet to find a neighborhood that that is on livable, I suppose everyone needs a home that it's just a flat out the truth and so there are really three things that any person who's renting is looking for one is the neighborhood. So they aren't going to be concerned if crime, for instance, is a big problem and where it is, for some of my houses I work closely, you know, first thing I do is find out who the police captain is, and introduce myself, I asked the tenant to let me know if there's any kind of roughness going on, so that they don't have to feel like they're the one making the call that I can be the person making the call. If there's a car that has sat abandoned in front of their house or near their house, I call the licensing and inspection agency, so they will tow it. So those are the things I do to make the neighborhood better than how I found it. Then the other things that a renter is going to look for, is going to be the landlord as well as the house itself, those two things I can absolutely control. So I control the neighborhood, only at the barest of margins, but the house and the landlord, absolutely within my scope. So that's what I do and to your question of where are these houses? I think that the I think that the issue is that most folks don't look from the bottom up, they look from the top down. In other words, they're used to asking themselves or allowing their bank to suggest to them that they start at what they have qualified for and what you have qualified for is probably far more than you have to pay. So if your salary and such qualifies you for that average price of a home in the three hundreds, first thing you should do is tell your real estate agent, only show me houses that are 60 to 100,000. In fact, don't even give them a range. I don't want to see anything. That's more than six figures. If I do if it's more than $99,999, you're fired and they will quickly show you the houses that meet that criteria and that way you accustom yourself to that to that look and you tell the realtor, just a look where the neighborhoods makes sense for you school district wise and so on.   Michael: Interesting. There, I've got so many questions. There's so much there to unpack, Pam but and Vicki about the price point, if someone goes to buy a $20,000 home, are they able to get financing on that home right?   Pam: Going to be difficult, that's the honest truth. The easiest source of financing, if they buy a house like that is going to be if they are also looking to be a home owner, and really a multifamily home owner. So for a person who tells me, they really don't have much, much in the way of savings, but they want to do something now and moreover, they're not too satisfied with where they are living as either a renter or possibly as a homeowner, then I would help them find homes, let's say in that lower price point of that 20 that you mentioned or 30,000 that are in the areas that they are okay with, we would look at the land banks listings, for instance, sometimes there are more than 200 land banks across the US. So sometimes a land bank will have a house that is in terrible, terrible shape, but it's in a good neighborhood, that house is going to qualify for some financing that can help the homeowner if it's not that kind of house, and instead, it's something owned by Fannie Mae, by Freddie Mac, by US Department of Agriculture by Veterans Administration, all these wonderful government agencies that you didn't know we're in the real estate business, well, then that's good news because they can now become your lender, in addition to selling you the home.   Michael: Interesting, okay, so someone can just google or your online search for the local land bank and whatever market they're interested in living or investing in, and it'll pop up with listings, just like the MLS.   Pam: That's exactly right. Just type in name of your state. If nothing comes up name of your county, if nothing comes up name of your city. So try it in that order and if nothing comes up in your county, then look at the surrounding counties. I would also just type in something like land banks, United States map sometimes, you know, some set of words like that and then that should uncover all of the line land banks and help you see For your state, for instance, if you're in New Jersey, what are the land banks in New Jersey and then find it that way.   Michael- Interesting. Wow, this is so cool, Pam and so you are you self-managing all of your properties that you own?   Pam: I am, so when I first got started with this, I was working in a really demanding job in corporate America as an exec and that was not feasible to be self-managing. So I worked with a property manager and perhaps someday I will go back that route except this go round, of course, creating my own property management company. But right now, I'm right in the thick of it. So all of the units are self-managed and that includes units that are two family, three family and even four family, again, all bought for 35,000 or less.   Michael: And what are the rents that you're seeing on these types of properties?   Pam: Yep. So for a house, that's a four family that well, that particular one is all studios. So of course, the rents there are going to be a lot less, so that's 850 each for a house…   Michael: Wait, wait, wait, wait, sorry, timeout back one second, 850 each on per unit on a four family that you bought for 30 35,000?   Pam: Yeah, for 26,000, yes, that particular one.   Michael: I've been thinking about people talking and saying there's you can't find properties that are the 1% that meet the 1% rule. This is like the 678 percent rule.   Pam: And that's why I encourage folks to come to come to my smart cousin.com where I will hold you by the hand and help you not only find these, but much more importantly than just like, hey, that one there? How about that one? But to really evaluate them and see, does it meet? What I hope is a set of criteria that you've given some thought to? So for instance, you asked me a really important question, which is do I self-manage? That's a question that anyone should think about, do they have the ability to self-manage and moreover, do they have any interest in self managing or do they think that's going to lead them to hate all of humanity and…   Michael: A one way ticket…   Pam: One way ticket straight to? Why am I already 30 years of my life before I was headed downstairs? So that's how they're built. Don't do it, don't do it, turn it over to someone else, pay someone else to 10% 12%, even 15% to do the property management. But if you're built for it, then go ahead and do it. So that's one. Second is are you looking at long term rentals, which is what I do? Are you looking at short term rentals, meaning the Airbnb ease of the world? If so, well, then we need to look at a different set of properties. Are you looking to have something have tenants essentially under your feet, in other words, a to family where they're next door to you or underneath, right underneath you? So those are the kinds of questions to think about before you just run in and buy the first thing that you say.   Michael: Yeah, that makes a ton of sense and such great tidbits and advice, but I'm so sorry, I interrupted you because I would just like my mind exploded. You have to forgive me. I hope it didn't get too much on the screen here.   Pam: Oh, no, no, not at all…   Michael: So, that was your for family lower rent at 850. A unit studio? Let's get that. Let's jump back to other side….   Pam: Yes, right. Okay, so probably the standard size is going to be your three bath, three bedroom, one bathroom, right and so that I have a lot of those and I suppose the lowest cost one is 1025 and there I just keep it there because it's, you know, a great family. They've lived there a long time and I'm not interested in changing anything for them. But I have another one where someone just moved in and that's 1500.   Michael: So that you bought for 28,000-30,000?   Pam: Right, that I bought for that one within a paper that one 345, 345. So yeah, it's a it's good pickings right now, but like anything, you just have to stay strongly tethered to the ground planning for other variabilities that could occur in the market for the two family that I have there. That's two beds, one bath, and that rent is 1000 for each. So I guess I just say that to say that in the north east. Generally the rents are going to be higher however, prices I mentioned a couple of states earlier, I mentioned Ohio and I think I mentioned Michigan and so certainly the Midwest is many, many more houses for the price of a car prices for rent are lower. But that said, Certainly you would target I think, the Midwest for a good solid multifamily, perhaps a three family that you might buy in that 40 $45,000 neighborhood. This is and then it won't hurt as much to have those lower rents.   Michael: Right, this is amazing. Pam, what are some of the risks or the downsides that either you've seen or learned about that folks should be aware of and hope to help mitigate?   Pam: Absolutely, so the risks, certainly one risk. You mentioned this earlier, when you asked about obtaining a loan and I would say more broadly, the risk is ensuring that you have sufficient cash to whether all of a sudden something is needed on that house, oops, I thought I could just put something to repair this roof and in fact, what do you know the roofer went up there, he said, it's like an eight layer cake made of asphalt shingles and so now I've actually have to replace that roof at a large cost or some other thing. So that's one risk is that you need to have the pocketbook, or access to a home equity line of credit or some other string to pull on. A second risk is how you start. I don't advise anyone to start in the deeper end of the pool, deeper and meaning, let's say auctions, auctions are site on scene, you are not able, at least not legally to go into the house and see it…   Michael: I think it might be a story there…   Pam: …And see it, it is Buyer beware. So I would never advise someone to do that as their very first house. Start instead with you mentioned MLS, lots listed on MLS, start their land banks, they will allow you most of them anyway, to go inside and bring someone with you to tour the home. I'd say another one, I suppose if I had this to do over again and so like a 2020 hindsight, it's think about when you're looking at homes, if something is in a much better neighborhood, or has some other vein of silver running through it, for instance, it is in a commercially zoned area. But maybe it costs a little bit more not a ton more. So for instance, it doesn't costs 55,000 Instead of cost 65. This thing that's a little better, I would have, I would say to young Pam Hill isn't worried. Those are what you should target the ones where you've got to spring for a little more and the reason why is even though that 10,000 or 15,000 will seem like a lot in the moment, the appreciation value is significantly higher. So that is something I would suggest to folks as well, to not just pick as many as you can dollar store style. But to instead look at where it makes sense to go a little bit higher, and that includes more multi families. 2-3-4 families are always going to be a little better than a single family because that is just one piece of infrastructure in the case of the roof. In the case of the sidewalk in front of the house versus two, I've also found that with multifamily is oftentimes the person who is living in unit one, as soon as unit two becomes empty, they refer you to a friend of family or someone else for unit two and that way you have a self-reinforcing mechanism for rent being paid by both parties because neither wants to see the other get into the terrible shape.   Michael: That is very interesting, that's very interesting. Pam on the property that you purchased, and I think I know the answer, but I'm going to ask it anyhow. What has the appreciation been like because as investors we talk about cash flow or appreciation, it tends to not be both or that's what kind of land somewhere in the middle. So what have you seen with your properties thus far?   Pam: That's a great question and it even gets back a little bit to the other question around the risks. So I would say First answering the question, the appreciation is not as high when you are buying for the price of a car and thus that is also the risk. If you are looking for a flip opportunity, you would do better to buy your standard $200,000 home, for instance, that is in a $400,000 neighborhood and needs $80,000 worth of work, you are going to be able to obtain, maybe not from a percentage perspective, you might not think, gee, that's returning as much, but absolute dollars are what matter in that example, not the percentage. So percentage wise, my houses have all appreciated quite a lot relative to others to the tune of two or three or even four times as much but think how low the base is. So those houses are really two things. Thing one is cashflow, thing two is lottery ticket for appreciation value. So as a for instance, the houses that I own in Wilmington, Delaware, I would imagine that when the Joseph R Biden library is built, I'm presuming that is going to happen in Wilmington, Delaware. Given President Biden's long experience there as a senator, that neighborhood is going to see some significant appreciation value. So that's where I see the upside, should there be a cash sale as it were of these houses. Something else that you can consider this is more of a risk. But it is something that you can consider when you buy a number of houses that have a common macroeconomic theme to them, like house for price of car, you can think about either a real estate investment trusts, so putting them under a REIT, or putting them under a hedge fund and for those investors who are interested in that higher level of return, you mentioned the 1% versus the six or seven, those investors kind of like low, low investment grade high yield bonds, might have some interest in that kind of portfolio and that can be another way to both obtain cash flow, or certainly to, to get out of the market as it were all together without selling them off one at a time.   Michael: Interesting and this has been so eye opening and so insightful. We chatted before we hit record last time we spoke about some of the things that you're doing to be an advocate for some of your tenants and people might hear that and think well, how can I be an advocate as a landlord and also have a tenant relationship? It seems almost counterintuitive, so can you speak to a little bit of the work you're doing?   Pam: I'd say first is that I do it, I do it because I feel driven to do it. In the same way that the community that I focus on mission wise is black and brown people, women, but certainly there's room under the tent for everyone. But I think about who has been disenfranchised, certainly by FHA and others, some many decades ago and still there's some of that rattling around in our system. So as I think about tenant rights, there are two in particular in Delaware that I'm passionate about. One of them says that you should not be able to discriminate against a tenant, because they receive a Housing Choice Voucher. In other words, because they receive section eight, it is legal to do that to advertise your home and say I do not accept section eight. That strikes me as a very strange, legal rule, since it is not legal to discriminate for other reasons, including economic source, I certainly couldn't tell a nurse your money doesn't spend here, missy, where are the firefighters? That's who I want. So it strikes me as the same with that and so I am advocating for that. A second one is a right to paid representation for very low income tenants who are facing eviction. This is a one year pilot of sorts that Delaware is looking to implement and that I approach from a perspective of fairness. It seems only fair, that folks who more than likely cannot afford not just a lawyer, but even a day off work to come to the eviction hearing in the first place. It seems only fair that some sort of representation for them just the same way that it's within my scope, should be available and second is from a landlord perspective, my hope is that with that representation, and usually it would not be a lawyer, it would be some sort of legal advocate. But the hope is that, that gives the tenant someone else to listen to, rather than thinking, Oh, Pam Hill, you're just talking your book, I do not want to listen to what you have to say, I'll just take my chances in front of the judge. But by hearing another person, look over their case and tell them, You owe the grant. It's just that simple. Let's work out an arrangement to make a payment. I think that that could help us both, so that's the reason that I am behind these.   Michael: It makes so much sense and it is so interesting, and frankly startling to hear that these laws exist, and it does seem so punitive to the tenant and so I really applaud you and thank you for being such an advocate for your tenants and I'm sure that they appreciate it as well. So keep up the good work.   Pam: Yes. Thank you, thank you.   Michael: Absolutely. Well, Pam, this as I've been saying it the whole show, the whole episode has been so interesting, so insightful. So much fun. Thank you again, for coming on. If people want to learn more about you want to learn more about my smart cousin, where's the best place for them to do so?   Pam: Come to my M Y, smart S M A R T cousin C O U S I N.com. Certainly follow me on instagram or twitter with the handle @mysmartcousin. If you go to my site, you'll be able to see a couple of things. One is a free eBook. Second are free webinars that I do and then third, paid courses. So look forward to seeing you there. Look forward to helping you on this journey. Please take action, even if you listen, and then tune out from any sort of hand holding from me or anyone else as quite alright. Just get going on your slice of this American Pie.   Michael: Love it. Pam, thank you again. I'm sure we'll be chatting soon. Take care, alright!   Pam: Thanks so much, Michael.   Michael: Okay, everyone. That was our show a big thank you to Pam super, super interesting story and pretty amazing what she's been able to accomplish at the price points that she has really amazing stuff and really cool work that she's doing being a Tenant Advocate where she invests locally. As always, we would love to hear feedback from you all on things that you'd like to hear future episodes on and the reviews are really helpful for us. We look forward to seeing our next one. Happy investing…

Sean: When do we need to start doing that? Is it when we bump someone up to be a leader of a team of four or five like we mentioned earlier? Or is it when they're managing a team of ten like two teams at the same time? Because that is a really good thing. That is a fantastic thing to do, develop your team's decision making skills and maybe telling them own up to it. If it fails, it fails. That's going to be your decision. It's your head on the chopping block and I support you when you make mistakes. I'll pay for your tuition fee, no problem. But how do you know when to involve them in your think tank? In your decision making process? In your ideas on the wall? Michael: It's a great question. When they manage a team at ten feels too late for me, and I think it actually comes much earlier than when they're even managing a team of four or five. You can build people's capacity to be independent thinkers, decision makers. Earlier on, you can have a leader who's managing a team of three and have that leader building that team's decision making skills. You know, their willingness to engage in in tough conversations, their willingness to speak their minds and freely share their ideas. And so then when those people get promoted, if they do, it's already embedded in the DNA. I mean, the question I would ask you to ask yourself, Sean, and for any listeners who are in a similar bucket, is like is the thing you're trying to cultivate at the leadership level embedded in the DNA of the entire organization? Meaning does everybody at every level feel empowered to make these really tough decisions and to have their voice be heard? Now you can't have - everybody can't be the boss. And that's not what I'm saying, I am suggesting that whatever you want to cultivate at the leadership level is embedded in the DNA of the organization. So you are not starting from scratch every time somebody gets promoted. Michael: I will say this, I'm going to give you some feedback, even though I'm not your coach and you can cut this out if you like. You may have just been saying this as a throwaway line on the podcast, but telling people that their heads on the chopping block, if they make a decision that doesn't work out, is not going to encourage people to make those tough decisions. Right. There's an opportunity there to say, 'even if I have your back, hey, if this doesn't work out, it doesn't work out. The most important thing here is that you're running lead on this.' Right. And that's a different message to somebody, even if that's just a throwaway line. You cast a huge shadow as a leader. If somebody in your team hears that, they're going to be more hesitant regardless. Sean: Yeah, for sure. For sure. I mean, perhaps I'm too deep into being the leader, you know, that's what I think about every day. My head's on the chopping block if I decide this and that. So yeah, for sure. Michael: But I know it. I'm with you. I'm in your shoes, man. - - - Youtube: https://www.youtube.com/leadershipstack Join our community and ask questions here: from.sean.si/discord Facebook: https://www.facebook.com/leadershipstack

Your home can be a powerful source of ready cash to fuel financial growth, add value to your property, or even provide a cushion should an emergency occur. Refinancing your mortgage and taking a home equity line of credit out on your home are two ways to make that capital available to you. HELOCs and refis are quite different from each other, though, so knowing which one fits your strategy best is important. In this episode, Pierre and Michael talk about the attributes of each and what situations might be best fit for either of them. Links mentioned: www.roofstockacademy.com  --- Transcript   Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Pierre: Hey, everyone, welcome to the Remote Real Estate Investor. My name is Pierre Carrillo and today I am joined with…   Michael: Michael Albaum…   Pierre: ….and today we're going to talk about refinancing and HELOC and which ones make more sense. So let's jump in.   How's it going, Michael?   Michael: Good here, I was telling you yesterday, my van broke down in the middle of California. So I had to get that taken care of and get a lift home from a buddy of mine…   Pierre: In my hometown?   Michael: In your hometown. That's right, that's right. We were smoking off the highway. So he said, oh, we got to pull over and get this thing fixed and it was going to be a week to diagnose it and get parts. So we just said let's leave it down there and then a buddy of ours was able to give us a lift home and we were like on our way home from being on the road for a month and a half. So we were super excited, super close and then wahh wahh wahh…   Pierre: Not usually the best place to get stuck, I left…   Michael: Yeah, if I had to point if I had to pick and choose it would not have been in this particular town. But that's okay, it's how it goes.   Pierre: All tight. Okay, so let's talk about refinance, what just roughly, what is a refinance? And why would someone want to use it.   Michael: So a refinancing that's not familiar is basically just getting a new mortgage on top of an existing one and it basically this new mortgage is going to replace the old one and so there are kind of there are two different types of refinances. One is called a rate and term refinance, where you're simply just changing the rates and the term of the loan and so if you have a 30 year fixed mortgage at 4%, and you go get a new 30 year fixed mortgage at 3%, because interest rates are better, but the loan balance remains the same. That would be a rate and term refinance, the other kinds of refinances called the cash out refinance and that's basically where you're actually you're getting money out of the transaction and so if you have that same 30 year fixed mortgage at 4% interest, and you have a balance of $200,000, but your home is appreciated significantly, or the property has appreciated significantly, you might be able to go get a new mortgage, a 30 year fixed mortgage at maybe the same 4% but for $300,000 and so that new mortgage is going to replace your old one, it's going to pay off the 200,000. But there's $100,000 left, that goes to you as cash in the form of tax free cash and so that can be a really, really powerful mechanism or lever to pull if you need access to cash and so those are kind of the two different types of refinances and how they work.   Pierre: So those both sound like awesome options. Why wouldn't everyone always just refinance?   Michael: Yeah, it's a really good question and a lot of people do they refinance, and refinance and refinance throughout the life of their property or maybe their own lives because it is such a powerful tool.   Pierre: Refi till you die.   Michael: Yeah, refi till you die, so it was it was not shocked to swap your job for the 1031 refi till you die. I love it. So yeah, I mean, it's a very powerful tool and of course, everyone's probably thinking, wow, if it's so powerful, like, is there no downside? I think that there are some downsides that we do have to talk about and understand. So first and foremost is it costs money to refinance, and some lenders will tell you oh, we can wrap the closing costs into the loan and so what that basically means is, if we go back to our initial example of like, $200,000, if it cost five grand to refinance, your new loan might be $200,000, to pay off that initial $200,000 loan, but it might, your new loan might actually be $205,000 and so they're wrapping your closing costs into the loan. So you don't have to pay anything out of pocket upfront day one. Now, you're still paying interest on that extra $5,000 over the course of that 30 year loan and so it ends up costing a lot. But for from a day one cash out your pocket perspective, it might not and so that's an option for folks to be asking their lenders about is that an option for them, depending on their situation. The other thing I think it's really important to keep in mind is that it resets the time clock, and for how your payment is broken down and so on a 30 year fixed mortgage or any kind of fixed mortgage, your monthly payment every single month is fixed, we know it's not going to change, it's gonna remain the same for the duration of the fixed period of the loan. But what does change over time is the amount that goes to principal and the amount that goes to interest and at the beginning of a loan, the majority of your payment is going to pay down interest. So if someone is towards the end of the life of their loan, they're paying down their principal very, very quickly and so if you go do a refinance again, that time clock is going to reset and now you're going to have a duration that you determined for the loan, but most of your payments going towards the interest. So that's important to understand that distinction as well.   Pierre: What is a HELOC and how is it different?   Michael: So a HELOC is an acronym and it stands for a home equity line of credit and basically, that is a line of credit against the equity that you have in the property and so a lot of refinances, they will give you 80% or 75% of the property's appraised value or they'll simply just replace the mortgage if you're going to take a lesser amount. So if you've got a $200,000 property, and it's worth 400k, but you do and rate and term refinance, you're gonna go get another $200,000 mortgage, that would be a 50%, LTV loan, versus going maximum 80%, LTV or 75%, if you're going to take out $300,000 loan, then you're going to be at 75%, you're gonna get cashed out. So a HELOC is basically on the equity and so if you have a let's say you have $100,000 of equity in the property, and a lender says, hey, we'll give you 80% equity line of credit, that means that they're going to give you like a line of credit of say $80,000 and the cool thing about line of credit is that they just sit there until you use them or until you need them and so if you set one up, you set up a line of credit, they're often free to set up with lenders, and never touch the thing, you're not going to pay a penny in terms of interest or principal payments, because you're not drawing on that line and you can think of it like a credit card. So with a credit card, if you're not spending any money on a credit card, you don't have any payments to make, there's no interest accruing. Same thing with a line of credit, so a lot of these lines of credit have a checkbook associated with them or an account associated with them. And so if I needed a $10,000, tomorrow, or in two days from now for repair, I could write myself a check, write Michael Albaum, a check from Michael Albaum line of credit, I'll deposit the check with my mobile deposit depositing app, it'll have $10,000 in my account, by the time the check clears now is when the time clock starts running on the interest payments and he locks are going to be traditionally interest only payments and the interest rate is going to be fluctuating it's going to be variable and it usually changes monthly. And there's oftentimes a ceiling and a floor. But so if I have a $10,000 balance, let's say my payments 100 bucks next month, if I make that $100 a month interest only payment, my balance hasn't decreased at all. So I'm not getting this benefit of the loan pay down like I am in a fully amortizing loan, which is basically what a cash out refinance or writing term refinances. So I want to just be very cognizant of what my balance is, what my interest rate is, and how much I'm paying off every month. Because you could pay off the entire thing tomorrow, or the day after, if you got a big $10,000 check in the mail, you decided, hey, I'm gonna go pay this thing off. There's usually no prepayment penalties, you can pay it off as aggressively or as slow as you'd like. It has a set period of set life that you have to pay it off in X amount of time. But that's going to be HELOC specific, but it's a very flexible tool and so your cash out refi is gonna be full interest, full interest and principal payments, fully amortized loan, your line of credit tends to be an interest only variable flexible line of credit you have access to.   Pierre: Okay, cool. I have a few questions on so the So you're essentially on a HELOC, you're borrowing that money from the equity in your property?   Michael: Yes.   Pierre: So when, who are the interest payments going to?   Michael: They are going to the bank, they're going to the lender that has that line if you have that line of credit with.   Pierre: Okay, all right. Next question is you said it's a variable rate.   Michael: Yes.   Pierre: What okay, so say you're, you have a certain amount of equity in your property based off of its current valuation, and there is some like major market correction where the value of your property drops down significantly. Does that new calculated equity in your property, then replace the amount that you had available to you and that HELOC?   Michael: It's a super good question and so it's something that a lot of people were very concerned with, sort of COVID is, hey, I've got these lines of credit out, are our lenders gonna start calling them do which they can, they're legally allowed to do that and it's all in the mortgage language and so it's important to read and understand that language very closely. But it can happen, lenders can say, hey, major downturn, like we're closing your line, you need to pay it all back and understanding what that mechanism is and how that works is going to be specific to your lender and your HELOC. Traditionally, I haven't seen that happen a whole lot, because values tend to fluctuate with time and lenders when they're looking at how much line of credit will extend to you. They're building in buffer and that's why lenders are only giving out 80% loan to value or 75% loan to value. They're like hey, Pierre, you've got to have 20% 25% skin in the game and so the property has to drop 25% before their investment is even at risk. So same thing with the locks they tend to go a little bit higher on the LTV I've seen up to 90% and so there's still that tempers sent buffer, which lenders that's how they're underwriting things, but to your question, short question long answer, they can close these lines of credit, yes.   Pierre: Okay and then how do the HELOC affect your credit rating? I mean, it's pretty big chunk of credit that you're then pulling out on $80,000. That's a huge credit card.   Michael: Yeah, potentially. So it's a lot of it'll show up as a second mortgage. That's really what it is. It's a second loan against the property and I, I'm not 1,000% sure. So I would ask the lender that you're getting the line of credit from, but my understanding is that most lenders when they do a credit poll, they'll see the full balance, the full amount of the line of credit as a debt on your credit score and so they'll just assume that you're making the minimum monthly payments on that loan, affecting your debt to income negatively. So I hope that answers your question. But again, I'm not 1,000% sure. But that's how I've seen it done in the past.   Pierre: Going back to the variable rate on a HELOC are can that rate just change from one day to the next or is there a schedule that it changes? Well, you can you plan ahead, you know, and say, you know, did you can use it within this certain time period before the rate rises or is it just like, rates are variable, we changed it.   Michael: Most lenders do monthly rate adjustments, and there tends to be a ceiling and a floor and so you know, going into it, okay, this is my maximum interest rate this, this will ever be throughout the life of this HELOC, which tends to be five to 10 years. So you can have an understanding, but no, it's really tough to forecast. Okay, rates are gonna go up on this date, and this is what they're going to go to. Okay and if you figure out how to do that.   Pierre: Alright, so that brings us to, when do we use which one? When does a HELOC make sense and when does a refi make sense? Which one's better?   Michael: It's a super good question and one that I get in the Roofstock Academy all the time, I'm constantly chatting about it with folks, especially given today's market environment where there a lot of people have made a bunch of equity in their home over the last couple of years. So it really depends which one is better, it really depends on it's a case by case basis. What I often share with folks is if you have a plan for the cash, within six to 12 months, I would go cash out refinance, if you're not sure, but you just know you want to have access to cash. I go with the HELOC because again, in that in that cash out refi scenario, you're paying on those borrowed dollars, day one, independent of what you do with the money independent what you do with the proceeds. So if I've got $100,000 proceed from a cash out refinance, but I don't quite know what I'm gonna do with it, I'm just kind of having it sit in my bank account that's costing me principal and interest every single day it's sitting there.   Versus if I go the HELOC route, I set up a line of credit for $100,000. I can access it tomorrow if I needed it, but doesn't cost me anything to have the ability to access it on a moment's notice. So it really depends, I would say on what you're planning on doing with the proceeds. It also depends on your current loan terms, and what your new loan terms would be in terms of a rate and term or cash out refi if you're at a two and a half percent loan, 30 year fixed, and you would have to go through a five and a half percent. If you want to do a cash out refinance, I would think long and hard about that depending on the loan size on the smaller the loan less impactful a delta and interest rates gonna be, but on a really big loan, that can be really really, really impactful to your monthly payment. Now you could make the argument that oh, I can always refinance again down the road. Yeah, but today, I know exactly what your payment isn't at two and a half percent and I know it's pretty darn attractive. So in that instance, too, it might make sense for someone to go the HELOC route if they have to give up a really attractive or really a really solid loan.   Pierre: Okay and can you use, is this a product like a HELOC? Can you just use this on your primary residence or can you use this on every one of your investment properties?   Michael: Yeah, also really good question. They are most predominantly used and given on owner occupant primary residences, there are lenders that will give them out on investment properties, but there are fewer and far between it comes in, it's much easier to get on an investment property. If the lender already has the first mortgage. I'm investigating this right now with a investment property that I own. I'm going back to the same lender that has the primary mortgage and say hey, can I get a line of credit on this thing, there's a ton of equity that they're being open, too or r if you own it free and clear, that tends to be very easy. But what lenders don't like to do is specifically on investment properties because it is a second loan. They're in essentially in a junior position. So they don't want to be second in line to foreclose on the property. If you're not making your HELOC payments to them.   Pierre: Okay, and so you take a HELOC out on your primary residence and then move out and now it's kind of you're renting it out as an investment property. Do you have to close out that HELOC or can you just keep that open?   Michael: Yeah, it's a great question. It's that's going to be lender specific as to what they have in their language, I would imagine you can continue keeping it in effect in force if it's if you're making payments to them. That's kind of like when you get a primary mortgage and then move out and rent it out. You don't have to close the mortgage, but it's going to be lender specific and product specific as to what you have to do what you have to disclose if it can becomes a rental and it was a primary at one point.   Pierre: Okay, cool. I think that's those are all of my questions on this topic. Do you have any, like final tips that you should that that you want to leave everyone with about both of them?   Michael- Yeah, I think they're both really powerful products, really powerful tools to have in your tool belt, there are applications for both. But if you're not sure, definitely do your research. But also, it doesn't have to be one or the other and there's this kind of hybrid approach where depending on what your new product you're going into, from a rate and term or a cash out refi is, you don't have to take your maximum loan to value. So let's say you've got $100,000 of equity to play with that you can get a loan against. Maybe you take 40,000 in cash out refi and then 40,000 in HELOC. That way, you give yourself a little bit of cash today, but you also give yourself a little bit of flexibility down the road. And again, you really want to think long and hard. What is the plan for the proceeds? What am I going to do with this money once I have it in my account and again, for me, my kind of number is six to 12 months. That's what makes me comfortable. But if you're sitting out there like no, I'm okay having this money sitting my account for two years because of the uncertainty or because of whatever justification you have. Great. But again, it's not an all or nothing type situation for either product. So definitely start chatting with lenders and it's easiest to start with the lender that currently has the mortgage if you're interested in HELOC, but there are plenty of lenders out there that have just HELOC only products that can that can complement a mortgage.   Pierre: All right, Michael, that definitely covers it. Thanks so much for sharing, anything else?   Michael: Now this was great, man. Thanks so much for that for the awesome questions here.   Pierre: All right, let's get out of here.   Michael: Let's get out of here.   Pierre: Thanks everyone for joining. Please subscribe to the podcast wherever you listen to it. If you're watching it on YouTube, hit the subscribe button that really helps us get out to more people. Thank you all for joining us and we'll catch you on the next one. Happy investing.   Michael: Happy investing.

Jaden Sterling is an award-winning, international Best-selling author of, “The Alchemy of True Success.” Creator of Wealth & Wisdom Daily Oracle Cards and founder of Sterling Stock Ed. Inc., an International stock investment program with hundreds of students worldwide. Sterling draws on 30 + years as a professional investor assisting people to become confident investors by simplifying the investment process. Prior to consulting, Sterling held title as Regional Vice President of Asset Management for Citigroup increasing sales from 100 Million to over 300 Million in two years. Sterling also worked as a financial consultant for Merrill Lynch and Smith Barney advising some of the wealthiest families in the United States. Sterling's passion and purpose is to assist people to take control of their finances and live life financially free. Sterling teaches via online platforms how to invest in stocks and how to buy and sell stocks via his software, “Sterling Stock Picker.” Join Jaden, as shares his story, his passion for teaching and helping people in real estate, what people need to be aware of going into their investment career, and an overview of his software, Sterling Stock Picker. Episode Links: https://sterlingstockpicker.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I have with me Jaden Sterling, who is going to be sharing his story about going from equity stock investor, to real estate investor to now equities teacher back in the markets which he left but with a purpose this time. So let's get into it.   Jaden, what is going on? Man, thank you so much for taking the time to hang out with me that I really appreciate it.   Jaden: Hey, my pleasure, Michael, happy to be here with you.   Michael: Awesome. Well, I think we're gonna have a lot of fun today and I know a little bit about your background. But I would love if you could share with our listeners who you are, where you come from, and what is it that you're doing in the financial sector today?   Jaden: Currently presently in British Columbia, Canada, absolutely beautiful up here and working in the financial realm. I've worked in this area for 33 years and finances and 11 years in real estate, and then the last 20 in the equity markets. So I'm super familiar with both and yeah, happy to be here with you and share some value with your audience.   Michael: Awesome and so you're living up in Canada. But did you always work up there? Are you doing equities in Canada or in the states talk to us a little bit about that?   Jaden: So I've been up here 11 years prior to that I was in St. Petersburg, Florida, where I built a portfolio of affordable housing units with the city of St. Pete partnered with them. We did 125 projects, and it worked out really well built a 12 and a half million dollar business in the real estate markets and this was even during the 0708 when it was really tough money was tight, super challenging, but got through it, thank goodness and but my background is steeped in the equity markets. My an initial training was in my 20s, I worked on Wall Street for Merrill Lynch and Citigroup and loved everything that I learned from my wealthy clients, not what I learned from the brokerage firms. That was actually kind of shocking in terms of what I learned about the equity markets and how the system is rigged and it's rigged to make the wealthy wealthier, and the firms are situated in a way to make money off of clients, not for clients. So when I recognize this, yeah, when I learned this truth, I was like, okay, I'm out of here and I'm going to help people also understand how this is set up, and then help people work through work around the situation there.   Michael: Interesting, so can you say more on that about how the system is rigged? Just curious to get, you know, an insider scoop on it, because you hear that being said, and but you also hear the opposition of no, we're here to make money for you and with you and grow with you. So talk to us about how you came to that conclusion.   Jaden: Yeah, a lot of professionals in the financial arena are great people, you know, they have great intentions to help their clients, they, they sincerely have some have a desire to really help people and make a difference and the challenge is the system is set up to steer clients in the direction that makes more money for the brokerage firm, not for the client. One aspect is you know, a lot of people think they need to diversify. We've heard that throughout the ages, right? Diversify for a safety. The challenge is it's like I love what Warren Buffett says diversification is the tax that people pay who don't know what they're doing.   Michael: That is a great quote.   Jaden: He's so right about that. You know, the key is to really focus folk focus your business when I was in real estate, I focused on one area affordable housing. Now, when the stock market, I have owned eight companies, shares of eight different companies. That's it not 100, not 200, not 300. So it really gives an investor leverage to get their money to finally work for them and not work against them. So the industry absolutely, it tracks the it's called velocity, it's still to this day, and I was in it 30 years ago, it tracks how much a portfolio turns over, meaning how much a broker or banker makes on that client's portfolio, not what they make for the client. So just in that understanding alone, you just kind of go yeah, I think I need to find another way than a banker broker to help me make money.   Michael: Yeah, yeah, that makes tons of sense and so just a curiosity. How did you end up in the affordable housing sector?   Jaden: Well, no, I got out of the brokerage business and when I was 31 and I looked around and I something very strong inside me said, start buying real estate and I didn't, I didn't really know I mean, I, you know, I didn't know what to do, I didn't have a mentor in that direction, I just knew that I had to do it. So I researched raw land, I researched apartment buildings, I researched trailer parks, I researched single family homes, commercial real estate and I landed in a, in a category that I felt comfortable with and that was like, from a personal level, doing good helping other people. I'm a big believer in that, the more the better we do for others, the more we help ourselves and it's a beautiful circle that way and so I liked the idea of affordable housing and I also felt like it gave me leverage, if I bought an apartment building that was you know, let's say 12 units, I could, I could renovate, you know, half of them in the beginning, and then still have income coming in. You know, there's only one roof on an apartment building, rather than if you buy 12 single family homes, you've got 12 roofs to deal with, and everything that comes with that. So I felt like the leverage was great and did you know with affordable housing, I didn't know this. But I learned back then that there's special financing for investors who get into that arena, you can get loans that are better rates, some of the money is forgivable in terms of the down payment, less down payment, like it had all these great attributes from an investor's standpoint and then once I bought my first affordable housing project, and made a lot of money, by the way, there's a lot of money to be made in affordable housing, it was always confirmation that when you do good by others and for others, that you'll be abundantly blessed.   Michael: Interesting. So you did that for quite a while and sounds like did quite well and then you moved back into the equities market.   Jaden: Yeah, I knew that my mission was to assist people to teach people how to become wealthy how to work with money, how to understand the principles of money that actually bring in money, rather than take someone's wealth and I wasn't teaching it. You know, I was in my office, I was running a big real estate company, I had 15 employees, we were busy, you know, so I wasn't I wasn't doing what I was intending to do, which was to teach others. So I wrapped up my entire portfolio all in one shot and stepped into my actually my twin brother got sick with cancer. He was diagnosed with stage four cancer.   Michael: I'm so sorry.   Jaden: And this is back in oh seven and he basically they told him look, you have two years to live and during that time, we had incredibly deep conversations and one at one point he said to me, you know, bro, I don't feel like I've lived my purpose and I said, What do you mean, you're doing great. You're a realtor, you're married, you got two great kids, like, what are you talking about? You know, I didn't really understand and he said, no, no, I just feel like, I didn't do what I came here to do and that really struck me because I knew at a very young age, what I was here to do, I had an epiphany at 14, you know, it's like something told me deep down inside, that I would be working with people assisting people to be empowered by money rather than enslaved by it. I just had this clear knowing and that's why I went into working in the equity markets and then ultimately real estate, you know, putting to practice what I had learned and, and I knew I had to start getting out and teaching so I made an about face right then and there. I told my brother I said, man, I'm going to do it for you and for me, I'm going to start getting out there living my purpose and start teaching.   So I did I sold my entire real estate portfolio right then I met my wife, she's up in Canada, we realize our relationship worked better and we lived in the same country. So I made the big leap and came up here and man, it's been amazing. It did bring me right back to my training and stocks and knowing because I I was able to build my real estate portfolio from what I had built from my stock investments over an eight year period. So one fed the other and you know, people ask me all the time, you know what, which do you like best right? Did you like stocks or real estate? I know this is the real estate show. I totally respect that and the thing that that I really draw from is real estate will give you a roof over your head. But stocks are a whole lot easier. There's no fixing toilets and dealing with tenants and you know that situation. So I think a balance of both is key. You can use one to support the other and one to actually buy hi there, I've, I bought an eight unit apartment building by putting my IRA up as collateral with a bank. So no money down. I just said here, take my IRA, and I'm going to do you know, X, Y and Z to this building. Once I get the rents raised and get it improved make these capital improvements, can I get my IRA back? And they said, sure. So I bought it, I got an appraisal done at that time. Six months later, after we made the capital improvements, raise the rents, I got another appraisal done. They issued they released my IRA back to me, so it was a no money down deal worked really well. But had I not had that IRA, it would have been a whole different situation.   Michael: That's unbelievable, Jaden, that's wild. So people, I think in your sphere, some of your coaching students know you as the spiritual money guy and I'm detecting a little bit of that as we converse here, but I would be loved. I'd love to hear from you. How did you come by that name?   Jaden: Two reasons. A lot of people know my background story, that epiphany that I had it 14 that I shared with you that understanding and really clear knowing I've always been a clear knower. So some people call it Claire cognizant, Claire means clear, and then Cognizant is knowing so I've had always had a super clear knowing in my life. But I live that way. You know, I just have, I have a very simple life and there's nothing complicated. I do my best by not lying, stealing, or anything like that and I think by having, having virtues like that, and paying attention to those virtues, and honoring them for yourself, you have a certain amount of clarity in life and things get a little simpler that way. So when I heard one day, it's actually a speaker in a podcast. I wish I could remember who it was because I would give her credit. But she said something really interesting. She said, look at the word prosperity, the Latin derivative of that word is pro spare, which means force spirit and she went on to say, you know, you honor your spirit when you're prosperous and that really spoke to me because I, I really, I believe that I believe she was absolutely correct in that and, you know, think about it, we're not here to worry about money, right? We're not here to let play life and in a small way to play a game that, you know, I look at life as a game. It's a big monopoly board, you know, you have so many houses that convert to hotels, and then apartment buildings, and yada, yada…   Michael: And you hope don't go to jail.   Jaden: That's right, yes right. That saves a lot of hassle when you say right, right.   Michael: Yeah. So let's get deep for just a minute if that's okay. So you I think, are a very lucky person in the sense that you've always been knowing and you've had this clear direction for your life. What do you say to folks that don't have that clarity or that are struggling to find that clarity? How do you how do you become how do you gain that clarity?   Jaden: Well, we know that purpose doesn't it's not like a billboard that drops out of the sky and says, this is your purpose. You know, it doesn't work that way. What I find for most people who asked me that question is what they're doing in that present moment is truly their purpose or else they wouldn't be doing it. So what someone is really asking is, how do I know if I need to be doing something different? That's really the question you're asking, right? Because if we start to acknowledge that where that person is, in that moment, is exactly where they're intended to be. If there's discomfort around that, if they say, you know, I know there's more for me, or there's something out there, but I'm not sure what it is, then it's, there's no way around it, my friend, it's a deep dive inside. It's, it's, you know, I, when I got out of corporate America, I took six months off and I did yoga, I worked with a shaman, I did a deep spiritual, inner work around what I was here to do and that really helped to give the clarity.   So I think people have to spend a little more time off screen and more inner work time. Push away from the, you know, these devices that we use these iPads and phones and computers, lower your brain function that your brain has to actually slowdown in order to connect in with this device to be able to take the information in. So what someone can do, I'm just thinking back then the practice that I did every morning, I'd wait before your eyes open, connect in with your higher self and just ask what do I need to know right now? So this is before the brain kicks in before your phone before any type of device phone or what have you that you turn on the that, that's the time when you're gonna get information, you're still kind of in a sleepy state you haven't fully woken up yet. Just sit with that at that time and you'll get information you'll get, you know, an idea will drop in or something inspiring or the thought of oh, yeah, I need to reach out to this person and then the universe aligns all of that for you. It happens in such an elegant way that a lot of people overlook it. Because they think oh, simple, is not powerful and actually, the truth is, peace is the new power, simplicity is the way to get there.   Michael: Oh, man, I love that I'm getting goosebumps just hearing you say that. I think my problem is I have that thought coming to me at 2am oh, I gotta call this person and then I can't go back to sleep. So I need to figure out a way to get around that.   Jaden: Yeah, super simple. Just either put a whiteboard in your room, and you get up and write that down on the whiteboard, or a pen and paper and so I just use a big fat marker, because I know I'm not gonna be able to read if I do a ballpoint, I can't read it in the morning, reach over, grab my piece of paper, write it down, and then in the morning, you'll have it.   Michael: Oh, that's great, too. I love it man, I'm getting way more than I bargained for here having you on. This is awesome, man. So okay, so let's fast forward now to what you're doing today. Because A, I think it's super interesting and B it's kind of controversial, I think from a traditional investment standpoint. So you are now picking individual stocks. Is it so I have that right?   Jaden: Yeah, so you know, like I say, I'm totally counter narrative, I anything that is out there in the narrative, generally, I'd like to turn on its head and look at it from a different perspective and we have to look at what's being pushed on people, mutual funds, packaged products, manage money, CDs, you know, all these things that are simply not going to give someone a successful retirement, a profitable retirement. And I realized, so back in 2017, I put a course together to teach people how to invest in stocks and what to look for, you know, how to read a chart what, how to interpret it and, and then one of my students said to me, you know, I love your course, could you create software around this and I was like, my brain just exploded, you know, like, oh, well, how would I do that and that's such a good idea and I'm not a techy guy, you know, and, and, and then the universe lined it all up and sure enough, I partnered with two gentlemen who are amazing IT guys, we spent three years developing software called Sterling stock picker, and it does exactly that I said to the guys, if we can create software that in three clicks, someone finds a winning stock, we could change the world and I believed, I believe it, I believe we can, and I believe we are.   So we did that we put the software together, it calculates the algorithm calculates all the metrics that someone needs to know so they don't have to worry about you know, it, about not knowing and it empowers people to find stocks aligned with their personal values, aligned with their risk tolerance level, it's a really comprehensive software that we've put together. And it worked out so well it became profitable right out of the gate that now I'm in the middle of a Regulation A offering where we've raised half a million dollars, I'm taking the company public in two years. So we've got two more years to go to increase the revenue for the for the software, and then our subscribers who get in at 50 cents. I'm going to just do a super low issuance and the float. So my goal is $8 a share to go public in 2024.   Michael: Holy crap, that's amazing. So how has someone not done this before? It seems it seems from the outside looking in so obvious, right?   Jaden: Like yeah, yeah. Oh, there's software out there man. But it's so convoluted it's so cuz I've paid 10s of 1000s of dollars to buy software to invest in the markets and I was confused and I'm like, if it's confusing for me, like this is my background. It's you breathe know what I did for a living for 11 years. If I was confused, there's no way that most people can understand it and it was so confusing. I couldn't put it to work. So we've made our super simple, so easy and I think that's our superpower is we've simplified the complicated with the software.   Michael: So Jaden, tell me why everyone like that is so different and counter to what you hear from everyday investors to the professional investors go get mutual funds, they're safer this and that. Why does this work?       Jaden: Well, it works because people are getting 30 4050 120% return on their investment. Like, first of all, you know, my biggest challenge, Michael, when someone comes into our platform is I have to, I have to teach them that 8% that average is not what they need to be shooting for. But everyone has been so conditioned to focus on, you know, just settle for average returns, right? Don't expect to outperform the markets. I mean, it is why it is so easy to outperform the markets, when you have the right information. That's, that's the key you got you got to have, you got to know when to invest. So our stock, where it tracks when to invest in certain sectors, it's been heavy and mining and oil and gas companies for the last 18 months. Those have been super profitable over the last 18 months, as we know, with the price and rising in oil, and hard assets, commodities, like gold, silver have been, you know, doing fairly well, I think they're still being suppressed in the prices. But that will change at some point, it has to. So yeah, I'm totally contrarian but you know, think about it as a if you're a business owner, entrepreneur and if you have 150, or 200 products to sell, right to manage in your company, you'd be like, I don't even know where to start, let alone how am I going to be profitable and successful, right. But if you have six to eight products that you're selling, you know, you're super focused in your business, you know, what you're doing, you know, your target audience, you know, your, your manufacturing costs, like you just have the six to eight products that you're selling, there's a really good chance your business is going to be really profitable. Wouldn't you agree?   Michael: Yeah, I mean, I'm thinking back to my prior career, and we sold one thing and one thing only, and killed it, as opposed to the other competitors that had multiple lines of similar business, so.   Jaden: Then you answered your question, my friend, it's exactly why we know a smaller, concentrated portfolio of stocks of these are the some of the largest companies in the world, mostly in North America that you know, buying into those shares, you can get rich, there's no question. I did it with one company, the decade in my 20s. It was the company that I worked for Citi Group, that the parent company at the time was travelers, and that stock tripled. So I turned literally $70,000 into over a million and that's why retired.   Michael: Holy smokes… That's incredible. All right, so talk to me a little bit about the software itself. I mean, it must be really expensive.   Jaden: You know, it's not, it's $33 US a month, we have a 14 day free trial. So someone can take it for a test drive for free for 14 days. We priced it in a way that everyone could take advantage of it, you know, we know it should be probably a few $100 a month. But we didn't want to do that. We want to just leave it at a price that people are comfortable paying. If you're paying 15 a month for Netflix, you might as well pay a little bit more.   Michael: That's such a that's such a reality slap in the face like yeah, I'm willing to pay 50 bucks for Netflix, don't even think twice about it. But for to help yourself get rich like well, 33 bucks.   Jaden: That's it, that's it my friend. Exactly, you know, it might as well invest in your future and learn a little bit. I'm in there. Every Monday I do a live stream every Monday at 12:30 and I  share what's going on in the markets from an a macro economic standpoint and then I get into the micro aspect of what I'm buying why I'm buying I tell I'm very, very transparent. I tell people what I'm buying the reasons behind it and why. You know, two weeks ago, I was gonna buy Tesla stock, it was $1,200 a share. I went on to the live stream and I said this these other reasons I'm not buying it here. I know it's going to pull back and I walk them through the software and show them. This is why the stock broke below their short term averages the MFI The Money Flow Index is too high, you know, we just go on and on. So I like to educate people through the platform. That's one of my big things in life is to teach people what to look for when they're buying the stock. So yeah, that's the that's the software.   Michael: That's awesome and so how well versed does someone have to be in the stock market in order to participate or really take advantage or utilize the software to its fullest intent or can someone literally just click a button and it'll spit out based on their inputs, stocks that they should buy?   Jaden: That's it right there, three, three clicks, and they're going to find a list of winning stocks that they can buy at the exact right time. We've already figured it out for them. We actually incorporated personal values as well because, you know, my belief is if you're if you're aligned in alignment with the companies that you're investing your money and then it'll work out far better than you know, let's say if you're a health nut, you probably don't want to own McDonald's. Well, did you know McDonald's is in most mutual funds and most equity funds in the US has holds McDonald's stock in there. So it just depends, right? If you want to steer clear of that you can with individual stocks. That's what's so cool.   I'll tell you a story and this is really this hits home as to why I do what I do. When, when I was a broker with Merrill Lynch, I was like 25 years old. I had a client named Dr. Walter Arnold, and he told me a story about a friend of his who was a back then we call them secretary, she was a an executive secretary and she, she invested $5, every single week in her stocks $5 back then and she did this for 40 years, while she retired with $1.2 million and her stocks grew like exponentially like she had 20% annualized growth year after year after year and he said, he said the fascinating thing was, was how she found these companies what she did back then, in the 40s, and 50s, it was very expensive to advertise in magazines in color. So she would flip through these magazines and any companies that advertised in color, you know, back then it would have been Kodak and just companies that were doing really, really well. IBM was advertising and color back then she said she bought shares of those companies. She had four different companies in our portfolio and she just kept investing in them week after week after week, $5 a week, her portfolio grew. She didn't touch it, she didn't take any dividends out until she retired with $1.2 million.   Michael: That's incredible.   Jaden: Isn't it simple?   Michael: It sounds totally the KISS principle.   Jaden: That's it, yeah…   Michael: My gosh. So it's funny, because you took the question before I can even ask it and I was gonna say, one of the things I think that's so powerful about real estate is leverage that you can take $20,000 and go control $100,000 worth of asset where you cannot do that, with lesser buying margin sort of thing in the stock space. So is it worth it for someone to take a little bit of money and invest it or does it need to be something a larger amount to really become impactful? And it sounds like I got the answer to that question. But curious to hear your thoughts.   Jaden: Yeah, well, you got to start somewhere and with how the equity markets are set up, you know, if you're in the US, you can buy stocks for free, it doesn't cost I my US accounts with TD Ameritrade zero commissions, right. Robin Hood, same situation. So yeah, all of that money goes to work for you were when I was a broker at 25, we were charging several $100 to buy stock. I mean, in one transaction, right? It was it was a lot of money back then. Now it's just that barrier is gone. So more now than ever. It works with starting to invest someone can dollar cost average into the equity markets. That's what that's what Ann did $5 a week. So she didn't try to time the market, she didn't try to figure out you know, what's the best price for a stock she just said, hey, I've got five bucks a week I can invest, put away and not touch and so that might be someone can start with $100 or but we got to start somewhere and like you said, margin is another aspect that can increase their purchasing power.   But you know, we're seeing something very interesting happen in these markets, real estate as well. There's, there's a construction happening, right? The Federal Reserve Fed is starting to raise interest rates on mortgages and I lived through like I said, oh seven and oh eight where it was a scary time. You know, it was a totally the market was contracting lines of credit were being reduced. It was hard to get access to cash. So I would say for an investor today you know, look at it from a multi approach standpoint, have some money in equities, stocks, companies, four to six different stocks. Consider real estate, but also hard assets like gold and silver coins. The actual physicality of gold and silver, I think, I think if you look at you know, there's talk about a central bank digital currency coming in. That has to be reset in the previous 500 years, whenever a currency went bust, it was reset against gold, the gold standard. So when that happens again, which it will at some point, it's probably sooner than later at this point. They're going to have to mark to market gold at a fair price. So that may be instead of 2700, or $2,000 announced it might it might be 20,000 an ounce. It could be 30,000. We don't know what that number is going to be. But if someone starts investing that way, thinking that way, you know, how am I going to maintain my wealth? How am I going to preserve my wealth and grow my wealth during this time? Because this is a tricky time we have we have inflation, probably hyperinflation, you know, on the horizon. We've got interest rates going up, which to me sounds totally counterintuitive. I don't know why they're raising interest rates as inflation starts to run rampid. But the printing presses printed and minted way too much money. So now they're trying to make up for that that's at least that's the narrative that they're telling us. So we have to plan for that and prepare for that.   Michael: Okay and one last question for you Jaden. As so many people, you hear talking about how frothy and how top heavy the equities market is, the stock market is so high, it's never been higher. You know, what do you say to that in terms of people who are just getting started?   Jaden: Yeah, so there's so much new money going into the equity markets right now. It's on an it's an add a net 15 billion, that's what the be a month net buying. So there's more 15 billion more month being purchased equities purchased on the exchanges than being sold. Because frankly, it's one of the best investments out there. So there's tons of money going into the equity markets that will continue to drive then the markets did pull back early this year 15% decline and just two years ago, remember, it was down 35% in a six week period once this COVID pandemic kicked in. So there's, it's pulled back. But what drives the market is buyers, not sellers, and we see the buyers continuing.   Michael: So okay, I like to have one follow up question for you. When Warren Buffett says I think it was Warren Buffett who said be greedy when others are fearful and fearful when others are greedy. To your point of there's all this money going into the market, I mean, is that people being greedy and so therefore should we be fearful or should we be kind of jumping on that bandwagon thinking, Well, hey, if these people that make a lot of money are investing, maybe I should to, you know, hitch my horse, my horse hits my car to their horse, so to speak?   Jaden: Yeah, it's that's such a good point. Because there are so many great companies out there right now that are thriving during this time, and you can make a lot of money in stocks. So I think I think you have to have a balanced portfolio in terms of some money in real estate, right? That's, that's important. People always have to have a place to live and equities and then like I mentioned hard assets, the golden silver coins and then once you have that perfect trifecta of investments, you can really sleep better at night because you're not worried about, you know, what the markets are going to do. You know, you have a study plan. If the market does pull back, well, you get to buy more shares, which is pretty good.   Michael: Now they're on sale.   Jaden: That's right now they're on sale, exactly, right.   Michael: Awesome. Jaden, this was so much fun, super, super informative, and interesting. Where can people learn more about you or take advantage of your software if they'd like to?   Jaden: Sure, https://sterlingstockpicker.com/ is where you can find me reach out to me, we have a clear, great website that shows how to get started in the stock picker software, and how to connect with me if you'd like, I always return emails. It may take me a while because I get a lot each and every day but I promise you I'll certainly get back to you.   Michael: Right on. Well, thank you again for taking the time to chat with me really appreciate you coming on and I'm sure we'll be chatting soon.   Jaden: My pleasure, Michael, I look forward to chatting again. Thank you!   Michael: Awesome, you got it take care. Alright everyone that was our show a big thank you to Jaden for coming on super, super cool software he's developed I will definitely be checking it out and I thought he shared some really interesting perspectives about how to balance a portfolio. So if you liked the episode, please feel free to leave us a rating or review wherever it is you're listening to this podcast and as always, we look forward to seeing the next one. Happy investing…

Collin Mitchell welcomes Michael Stamison, a Business Development Manager for Röhlig Logistics, in this latest episode of Sales Transformation. Michael was involved in a BombBomb Documentary about digital pollution. He also spends some of his time as a head coach for wrestling and assistant coach for football. Together with Collin, they will be discussing sales in the logistics business, and how to keep sales communication as human as possible. Join Our Free Podcast Community HERE!Want to solve a leaky sales funnel? Get Signup for your Free RevenueGrid trial HERE! Want Your Reps Hitting Quota in 2022? Get Your Wingman Free Trial HERE!HIGHLIGHTSMichael's sales storyPandemic TransformationSales go on even during the pandemicTransforming his messagesKeep being humanQUOTESMichael: “It's every day is a grind. But it is an exciting industry to be a part of because we're now we're at the forefront.”Michael: “So easy now to connect with people. But I do miss that interaction. I miss being on the road.”Michael: “It's not a traditional sales job. It's more of, you've got to figure out how to do things. It's such an abstract thing because that we were really as a service-based cuts company.”Michael: “ I'm just gonna keep doing what I can do in my small little world here, my little corner of the country, a quarter of Massachusetts, and just keep being human.”Watch Michael talk about digital pollution in the BombBomb Documentary, Dear {first_name}: A business case against digital pollution.Learn more about Michael in the link below: LinkedIn: linkedin.com/in/michael-stamison-20342934Connect With Collin on LinkedIn Want to Start, Grow or Monetize Your Podcast? Book a Free Strategy Call HERE!  

Michael Benezra is the Executive Director and Co-Founder of the GK Fund: a nonprofit social impact fund to support BIPOC-owned companies in Greater Boston. Michael also serves as the COO of Colette Phillips Communications, helping to lead the All Inclusive Boston (https://www.bostonusa.com/allinclusivebos/) tourism campaign, among other projects. Chad talks with Michael about being a BIPOC ally, disparities amongst the VC world, and how the GK Fund looks for the same things in BIPOC-owned companies that they look for in other companies because the innovation is there; it's just that the opportunity isn't. The GK Fund (https://www.thegkfund.org/) Follow The GK Fund on Twitter (https://twitter.com/GK_Fund) or LinkedIn (https://www.linkedin.com/company/thegkfund/). Colette Phillips Communications (https://www.cpcglobal.com/) All Inclusive Boston (https://www.bostonusa.com/allinclusivebos/) Black Owned Bos. (https://www.blackownedbos.com/) Follow Michael on Twitter (https://twitter.com/MichaelBenezra) or LinkedIn (https://www.linkedin.com/in/michaelbenezra/). 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 Michael Benezra, Executive Director and Co-founder of the GK Fund, a non-profit social impact fund to support BIPOC-owned companies in Greater Boston. Michael is also the COO of Colette Phillips Communications, helping to lead the All Inclusive Boston Tourism Campaign, among other projects. Michael, thank you for joining me. MICHAEL: Thanks for having me. CHAD: I'm curious about the GK Fund. When did you start the Fund? MICHAEL: So, at the time, I was working for the Israeli Foreign Ministry, and I was working with venture capital firms, private equity firms. And I was representing over 200 Israeli companies in New England, most of them startups. And my wife is Black; my family is Black. I've been close to that community for a long time. And especially in the venture capital world, I started to see some real disparities amongst other disparities in general everyday life, but it was particularly bad in the VC world. And so Colette being a mentor and a friend of mine, Colette Phillips, I approached her, and I said, "Hey, what do you think about starting this fund, this non-profit fund?" And her and Andre Porter, who is our other co-founder who used to be the head of the state's business development agency in Massachusetts, we all decided to band together and start this non-profit. Now, we started the non-profit in December of 2019, so the pandemic hit right as we were creating this organization. And we had a decision to make, do we put this on hold, or do we move forward and accelerate? And we decided to just move forward. CHAD: Well, I'm glad you did. I'm glad you made that decision. Hopefully, you feel the same way. [laughs] MICHAEL: Yeah, I do. CHAD: You're absolutely right. There's a big need here. And I actually have had over the last two months or so a few different guests that are creating VC funds or funds of certain kind that address underrepresented communities, Black, another one was veterans. And there's such a big need. How did you decide what you were going to focus on or focus down into so, for example, focusing on Boston? MICHAEL: For Boston specifically, it had to do mostly with proximity. So I went to Harvard here for grad school. I worked for Governor Patrick. And so, for me, it was natural to stay local, especially during COVID. In my experience, there were a lot of BIPOC, particularly Black-owned startups, that were on paper akin to a lot of other startups in the Israeli world, which were very developed or also in the United States. I'll give you an example; there was a company that I worked with that had a $100 million valuation but had no products, no physical products. They had no revenue, but they had innovation. Now, you and I being very honest, do you think a Black-owned company could get away with that? CHAD: Yeah, no. MICHAEL: There is no way. I knew that; the other entrepreneurs that I've talked to know that. That is a terrible double standard that needs to be fixed. So we look for the same things in BIPOC companies that we look for in other companies because, for the most part, the innovation is there; it's just that the opportunity isn't. CHAD: Yeah. To dig into that a little bit more, I think one might say, well, if they had a founding team that had a proven track record, then maybe. And that's where you get to the fact that it's systemic, too, because if the headwinds are there where they can never get that experience, to begin with, they never get that opportunity, to begin with, then they're not going to have a founding team that has a track record that will be invested in based on just the team. MICHAEL: That is 100% accurate, but it's actually even worse. So we do not ask our founders in the application process for their educational background. But all six of the companies that got grants from us last November they all have their bachelor's, four out of six have masters or higher. And so the cream definitely rose to the top. We had a store owner she owns an online boutique who got an engineering degree from Purdue. And we also have an entrepreneur who was an attorney at State Street, a corporate attorney, and now he's created this startup. And so, in some cases, like in most other areas, these individuals are overqualified. CHAD: So, what is the funding model for GK on both sides of the equation? Where is the money coming from, and then how are you funding the companies? MICHAEL: So we raise money organically like any other non-profit does. So we apply for grants. We take corporate donations. We take individual contributions online. Most of our money so far has come in through corporate contributions. So PNC Bank has been with us since the beginning. They made a very large commitment to supporting racial equity, and they've really stuck to it. The Bar Foundation has been exceptional. And then we've also had a group of individual donors who were actually White women who have started their own non-profit now, and they've also banded together to give us money that we need to re-grant to the companies. We have over 100,000 from the State of Massachusetts to operate a grant program. So money is coming through a number of different avenues. We've issued six micro-grants so far at $10,000 each. We did that in November. We plan to do ten more in the next month. I said in the Boston Business Journal article you can give us money, but you can't park it with us like you could with a donor-advised fund and watch it accumulate interest for 15 years. We're going to take it, and we're going to give it to the people that need it the most. CHAD: And are they grants then? You're using the word grants, so I assume that they are. So you're not doing this in exchange for equity in the companies? MICHAEL: No, no equity in the companies, no convertible notes, just a straight capital grant directly to the company. So I send a message over to our fiscal sponsors at Philanthropy Massachusetts. They send the check directly over to the company. After that, we have the company fill out a survey letting us know what they plan to use it for, but we're not overly prescriptive. And that's actually the way that philanthropy is heading right now is, putting fewer restrictions and barriers in the way. And that's another thing I'll talk about as well is making it easier for companies to gain access. CHAD: So, did you ever consider more of a traditional VC fund model with this? MICHAEL: Yeah, originally, I did. Before the pandemic, actually, I did. So the original purpose or impetus of the fund was to take companies that were coming out of accelerator programs that were underfunded. You have some great accelerators, but you have companies leaving with a business plan and $2,000. In some cases, there are companies that have been through three accelerator programs. They're not getting as much out of it as they should. I wanted us to intervene, find the companies that have the most potential, and make investments. But after COVID hit, it was a crisis. And so, we needed to shift our focus to philanthropy. CHAD: The nice thing about that is then you can do those grants with basically no strings attached for the companies. Whereas if you were taking money from people who expect to get a return on that investment, you wouldn't be able to do that. MICHAEL: That's exactly right. There are organizations out there that say that they're making an impact when in reality they're just making, you know, loans which is not a not a bad thing. But they're issuing loans, or they're taking equity in the companies, that's fine, but it's not what we're doing. CHAD: What are your plans for, like, upcoming? Are you going to be continuing with micro-grants, or do you have bigger plans? MICHAEL: We have bigger plans. So I can't say too much right now because we have an announcement coming up. But I will say issues like legal services have come up. There's a constant need for attorneys for any company, whether it's contracts, or locking down real estate, or copyright and trademark, or IP. We are working with a very large prestigious law firm that's really making a generous commitment to our companies. And this would involve us even adding free legal services for an entire year to our grantees. So that's one thing that we're planning to do. And then the other is, and this another function of the fund, is we speak with organizations like Lyft who's donated like $5,000 in ride credits that we're giving to our grantees or Wix, which has given us like 75% off of websites. We work with partners who can also give us other services that we can provide to these companies to try to get them closer to where there's a gap. Giving them capital is not enough. The disparities are too significant. We also partnered with Berkshire Bank, so I can make direct referrals for loans if they need them. But the idea is to really narrow that gap and give these companies the same opportunities that their White counterparts have. CHAD: That's great. So you, as someone who's White doing this work, how do you find yourself in the community? How do you be an effective ally and advocate? MICHAEL: For me personally, my connection personally through my wife and also through my family and my boss. Colette is a pioneer. She's a Black woman in Boston who moved here not knowing anybody. And 30 years later, she's on The Power of 50 and 100 influential lists, but she did that through hard work. And she's worked much harder, I think, than she would have had to if she weren't a woman from Antigua who came here on her own. But ultimately, as an ally, it's my role; it's our role to step in between situations where there's inequity. So if there is a company, one of our companies, for instance, who's having a problem locking down real estate, (I think I use this in the article.), and they're saying, "Well, the real estate agent is telling us they can eliminate our lease at any time they prefer which I know is basically legal." I'll call them up and say, "Look, I'm with the fund. We're backing this company; we support them. What's the situation?" And unfortunately, most of the time, the outcome actually changes. So it's a matter of almost you got to be proactive, and you got to be intentional. You have to use your privilege in the best way that you can. So I think that's how you do it. And then, when it's time to shed a light on these companies, you take a step back, so it's not my role to go out there and promote myself. If anyone asks me, I'm always promoting the companies. So the best thing we can do is be advocates. You can be out front, but at the end of the day, it's about uplifting them, these companies in this case. CHAD: Yeah, that's great. Speaking of that, I was going to ask you, what are some of the companies that you have given the micro-grants to, and do you know how they use them? MICHAEL: Yeah, so we gave our grants to six companies. One is called MustWatch, and MustWatch is founded by Che, and Che, his family, is from Haiti. They are an app. You can actually find them on the App Store. But what they do is they allow you to log in, select which movies and television shows that you watch, and share them with your friends. And it sounds like a very simple concept, but there is actually nothing on the market that allows you to do this. And the idea is that you're collecting data while you're doing this as MustWatch. So at the end of the day, if you have a sample of like 20,000 users on the platform, you gain a lot of valuable insight and data. And that data can be useful for Nielsen or the television networks or movie production studios. I encourage people to sign up for MustWatch because if you spend as much time as I do looking for good movies, you're probably miserable. CHAD: [laughs] MICHAEL: [laughs] I spend so much time doing that. We also have a few online retailers. So we have B. Royal Boutique and So Zen Spa, both of them have doubled their revenue during COVID. They originally had stores. They pivoted during COVID, went online, and really were excellent when it comes to branding and marketing on social media and on other digital platforms. So they've been very successful. We have a company called Black Owned Bos., which is pretty well known here in Boston. They basically focus on organizing and running pop-up shops. And Jae'da, who's the head of the company, is just, I mean, she's a business mastermind. She's brilliant, always finding new ways to innovate. And then we have Our Village, which is focused on community development and housing. And finally, sySTEMic flow, which is a company that helps school districts, educators support Black women in STEM and STEAM fields. So we looked for companies that could pivot, basically. CHAD: And you mean in the face of the pandemic. MICHAEL: In the face of the pandemic, we looked for companies that had success and had a plan and also knew their audience. The main things that we look for…and I should say this too; our application process takes an average of seven minutes. And the way that I did that was I evaluated over 20 accelerator applications. I did a comparative analysis and identified the questions that were either irrelevant or unhelpful for us. And that gave us a very short application for our companies but one that's really efficient. And basically, what we're looking for is companies that have a good business model, have a very specific customer base and target market, and have a strong founder, and also has been undersupported. There are companies that we've identified for our next cohort that by this point in their development would have been venture funded in my experience, at least, had they not been people of color. 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. CHAD: What has been the most surprising use of one of the grants? MICHAEL: So B. Royal used the grant money to lock down a store in Assembly Square in Somerville. We kind of anticipated they might do that. So Zen Spa they improved their website. MustWatch actually really surprised us. So they went out and got a valuation of their company and then basically worked with a crowdfunding platform called Netcapital to raise more capital. They had a very specific plan, and they had disclosed that plan to us. I just didn't anticipate they would act so quickly on it. And based on the fact that we had given them a grant and all this mentoring and support, their valuation actually went up. CHAD: That's a really smart use of the funds to propel that into a larger fundraise. That's really smart. MICHAEL: I agree. CHAD: So you do this in addition to a day job. [laughs] MICHAEL: I mean, they're both day jobs; it's just, yeah. CHAD: So you mentioned Colette Phillips, the person, [laughs] how about Colette Phillips Communications? So The All Inclusive Campaign it really is historic. The genesis of the campaign is that back in 2020, Colette and I applied for an RFP from the City of Boston; it was for a tourism recovery campaign. All of the major cities in the country got this grant money through regional tourism agencies, you know, like they're a special interest niche. And they went to the Feds, and they're like, "Look, we're suffering, travel is suffering, we need a grant," so all these grants went out. The City of Boston actually said, "Look, we want to focus on diverse tourism." So that was perfect for us. We applied, we got the grant. And we brought on Proverb, which is an incredible digital marketing agency and creative design agency, and the Greater Boston Convention & Visitors Bureau. It was the largest contract ever to go to a minority-owned company by the City of Boston, ever, and it was about 1.5 million. CHAD: Which in and of itself for what the City of Boston probably spends on things [laughs] is a little ridiculous that that's the biggest one, but … get beyond that, I guess. MICHAEL: It's insane. It's very upsetting. And it was a long time overdue. In this case, that contract or that RFP was really only supposed to last like one quarter. So all these regional tourism agencies they get their influx of money, a million dollars or a few 100,000. And then from there, they do the campaign, they move on. We are now three mayor's into this. We are four million dollars into this. We submitted the campaign to the city 60 days after they contracted with us; 84% of the contractors on the project are minority-owned companies. And in that 60 days before delivering the campaign, we actually never met in person. So we did this whole campaign virtually from the start. We came in under budget. We came in ahead of time. This is what happens sometimes when you let minority-owned companies take the lead. CHAD: Yeah, that's great. How do you do a campaign like this? I mean, this is why they came to you, the experts, but I think it's important that this message seem authentic and not pandering. MICHAEL: Yeah, Colette is a visionary. She's been talking about diversity and inclusion for like 20 years. There's an article that came out, I think, in 1992 where she was talking about the importance of diversity in the business community. And now it's like microfilm; you can't even find it digitally online. CHAD: [laughs] MICHAEL: She's years ahead of her time. And she's constantly innovating, and All Inclusive was her idea, and she branded it. I think it was a long time coming, basically. This is a culmination of a message and campaign that she's been running her whole life. CHAD: Yeah, I think that that's very powerful. And I think it comes across in the campaign. It seems authentic. I think it would be easy for it to not seem that way. And so yeah, it comes from that place of this was already a thing. It was already brewing. It wasn't just -- MICHAEL: Do you want to hear a story? CHAD: Yeah, I'd love it. MICHAEL: So, most of the media coverage for this campaign was exceptionally positive. There are a few reasons for that. We included all small, locally-owned businesses in the campaign. So you won't find celebrities, no athletes, or anything like that; we may do that later. We also invested...we took 200,000 of the contract, which this was not even supposed to be in there. We actually did ad buys with 19 different local newspapers. In some cases, these newspapers would have actually closed down if we had not done that, and that was just a byproduct of something we felt was important. But amidst all of that, she got invited to do an interview on Bloomberg on the local Bloomberg station. She's on the phone, and some guy who was on the other line, and I won't go into it too much, said, "You know, as a White man, I'm really offended. I don't feel represented in this campaign." [laughs] And she's like, "I've had enough of this," hangs up the phone. [laughs] And this is another part of allyship I think is...naturally, you know, I said, "Look, I'm taking care of this." I wrote a letter to Bloomberg. I said, "This is unacceptable. You need to take him to task." I don't know if he still works there anymore. But that's kind of the role. You have a Black woman who's a pioneer. She just released a campaign. The first thing you should be saying to her is "Congratulations," instead of saying that, all you can tell her is about how being a White man is like, I don't know, a disadvantage? Which is crazy. There are tons of White people in the campaign. I'm White; I'm in the campaign. CHAD: It's so foolish. I don't even want to have to explain it, but the campaign is literally called All Inclusive. MICHAEL: [laughs] Exactly, exactly. It covers everybody, I mean, literally. And it's like, I don't know what you want from us. CHAD: Yeah. And it's not even...like you go to the site it talks about here's what you can do with families. Here's what you can do with kids, kid-friendly activities. MICHAEL: This campaign was also research-based. So we spent 100,000 on research with this incredible company called Heart + Mind. They did a lot of research, and they did a lot of surveying. And the words that came back when describing Boston were unwelcoming, masculine; I think Tom Brady, Ben Affleck, crime, you know, just this kind of machismo unwelcoming environment. And it kind of confirmed some of the assumptions we had, but it was really surprising to see it in the data. So we said, "All right, this is what we're working with. We have to come up with a narrative that counters that because Boston is a majority-minority city, 23 neighborhoods, 60% of the population speaks two languages or more. That ethos is really not accurate. So hopefully, we're doing a good job. CHAD: So if folks want to help, we already said GK Fund is a non-profit. It's coming up to tax season [laughs], so at the very least, even if you don't...hopefully, you care about the cause, but if you just want that tax write-off, I suppose that's another reason to donate. MICHAEL: Absolutely. CHAD: So where can folks do that if they want to learn more and donate? MICHAEL: Visit www.thegkfund.org. CHAD: And are you looking for help in other ways beyond monetary? How can people get involved? MICHAEL: Absolutely. So we're looking for mentors so individuals who feel like they have experience or skills to lend to these companies, and we'll try to deploy these individuals in the best way possible. Obviously, we're looking for partnerships. So if you have a company that you feel has something to contribute or is willing to make a contribution, not monetarily but either with your products or with a discount, we also want to give that benefit to the companies as well. And there are a number of different ways. CHAD: That's great. And if folks want to follow along with you or get in touch directly with you, how can they do that? MICHAEL: You can feel free to follow me on Twitter. It's just @MichaelBenezra, all one word on Twitter. I got a lot of positive messages after the Boston Business Journal article came out and in LinkedIn as well. CHAD: Great. And you can subscribe to the show and find notes and a full transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. You can find me on Twitter @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Michael, thanks so much for joining me. I really appreciate it. MICHAEL: Yeah, thank you for having me. CHAD: And thank you for listening. 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: Michael Benezra.

A lot of real estate investors start out with single-family homes and soon realize that multifamily helps them scale much faster. But multifamily properties can come with more complications and many investors appreciate having learned the ropes in the single-family space before taking on this asset class. So is it smart to start small and work your way up or just dive into the deep end?    In this episode, Emil and Michael share their experience on this topic and point out the pros and cons of either strategy. --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by my co-host…   Emil: Emil Shour   Michael: …and today Emil and I are going to be chatting about does it make sense to start with single family or with multifamily? So let's get into it.   Alright, Emil, how's it going, man? It's been a minute.   Emil: Good dude. How you doing?   Michael: Hanging in there hanging in, I got a couple of refinances that just close today that I'm working on for a long time, so really excited about that. So I'm going to be redeploying some capital here to some short term rentals. How's, how's the triplex sailing all smooth?   Emil: Yeah, I haven't, I haven't received an email in weeks. So that's my favorite kind of news is no news for my property manager.   Michael: It's a good sign. Yeah, oftentimes I would say.   Emil: Yeah, yeah… We've got tenants in place, you know, they're all fresh, no bad news. So fingers crossed, it keeps staying that way.   Michael: Sweet! Well, today, Emil and me want to talk about if it makes sense to start with single family or multifamily as you're just getting started. And you are someone that started with single families, right?   Emil: I did! My first investment property or actually any property I purchased. It was an investment property. It was a single family in Jacksonville, Florida in 2017.   Michael: Okay, and now you're a seasoned investor, you've got six units, I think, you've done some multifamily.   Emil: Yes sir.   Michael: Should you have done differently?   Emil: I am happy I started with single family. I think starting with one tenant, one home one unit, is the ideal way to start. I don't think, I don't think this is like one of those. There's a better or worse way. I think it's what is what is your appetite for pain? Do you do want to like learn really fast and deal with a lot of craziness at first or do you want something slow and steady and just like an easy on ramp? So for me having a full time job, at the time, starting with a single family was perfect. It was like, I got to learn how to manage a property manager different things that can go wrong. It was just an easier transition for me and I'm happy I started that way.   Michael: Yeah, it's funny you say appetite for pain. I think we just want to be careful to not give people the impression that single families can't be a highway on ramp to pain because you know, my first, my first investor was also a single family and it was like the most painful one ever. So I think it's, it's you can have you can have it either way. You can have horrible experiences with single family, you can have amazing experiences of multifamily. So it really just depends, I think how the asset is structured and where you're buying it.   Emil: Yeah, but you could… let's say you bought a quad Plex, right? You had the same thing, but times fours. It's just like your percentage. No, actually, I don't know, you could look at it either way, you could say, well, I have 4 units, my likelihood of 100% pain is much, is much less likely than so I think personally it's just easier to go with one, learn the ins and outs. Again, you're learning, especially if you're remote investing, you're learning how to do that, you're learning how to deal with a property manager. I think overall, it's just easier with one.   Michael: Okay, and let's dive a little bit deeper. I mean, talk to talk to us a little bit about like, when you say learning the ins and outs, what does that mean? What did you learn from investing in that single family that then better prepared you to invest in that triplex and what was totally brand new? Like what caught you off guard with the triplex?   Emil: That's a good question. I think it's just, you know, if you never if you've never owned your own home, there's all these moving parts of a home that you're not really like, I don't know how an H back works. How does plumbing work? What's uh, what's the main line? What's all these things? I've even forgotten already, as we're on this podcast, but like all, all these bars, all these parts of a home that you just you don't really know. I think that's one just getting more familiarized with all the moving parts.   Michael: Does it matter that you didn't know how an H back works? I mean, you don't know how a car engine work. I mean, I assume I don't want to I don't want to put words in your mouth. But do you know how a car engine works?   Emil: Here's the difference. A lot of things go wrong with your property. I don't say a lot, but things go wrong, right? And it's on you to know, how much does it cost to get that fixed, right? Like if someone said, Hey, your condenser broke? We're gonna replace it for $10,000, how would you know if that's accurate or not?   Michael: I gotcha, I see what you're saying. Okay!   Emil: So that's that's one thing.   Michael: But it's the same thing with car if you take your car to the mechanic and they say, oh, you're continuing to trance function or is broken. We're gonna turn into $1,000 to fix it. So our concept, right, I guess you have to you have to chat with other people…   Emil: Well my first car was a $6,000 used car. So I would just say, okay, you guys keep it, I'll go get a new one, you know what I mean…? I mean, it's like, it's, it's also, in most cases, less less dollars in, right. So a multifamily is going to be more dollars in your learning on more dollars versus single families less dollars in potentially, so less dollars you potentially have on the line to learn.   Michael: All right, all right. I will, I'm gonna I'm gonna take a… alternative position on that one and push back, I think that you can actually find multifamily in particular markets that are as inexpensive or less than some single family. I mean, they're single family all over the place in the 2,3,4- $100,000 verse multifamily, you can find properties that are less than so I think that's a very common misconception that people fall into is oh, multifamily is automatically more expensive and I don't know that that's necessarily the case for every market.   Emil: Yeah. But then you're putting you're potentially putting the cart before the horse, right? You're saying I'm going to go find a market where it meets this versus you should find a market that you like, and then look within that market?   Michael: Hmmm… Yep. So you're letting the deal dictate the market or letting the market dictate the deal?   Emil: Right! I think it's like some people will just I started that way, right. I said, okay, this is how much I want to spend, which markets kind of fall into that, which is one way, but I don't know if that's the right way. I don't know if it's the wrong way. But I would, I would rather if I could start it all from scratch, say like, what is the market I want to really invest in? And then secondarily, who is the property manager, I want to invest with?   Michael: Oh, that's very well said. And so you're someone that wants to kind of cluster their investments in the same market? It sounds like…?   Emil: I would yeah, I think I've said that, like on previous episodes being scattered across couple different markets, I think finding one market you like, you're finding good deals, you have a good property manager, again, to me, that's the key is finding a property manager. It's tough, it's like how do you find that good property manager without trying several markets, right?   Michael: If you get some perspective and you go other places, you realize, oh, man, my manager was amazing, or well, my property manager kind of sucked.   Emil: Right, right. Well, that's the value of I think networking and talking to other people who are doing real estate investing rather than just going solo.   Michael: Totally, totally. And I cut you off before to go down this rabbit hole but you were saying, you were talking about what the ins and outs were that you actually learned that prepped you to be ministers as a multifamily investor.   Emil: I don't think I'm a successful multifamily investor. I have one drive legs and that's been a big learning experience. I don't know, it was just it was a different learning experience in that I had multiple tenants leave at the same time. You know, single family, you're not paying a lot of the utility bills, right. So you're learning on the multifamily, like, what are my actual expenses? What do I cover? And how much are they each month? So it's like, yeah, you can estimate and talk to people, but like, it's just things you're going to learn by doing and buying? I don't know…   Michael: Yeah, I think it makes a lot of sense, I think it makes a lot of sense…   Emil: Those are of the things that come to mind.   Michael: Yeah.   Emil: And then, you know, how long does your average single family tenant stay versus multifamily? Like, yes, their stats online, but it's to me another one of those things you learn by doing?   Michael: Yes, very much so, very much so. See, it's so funny, so many of the points you brought up for single family, I agree with and I think are valid, but I have like the opposite experience and I experienced those things with multifamily. So I actually have another episode too, like my first two investments were single family. I had the tenants leave every single year, they did a ton of damage on the way out and had to go to small claims court. So I was like, oh my God, this sucks. So that's ultimately kind of what led me to multifamily, I was like, oh, I gotta do something different. This is not this is not working out. So had much better luck with multifamily and that's where I've been focusing on since.   Emil: For the record, where are your single family, those two single families you bought?   Michael: They were both in California, in Southern California.   Emil: Southern California is a tough market for landlords, man…   Michael: It very much is…   Emil: That I think probably played some into it, potentially for you.   Michael: I think so, I think so. But also I mean, like given that I've also purchased I purchased two flip properties. One was in Birmingham, Alabama and the other in Kansas City, KC Mo, and that's been those have been paying to the butts too and so I think it's it's not a one size fits all like you were saying and it's it's very much personal preference.   Emil: Sure   Michael: But some takeaways that I had from investing in small multifamily, so two, three and four units is, as he touched on earlier, was the likelihood that you have both tenants or all of the tenants having issues or vacancy or causing damage, the Cisco likelihood just goes down. And so that's why a lot of people buy multiple properties because if you have one property, the likelihood of having one vacancy is fairly high if you have two that goes down, so on and so forth as you expand your portfolio. And so you can do that and acquire more units and increase the statistical likelihood of success.   Success in this case, meaning not no vacancy and less repairs, with fewer transactions and so it just becomes, easier from a management standpoint and easier from a mental capacity standpoint, when you're thinking about, okay, I've got one address to worry about, these are all the things going on there as opposed to these five different addresses to keep track of and so I think for from a small multifamily perspective, like, again, those two to four units, it's fairly similar from a how to own and operate perspective and I think you nailed that also talking about like the expenses and so from that perspective, it can be a little bit different, and your expense load and what your operating costs look like, and who pays what and how often you might have a turn. And but the cool thing is, the financing is the same. So if you go buy a one single family or a two to four unit, and you're getting conventional financing, that's the same, which is really, really cool. It's not until you make that gap into that five plus unit space that it changes into commercial financing.   Emil: Right. And that's probably something important to consider here as well, if you're like thinking about multifamily or single family is, well, if you have less time, let's say you wanna invest real estate, but you have less time, right? Multifamily, we know is valued on how well can you make it perform, it's more like a business, tather than, you know, one to four unit, you're kind of writing the ups and downs of the market to value it right. It's all sales comps. So maybe if you have more time, and you can you feel like you can manipulate the NOI on that property, get it valued higher to do those things. Maybe multifamily makes more sense for you and then but maybe if you're you know, super busy and you want something a little bit more passive, I've just found that my single family has been more passive, my attendance stay longer. I haven't done the triplex for a ton of time. It's been a year and a half. But my tenants stay longer, I hear less things overall, is what I've is my personal experience with, very limited units, so…   Michael: Yeah, I think you've made a great point talking about time, time perspective, I would just add to that, that if you're just starting out and taking on a multifamily investment, finding something that's that has a value add component might be tough. And it really comes down to like, I know, I was way in over my head with my first multifamily deal I had. Because I just feel like you don't know what you don't know and so you're jumping in, like you mentioned, to this multiple unit situation where all of these things are new, versus trying to figure it out with one tenant and one property in one door, where everything is still new. And so I think that there it's it's often an easier pill to swallow. But if someone is super gung ho and wants to take risks and has the financial wherewithal to back it up, and is like yeah, I know I'm gonna I'm no, I'm gonna learn lessons, but I want to learn lessons hard and fast. Multifamily can be a really great way to do that. Most value add now layering that on top of that is another way to learn even harder and faster and more expensively. So if someone's just starting out, I think and they're gung ho about multifamily, I think a turnkey multifamily can be a really a really great way to go.   Emil: Yeah. That's something interesting you kind of bring up their trauma to me not trauma, but like recollection of my this, this triplex my first multifamily is when you're wrong on your calculated repair costs and all that it compounds, right. So if you have three units, you got a turn, and you think it was 5k each and you were wrong, it multiplies faster than oh, the the kitchen on my multimeter and my single family, I thought was gonna be 5000 ended up being 6000, right. Like, you just multiply it if you're wrong multiple times.   Michael: Yeah. No, it's such a good point, it's such a good point. I wholeheartedly agree.   Emil: Yeah. But it's good. That's a good learning experience that, you know, people should go through.   Michael: Yeah, well, I would argue I would have preferred to have someone else go through it and tell me about it and then I could learn from their mistakes, which is why we started the Roofstock academy. By the way, we talked about, hey, this is purpose built for investors, by investors for all the crap that we had to go through that we wish other people had told us ahead of time.   Emil: True, true and it's also valuable in that, like, your cost will change from market to market, right? So having other people in the same market you invest in, it's just so valuable.   Michael: Totally, totally. And oh, I forget who said it. I don't know if it's a famous quote, or it was someone I just heard talking, but they're saying like, not every dollar of rent is created equal, in that in every market you go to, just because it looks attractive on paper doesn't necessarily mean that it's going to be, you know, a rosy walk in the park and so be very particular and do your due diligence around okay, what is the market do? And what is the market doing? And why is this thing, both single family or multifamily, the price that it is both from a rental perspective, as well as a cost perspective. So if you're like, holy crap, I can go buy these $200,000 property rents for five grand a month. Why is that? You know, what, did you find a unicorn? Maybe? And let's, you know, go figure that out, just because it's so good. It shouldn't scare you but you should definitely put up a red flag and say, okay, well, let's investigate this further and find out why this is the way it is.   Emil: Right.   Michael: Awesome. Any other points Emil, before we get out of here?   Emil: No, I think I think we actually cover this one pretty well, in terms of our individual experiences, pros and cons of each thing and it was well covered.   Michael: Love a good humblebrag… Awesome, let's get out of here.   Emil: More so by you, you're just grilling me and I'm like, uh,… I still remember Michael, it was four years ago.   Michael: You tried to block it out of your mind? Forget about it.   Emil: Yeah, I'm like, I don't know. I just it's kind of one of those things where you're like, you just put one foot in front of the other and you know, you're drinking from the firehose, so…   Michael: Totally. Yeah. Well, but real quick, so last question, before we get out of here. How has that investment panned out for you, that first single family?   Emil: My first one?   Michael: Yeah.   Emil: So yeah, it's been a cash cow and if you hear crying in the background, that's my newborn baby in, shout out in.   Michael: My baby boy in… baby boy… Emil: Baby boy… So when I bought it, I think the rent was somewhere around 900 and we've just had steady rent increases and the same tenant for four plus years now. So I think now it's at like 10350 or somewhere like that. Yeah, and just having the same tenant is so valuable. I love it. It's so nice. That's my favorite thing was single families. They seem to stay longer.   Michael: Love it. So what was probably a good deal at the time has now turned into if you saw it today, a great deal, it sounds like…   Emil: Yeah, I think it was a, if I'm being objective. It was a decent deal at the time and now it's become a pretty good deal for me.   Michael: Love, time, compounded with like good decisions. That should be like an equation time. Time plus good decisions equals, I don't know, killer deals. Hey, everyone…   Emil: Michael Einstein, the Einstein of real estate.   Michael: So dumb… awesome. Well, let's get out of here, Emil. That was our episode, everyone. Thank you so much for hanging in there with us through all those rabbit hole side tracked conversations. As always, if you liked the episode, feel free to leave us a rating or review wherever it is you get your podcast, and we look forward to seeing the next one. Happy investing.   Emil: See you later.

Whitney is a real estate investor and personal finance trainer whose vision is to help thousands of families on their path towards financial independence. After purchasing her first rental in 2002, and hitting a home run, then nearly losing it all on her second deal, Whitney took control and figured out how to invest in real estate the right way. She realized that success must leave clues. So, she studied and using her skills in research,  business operations and training, she replicated the very personal finance and wealth creation strategies the wealthy use to create financial freedom. Today, Whitney is a partner in $900M+ of real estate assets, including 6,500+ residential units, 1,400+ self-storage units, including flipping over $3M in residential real estate. In this episode, she shares her journey and explains how to build the mindset, skills, and strategies necessary to succeed as a real estate investor, so that you live the way you want to. Episode Links: https://www.passiveinvesting.com/whitney/ https://ashwealth.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today with me we have one of our favorite recurring guests: Whitney Elkins-Hutten and she's gonna be talking to us today about what do you need to be a badass rockstar, female investor? Let's get into it.   Whitney, what's going on? Thanks for coming back yet again for another episode of record with me really appreciate you.   Whitney: Yeah, thanks so much for having me on. I'm so excited.   Michael: Oh my god, this is… I'm more excited. I'm the most excited. So today, we're gonna be talking about your thoughts, advice, recommendations on how to become a badass rockstar, female investor, because you've done it. So curious to get your thoughts from a high level, you know, what is it that people are getting wrong with their mindset? Or is it something physical that they're doing?   Whitney: Well, yeah, so I don't know if it's something that somebody does wrong, right. I think there's really three key components to like being a successful investor period, but, and we can kind of like dive into like, you know, those nuances between females and males and like what females can do to like, kind of elevate themselves. But really, it boils down to three things: mindset, skill sets, and network. So I mean, if you've read any of the works, you know, thinking grow rich or anything by Kiyosaki, like it boils down to those three things. But just knowing those three words is not enough, like you have to understand how to act on them.   Michael: Here, I was thinking, man, I know the three words, I got the secret recipe now, I'm good.   Whitney: All right. Well, I wish it were that simple, right? You know, that's half the battle like, right, I know that right there. But um, you know, on the mindset piece, um, you know, that that's like the foundation like we're building a pyramid for like, your entire investing business to live off of, like, you have to have a good foundation. And that foundation is like your operating system, like what's in between these two years of yours. And unfortunately, like, or, I mean, we've evolved our society over the years, but this operating system still is like, you know, it's, it's, it's still like in the mastodon air, like, it hasn't like really caught up. Evolution is slow but you know, if you believe in evolution, but yeah, it's a little slow. So we have to, like really work on this on a daily basis and condition it daily and it's so hard in today's environment to do that.   Michael: So, yeah, what are some what are some tips or tricks or steps that you've taken, or you've seen others take to be successful to change their mindset?   Whitney: Well, I can speak for me personally and these are questions that like, I mean, I've had so many mentors and coaches in my life and these are like questions they've given me, too, that I have to continue to ask myself on a regular basis, sometimes daily, like if I'm going through a tough time.   But, you know, if you're getting into real estate, you have to know why you want it. Like why do you want to invest in real estate because real estate is a tool, right? There are some people that love real estate, and you know, you and I are chatting before the show, like, there's your strengths and then there's your gifts, right? For a lot of people, they they have a strength that a translatable skill they're bringing in it thinks that they might be good at investing in real estate, but end of the day, they don't want to own houses, they want the result that the houses give them, right? So know what you want, like, do you want time freedom? Do you want cash flow? Do you need a net worth bill do but I mean, even getting down to that, that freedom of choice, freedom of time, freedom to travel? Like, what is that freedom that you want? And then more importantly, why you want it?   And being able to answer those questions, you know, will reinforce what you're doing. It's like your North Star, like nothing will be able to derail you. Because no matter where you are in your investing plan, if you're just like, I know, I want to have control of my time and this is why because I want to spend it with my family, I want to spend it traveling. Like that's your north star and it can be like a filter for guiding all your decisions.   Michael: I love that.   Whitney: So that's like, yeah, it's like that's like, I mean, it really under it really boils down to getting the right questions in the right sequence, and then pass that deciding it's yours. Okay, just make giving yourself permission. I know for me as a female, like the way I was raised, um, um, you know, borderline millennial Gen Z, right? Like, my mom was very much, you know, pro feminist and stuff like that. You know, I have no problem with that, or very little problem with that, like, I mean, that's just the infighting meant that I was raised in but I'm not. That's not how everybody, everybody came on, right. But you have to decide it's yours. Like, I'm going to go after that, and I deserve it. And there are going to be things that knock you down. Yeah, that happened. throw you off course.   I was just speaking to one of my coaching clients earlier today. And, you know, she's going through divorce now. She's just like when I thought it was getting all this momentum. And I'm like, do you still believe in what you're doing? Yeah. Like, is it yours? Yes. I'm like, okay, great. Like, now let's focus what we can control. And, you know, but those types of things, you know, we feel we're very empathic, but yeah, those type of things get kind of, like derail you a little bit. But really, like just having this, you know, two key decision or two questions and a key decision, like, written down can really help you move forward in that mindset piece.   Michael: I love that and Whitney, I'm curious if we just take a step back for a second for making, you know, knowing your why, and kind of making that decision? How important is it and how granular do you recommend people get, because at the restart Academy, we talked about smart goals and use that acronym for goal setting. But I know so many people are like, oh, I want to invest in real estate because I don't want to work anymore, like, is that enough? Or like, how do they get?   Whitney: I mean, it's a good story. Tony Robbins has this like great exercise like we've ever done unleash the Power Within or any of his bracer series, like, it's the first time you do it, it might actually feel very unsettling and awkward. Like, it's called, like, the seven reasons and so you you name like, why do you want to invest in real estate, right? Because I don't want to work anymore. Why do you want that? Well, because I want to travel great. Why do you want that? Well, I want to see the world and like, you start getting people's puzzles looks on their face, they're like, see me…   And you're like, but that's that gets down to the core essence. Because, as I explained it to, you know, people like Coach is that first level knee jerk, why is what you're running from?   Michael: Hmm…   Whitney: When you ask seven layers deep, you finally figure out you might not be able to articulate the first two or three or four or 5-10 times that you sit down to do that exercise. It may take you months, or even a year or two, you're then figuring out what you're running towards and what is going to get you more motivated, okay, you know that day to day pain, it might be like, understanding what you're running from, like I want to get I don't want to work for you know the company anymore. I don't want to work for my boss, I want to have my time back, blah, blah, blah, right?   But what you're running towards is what's going to be your that Northstar guiding post for you long term, it's what is gonna have you help you build the right real estate business for you, right, because there's so many gets down to that last one, that seventh why and they like, I want my time freedom and they come to me and they're like, teach me how to flip. I'm like, thinking hold on…   Michael: We'll need a little bit of alignment.       Whitney: Yeah, well, that was like, now, you know, we can use flipping as a means to an end to build the real business they want. But you know, we have to understand, you know, you know, where different modalities fits into different phases of the business, but got a little off course in the wild, but that's why you want to make sure that you sit down and kind of go through the exercise. It's, it's hysterical. I mean, I went through the same experience, like, the first time you do it, you're like, why am I asking this question seven times, like I got it the first time…   Michael: I study for the test…   Whitney: It is not the same question. Because now you you're figuring out why you want the next thing that you named.   Michael: Hmm. That is very interesting, I like that, I like that a lot and so who do you who should be having these conversations? Who should be asking these questions of the potential and would be investors? Is it spouses, partners, friends, colleagues? I mean, who should who's a good person to have these conversations with?   Whitney: I mean, you know, you can some people are like introverts they want to do it with by themselves. If you have a good partner or a good friend that can help lead you through that exercise and interrogate reality with you… you know, kind of like, open and honest way, then fantastic. I think the more the merrier. My husband and I we sit down and we do a couple schools setting retreat every year and you know, normally we've like gone back answer the questions that what of what we want for the year ourselves and then come back together and we kind of formulate a plan.   This year, we sat down in the same room and did everything live with each other and I'm like, you know, like peeking on his paper. I'm like, well, yeah, like, what was that like? That but I get to learn so much more about you know, who he is and, you know, we're just gonna there are things that I learned about when we've been married, I mean, she's gonna kill me like, you know, we've been married for a really long time and he's just like, you know, we know everything about each other. I'm like, No, you don't. We don't at all. It was that's so much fun. But you know, really like, if you're open to like having helped, you know, somebody asked these questions with you, so you can help deepen your own like, it frees you up from being the the questioner and also the answer, answer or if you can bring somebody in in that process. You can just take on one role.   Michael: Yeah, I dig it, I dig it. Okay, so that was mindset and then you mentioned what was stuck to…   Whitney: Yeah… So that you know for you to do anything in life you have to have the right mindset you know, the the fact that you know what you want why you want it and that you are going to go after you have given yourself permission to go after it right, that's mindset.   Once you once you understand that you might be standing there going, the person on the street going, Grant, okay, I want real estate, I want financial freedom. Where do we go from here, right. Now you're down to the skill sets, okay? Like the kind of get into the how do we get things done? Now, here's the trick, I'm going to give you you know, people a couple of different ways to look at it first, we can look at what's what you have and what you don't. Okay, so, if you come from business, you've probably heard a SWOT analysis. So where you're, you're listing out your strengths, your weaknesses, your opportunities to your investment, like what can you bring that is really cool that you can really utilize in your threats, like, you know, um, you know, if you have a family like, I've got a nine year old at a time that can like bomb me anytime in any podcast, and I'm doing like the doors latch, right… Handle that threats what…   Michael: Threat destabilized…   Whitney: …disarmed, those are, you know, really sitting down on all seriousness, the strengths and the weaknesses, you know, focusing there first, and I don't like thinking of weaknesses, but those again, you know, that's what the acronym is, but those are areas that your blind spots, you know, what are what don't you have that, you know, that you need in order to succeed?   Okay, taking, taking, like 510 15 minutes, you know, to look at your strengths and weaknesses and revisit those on a regular basis because as you start, you don't know what you don't know. And as you start digging into, like, whatever path or real estate you're going to go down, you will uncover things like, oh, I need to have a property manager and I don't know how to interview great like, that's, you know, that needs to over here as an opportunity or like, you know, weakness that I need to fill in.   You were talking about strengths. I think there's a confusion that people have, right. Between strengths and gifts. Yeah, in strengths are things that we are good at, we have been trained, we have learned over time we have mastered them, you know, it can be through schooling, training, on the job training and stuff like that, it doesn't actually mean that it's a gift and then it's our net that it lights us up on the inside. Case in point: I'm an epidemiologist by training, I love thinking through critical things. You handed me like a regression analysis and like on software and spreadsheets and stuff, like like that, I can do it. I'm really fast at it, I'm really good at it, do I love it? No, it's a strength, but like, if you if I doubled down on that strength and just solely honed in on that, that being a core part of my business, I would struggle, right because it's not a gift of mine. Like I would eventually hit a wall and go I don't love doing this at all I need to reengineer my business. So even getting more granular so once you have your strengths, weaknesses, opportunities, threats, you know, written down on that strengths, separate them out of like things that you've been trained that that you're just good at but then also what do you love? What, what would you do, if you never got paid? Like for me like I love talking, I love educating like, you know, I could I get up I'll do it in the morning. I go to bed doing it at night. My husband is like, can you please just get off the phone? Like I'm on it… and like for women, you know, we have some you know, but there's some big differences between men and women like women we naturally come you know, probably more culture with like communication report building organizational skills, and attention to detail and not so much like being able to focus on detail, but also like handle like, you know, more and I hate the word multitask, but like attention to detail and multiple areas all at the same time, right. Yeah, that's, you know, we were the gatherer part of the chain. You know, we had to pay attention to the kids running around, is there a saber toothed tiger in the area? Where would I get those last berries, that didn't make me sick? Right like we had to pay that into all those details and that is part of our physiology, it's part of this operating system up here in our head.   Michael: It's so funny, you mentioned that yeah, the other day, we had some contractors at our house and I was outside chatting with them, we got along just fine and then I was gone for 10 minutes and my wife, Claire was outside, and they're like, best friends in 10 minutes and she's like, oh, yeah, we just get along, we're buddy, buddy, like, how do you do that? How do you build rapport people so quickly? So I love that you mentioned it. I'm like, yeah, first, first, it's really happening in my household…   Whitney: Yeah, I mean, it's in every, like I said, it's not like, it's not a blanket statement. But identifying what those strengths are and, you know, I think for women, when we're getting into like a very male dominated industry, I think there's an expectation that we have to go toe to toe with them, you know, with males, I'll give you an example: I was on a, speaking on a panel last month at a conference and two incredible male investors with me, I mean, couldn't be, you know, on the stage with more nice, nicer people and I was like, a little nervous, because I was like, these guys are gonna go over deal specifics and numbers, and they're gonna hammer home their deals and returns and I was just like, I'm like, I'm gonna take a different approach. And so whenever I got asked my questions on a panel, I turned back to the audience, and I, like engaged in a conversation with the audience and I had like them laughing and rolling over each other. Because I was in, you know, it was just a different way of connecting, right, like, so um, you know, in the in, you know, not what, there's not a one size fits all solution. But you know, some people would have resonated with that a little bit better, so…   Michael: Absolutely. Oh, how cool. That's great.   Whitney: And, and then, you know, so when we understand what the strengths are, we've got the strings, we've got the guests. Also, we have to switch back to that that awkward the weakness column, and I hate to say I hate the word weakness, I always want to call it opportunities, because it just feels better. Like, this is an area it's kind of my blind side is what area for me to get better. But when we're talking about scaling a business, really, do you just need to be aware of the blind spot and do you have to fix it? Or do you need to find out who to help you, right? So if you don't if you ever read the book, who not how? Michael: Yes, love it!   Whitney: …and the title says it all, who not how... Done, you don't have to read the book.   Michael: Yeah, we just saved you two hours' worth of reading...   Whitney: Right, but you know, really, you know, how can, you know, you really tap into understand what your blind spots are, and what how they might be limiting for you. If we all can do better in like, you know, fixing our blind spots, when you're building a business, you may not have that luxury or time, go find somebody that that you can bring in that has a complementary skill set.   Me, I found out really fast when I got my first like actual rental, like when we placed tenants in our properties. I was like, okay, I love talking to the, to the tenant, I could build a report, I could get them in, I have got sales skills, not a problem. But when it came to day to day communication with them, I wanted to have nothing to do with it, like I was just like, yeah…, I checked the box, right. Um, but it takes a very special person to do that right to, you know, to manage the tenant and obviously, I mean, I need a property manager, that's my who, like, take me out of this role. Like, I remember standing in the Children's Museum in Wisconsin, I hadn't seen my friends for two years, our kids are playing, and my husband's on the phone talking to our tenant for an hour and a half and this the whole experience of our kids playing because we didn't have a property manager. So that's what I mean by who, right, it was a blind spot for us, we thought we could power through it, but at the end of the day, um, you know, the tenant would have been better served with property management and so we would have we two totally needed to who, in our business…   Michael: When I'm gonna get real vulnerable with you and everyone for a minute, I am not the best identifier of my own blind spots, my wife can attest to that. So how I mean, so much of the who should this conversation be had with question that I was asking you previously? How can we identify or how can we get our blind spots identified and not be, not be rude about it not be you know, have our claws out when that conversation is happening?   Whitney: That is a little tricky, right? Like, who likes being told that you're not so good at this?   Michael: Tell me all the things I can't do well, yeah, it's not a fun conversation.   Whitney: Right, so I think, you know, um, you do having that conversation with somebody that you know, love and trust. I did this this is I started this off like years ago, I sent me an operator, ,I sent a survey out to like my best friend, like my 10 a small group of friends and I asked them, it was anonymous. They, they could say whatever they wanted on the survey, now, it's only 10 people, you kind of figure out who like said, What, but that, like, what do I have an opportunity to develop? And you know, it's really, it was really interesting, I got some great feedback and that's how you have to take it, it's feedback, right…   Michael: It's not criticism…   Whitney: …Like, we look in the mirror, we're looking at a direct reflection, but we're not seeing the back of our head, there's just no way for us to see, you know, around our body, like how many times you've walked out a bathroom got toilet paper stuck on the backside of your shoe, right? Like you just, there's just no way, so we have to get somebody that has seen all sides of us and the good guy, my ugly, right?   I'm also like, I love having those people in my life and it's just radical candor, okay, it doesn't mean that it's not love. I actually, you know, find it more endearing and more empowering. If I have somebody that's willing to tell me where I like with, you know, with some love and just like, hey, listen, like, you know, you move really fast up into topic, I know you and I know, you don't mean to do that but it'd be really cool if you could just like look me in the eye and say that you understood where I was coming from before you saw the problem and that that's for me, like, that was feedback that I got? No, I was just like, what do you mean? You know, my first I was, I was first taken aback and then I was like, you know, what, do you know how many thoughts went through my head before the words came out of my mouth? Like, I was like, thinking about her mom and thinking about this, like all these different situations and how I could help her and then like, I would love from her telling me what's wrong in her day to like me telling her, this is how we're going to fix it and I didn't… I, my problem is I don't actually like say all those things are going through my head first to create empathy. I think those are amazing things to hear back because it just gives us an opportunity to create a richer relationship with people…   Michael: Oh, that's so good, that's so good and I'm right there with you. I'm so guilty of the same thing, I'm like, oh, cool, here's the problem, well, here's the solution. It's like, well, maybe that's not always the best way to go about it. There's a lot of other things that we could do in the in the in between…   Whitney: Yeah, I mean, it gives you an opportunity to kind of put tools in place. When I was given that feedback. Um, I, I like when searching for tools, like, do I just need to, like, ask more questions. That's always a great thing and, but also, like, I, my question now that I asked is one I'm like, do you need me to help you solve this? Or do you just need me to listen, you know…   Michael: Yes, yes…       Whitney: And half the time, it's like, no, I just need you to listen, I'm like, okay, then, of course, I'm like, I got a solution.   Michael: I have the answer, it's a magic.   Whitney: Yeah, but anyways, you know, we've kind of like, you know, dove down a rabbit hole there but I think it can be a blind spot in any sort of way. Like, I think it's just, you know, again, you know, we're, it, we're having a human experience, right, I heard a quote from one of a, an old coach of mine, he was like, we're just here, you can have any human experience, we're all walking each other home and so you know, you just can't take that feedback about your blind spots too, personally, because really, at the end of the day, the person is, you know, really trying to tell you what you can do to improve yourself. I would be more worried if somebody said, you don't have any blind spots, right? You're just kind of like, really? There's nothing for me to work on, like…   Michael: Yeah, totally, totally. Awesome, okay. So we covered mindset, we just tackled skill set, what's the third thing to be aware of…   Whitney: Networks, right. So this is an extension of the who, not how, and I think women really excel at building networks and but I want to dive deeper, because it's not exactly building the network, but building the right network, right.   So the network is, you know, when you hit a level of achievement, you're missing, you know, a skill or a person to help you get to that next area. So I mean, I think this is a huge thing. You know, we've all heard the quote from Jim Rohn, you are the average of the five people that you surround yourself with. I would really challenge you, I do this with my coaching clients every single year and they they hate it and they love it at the same time. We do a purge exercise, I have them list out everybody everything in their life and move things to a purge column that just aren't serving them. Now, the first time they do this, they're just like, there's no way that I'm going to like stop talking to that family member and I'm like, I'm not asking you to stop talking to them, I'm asking you to identify those areas in your life, those toxic relationships, maybe like relationships that are holding you down, right? They're not elevating you to that next level of business where you want it be, they challenge, they challenge you in some way, they, they're holding you back.   Maybe there's double standards there, they can do it, but you can't, right. Or maybe they've just have a victim mentality, and you just need to throw them back the rope and be there be loving, be open, but like, You got to figure out your problems on your own because I, I gotta go solve this over here, not that, right. So, um, you know, surrounding yourself with the right people that need to be in your world in order to get to that next level. I know, when I got into real estate, that was super hard for two reasons: One, nobody around me was doing real estate, I didn't have, I didn't feel like I had permission. I was, I was crazy. I was like, you're buying your, you're spending how much on a house I'm like… I'm not spending, it's investing…   And two, my mom was still alive, bless her soul, I mean, it's such a strong, amazing woman to learn from. But I was, I was scared of my mom, like when I needed her permission to invest in you know, she finally just kind of like understood, like, before she passed away that I was I needed to do what I was gonna do. But we had, like, we had some odds there. But I eventually had to be like, you know what, we're gonna agree to disagree and I'm still gonna, I'm still here, I'm your daughter, I love you and you just need to let me do what I'm going to do. But that's hard, those are hard relationships to kind of set aside. But once you kind of create that space, right, you know, whether you actually put boundaries on those relationships, or eliminate the toxic… toxicity and double standards, you can you the first time you do that exercise, you may or may not actually take any action, but over time, you'll realize you have to in order to move up to the next level. Now you got to fill the void when you start moving those people out, now you got to fill the void and backfill with people that are, you know, maybe just right above you that are doing what you have are what what you want to do, go find a mentor, go find the quote, scope be part of a mastermind, right? When you help fill that void at the next level…   Michael: And how I mean, you mentioned it, and I think it's so applicable for so many people, especially a lot of our listeners, maybe who are just getting started who don't have five other people to surround themselves with. How do you build that network? How do you go? Yeah, how do you how do you build that network?   Whitney: So internet… You know, that's great. I love this question and I'm really glad you're one of my favorite ways is actually through podcast?   Michael: Oh, really…   Whitney: I'm in, you know, when we think of network, or a mentor, or coach, it doesn't actually mean that you have to exchange money, I think there needs to be a time at some point in time that, you know, if you really are serious about building your business and scaling, you're gonna find you want to short cut your path to growth, right, you want somebody like looking over your shoulder partnering with you. But when you're just starting out, um, you know, maybe it's like, choosing like, you know, visiting, like a math meetup, like locally finding some, a couple local investors that you resonate with and then like two or three podcasts, people that you love, and you follow, and you just, you know, these are the people again, it's kind of like you're the gifts part you just, like, want to listen to them all the time.   You know, that can even be like a great way to surround yourself in that environment until you can actually, you know, build out that the physical network and to do that, again, meetups can be great. And now that we have zoom, you know, it's proliferated in the past couple years, you know, meetups, a lot of meetups are still virtual. I love conferences, too because conferences, you get like a high density of like, like, a awesome, like investors and operators and stuff like that. So can you find those conferences? For me, I'm attending best ever conference here next week in Denver, Colorado. But that's geared towards multifamily and self-storage, new maybe you're more into single family homes, there's a, there's a conference out there for that, like attend those events. One, you can get your stuff around operators, which we've talked about in length, but too you can get around yourself around other investors that are doing bigger and better things and that you that you want to do…   Michael: That's so good and just one kind of piece of advice, piggybacking off that is when you go to these events, and you go to these in person conferences, or even just these zoom meetings, set an intention, and then follow up on it because I think so many people go to these conferences and it gets super excited and get super hyped and then go back home kind of bored. They might be isolated and don't have a network around them, they're like, oh, well, that was cool but now I'm you know, back to reality here and you never do anything with it…   Whitney: Well, it's all about execution, right? You don't go to the you go to the conference right to learn information, but how can you carry the whole point in building the network is to reger… is for regular engagement. How can you make two or three friends at that conference that you're going to maybe like, do put together a little mini mastermind yourself, you guys are going to meet monthly and hold each other accountable on your goals. You don't have to be doing the exact same thing, you're just like both kind of like, you're all just kind of, you know, going in the same direction in your build, right, your wealth build. You know, you can join, you can join paid masterminds for that type of thing. But it's just it's about the consistency and the persistency of staying engaged, right? You can't, you can't just like attend one conference and go, hey, I built a network.   Michael: I did it now…   Whitney: Yeah, now we just have to be cultivated. I mean, I think people hate the word networking, I actually do a module like with my coaching clients on this. Networking is just us having a conversation. It's really me just asking for directions, right? So how can we like you know, you know, make that just like a regular regular thing. I'm part of the women's go abundance and there's, you know, there's four of us that meet like, every two weeks, whether we have like anything that's for progress forward. We meet every two weeks, we set an intention and I know I've done this, I'm guilty of this. I know like our meeting is on Thursday, I committed to some things two weeks ago, they're not done… I got, I got a report on that, right… And why and it's sometimes it's just like, well, darn, it's just easier for me to get it done but it keeps you moving forward and that's part of the networking it's the accountability, too…   Michael: Totally! I think networking, so often has this connotation around me using someone or you being used by someone else but really, I think renaming it or reframing it to call it relationship building is that a stitious?   Whitney: Yeah, rapport building relationship building, like, there's you don't have, there doesn't have to be an exchange of anything other than just like report initially and, you know, I mean, we've all been to those events, that the networking events where somebody is like shoving all their cards in your hands, that's what I'm talking about. I'm talking about actually finding somebody that you just like, you know, at the core fundamental that you resonate with, like, either you guys are walking a similar path, or they're just like, I like put, I like being in the room, or I am the dumbest person in the room. Like, I love that, and it pushes me, but at the same time, I also put myself in situations where I'm the mentor, and I'm giving back and it's just as rewarding.   Michael: That's so good, that's so good. Whitney, we covered mindset, skill set, networking, anything else that you'd recommend to be a rockstar, badass woman investor?   Whitney: Well, I think it's just continuing to, like, revisit these questions on a regular basis, right, because every time you you, you level up a part of your portfolio or achieve a goal, you now have to change who you have to become to get to the next level. So the mindset that got me to buying my first one or two single family properties, compared to the mindset that I have to have it now is entirely different. So it is an evolving process. You're constantly having to level up your mindset, your skill sets in your next your network to reach the next level. So it's not stagnant, this isn't one and done, this is like perpetual work that you have to do on yourself.   Michael: That's so good because I think so many people think about it. If I can just get this one deal, I you know, I'm there if I can just do this one thing that I'm there but it sounds like that's not the case, it's this ever evolving kind of evergreen cycle.   Whitney: I mean, I knew very few investors that have gotten like four or five or 10 single family properties that didn't want didn't go hmm oh, I have a multifamily look great, now you gotta like level level up right? You got to learn or do at least a whole new skill set and you know, probably expand your network to like figure out how to do the multifamily property.   Michael: I love it, I love it. Really this was so good. If people have questions for you want to reach out to you what's the best way for them to get in touch?       Whitney: Yeah, so you can reach out to me at https://www.passiveinvesting.com/whitney/ and you know, I know there I have tons of free downloads on how to get started with passive investing in multifamily and self-storage, real estate. You guys can find me there, but also just happy to jump on the phone and answer any questions for people.   Michael: Oh my god amazing. Well, thank you again for coming on. Always a pleasure to see you and I'm sure we'll do this again soon.   Whitney: Alright, thanks so much, Michael.   Michael: Thanks Whitney, bye…   Alright, well, that was our episode, a big thank you to Whitney for coming on yet again. She shared tons of knowledge, tons of wisdom, really some insightful stuff. So if you like the episode, feel free to leave us a rating or review wherever it is you get your podcasts and as always, we look forward to seeing the next one. Happy investing…