Latest / Earn Your Leisure / He Sold at the Perfect Time — Business, Investing & Economic Lessons from Mikey Taylor

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He Sold at the Perfect Time — Business, Investing & Economic Lessons from Mikey Taylor · Earn Your Leisure

0:00
Speaker 1: Well, let's let's bring our guests up, can we please?
0:06
Speaker 1: Hey man, how's it going?
0:08
Speaker 2: What a show I came into? Huh fed cheers which
0:11
Speaker 2: win your self profits? What's going on? Guys?
0:14
Speaker 3: Hey brother?
0:15
Speaker 2: How are you? Mister may I'm doing well? Thank you guys.
0:20
Speaker 1: Yeah. Man, Mikey Taylor entrepreneur, investor, former professional skateboarder turned
0:27
Speaker 1: civic leader. He built and exited and nationally recognized Brory.
0:31
Speaker 1: We're gonna be talking about that, selling a company, transitioned
0:34
Speaker 1: into commercial real estate and private equity, etcetera, etcetera, etcetera.
0:39
Speaker 1: Extremely accomplished athlete now an extremely accomplished entrepreneur an investor.
0:45
Speaker 1: Thank you for joining us, Appreciate it.
0:47
Speaker 2: Thank you for having me. God's been good.
0:50
Speaker 1: All the time.
0:51
Speaker 2: How thou treating you?
0:52
Speaker 1: Man?
0:54
Speaker 2: You know it's it's busy right now. It's going well though.
0:58
Speaker 2: We got it under We're doing a pretty good job.
1:01
Speaker 2: We're saved for clean, got good jobs. We're just trying
1:04
Speaker 2: to maintain and push forward.
1:06
Speaker 1: Amen. So I want to we're going to talk about
1:09
Speaker 1: your transition from an athlete to entrepreneur, but I want
1:12
Speaker 1: to just go right into it as far as your
1:14
Speaker 1: decision to actually uh, well, the idea right as far
1:18
Speaker 1: as going into entrepreneurship, your company got it acquired. So
1:23
Speaker 1: we just actually, this is perfect time because we just
1:25
Speaker 1: got finished talking about selling, like when it's when to sell,
1:29
Speaker 1: when to sell a stock, but also like you know,
1:32
Speaker 1: very few people have insight on when to sell a company.
1:35
Speaker 1: So what was the thought process in selling a company?
1:38
Speaker 1: Can you walk us through that journey?
1:42
Speaker 2: Yeah, So, first and foremost, we had investors. So anytime
1:46
Speaker 2: you're going to bring on investors, you're going to have
1:48
Speaker 2: to answer the question how are they making money? And
1:51
Speaker 2: you're either going to build a business that pays a
1:53
Speaker 2: dividend or you're going to build a business that exits.
1:57
Speaker 2: And so what we did was we got a handful
2:00
Speaker 2: of offers on the table, and then we had to
2:03
Speaker 2: make the decision on if we should take more capital
2:06
Speaker 2: to grow the business to a larger position than to
2:09
Speaker 2: potentially exit in the future. And that calculation just didn't
2:13
Speaker 2: really make sense for us. And secondarily, we were looking
2:16
Speaker 2: at the industry, and at that time in the beer industry,
2:19
Speaker 2: all the big giants, your miller cores, your anheusers, your
2:23
Speaker 2: consolations were buying and so we definitely were concerned that
2:28
Speaker 2: once the big players stopped buying, the multiples went down,
2:32
Speaker 2: and so we made a calculated decision, and then in hindsight,
2:35
Speaker 2: we were correct at the timing side. So sometimes it's timing,
2:39
Speaker 2: sometimes it's luck, and sometimes you're able to see some
2:42
Speaker 2: of the data and then make a maybe educated decision.
2:47
Speaker 4: Yeah, after you make the exit, right, a lot of
2:50
Speaker 4: times people are looking for the next company to build.
2:53
Speaker 4: You kind of made a pivot and went into real estate.
2:56
Speaker 4: Like what was that process like for you?
2:59
Speaker 2: All Right? So I know this is a little bit contrarian,
3:04
Speaker 2: but I was a little bit scared of lightning striking twice.
3:08
Speaker 2: And we went into an industry where we were a
3:11
Speaker 2: little bit of disruptors, and we found a model that worked,
3:15
Speaker 2: and then a lot of the other companies came in
3:17
Speaker 2: and started using it, so over time it it wasn't
3:20
Speaker 2: special anymore. And so I was definitely scared that if
3:23
Speaker 2: I did it again in the beer space, I was
3:28
Speaker 2: going to flounder. So I just switched it, went to
3:31
Speaker 2: another industry, tried to take that model into something nobody
3:34
Speaker 2: had seen before, and then all of a sudden, it
3:36
Speaker 2: was blue ocean again. So that was more my framework.
3:40
Speaker 2: I was just scared of doing the same thing twice.
3:44
Speaker 1: Well for before you asked that question, because that's actually it.
3:47
Speaker 1: So that's what you just said. Ian as far as
3:49
Speaker 1: if you option trading, don't try to run a gambit
3:52
Speaker 1: of hitting lightning in a bottle twice, right, taking put
3:55
Speaker 1: to a more conservative index funds. So across disciplines, there's
4:00
Speaker 1: a lot of the same practices. So I just wanted
4:04
Speaker 1: to kind of highlight that because that's actually in line
4:05
Speaker 1: with what you just had mentioned earlier.
4:08
Speaker 2: Ye. Look, at the end of the day, investing should
4:10
Speaker 2: be boring, right, we just want to make it exciting.
4:12
Speaker 2: But when you guys are talking about your buy sell disciplines,
4:15
Speaker 2: at what point am I a seller? It's really important
4:18
Speaker 2: to establish that and then hold to it. If you
4:21
Speaker 2: just do that, you're gonna look back. You're gonna be
4:23
Speaker 2: in a pretty good spot.
4:26
Speaker 3: Why do you think most people don't stick to that
4:27
Speaker 3: discipline of when to exit? And for you personally, what
4:31
Speaker 3: happens as an athlete? Did you have that made you
4:34
Speaker 3: incredibly successful as an entrepreneur? That carried over?
4:38
Speaker 2: Okay, so why don't we do that? Because we're human
4:40
Speaker 2: and you know, we see opportunity and we get dollar
4:44
Speaker 2: signs in our eyes, we want more, and that's just
4:47
Speaker 2: something we have to fight, is that side of us.
4:50
Speaker 2: For me as an athlete, you know, Number one, I
4:54
Speaker 2: was doing something I loved and I didn't want it
4:56
Speaker 2: to end, but the reality was it was going to end.
4:59
Speaker 2: And how I looked at it was I had sponsors
5:01
Speaker 2: that paid me while I was relevant, and I just
5:05
Speaker 2: felt like they controlled my future, and I did not
5:07
Speaker 2: like that feeling. It's probably similar to just having a
5:10
Speaker 2: job and your boss basically is the decision maker on
5:13
Speaker 2: your future, and there's something that's uncomfortable with that. And
5:17
Speaker 2: so I just tried to put myself in a position
5:20
Speaker 2: where I didn't have to rely on my sponsors anymore.
5:24
Speaker 2: And really what that meant is if I can move
5:26
Speaker 2: out of a position where I was completely dependent on
5:30
Speaker 2: income and start owning assets that eventually paid me, well,
5:34
Speaker 2: I felt like I was taking power away from them
5:36
Speaker 2: and putting them into kind of my future, which I
5:39
Speaker 2: love that feeling once I accomplished it.
5:42
Speaker 1: So you led a life that you can write a
5:45
Speaker 1: book on, you know, your legendary professional athlete in the
5:49
Speaker 1: realm skating, then you you know, had a business that
5:52
Speaker 1: was actually successful enough to actually exit. Then you start
5:55
Speaker 1: to invest in real estate and now you're the mayor
5:58
Speaker 1: of a city. I am, so, how'd the politics thing
6:03
Speaker 1: come into play?
6:06
Speaker 2: That's a good question. Huh. We're going to get to
6:08
Speaker 2: know each other real good huh. Boys, you know the
6:12
Speaker 2: the you know the politics. For me, I was always
6:15
Speaker 2: frustrated by politics. You know, every time I looked at politicians,
6:19
Speaker 2: they didn't seem like real people to me. They always sold,
6:21
Speaker 2: they never delivered. It was completely opposite from what you
6:25
Speaker 2: have to do as an entrepreneur. So I really had
6:27
Speaker 2: no interest in going into that world. But the only
6:31
Speaker 2: caveat is if you get involved in the local level
6:34
Speaker 2: at the city, it's completely different than a lot of
6:37
Speaker 2: the things we talk about or argue about on the
6:40
Speaker 2: national side, because the decisions you're making are things that you,
6:44
Speaker 2: your family, your residents are feeling, and it's actually it
6:48
Speaker 2: is political in some regard, but I mean, think about
6:50
Speaker 2: what we're voting on. It's budgets and sidewalks and real estate.
6:57
Speaker 2: It's things that we actually feel in touch every single day.
7:01
Speaker 2: And so I felt like I would get involved there,
7:03
Speaker 2: but that was going to be my ceiling. I never
7:05
Speaker 2: wanted to do more than this, and so I think
7:08
Speaker 2: that's probably going to be it. I do this run
7:10
Speaker 2: and then step out and keep building more companies.
7:14
Speaker 4: You heard us talking about the new FETCHA. You recently
7:18
Speaker 4: put up a post that Trump's FED pick could reshape
7:22
Speaker 4: real estate faster than rate cuts.
7:24
Speaker 2: Can you break that down? It splaitatility? Okay, so it
7:30
Speaker 2: really comes down now we will see what I will
7:33
Speaker 2: be completely transparent with everyone here on. You don't know
7:37
Speaker 2: what somebody is going to do until they start acting.
7:39
Speaker 2: So if you know, Wash gets in, we'll see. But
7:43
Speaker 2: at least his idea is a little bit different than
7:46
Speaker 2: what the FED has been probably over the last twenty years,
7:50
Speaker 2: which the FED has become the stabilizer. It's like they
7:53
Speaker 2: come in and they go, Okay, how do we protect
7:55
Speaker 2: the market, how do we protect unemployment? And what that
7:59
Speaker 2: means is when bad things happen, they come in and
8:01
Speaker 2: save the day. Two thousand and eight was our most
8:03
Speaker 2: recent well you could call twenty twenty our most recent example,
8:06
Speaker 2: but two thousand and eight was a big shift. And
8:09
Speaker 2: what should have happened is a full blown crash. A
8:12
Speaker 2: lot of those banks should have completely gone under for
8:15
Speaker 2: the decisions they were making, and the FED covered them.
8:19
Speaker 2: And so the new potential FED chair has a different outlook.
8:24
Speaker 2: We'll see if he acts on it. But what it
8:26
Speaker 2: really is is stay out of it and be the referee.
8:29
Speaker 2: I'm not going to be the stabilizer. I'm going to
8:31
Speaker 2: be the referee. And what that means is more potential volatility.
8:35
Speaker 2: It means things could crash. But if things crash, you
8:39
Speaker 2: don't have a lot of bubbles created that are held
8:41
Speaker 2: up by ultimately easy money printing. And so that does
8:47
Speaker 2: mean there's going to be some pain. So I want
8:48
Speaker 2: to be careful in saying this. I recognize pain and
8:52
Speaker 2: that sucks. I don't want things to hurt. But usually
8:56
Speaker 2: what happens is we try to protect pain on the
8:58
Speaker 2: front end, and then we put ourselves in a situation
9:01
Speaker 2: where it's worse for us on the back end. I mean,
9:04
Speaker 2: look at millennials and gen z and ask them how
9:06
Speaker 2: everything's going. They're going to tell you it's not going
9:09
Speaker 2: very well. And I think a lot of that is
9:11
Speaker 2: because we put ourselves in a situation where things are
9:14
Speaker 2: so out of reach for so much of us, so
9:16
Speaker 2: many of us, and I think that's because we've artificially
9:20
Speaker 2: held up the market beyond what it's actually at. That's
9:22
Speaker 2: at least my outlook. We'll see what happens from all
9:25
Speaker 2: of this, though.
9:26
Speaker 3: Do you think we're too far in the rabbit hole
9:29
Speaker 3: to fix the changes in the pain that gen Z
9:32
Speaker 3: may be feeling.
9:34
Speaker 2: I hope not, I really do. I think probably the
9:38
Speaker 2: most fair way to say this is there are some
9:41
Speaker 2: things that could come into play that change everything. Like
9:44
Speaker 2: you're looking at AI and everything going on there, the
9:47
Speaker 2: potential for how productive this could be and what that
9:51
Speaker 2: could mean for GDP growth could put us in a
9:55
Speaker 2: position where we course correct on some of this other
9:57
Speaker 2: bureaucracy and you know, support that we've had. We could
10:02
Speaker 2: right size this thing, that could right size our debt
10:05
Speaker 2: issue that we're struggling with. But I'm naturally more of
10:10
Speaker 2: an optimist. I try to find the potential pathway and
10:15
Speaker 2: focus on that. But there's some things that could come
10:18
Speaker 2: into play that make it worse as well. I just
10:20
Speaker 2: know where we're at right now is not healthy. That's
10:22
Speaker 2: at least my view. What do you guys think? You
10:24
Speaker 2: guys feel like we're in a healthy spot?
10:26
Speaker 3: Well, really quick, you said there's some things that can
10:28
Speaker 3: make it worse. What are some of those roadblocks or
10:31
Speaker 3: financial asteroids that the audience may not be aware about
10:34
Speaker 3: that could make it worse.
10:36
Speaker 2: Okay, so I'm gonna I'll keep this kind of high level.
10:39
Speaker 2: I'll try to make it pretty simple. If you viewed
10:43
Speaker 2: America as US as individuals, we all bring in a
10:46
Speaker 2: certain amount of money, we all spend a certain amount
10:48
Speaker 2: of money, and there's some debt component. Potentially we are
10:52
Speaker 2: spending way too much and we are borrowing like crazy
10:57
Speaker 2: in the inevitable outcome that is bankruptcy. And so there's
11:02
Speaker 2: a choice that we have to make. Right, if you're
11:05
Speaker 2: in debt, you have two options to get out of it.
11:08
Speaker 2: You're to cutback your expenses and put more of your
11:10
Speaker 2: revenue towards paying off your debt, or you increase your
11:13
Speaker 2: revenue and pay more of your debt elsewhere. Right, So
11:16
Speaker 2: it's either growth or pullback for us. I don't think
11:21
Speaker 2: we can save our way out of this. I think
11:23
Speaker 2: it has to be a combo. And we've got to
11:26
Speaker 2: be in a position where we're not giving away the farm.
11:28
Speaker 2: And I think we've just given away too much. We've
11:31
Speaker 2: outsourced everything. So I think that's the that's the challenge.
11:34
Speaker 2: If anyone's a reader in this audience and you know
11:38
Speaker 2: you want to get caught up on this, read Ray
11:40
Speaker 2: Dalia's books, the debt crisis and everything he's forecasting. That
11:44
Speaker 2: is a potential for us that we have to avoid.
11:48
Speaker 1: Well, how do you think that we have an opportunity
11:50
Speaker 1: to get out of that? Because nobody wants to, well,
11:54
Speaker 1: at least the Republicans, they don't want to raise taxes.
11:58
Speaker 1: The Democrats don't want to cut programs, and the Republicans
12:02
Speaker 1: don't really want to cut programs too, if you're really
12:04
Speaker 1: honest about it, because I mean the major programs as
12:07
Speaker 1: far as military and health benefits and things that really
12:12
Speaker 1: really caused trillions of dollars to get taken out, there's
12:17
Speaker 1: no real solution on how to cut that from that.
12:18
Speaker 1: So if we're not going to cut anything and we're
12:20
Speaker 1: not going to raise taxes, I mean, what can we
12:26
Speaker 1: actually do?
12:27
Speaker 2: Okay, So it's actually really interesting that you brought that up,
12:30
Speaker 2: because I would say that has been a recent shift
12:33
Speaker 2: on the Republican party that there's no appetite for cutting
12:37
Speaker 2: programs there either. I think the fascinating part is it's
12:41
Speaker 2: the people don't have an appetite for it. If you're
12:43
Speaker 2: an elected official, what you're supposed to be is a
12:46
Speaker 2: representation of the people who voted for you. And if
12:49
Speaker 2: you ran on a platform of we're cutting, you're not
12:52
Speaker 2: getting elected. And so we're in a tough spot, right,
12:56
Speaker 2: I think, probably knowing that the only real shot is
13:00
Speaker 2: control expenses where they're at and grow our way out.
13:04
Speaker 2: And you know, I think you could make the claim
13:07
Speaker 2: that AI could get us there, but if the politicians
13:11
Speaker 2: aren't willing to do it, the only option is growth.
13:14
Speaker 2: The caveat to that is, are you guys seeing the
13:18
Speaker 2: percentage of people that are moving into the Independent party? Yeah,
13:22
Speaker 2: it's massive. It's the largest group we've ever seen in history.
13:27
Speaker 2: That could be a tell for what's coming politically that
13:31
Speaker 2: the majority of people don't have faith in either side.
13:36
Speaker 2: And if we saw a situation where the two party
13:39
Speaker 2: system didn't control everything, that could be something totally new
13:44
Speaker 2: for us. But with that said, if I'm trying to
13:47
Speaker 2: pick the most likely outcome, it's grow your way out
13:50
Speaker 2: of this.
13:52
Speaker 1: When you say, oh, just for clarification, when you say
13:55
Speaker 1: grow your way out of this, what does that actually mean?
13:57
Speaker 2: Though?
13:58
Speaker 1: Like as far as on a corporate side, just to
14:00
Speaker 1: have more corporate profits, because that's not coming back if
14:03
Speaker 1: we don't tax corporations.
14:04
Speaker 2: So yeah, yeah, that's a good question. The large corporation
14:12
Speaker 2: scenario we're in, that's a that's a whole separate conversations. Right.
14:18
Speaker 2: Just look at it as total revenue into the government. Right,
14:22
Speaker 2: so every single revenue stream that the government government has,
14:25
Speaker 2: how do we increase that? And now you can definitely
14:31
Speaker 2: make the case and I get it that this is
14:33
Speaker 2: nuanced and there's not enough time for this. But if
14:36
Speaker 2: companies are growing and taxes are coming in at a
14:40
Speaker 2: larger dollar amount, well there's the potential for growth. The
14:44
Speaker 2: large corporations not paying taxes, that that's nuance and there's
14:49
Speaker 2: caveat to it. The corporations are paying taxes, it's you know,
14:53
Speaker 2: at what portions are they taking loss? That covers a
14:57
Speaker 2: lot of it, and you know where to R ANDD go.
14:59
Speaker 2: Where's the incentive go. That's a separate combo.
15:05
Speaker 4: You mentioned something you said, after this political run, you're
15:08
Speaker 4: going back to finding companies owning companies, Which is interesting
15:12
Speaker 4: because it makes me think of where do you see
15:16
Speaker 4: or what excites you, what type of company would you
15:18
Speaker 4: be looking at of the future? Right, it's going to
15:20
Speaker 4: be looking a little bit different than when you started
15:22
Speaker 4: your entrepreneurial journey. What companies are the wave of the future?
15:26
Speaker 4: Which ones excites you? What are you looking for when
15:28
Speaker 4: you're trying to find one.
15:29
Speaker 2: Yeah, that's a good question. Now, I heard somebody say,
15:31
Speaker 2: I'm not sure who it was, but one of you
15:34
Speaker 2: guys said that you want people to win with their money. Right,
15:38
Speaker 2: if you're new, we want you to grow your wealth.
15:40
Speaker 2: Who want you to succeed? That outlook is very much
15:45
Speaker 2: in alignment with me. I want people to understand how
15:48
Speaker 2: to manage their money, how to invest it, and put
15:51
Speaker 2: the you know, let's grow the middle class and let's
15:54
Speaker 2: grow it upward. So if you're not in the middle
15:57
Speaker 2: class at let's get you there. If you're in the
15:58
Speaker 2: middle classes, try to, you know, stend it up. That's
16:01
Speaker 2: really my focus. That's why we built the business we
16:04
Speaker 2: have now, you know, all the content we put out
16:06
Speaker 2: is financial literacy. We have opportunities for people to invest
16:10
Speaker 2: in real estate with us, whether you're accredited or you're not,
16:13
Speaker 2: so you can grow your wealth that way. The next
16:16
Speaker 2: business I start will probably be in some way aligned
16:19
Speaker 2: with that, I won't tap into a you know, maybe
16:23
Speaker 2: a tech platform or AI, it'll probably be around how
16:27
Speaker 2: do I help more people grow what they own?
16:33
Speaker 3: For the entrepreneurs listening tonight, what matters more to you
16:36
Speaker 3: the idea or the operator? And if they're looking to scale, like,
16:40
Speaker 3: what are some must haves in business now that will
16:44
Speaker 3: allow them to scale?
16:46
Speaker 2: It's a phenomenal question. Okay. So number one, this is
16:49
Speaker 2: not to take away from the idea, because the idea
16:52
Speaker 2: is incredibly important, But there are more good ideas out
16:56
Speaker 2: there that don't get executed than bad ideas that people
17:01
Speaker 2: try to drive forward. So there is a pairing. You
17:04
Speaker 2: have to have a good idea, you have to have
17:05
Speaker 2: an operator, because if you can't bring the idea to
17:08
Speaker 2: reality and then you can't scale it, the idea is
17:11
Speaker 2: almost worthless in some regard. So if you're a visionary
17:15
Speaker 2: pair with an operator, bring an operator or a team
17:19
Speaker 2: of operators into the business so that you can actually
17:23
Speaker 2: track your momentum forward. And then it just becomes a
17:27
Speaker 2: game of right person, right seat, What seat do you need?
17:31
Speaker 2: Find the right person and fill it and then track
17:34
Speaker 2: the progress. The beginning stages are the hardest. So if
17:38
Speaker 2: you're a solopreneur, it's the hardest to go from one
17:41
Speaker 2: person to three, and then from three onward. And so
17:46
Speaker 2: what you're going to have to wrestle with is when
17:48
Speaker 2: you're the solopreneur, you're making all the money and for
17:51
Speaker 2: a time you're going to make less then because you're
17:53
Speaker 2: gonna have to pay somebody else to get involved. You
17:55
Speaker 2: might have to give somebody equity to get involved. But
17:59
Speaker 2: two people can further than one. So the idea is
18:02
Speaker 2: take the hits on the front end, delay your gratification,
18:06
Speaker 2: build the team, and what you're going to experience on
18:08
Speaker 2: the back end is going to be much larger.
18:12
Speaker 1: So let's talk about real estate. Went into commercial real estate,
18:16
Speaker 1: So you're a real estate investor, but you're also a politician.
18:19
Speaker 1: So I was interested to see your thoughts on this
18:22
Speaker 1: is commercial real estate debt because we've been seeing even
18:25
Speaker 1: in New York, the Chrysler building that they that's in
18:28
Speaker 1: shambles right now, like so many office buildings when you
18:31
Speaker 1: think of commercial real estate, at least on the office side,
18:33
Speaker 1: but a lot of other commercial whether there's even businesses,
18:39
Speaker 1: they're going online and people are not coming in the
18:41
Speaker 1: same and everything is changed. So what's your thoughts on
18:46
Speaker 1: commercial real estate in twenty twenty six?
18:48
Speaker 2: Okay, so commercial real estate, just for anybody who doesn't
18:51
Speaker 2: knows a lot of different asset classes, it's office, it's
18:54
Speaker 2: you know, industrial, warehouse, it's retail, it's commercial. Multifamily. Office
18:59
Speaker 2: is definitely getting hit the hardest. That will reshape, it
19:03
Speaker 2: will survive. Even though we're going digital, we have not
19:07
Speaker 2: mastered how to work as an organization and maintain culture digitally,
19:12
Speaker 2: and so it's probably going to become somewhat of a hybrid.
19:15
Speaker 2: And I think that hybrid is going to hold. So
19:17
Speaker 2: I think there's a buying opportunity on office where you
19:20
Speaker 2: can buy it an extreme discount. Industrial is going to
19:23
Speaker 2: be here. You know. Retail, I think is going to
19:27
Speaker 2: still be here as well. A lot of us wrote
19:29
Speaker 2: that off in you know, two thousand and nine to
19:31
Speaker 2: twenty fourteen as e comm started pumping. I think retail
19:35
Speaker 2: is going to stay because at the end of the day,
19:37
Speaker 2: we're emotional creatures that like community, We like seeing and feeling,
19:42
Speaker 2: and so there will be a footprint for that. Multifamily
19:46
Speaker 2: in a lot of markets is correcting hard right now.
19:49
Speaker 2: It's a lot of the markets where the regulation is
19:51
Speaker 2: low and they actually added supply. But here's the thing
19:54
Speaker 2: to know about commercial commercial real estate values are tied
19:58
Speaker 2: to interest rates. So when the FED drove rates up
20:01
Speaker 2: three x, you watched prices come down because of that.
20:05
Speaker 2: That's very different than how single family works. So we're
20:09
Speaker 2: just in a moment where there's a buying opportunity. I
20:11
Speaker 2: think you probably have a year or so of that
20:14
Speaker 2: and then we'll see things tightened and then we'll go
20:17
Speaker 2: through the beginning of the cycle again, and it will happen
20:19
Speaker 2: again and again after that.
20:21
Speaker 4: The most important thing is that people will need capital.
20:24
Speaker 4: And you had this thesis on the millennial career crisis
20:29
Speaker 4: that we had a conversation about that earlier today, and
20:33
Speaker 4: just where we're headed.
20:34
Speaker 2: What's your thoughts on how.
20:36
Speaker 4: We combat it, what can we do to you know,
20:39
Speaker 4: put a dent in it, because it's a real thing.
20:41
Speaker 4: Right when we talk about the amount of jobs that
20:43
Speaker 4: are going to be replaced, yes, some will be created,
20:45
Speaker 4: but if we don't have income, then we're not going
20:47
Speaker 4: to be able to invest in residential real estate or
20:49
Speaker 4: commercial real estate.
20:51
Speaker 2: Okay, So there's two parts that the millennial career crisis
20:55
Speaker 2: is real one hundred percent what AI does, and you
21:00
Speaker 2: know how we're going to make money. I actually think
21:02
Speaker 2: there's a higher probability that we experience something similar to
21:06
Speaker 2: the industrial the Industrial revolution, where we see a lot
21:11
Speaker 2: of new jobs created because of AI. I don't know
21:15
Speaker 2: if we're all just going to be jobless and you
21:17
Speaker 2: know something like UBI is going to turn on. Not
21:21
Speaker 2: saying that doesn't happen, I think that's lower probability. I
21:24
Speaker 2: think the big issue with the millennials and gen z
21:27
Speaker 2: is it's housing. It's like, we got fifty to seventy
21:31
Speaker 2: percent of our income going towards housing, and the price
21:34
Speaker 2: tag for a first time purchase is so high. The
21:38
Speaker 2: American dream has taken off the board at that point,
21:41
Speaker 2: and so I think the conversation for housing is more
21:45
Speaker 2: what happened and why are we here? I think that
21:47
Speaker 2: goes back to the old outlook of the FED. We
21:51
Speaker 2: we have allowed a bubble to be created because we
21:55
Speaker 2: are trying to artificially support people in and through and
22:01
Speaker 2: so what does that mean? Number One, you got to
22:03
Speaker 2: add supply. If our population grows and we're not adding supply,
22:07
Speaker 2: you're going to watch asset prices increase. You know. Some
22:10
Speaker 2: of the other things is it's regulation and politicians. You know,
22:15
Speaker 2: if you're if you're looking at the housing crisis, right,
22:19
Speaker 2: I think both sides can agree that prices are too
22:21
Speaker 2: high now. It just becomes what's the solution. And I
22:26
Speaker 2: would say one group looks at the solution as being
22:29
Speaker 2: the government. The government needs to come in, They need
22:31
Speaker 2: to build more regulation, There needs to be rent controls,
22:35
Speaker 2: there needs to be you know, eviction moratoriums, and that
22:38
Speaker 2: will bring prices down. The other side views it as government,
22:43
Speaker 2: get out of the way, let us build. I promise
22:45
Speaker 2: you we will build too much, and when we do,
22:48
Speaker 2: you know you're going to experience something like Texas is
22:50
Speaker 2: right now, prices are dropping at a crazy rate. The
22:54
Speaker 2: true answer is it's going to land somewhere in the middle.
22:57
Speaker 2: Like the private market and the policy makers need to
23:00
Speaker 2: come together and actually speak the same language. They need
23:03
Speaker 2: to get aligned on what the desired outcome is, which
23:06
Speaker 2: is more housing, which will bring prices down. And you
23:10
Speaker 2: haven't seen that happen yet in a lot of the markets.
23:13
Speaker 2: Some you have, but the majority of markets you haven't yet.
23:18
Speaker 3: We all have one story of an investment that we
23:21
Speaker 3: missed out on that we wish we would have been
23:22
Speaker 3: a part of. Is there an investment that you missed
23:27
Speaker 3: and investment into, whether it's real estate or a company,
23:30
Speaker 3: and what's the lesson that you learned from it.
23:33
Speaker 2: Twenty eleven, one of my friends started talking to me
23:37
Speaker 2: about bitcoin, and he's telling me about this digital currency
23:42
Speaker 2: on some website that you could buy and it was
23:44
Speaker 2: going to be the future. And instead of me asking
23:48
Speaker 2: him questions to learn about it, I looked at him
23:51
Speaker 2: and went, bro, you are crazy. That's some black market stuff.
23:55
Speaker 2: You're gonna lose all your money. And he made an
23:59
Speaker 2: astronaut nomical amount of money and I waited until twenty
24:03
Speaker 2: nineteen to buy in. And so the moral of the
24:06
Speaker 2: story is if somebody is talking about something, treated as
24:10
Speaker 2: if they have information that you don't have, and ask
24:14
Speaker 2: questions for you to learn, and that message goes actually
24:18
Speaker 2: beyond investments. I think we should talk to everyone that way.
24:24
Speaker 1: Private equity for people that may not be familiar, like
24:27
Speaker 1: explain you know how, like what's the real metrics? And
24:31
Speaker 1: in private equity, as far as how companies are evaluated,
24:33
Speaker 1: who gets money, like you know, what's what's been your
24:36
Speaker 1: experience of private equity.
24:37
Speaker 2: Okay, so what private equity means is that you are
24:42
Speaker 2: getting your capital outside of the public markets. You're not
24:45
Speaker 2: going to the stock market for capital, and so that
24:49
Speaker 2: can look like a bunch of institutions or pension funds
24:52
Speaker 2: are giving you money all the way down to like
24:54
Speaker 2: what my company is. You can invest with us for
24:58
Speaker 2: as little as five thousand dollars. So there's a lot
25:01
Speaker 2: of different ranges of it. Traditional private equity means that
25:06
Speaker 2: you're buying businesses. The real estate I do is technically
25:10
Speaker 2: called private equity real estate, but investing in real estate
25:13
Speaker 2: as a syndication is different than what you're seeing with
25:16
Speaker 2: a business and what you're seeing over there. The multiples
25:20
Speaker 2: on traditional private equity are typically going to be three
25:23
Speaker 2: to five x. And what they're doing is they're buying
25:27
Speaker 2: a bunch of businesses inside of a certain industry and
25:31
Speaker 2: they're trying to create efficiency efficiencies in it. They're trying
25:34
Speaker 2: to drive revenue up, and they're trying to cut expenses back,
25:38
Speaker 2: and then when they do that at scale, they then
25:40
Speaker 2: try to offload the portfolio and make money. Now there's
25:45
Speaker 2: a big problem happening in traditional private equity where they're
25:48
Speaker 2: buying up small kind of mom and pop type of businesses.
25:53
Speaker 2: They're running the culture into the ground. The consumer is
25:56
Speaker 2: getting a product that is not even close to as
25:58
Speaker 2: good as you're seeing a challenge there. On the real
26:02
Speaker 2: estate side, what we do is we go try to
26:04
Speaker 2: find real estate that doesn't exist or is vacant, and
26:09
Speaker 2: then we pool investors together and then we go in
26:11
Speaker 2: and we buy it. We usually develop something new, and
26:14
Speaker 2: when you're developing, you have the opportunity to grow the
26:17
Speaker 2: value of it, and so that's how we grow wealth.
26:20
Speaker 2: We just do it as a group as opposed to
26:23
Speaker 2: an individual.
26:27
Speaker 4: As you look at your career how it's played out,
26:29
Speaker 4: obviously you've had different multiples throughout each stage these decades,
26:33
Speaker 4: I wonder what you define as your legacy, Like, what
26:37
Speaker 4: do you want it to be looking for? I know
26:39
Speaker 4: you're a husband, your father, how do you see your
26:41
Speaker 4: legacy shaping out?
26:45
Speaker 2: All right, that's a good question. I would say for
26:51
Speaker 2: anyone who's met me, talk to me, has a relationship
26:55
Speaker 2: with me, I think the only thing I would want
26:57
Speaker 2: them to view what I was while I was here
27:02
Speaker 2: is that I was somebody that they trusted and just
27:07
Speaker 2: overall was like somebody they could count on. For my kids,
27:11
Speaker 2: I think it's more about what my wife and I
27:15
Speaker 2: put into them as opposed to what we leave them.
27:18
Speaker 2: I'm not saying I don't leave my kids anything, but
27:21
Speaker 2: I think it's more important that we instill good character
27:26
Speaker 2: and good values and give them the tools for them
27:29
Speaker 2: to go on and do their thing, as opposed to
27:32
Speaker 2: just passing down assets. So that's kind of where we
27:34
Speaker 2: put more of our attention. I want to build them
27:36
Speaker 2: up to be, you know, good husbands and good wives
27:39
Speaker 2: and good fathers and good mothers. But I also want
27:43
Speaker 2: them to know how money works. So I'm not saying
27:45
Speaker 2: that to say we don't teach them about money. We
27:48
Speaker 2: do that as well. I just think that's secondary.
27:52
Speaker 3: If you can only pick five things that you can
27:53
Speaker 3: focus on on a daily in your business, which are
27:57
Speaker 3: those five things that would give you the highest return?
28:02
Speaker 2: All right? You have to pay attention to sales is
28:07
Speaker 2: Without sales, there's no revenue that comes in. So sales
28:10
Speaker 2: is a big one. You got to manage the money correctly.
28:14
Speaker 2: So having somebody on your accounting team is a necessity.
28:19
Speaker 2: The tracking of the different pillars of your business. We
28:23
Speaker 2: use a system called EOS. It's from the book Traction.
28:27
Speaker 2: So if you're an entrepreneur and you want to learn
28:29
Speaker 2: how to manage a business correctly, I'd recommend buying that book.
28:33
Speaker 2: The other one, culture is a really big one. Make
28:36
Speaker 2: sure that everyone on your team is very clear on
28:40
Speaker 2: where you're headed, that you're building them up and they're
28:44
Speaker 2: a part of the organization. And then I probably put last,
28:47
Speaker 2: which is the kind of what puts all the glue together,
28:50
Speaker 2: is leadership. Make sure that if you're in a leadership position,
28:54
Speaker 2: you are not the one that's trying to take all
28:56
Speaker 2: of the credits or being the star. I really think
29:00
Speaker 2: a leader is looking at the people next to you
29:04
Speaker 2: and building them up to be something greater than what
29:07
Speaker 2: maybe they even realize. And if you have somebody that
29:10
Speaker 2: you built up and they built a skill set and
29:12
Speaker 2: they end up leaving your company and working for somebody else,
29:16
Speaker 2: don't get pissed at that. That's actually a great example
29:19
Speaker 2: that you did your job as a leader, because at
29:22
Speaker 2: the end of the day, what you're trying to do
29:23
Speaker 2: is build people up.
29:26
Speaker 1: Well, Mikey, thank you for your Tom