Latest / REL Freedom Podcast / Matt Ricciardella - Turning "Mom & Pop" Into Millions

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Matt Ricciardella - Turning "Mom & Pop" Into Millions · REL Freedom Podcast

• 0:00
  SPEAKER_00: So I kind of transitioned my investing activities towards more passive, safer cash flow investments.
• 0:07
  SPEAKER_00: Um, and as opposed to buying properties to flip them where it's dependent on you showing up every day, I love the idea of buying a piece of property that's going to throw off a cash flow in perpetuity whether or not I show up.
• 0:23
  Mike Swenson: Welcome to the Real Freedom Show, where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:30
  Mike Swenson: I'm your host, Mike Swenson.
• 0:32
  Mike Swenson: Let's get some real freedom together.
• 0:42
  Mike Swenson: Hello, everybody.
• 0:43
  Mike Swenson: Welcome to another episode of Real Freedom, Real Estate Leverage Freedom, where you talk about different ways that we're building time and financial freedom inside the real estate space.
• 0:53
  Mike Swenson: I'm your host, Mike Swins.
• 0:54
  Mike Swenson: And if you want to get started on your real estate journey, check out our website, freedom through realestate.com.
• 1:01
  Mike Swenson: It's where we put all of our articles, all of our episodes to be able to help inspire you with great stories and paths for you to be able to choose your own adventure and where you want to go inside of real estate.
• 1:12
  Mike Swenson: Super excited today.
• 1:13
  Mike Swenson: So we've got Matt Ricardella, and he is the founder and CEO of Crystal View Capital, private equity real estate firm specializing in value add investments in manufactured housing communities and self-storage.
• 1:25
  Mike Swenson: Currently managing over$650 million in assets.
• 1:29
  Mike Swenson: And your focus is acquiring underperforming, fragmented mom and pop owned assets and transforming them through operational refinement, rent optimization, and professional management.
• 1:38
  Mike Swenson: And excited to talk about how you do that and how you add value to all the investments that you do.
• 1:43
  Mike Swenson: So, Matt, thank you so much for being on the show.
• 1:45
  SPEAKER_00: Thanks for having me, Mike.
• 1:46
  SPEAKER_00: Excited to be here.
• 1:47
  Mike Swenson: Just take us back, get us started, kind of talk about for you how you got into real estate and the whys behind it, and we'll go from there.
• 1:54
  SPEAKER_00: It's kind of an interesting story.
• 1:55
  SPEAKER_00: I really didn't have a plan when I was younger.
• 1:58
  SPEAKER_00: It's one of those things you fall into by luck or happenstance, and it really served me well.
• 2:04
  SPEAKER_00: I grew up in New York in uh the restaurant business.
• 2:07
  SPEAKER_00: My my father had some restaurants up there and started from a very young age working in the kitchen, washing dishes, you know, making pizza.
• 2:16
  SPEAKER_00: We were Italian, so we had Italian uh restaurants, pizzerias.
• 2:21
  SPEAKER_00: And um, I learned pretty quickly I didn't want to be in that business.
• 2:26
  SPEAKER_00: I didn't know what I wanted to do, but I knew what I didn't want to do, and that and it was being in the restaurant business.
• 2:31
  SPEAKER_00: So um, you know, I moved out to Southern California just looking for a change of pace, you know, being from the East Coast and wanted to see what was going on on on the other side of the country.
• 2:43
  SPEAKER_00: And um, you know, I always knew I wanted to become wealthy.
• 2:46
  SPEAKER_00: I didn't know how that was gonna happen.
• 2:49
  SPEAKER_00: Um, and I I did know I was not a good student.
• 2:53
  SPEAKER_00: Um, so I did not do well in school, drop, ended up dropping out of college, and um thought to myself, what could I do without a college degree that's going to generate a lot of wealth?
• 3:05
  SPEAKER_00: And I don't know, the thought popped into my mind uh becoming a realtor.
• 3:08
  SPEAKER_00: So that's exactly what I did.
• 3:10
  SPEAKER_00: I joined a local uh Coldwell banker office um when I was very young, 20 years old, and um kind of built my book of business up the old school way just through phone prospecting, knocking on doors, building relationships because I didn't have any.
• 3:28
  SPEAKER_00: Um, you know, I couldn't fall back on people I knew or or a resume or or anything of that sort.
• 3:34
  SPEAKER_00: I coming to a new area, young kid, don't know anybody, had to had to go about it um the old-fashioned way.
• 3:41
  SPEAKER_00: So kind of built my business up slowly.
• 3:43
  SPEAKER_00: You know, there were some hard times I had to go through where you didn't know where you're gonna get your next meal, you didn't know how you were gonna pay rent, but uh, but made it through.
• 3:51
  SPEAKER_00: And um, one day I I made a a cold call to list a property, and that particular owner said, Well, why don't you just buy it?
• 4:01
  SPEAKER_00: And, you know, this was the the day and age where you had ninja loans, stated income, no asset.
• 4:07
  SPEAKER_00: Anybody could get uh debt financing on a single family.
• 4:11
  SPEAKER_00: This was a duplex in Long Beach, California.
• 4:14
  SPEAKER_00: Um, and I was thinking, how am I ever gonna get a loan?
• 4:16
  SPEAKER_00: I can't get a$500 credit card, um, let alone a loan on a piece of property.
• 4:21
  SPEAKER_00: But I got approved, I bought this property, um, sold it about a year and a half later, made about a$350,000 profit, went in there, turned it around, released it, um, made some improvements.
• 4:36
  SPEAKER_00: And and after that, I thought to myself, well, why would I continue to sell real estate as a realtor?
• 4:42
  SPEAKER_00: I'll just, I'll just do this for myself.
• 4:45
  SPEAKER_00: And and that's exactly what I did.
• 4:47
  SPEAKER_00: So that that spawned my real estate career.
• 4:50
  Mike Swenson: It's uh interesting to hear hear your story.
• 4:53
  Mike Swenson: You know, I kind of tackled it from the well, well, I I came at it a different way and I came at it much later in life, but I was the straight A student, you know, always focused on, you know, trying to achieve perfection through school.
• 5:05
  Mike Swenson: And I remember when I started this podcast about five years ago and I interviewed a guy that was my age, had been in real estate, kind of out of high school shortly after high school, and I had just kind of started the investing side at that point on the interview.
• 5:19
  Mike Swenson: And it's like this dude barely skated through school and got into real estate and is, you know, had a large portfolio.
• 5:26
  Mike Swenson: And I'm thinking, yeah, there's something to be said about getting into real estate.
• 5:30
  Mike Swenson: And so I talked to my kids now about school, and it's you know, kind of the the message of hey, dad's in a career where you don't have to have a college degree to do it, and you can be super successful.
• 5:40
  Mike Swenson: And so teaching them different paths.
• 5:42
  Mike Swenson: But I love how you said, you know, being in the restaurant industry, right, taught you it's what you don't want to do, and that's really important to know kind of what what you like, but also what you don't like.
• 5:51
  Mike Swenson: Love the story, love the transition into into the investment side, you know, after that duplex, share a little bit more how that journey continued for you.
• 5:59
  SPEAKER_00: My career was was very much built on uh heavy phone prospecting.
• 6:03
  SPEAKER_00: So I would, you know, I'd show up, I would outwork everybody else, I'd make 100, 200 phone calls a day, I'd work eight hours a day, didn't have anything else to do.
• 6:12
  SPEAKER_00: You know, young guy, didn't have a family, um, new part of the country.
• 6:17
  SPEAKER_00: And I just poured everything I had into it.
• 6:20
  SPEAKER_00: And I actually built a team around me as well.
• 6:22
  SPEAKER_00: So we were making cold calls all day long to absentee owners of single family properties in Southern California.
• 6:30
  SPEAKER_00: Um, buying those properties.
• 6:32
  SPEAKER_00: We we didn't really have a scientific approach, but it worked.
• 6:35
  SPEAKER_00: We would buy these properties off market, um, significantly below market value.
• 6:40
  SPEAKER_00: This is during the the time when it was a very inefficient market, no Zillow, no Redfin, those types of platforms that would tell somebody what something is worth.
• 6:50
  SPEAKER_00: Um, so we'd buy them opportunistically and then sell them very quickly, really didn't make improvements to those homes, but made great spreads on them.
• 6:59
  SPEAKER_00: And you know, that worked really well.
• 7:01
  SPEAKER_00: Probably did 15 to 20 of those in Southern California um during 2004 through 2006, 2007.
• 7:12
  SPEAKER_00: And, you know, I just kind of saw the writing on the wall during that stage.
• 7:17
  SPEAKER_00: I thought to myself, you know, it's just it seems like it's so easy to get a loan and and values are rising so readily.
• 7:26
  SPEAKER_00: You know, still being young, I thought, when's the other shoe gonna drop on this thing?
• 7:30
  SPEAKER_00: So I kind of transitioned my investing activities towards more passive, safer cash flow investments.
• 7:38
  SPEAKER_00: Um, and as opposed to buying properties to flip them where it's dependent on you showing up every day, I love the idea of buying a piece of property that's gonna throw off a cash flow in perpetuity, whether or not I show up.
• 7:52
  SPEAKER_00: That kind of uh jumped out at me.
• 7:54
  SPEAKER_00: It was very compelling.
• 7:56
  SPEAKER_00: So I started going out there and changing my approach to finding commercial properties.
• 8:02
  SPEAKER_00: Same playbook, went out there, made the cold calls, but the idea wasn't to flip, the idea was to keep.
• 8:09
  SPEAKER_00: So found these properties, office, retail, multifamily, industrial.
• 8:14
  SPEAKER_00: Um, went into them, figured out how I could tweak operations to drive value, whether that's bring rents to a market level, fill vacant sites, invest capital into the deal.
• 8:25
  SPEAKER_00: Um, didn't have very much capital of my own.
• 8:28
  SPEAKER_00: So I was always raising second, third trustees, having sellers finance for me, um, did well, improved these properties, sold some of them, kept some of them.
• 8:39
  SPEAKER_00: And then I was really wanting to own assets that threw off the highest amount of free cash flow.
• 8:45
  SPEAKER_00: And I kept coming back to two property types that did that, and that was storage and manufactured housing communities.
• 8:52
  SPEAKER_00: And um, I bought my first uh mobile home park back in 2007 in Anaheim, California.
• 9:00
  SPEAKER_00: Bought my first storage in Louisiana in 2008, and you know, just kept building a portfolio in these properties.
• 9:08
  SPEAKER_00: The rents kept growing, the NOI kept growing, and and it was like, hey, I'm on to something here.
• 9:15
  SPEAKER_00: So um, you know, did really, really well.
• 9:18
  SPEAKER_00: The problem was I just had a finite amount of capital, couldn't really scale, had a decent portfolio for a young guy, um, didn't really have partners, just took on a lot of debt, you know, is financing these things 90-95% LTV, so relatively higher on the risk spectrum, but did a good job on buying them right and creating value.
• 9:40
  SPEAKER_00: And then I would refi and take that debt piece out.
• 9:44
  SPEAKER_00: And uh back in 2014, I thought to myself, this is a great business.
• 9:50
  SPEAKER_00: If I could scale this, I could really go to the next level.
• 9:53
  SPEAKER_00: So that's what I did.
• 9:54
  SPEAKER_00: And I launched Crystal View Capital Fun One back in 2014 with the idea of raising other people's money and following the same playbook and strategy that uh I've employed successfully over the years.
• 10:06
  Mike Swenson: Now you talk about raising capital and needing to find capital from people early on.
• 10:10
  Mike Swenson: And so, you know, you're a younger guy, inexperienced, still kind of building your portfolio, building that resume for people.
• 10:17
  Mike Swenson: Talk about how you're able to build those relationships where people would trust you to say, Yeah, here's here's my money.
• 10:23
  Mike Swenson: You know, I trust your plan and what you're doing.
• 10:25
  Mike Swenson: And then obviously, the more you get in the rearview mirror, the more you can point to that and say, here's the successes I've had.
• 10:31
  Mike Swenson: But as you're building that, it takes a little bit of time and it takes a little bit of proof of concept to show them, hey, you can trust me with your money.
• 10:38
  Mike Swenson: So kind of talk about that early piece in the the transition as you're as you're building that resume for your investors.
• 10:44
  SPEAKER_00: You know, it's selling is is partly being relentless.
• 10:49
  SPEAKER_00: You know, you you just show up and you grind day in and day out.
• 10:52
  SPEAKER_00: A lot the majority of everybody says, no, are you insane?
• 10:56
  SPEAKER_00: You're buying trailer parks, why would I put my money into this?
• 11:00
  SPEAKER_00: Um, but I found a couple who would, and they did unbelievably well by investing in me, and I did unbelievably well.
• 11:07
  SPEAKER_00: And I was on to something with an asset class in the beginning stages of growth that had a very long-term trajectory.
• 11:15
  SPEAKER_00: Now it's you know, a lot of institutional capital is is chasing those deals.
• 11:20
  SPEAKER_00: But but back then, to answer your question, it was also, you know, being a person of my word, doing what I said I was gonna do.
• 11:28
  SPEAKER_00: You know, when you deliver for somebody, that word spreads, you know, and you could start on a very small scale by by honoring your word.
• 11:37
  SPEAKER_00: And I've always been an advocate for uh underpromising and over-delivering.
• 11:42
  SPEAKER_00: And when you do that, when you go back to those folks and you're you have your next deal, guess what?
• 11:48
  SPEAKER_00: No questions asked.
• 11:50
  SPEAKER_00: I I know you're gonna deliver because you've done it for me time and time again in the past.
• 11:54
  SPEAKER_00: So once you in the beginning, it is very challenging, and you just got to grind and you got to get in front of people, and you've got to have high conviction, confidence in your concept and yourself, and uh, and frankly, get lucky once or twice.
• 12:08
  SPEAKER_00: And then when you get lucky, deliver for those people.
• 12:11
  SPEAKER_00: And then they're gonna tell their friends, they're gonna tell their family.
• 12:14
  SPEAKER_00: Um, a lot of them were sellers.
• 12:16
  SPEAKER_00: I bought their property and I did what I said I was gonna do.
• 12:19
  SPEAKER_00: And then when I went to raise capital, went back to them and they said, Yeah, you know, you you did well here, and uh, your plan and it makes sense, so I'm gonna invest in you.
• 12:30
  SPEAKER_00: So it's just kind of the snowball effect.
• 12:32
  SPEAKER_00: You s you start very small and very slow, but as that snowball grows and builds momentum, you know, then you could start raising millions, tens of millions, eventually hundreds of millions of dollars.
• 12:46
  SPEAKER_00: And it all starts by doing what you say you're gonna do from the outset and delivering.
• 12:51
  Mike Swenson: Uh, you've invested in quite a few different states.
• 12:53
  Mike Swenson: And so I know for some people, right?
• 12:55
  Mike Swenson: Like you like to start where you're at, and and obviously you started in Southern California, but you've got to take those risks in different areas that maybe you're not a hundred percent comfortable with the market, and and you've got to educate yourself.
• 13:06
  Mike Swenson: And then, two, you had mentioned about a couple different asset classes and and doing new asset classes that you haven't done before.
• 13:12
  Mike Swenson: So, talk about kind of that risk analysis and and educating yourself and being comfortable to say, yes, I'm gonna take down this project in a new state that I've never been, doing an asset class that I've never done before, and being able to kind of have that confidence to do that.
• 13:28
  SPEAKER_00: Yeah, you got to do your due diligence, got to understand what you're buying.
• 13:31
  SPEAKER_00: And a lot of mistakes are made up by buying right.
• 13:35
  SPEAKER_00: You know, again, it's not scientific, but if you take care of the downside, the upside takes care of itself, is one of our mantras here and has always been one of my personal mantras.
• 13:46
  SPEAKER_00: So um, you know, it's really focusing on buying deals right.
• 13:51
  SPEAKER_00: So if you make a mistake on your operations or you can't execute at the level that you anticipate or you underwrite to, you're still gonna make it out okay.
• 14:01
  SPEAKER_00: But if if you're thinking along the the kind of the wavelength of, hey, let me buy this at any price, and I'm so smart, I'm gonna make it work, especially when you're entering into a new asset class and a new market, you quite don't understand.
• 14:16
  SPEAKER_00: That's a recipe for disaster in my mind.
• 14:19
  SPEAKER_00: So it's really mitigating your risk through buying these properties right, is the big part of it.
• 14:25
  SPEAKER_00: And then doing your research, your diligence in the marketplace, spending a lot of time, you know, boots on the ground.
• 14:31
  SPEAKER_00: This is a very local business.
• 14:33
  SPEAKER_00: You know, to buy real estate without seeing it is crazy to me.
• 14:37
  SPEAKER_00: I mean, because you could look at spreadsheets and you could look at financial models and you could go onto Google Maps and do all of that type of work.
• 14:44
  SPEAKER_00: And that's a good prelimin preliminary analysis, but to buy an asset based off of that, that that's just that that's that's madness to me.
• 14:54
  SPEAKER_00: You really got to go out there and understand the market.
• 14:56
  SPEAKER_00: And if you could do that and you could buy it right, and you, you know, you work hard in terms of value creation and you network with other owners and brokers and try to gather as much information and intel as possible.
• 15:10
  SPEAKER_00: Um, have a sound, um, conservative financial model, I think you're gonna do well.
• 15:16
  SPEAKER_00: Um, but you got to put in that work.
• 15:19
  SPEAKER_00: It's you know, it's not a luck thing, it's it's a work thing.
• 15:22
  Mike Swenson: Talk with us about kind of size-wise what you were acquiring early on versus what you're acquiring now.
• 15:28
  Mike Swenson: And then two, the market's getting more and more competitive, and more and more people are looking for those types of deals.
• 15:32
  Mike Swenson: And as you get to the larger, you're getting to institutional investors and larger investors that you're competing with.
• 15:37
  Mike Swenson: So trying to stay sharp enough and ahead of the curve and finding enough deals to continue to grow, I'm sure, is a challenge too.
• 15:43
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 15:48
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 15:55
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 15:58
  Mike Swenson: Real estate investing is what we do full time.
• 16:00
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 16:03
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 16:08
  Mike Swenson: We've got large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 16:14
  Mike Swenson: The best thing is it's 100% passive to you for less capital than you put down trying to acquire a property on your own.
• 16:21
  Mike Swenson: Don't let this year go by where you don't make the leap, add to your portfolio, or you just did an analysis by paralysis.
• 16:28
  Mike Swenson: To find out more, visit freedom throughrealestate.com and click on invest.
• 16:33
  Mike Swenson: You can book a call and learn more there.
• 16:35
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 16:38
  Mike Swenson: That's freedomthroughrealestate.com and click on invest.
• 16:42
  SPEAKER_00: Yeah, well, I started my my first mobile home park was eight sites.
• 16:46
  SPEAKER_00: It was in Anaheim, California.
• 16:48
  SPEAKER_00: Now we're buying parks north of 400 sites.
• 16:52
  SPEAKER_00: And, you know, we're buying more institutional assets.
• 16:56
  SPEAKER_00: And what that means is that it's it's of a certain quality that uh, you know, you're gonna see the pension funds and the larger private equity funds of the world wanting exposure to because they're hard to come by.
• 17:08
  SPEAKER_00: And and scale is your friend in this business, especially if you have capital behind you.
• 17:14
  SPEAKER_00: Because it frankly, it's it's actually less work to buy a large community than several small communities, uh, from my experience.
• 17:24
  SPEAKER_00: So that's kind of been the transition that we've gone through is starting on the very small end, learning the business and scaling and growing and refining operations and putting systems in place where you could own and operate, you know, multiple three, four hundred site communities, really go to scale, have something that's uh an institutionalized operation.
• 17:46
  SPEAKER_00: And then at some point in in the way distant future, you sell these assets for an unbelievable premium because of the work that you've done.
• 17:54
  Mike Swenson: Now, one of the things that you talked about offline before we started that makes you guys special is you know being able to be vertically integrated.
• 18:01
  Mike Swenson: Um, so obviously, kind of early on, um, the economies of scale are a little bit different than where you're at today.
• 18:07
  Mike Swenson: And you alluded to being able to, you know, take that down with those 400 unit portfolios.
• 18:11
  Mike Swenson: But talk about that process of kind of going from, I'm guessing maybe where you were outsourcing that to then being able to take that in-house and being vertically integrated yourself.
• 18:20
  SPEAKER_00: Yeah, well, you know, we started by outsourcing and have been burnt time and time again.
• 18:27
  SPEAKER_00: Um, I guess the old axiom, nobody's gonna care about the property like the owner, is very much true.
• 18:34
  SPEAKER_00: And I I think I think our investors really appreciate our philosophy as it pertains to that, because we control the operations and the value creation plan from A to Z.
• 18:46
  SPEAKER_00: So we have an in-house asset management slash property management team that's handling rent collections, that's growing occupancies, buying homes, filling vacant sites, um, collecting rents, investing capital into these deals.
• 19:01
  SPEAKER_00: Where could we cut costs?
• 19:03
  SPEAKER_00: All with the end goal of driving NOI, it all happens in-house.
• 19:08
  SPEAKER_00: You know, when you outsource that function, most property managers are thinking along the lines of let me collect the rent, I'll clip a fee.
• 19:16
  SPEAKER_00: You know, am I gonna really sit, you know, stay up at night and think about how I'm gonna add value across these properties?
• 19:23
  SPEAKER_00: No, there's a strong chance that that answer is no, I could tell you.
• 19:27
  SPEAKER_00: But when you own it, you do.
• 19:30
  SPEAKER_00: You're you're maniacal about value creation because you have your own money at stake and you think about it like an owner because you are an owner.
• 19:38
  SPEAKER_00: And this is a very nuanced asset class where you can't really hire CBRE.
• 19:43
  SPEAKER_00: There are no real premier third-party operators in the space.
• 19:47
  SPEAKER_00: So we created our own.
• 19:49
  SPEAKER_00: And uh, we've executed it at a very high level over the years as a result of it.
• 19:53
  Mike Swenson: So talk about hiring that out and finding people because you're gonna have a mix of off-site operations, right?
• 19:59
  Mike Swenson: The technology and that kind of stuff that you can do from one central location, and then obviously you've got your boots on the ground of stuff that has to be done on site.
• 20:08
  Mike Swenson: Um, so kind of talk about how you were able to build and scale that where you've got the mix of off-site and on-site operations.
• 20:15
  SPEAKER_00: Trial through error.
• 20:16
  SPEAKER_00: You know, you go out there and you, you know, you find some managers, they work.
• 20:20
  SPEAKER_00: That's great.
• 20:21
  SPEAKER_00: You could build around them.
• 20:23
  SPEAKER_00: Some aren't gonna work, you're gonna have to fire, you're gonna have to start back over again.
• 20:28
  SPEAKER_00: When you treat people well, they stay within the organization.
• 20:31
  SPEAKER_00: A lot of them do, and and they you could move them from one property to the next.
• 20:36
  SPEAKER_00: You know, once you build scale in a region, you have regional managers that could oversee operations.
• 20:42
  SPEAKER_00: The key is you got to get out in front of the asset, you got to spend time on site.
• 20:48
  SPEAKER_00: When I'm traveling looking at a new acquisition, I always make a point to go and visit the properties that I already own because I want to see what's going on.
• 20:57
  SPEAKER_00: I show up unannounced.
• 20:58
  SPEAKER_00: Are they executing um at a high level?
• 21:01
  SPEAKER_00: Are they doing the things they say they're doing?
• 21:04
  SPEAKER_00: And we call them out when they're not.
• 21:06
  SPEAKER_00: You know, you you really got to show them you care.
• 21:08
  SPEAKER_00: You got to spend time on site, you got to build the culture where you're you're inspiring people and you're educating your on-site team and your off-site team to grow and scale.
• 21:20
  SPEAKER_00: And you put world-class systems in place.
• 21:23
  SPEAKER_00: And it's it's basic blocking and tackling and execution at the end of the day.
• 21:27
  SPEAKER_00: This is not that complicated of a business.
• 21:30
  SPEAKER_00: What makes it complex and challenging is the execution, all the moving part, all the moving parts, all the different personalities, all the different people.
• 21:40
  SPEAKER_00: But, you know, we've built a brand and we we like to think we've put the right people in the right seats.
• 21:46
  SPEAKER_00: And um, we go out there every day and and tirelessly execute on behalf of our investors.
• 21:51
  Mike Swenson: Talk a little bit about, you know, where where you're at today, because obviously you've you've grown and scaled.
• 21:56
  Mike Swenson: What types of assets or what types of opportunities are you exploring now?
• 22:00
  Mike Swenson: Here in the next couple years, now that you're at the size that you're at.
• 22:04
  SPEAKER_00: You know, it's again, it's the larger communities, is what we're predominantly focused on.
• 22:09
  SPEAKER_00: Let's call it uh 150 sites plus.
• 22:13
  SPEAKER_00: Um, you know, this asset class is mostly in secondary and tertiary markets.
• 22:17
  SPEAKER_00: So those are the marketplaces that we're focused on, but it's all about building relationships.
• 22:23
  SPEAKER_00: You know, we we've built the data to know who the owners are.
• 22:28
  SPEAKER_00: Um, I've personally been out there in the field, on the phone, communicating with these owner operators.
• 22:34
  SPEAKER_00: So it's not so much a cold call anymore, it's more or less a check-in.
• 22:39
  SPEAKER_00: They know who I am.
• 22:40
  SPEAKER_00: I've been doing this for so long.
• 22:42
  SPEAKER_00: And and we built a great sales and acquisitions team that's constantly building the funnel and the pipeline of potential opportunities where we could be picky.
• 22:52
  SPEAKER_00: You know, that that's the thing.
• 22:53
  SPEAKER_00: You know, when when you see some of these private equity funds and they don't have a lot of options, they want to get capital out the door, they start doing foolish things.
• 23:04
  SPEAKER_00: When you got a lot of deal flow, when you got a strong pipeline, you could cancel a deal, you could pass on this one because you've got so many options to choose from.
• 23:13
  SPEAKER_00: That's the position that we're in now.
• 23:16
  SPEAKER_00: That's the position we always have to be in in order to deliver at a higher level for our investors.
• 23:21
  Mike Swenson: Absolutely.
• 23:22
  Mike Swenson: And so talk about the investors, where you're at today, and the opportunities that uh exist for them.
• 23:28
  SPEAKER_00: Yeah, today we're, you know, we're actually closing out our fourth fund.
• 23:32
  SPEAKER_00: Uh, we anticipate we'll close it out at about 130, 140 million equity capital raise.
• 23:38
  SPEAKER_00: So we're excited about that.
• 23:39
  SPEAKER_00: After that, we are eventually going to launch an open-ended vehicle, which uh basically provides liquidity features for investors who want to exit early.
• 23:49
  SPEAKER_00: Um, so that's the plan for fund five.
• 23:52
  SPEAKER_00: Um not quite sure when we're gonna launch that vehicle.
• 23:57
  SPEAKER_00: In the interim, we are closing on some large opportunities in fund four, which we anticipate will be done in the next, let's call it 45 to 90 days, which we're really excited about.
• 24:09
  SPEAKER_00: And in the interim, we're gonna go out there and we're gonna do some single asset JVs where we raise capital around a single opportunity versus a fund structure.
• 24:19
  SPEAKER_00: So our investors uh range, to answer your question, Mike, on this very small end of a$50,000 commitment to very large end to a$25 million plus commitment and everything in between.
• 24:32
  SPEAKER_00: And I think they're they're very similar in terms of what they're after here at Crystal View, and that is a risk-adjusted return.
• 24:41
  SPEAKER_00: They're after a premier operator in this space, which is providing them exposure to a recession-resistant asset.
• 24:50
  SPEAKER_00: Um, again, with a hands-on world-class operating team that has skin in the game, that invest their own capital, and it has a 10 10-year-plus track record of delivering at a very high level.
• 25:03
  SPEAKER_00: Um, and they want to be passive, they want to be hands-off, and that's that's why I believe they invest in us.
• 25:09
  SPEAKER_00: And that's why I invest as an LP myself into the vehicles.
• 25:13
  Mike Swenson: Talk real quick just about because you had mentioned about JV and you know, single asset deals versus a fund.
• 25:18
  Mike Swenson: So when you're raising, you know, money$125 million for a fund, how does that work?
• 25:23
  Mike Swenson: And then obviously, as you're picking up deals, you know, you don't know what deals you're investing in when they're starting to put their money in.
• 25:30
  Mike Swenson: So kind of talk about that process of hey, you're investing in something that we will be acquiring in the future versus hey, here's this deal and this plan for you to invest in.
• 25:40
  SPEAKER_00: Yeah, it's a blind pool fund.
• 25:42
  SPEAKER_00: I mean, the idea is I think invest our investors have a really good idea of what we're going to buy.
• 25:48
  SPEAKER_00: Um, they don't know addresses, they don't know what the strategy is on that particular opportunity, but on a broader level, they they understand it.
• 25:57
  SPEAKER_00: They're they're obviously comfortable with with our approach there in terms of uh our historic ability to deliver cash on cash returns to our investors through a preferred return.
• 26:09
  SPEAKER_00: Um, but the single asset deals, they get the details on the front end.
• 26:13
  SPEAKER_00: You know, where is the property, what's what its occupancy is, um, what the plan is to create value, um, what the returns we project and and anticipate on that single asset opportunity.
• 26:26
  SPEAKER_00: At the fund level, they see what our projections are at uh at let's let's call it a 25, 30, 35 property portfolio level, and how they're gonna shake out over a 10, 15 year time horizon of holding those assets.
• 26:42
  SPEAKER_00: So it's very different that you're buying into a portfolio of assets based off a sponsor's track record and general guidance around returns versus a single asset where you have more clear expectations on how that property is going to perform and you invest in that one deal.
• 27:02
  Mike Swenson: What else do you want to share, kind of in terms of crystal view and value add benefits that you guys can offer to investors?
• 27:10
  SPEAKER_00: Look, we yes, we could deliver outsized returns, um, I believe, for historically speaking, from our performance.
• 27:18
  SPEAKER_00: Um, yes, we could we could provide exposure to an asset class that's highly coveted, that actually performs better in a down market that runs counter-cyclical, that's important to folks.
• 27:30
  SPEAKER_00: Yes, we could deliver some tax advantages, which is compelling.
• 27:34
  SPEAKER_00: But I always like to think we could offer something a little extra that others can't.
• 27:39
  SPEAKER_00: And that comes back to our edge.
• 27:40
  SPEAKER_00: And we touched on some of those things, and and those are the vertical integration, the ability to source deals off market, um, the culture, you know, the culture of excellence and building a team based on that culture where it's not based off of resumes, contacts, who you know, pedigree.
• 27:59
  SPEAKER_00: It's really that the people on this team, and it's not for everybody, Mike.
• 28:03
  SPEAKER_00: The people on this team, it's all about value add.
• 28:08
  SPEAKER_00: How could you add value for this company and in turn our investors?
• 28:12
  SPEAKER_00: And you're promoted and you're compensated based off of that.
• 28:15
  SPEAKER_00: That either resonates with people or people that live in this higher corporate hierarchy, they despise it.
• 28:22
  SPEAKER_00: Um, but that's our culture, you know, love it or leave it, as we say.
• 28:28
  SPEAKER_00: Um, so we bring that to the table, and then we also bring a very strong alignment of interest because we invest, I invest a lot of my own capital in these deals, and that's dissimilar from a lot of our peers and competitors.
• 28:42
  SPEAKER_00: So those are the things that we bring to the table that are a little bit unique, a little bit different, a little bit extra than I think you'll get in the marketplace with some of our peers and competitors.
• 28:54
  Mike Swenson: Awesome.
• 28:55
  Mike Swenson: Well, Matt, thank you so much for coming on and sharing.
• 28:57
  Mike Swenson: Excited to hear about all that you've accomplished and cool to see you know such a great story start at such an early age and excited to see where you guys continue to go and best of luck to you guys in the future.
• 29:08
  SPEAKER_00: Well, we really appreciate it.
• 29:10
  SPEAKER_00: Thanks for having us on the show today, Mike.