Learn. Share. Evolve…

0:00:03 10 years ago, this guy owned $0 of real estate,
0:00:05 and today he’s got a portfolio
0:00:06 of about a billion and a half dollars.
0:00:08 And he did that with no outside investors,
0:00:10 just starting from scratch,
0:00:11 one property after another,
0:00:13 flipping, flipping, flipping, compounding
0:00:15 until he built a billion dollar portfolio.
0:00:17 He’s also my brother-in-law,
0:00:18 and I’ve known the guy for 10 plus years.
0:00:20 I’ve been asking him to come on the podcast,
0:00:22 and he likes to keep a low profile,
0:00:24 but finally he agreed to come on and tell his story.
0:00:25 And the story’s a little bit crazy.
0:00:27 He started off as a broker,
0:00:29 ends up making a few million dollars
0:00:30 doing deals as a broker,
0:00:33 and then gets caught holding the bag
0:00:34 when one of his clients,
0:00:37 I don’t want to say screws him over,
0:00:38 but leaves him holding the bag.
0:00:40 And he ends up $15 million in debt.
0:00:41 And instead of declaring bankruptcy,
0:00:44 he decides to try to pay it all back,
0:00:45 piece by piece by piece.
0:00:47 He does, he pays it all back,
0:00:48 and he ends up with a billion dollar
0:00:49 plus real estate portfolio
0:00:51 using a very specific strategy.
0:00:53 So in this episode, I asked him how he did it,
0:00:54 to tell that story,
0:00:56 and to explain the strategy
0:00:57 and his approach to real estate,
0:00:58 because it’s a little bit different than anybody else.
0:01:00 So enjoy this episode with my brother-in-law,
0:01:01 Sanjeev,
0:01:03 aka the Rhino of real estate.
0:01:14 All right, my brother, we’re here.
0:01:15 Your story’s a rollercoaster.
0:01:17 You have crazy highs,
0:01:21 complete lows where you lose it all,
0:01:25 and then rebuild back up 20 times bigger than the first time.
0:01:26 So I want to go into that story.
0:01:29 So today, you are sitting here,
0:01:31 you’ve got a collection of real estate assets
0:01:32 that you’ve built up over the last 10 years.
0:01:35 That’s now how big, roughly?
0:01:36 A little about a billion and a half in total.
0:01:37 Billion and a half.
0:01:39 So 1.5 billion today.
0:01:41 And that’s really in kind of just a decade.
0:01:44 So I want to go through the steps of how you got there.
0:01:45 So where did the career start?
0:01:47 You know, in the name of the podcast,
0:01:48 My First Million, right?
0:01:48 Right.
0:01:49 How you made your first million.
0:01:50 Yeah.
0:01:51 I, you know, for me, it started,
0:01:53 I went to law school, did an MBA.
0:01:54 Did you plan to be a lawyer?
0:01:55 You thought?
0:01:57 I was full on set on being a lawyer.
0:01:58 You know, I went to law school,
0:02:00 worked for a very famous lawyer,
0:02:02 Mark Garagos out of LA.
0:02:05 We were working the Scott Peterson case.
0:02:06 And it was very intriguing,
0:02:07 you know, in criminal law.
0:02:10 When I met my, my now wife or my wife,
0:02:13 she was very much me against me being a lawyer.
0:02:16 For some reason, she was always programmed that,
0:02:17 you know, you’re going to, you’re going to,
0:02:19 you’re going to do certain things to win cases.
0:02:20 So we’d always talked about, you know,
0:02:22 I’m going to work for a lawyer for five years
0:02:23 and then I’m getting real estate.
0:02:23 Okay.
0:02:25 She goes, why do you need to,
0:02:27 why do you need to work for five years?
0:02:28 Why don’t you just do it?
0:02:30 You know, me thinking, I’m like, oh, wow,
0:02:31 that’s a different thought.
0:02:32 I don’t have a good answer to that.
0:02:34 You know, so I ended up opening
0:02:36 a real estate broker’s office,
0:02:38 went back to my hometown where I grew up,
0:02:40 town called Modesto and opened up this,
0:02:44 you know, real estate, just broker’s license.
0:02:47 And I had a small hundred foot office and a phone.
0:02:50 Start calling people, trying to understand the market.
0:02:52 And really, I think my first high came
0:02:54 when I sold my first building.
0:02:56 I called someone and actually,
0:02:57 I needed to grow my office.
0:02:58 And I called this person.
0:03:00 I said, hey, what if I lease your office?
0:03:01 Will you let me sell your office?
0:03:04 He said, yes, if you lease it, I’ll let you sell it.
0:03:05 So if you become a tenant,
0:03:06 you could be the broker.
0:03:07 You got it.
0:03:09 I never had a minute.
0:03:11 Was that planned or it just happened to be that way?
0:03:12 No, I don’t know if it was planned.
0:03:13 It was kind of just like, you know,
0:03:16 sometimes you never ask, you never know, right?
0:03:16 Right.
0:03:18 And so at that moment I had asked,
0:03:19 it was an older couple
0:03:21 and I sold the building for them quite fast
0:03:23 and I made 60 grand.
0:03:25 And from there I started, you know,
0:03:27 doing real estate brokers.
0:03:28 I started understanding
0:03:31 and I started meeting different tenants in retail.
0:03:33 You know, I was working for Jack in the Box, AutoZone,
0:03:36 DPRCO, different tenants that I would help
0:03:37 get them spaces for.
0:03:40 Now tell me, because today you’re a real estate developer,
0:03:42 but it’s interesting, you started as a broker.
0:03:45 I think many brokers want to become developers
0:03:49 and it rarely gets to the scale that you got to, right?
0:03:50 What were you like as a broker?
0:03:52 Are you just dialing for dollars?
0:03:52 What were you doing?
0:03:55 I mean, yeah, gosh, man, I would be knocking on doors.
0:03:56 I’d be calling.
0:03:58 You know, I learned early on
0:03:59 that if you don’t ask, you don’t get, right?
0:04:02 And so it was no real like shame in my game.
0:04:04 It was kind of like, you know, it was just like,
0:04:05 hey, I’ll ask.
0:04:10 And so, you know, oftentimes we’d be going to anywhere,
0:04:11 whether we go to an Indian party,
0:04:12 whether we go anywhere, I was growing up.
0:04:13 What do you do?
0:04:14 How do you do it?
0:04:16 Oh, you own, you’re a doctor.
0:04:18 Oh, you own this office building.
0:04:19 Would you ever sell it?
0:04:19 Right.
0:04:20 No, but I’ll lease it.
0:04:21 Great.
0:04:22 I’ll take on the leasing business.
0:04:24 Anything to, anything at that point
0:04:27 to build up my CV or resume up
0:04:29 of things that I was able to get done.
0:04:29 Right.
0:04:33 And so I fell kind of into a deal
0:04:35 with a jack-in-the-box operator.
0:04:37 And, you know, this person was probably
0:04:39 the first person in my life that ever,
0:04:41 you know, I would call, I thought was a mentor
0:04:43 or even like a father figure.
0:04:43 Okay.
0:04:45 My dad was a little bit different
0:04:48 and I kind of drank the Kool-Aid.
0:04:50 And so I started doing really well
0:04:51 because what would happen is
0:04:52 I’d have this relationship
0:04:54 with these jack-in-the-box guys
0:04:55 and I’d know where they want to go.
0:04:57 I didn’t have the money to do it myself
0:04:59 because I was just starting out.
0:05:00 So what I would do is
0:05:02 I would basically do development in a box.
0:05:05 I would go and I would find the property.
0:05:06 I’d get the tenant
0:05:08 and I’d go to another developer
0:05:09 and I’d say,
0:05:11 hey, give me the buy, sale, lease commission.
0:05:13 Give me all three.
0:05:14 I’ll manage the process for you.
0:05:16 Then as time went on,
0:05:18 I started to manage their construction process.
0:05:20 I didn’t have the money to do it,
0:05:21 but I was doing it.
0:05:24 And that went really well for me
0:05:27 until the jack-in-the-box operator,
0:05:29 you know, basically didn’t pay their payroll taxes,
0:05:31 you know, kind of fell in dire straits.
0:05:34 And, you know, a week before,
0:05:35 maybe let’s say three days before
0:05:37 we’re supposed to close a big deal
0:05:39 and I was going to make my first 10 million,
0:05:41 not even my first million.
0:05:42 Just on the commissions
0:05:44 from the buy, sell, lease side?
0:05:45 So what had happened was
0:05:46 we started buying property
0:05:49 with these guys buying it.
0:05:50 So in essence, we would buy it,
0:05:51 we’d do all the work
0:05:53 and then they would buy it later on
0:05:54 using their lines of credits.
0:05:54 Right.
0:05:56 And so what happened was
0:05:58 this person that we were developing for
0:06:00 was the largest jack-in-the-box franchisee
0:06:00 in Sacramento.
0:06:02 And then what ended up happening was
0:06:03 they didn’t pay their payroll taxes.
0:06:04 But you had bought it on spec
0:06:06 thinking this guy’s,
0:06:07 he’s good for it.
0:06:08 He’ll take it off me.
0:06:09 Yeah.
0:06:10 And I still remember, it’s funny,
0:06:11 I would sit there at night
0:06:13 and, you know, there’s an old rule that,
0:06:13 you know, people said,
0:06:14 never count your money.
0:06:15 But man, I would be looking
0:06:16 at that sheet every night.
0:06:17 Yeah, baby.
0:06:19 Let’s go.
0:06:21 You know, because you’re taking a big risk.
0:06:21 Yeah.
0:06:22 You know, at that time,
0:06:23 I didn’t understand the risk.
0:06:25 But, you know, it was a big risk.
0:06:26 I look back now and I say,
0:06:27 wow, that was, you know,
0:06:30 I think I borrowed like $15 million.
0:06:31 How were you able to borrow
0:06:32 $15 million at the time?
0:06:34 I mean, it was all private lending.
0:06:36 You know, I went to private lenders.
0:06:38 You know, when you come out of school,
0:06:40 you get a W-2 or 1099.
0:06:40 I was 1099.
0:06:41 I was a broker.
0:06:43 Banks didn’t underwrite it.
0:06:43 Right.
0:06:44 The banks looked at it and said,
0:06:47 oh, you went from this to this?
0:06:47 Wow.
0:06:49 We don’t understand.
0:06:50 We can’t understand this.
0:06:50 We don’t understand it.
0:06:51 Right.
0:06:52 And so, you know,
0:06:53 as they don’t understand it,
0:06:53 then all of a sudden,
0:06:54 you know, you’re like,
0:06:55 oh, okay, well,
0:06:57 where’s my options?
0:06:59 And so we had, you know,
0:07:01 we had everything kind of lined up
0:07:02 and, you know,
0:07:03 literally three days before
0:07:04 we’re supposed to close
0:07:07 and we were getting ready to close
0:07:08 and, you know,
0:07:09 this person’s not on their phone.
0:07:11 This person would talk to me daily.
0:07:12 They would call me.
0:07:13 They were the first person in my life
0:07:14 to ever call me son.
0:07:14 Right.
0:07:15 You know, I was,
0:07:17 I drank the Kool-Aid harder than anybody.
0:07:19 And then, you know,
0:07:20 this happened where they,
0:07:22 where they ended up getting in trouble
0:07:23 and, you know, kaput.
0:07:25 The deals kind of got soft.
0:07:26 Right.
0:07:27 How many did you have?
0:07:28 It was 10 total.
0:07:29 So you committed to 10.
0:07:31 You borrowed almost $15 million.
0:07:33 You’re ready to make
0:07:34 your first 10 million bucks.
0:07:36 You’re looking at the sheet every night.
0:07:37 Three days before,
0:07:39 the guy gets popped
0:07:40 for whatever he was doing
0:07:42 outside of what you guys
0:07:42 were doing together.
0:07:43 Yeah.
0:07:45 And now you owe this money.
0:07:46 And there’s no way out
0:07:47 because you signed it.
0:07:49 You’re under contract, basically.
0:07:50 No, we bought the property
0:07:51 and we owed the debt.
0:07:52 You sent him the money.
0:07:52 Yeah, all right.
0:07:54 We spent the money.
0:07:54 It was there.
0:07:55 And so, you know,
0:07:56 I still remember, you know,
0:07:58 and this is where the lows start, right?
0:07:59 I still remember, you know,
0:08:00 going home to my wife
0:08:01 and, you know,
0:08:03 three days I cried.
0:08:04 You know, literally crying.
0:08:06 Grown man, just like tears
0:08:07 coming out of my eyes.
0:08:09 And my wife says,
0:08:09 you know, look,
0:08:10 you always like to work out, Sanjeev.
0:08:12 Like, go to the gym.
0:08:13 Get out of the house.
0:08:14 Go to the gym.
0:08:17 And so, normally I used to go to the gym
0:08:19 at like 9, 10 o’clock at night.
0:08:21 And there’d be two, three guys
0:08:22 in there, you work out.
0:08:22 You know, the gym was always
0:08:23 an interesting atmosphere
0:08:25 because you have no clue
0:08:26 who the other guy is.
0:08:26 Right.
0:08:28 He could be, you know, homeless.
0:08:28 He could be a billionaire.
0:08:30 You know, but he asks you,
0:08:31 hey, what do you do in the gym?
0:08:31 Right.
0:08:32 Hey, bro, let me,
0:08:34 can I get a spot?
0:08:34 Let me help you out.
0:08:36 So, there was a guy
0:08:37 I used to work out with
0:08:38 at nighttime
0:08:39 and there’d be very few of us
0:08:39 in the gym.
0:08:40 And so, we would always say,
0:08:41 hey, how are you?
0:08:42 We’d talk about life.
0:08:42 But we had,
0:08:44 I generally had no clue
0:08:44 who he was
0:08:45 or what he did.
0:08:46 And so,
0:08:49 this random day we walk in,
0:08:50 I walk in the gym
0:08:51 at 2 o’clock
0:08:52 and this guy’s standing
0:08:53 behind the front desk.
0:08:55 I look at him
0:08:55 and I say,
0:08:57 what are you doing, Dave,
0:08:57 behind the desk?
0:08:59 He said,
0:09:00 oh, come into my office.
0:09:01 You got an office here?
0:09:02 So, he was a manager?
0:09:03 He owned the place?
0:09:04 He owned the place.
0:09:04 He was the owner
0:09:05 and he’s actually said,
0:09:06 hey, I’m trying
0:09:06 to sell this place.
0:09:09 All right.
0:09:09 So, I’ve built
0:09:10 a few companies
0:09:11 that have made
0:09:13 a few million dollars a year
0:09:13 and I’ve built
0:09:14 two companies
0:09:15 that have made
0:09:15 tens of millions
0:09:16 of dollars a year.
0:09:17 And so,
0:09:17 I have a little bit
0:09:18 of experience
0:09:19 launching,
0:09:19 building,
0:09:21 creating new things.
0:09:23 And I actually
0:09:23 don’t come up
0:09:24 with a lot of
0:09:25 original ideas.
0:09:25 Instead,
0:09:26 what I’m really,
0:09:27 really good at,
0:09:29 what my skill set is,
0:09:30 is researching
0:09:31 different ideas,
0:09:32 different gaps
0:09:32 in the market
0:09:34 and reverse engineering
0:09:34 companies.
0:09:35 And I didn’t invent
0:09:36 this, by the way.
0:09:36 We had this guy,
0:09:37 Brad Jacobs.
0:09:37 We talked to him
0:09:38 on the podcast.
0:09:39 He started like
0:09:39 four or five
0:09:40 different publicly
0:09:40 traded companies
0:09:41 worth tens of
0:09:41 billions of dollars each.
0:09:43 He actually is the one
0:09:43 who I learned
0:09:44 how to do this from.
0:09:45 And so,
0:09:46 with the team at HubSpot,
0:09:47 we put together
0:09:48 all of my research
0:09:49 tactics,
0:09:49 frameworks,
0:09:50 techniques
0:09:51 on spotting
0:09:52 different opportunities
0:09:53 in the market,
0:09:54 reverse engineering
0:09:54 companies,
0:09:55 and figuring out
0:09:56 exactly where
0:09:57 opportunities are
0:09:58 versus just coming up
0:09:59 with a random silly idea
0:10:00 and throwing it
0:10:00 against the wall
0:10:01 and hoping that it sticks.
0:10:02 And so,
0:10:03 if you want to see
0:10:03 my framework,
0:10:05 you can check it out.
0:10:05 The link is below.
0:10:06 in the YouTube description.
0:10:09 I grew up bodybuilding
0:10:10 at a young age
0:10:11 and so I was always,
0:10:11 you know,
0:10:12 very fascinated
0:10:13 by the fitness business.
0:10:14 I was a trainer
0:10:15 when I was in college
0:10:16 and, you know,
0:10:16 for me,
0:10:17 it was like,
0:10:18 oh my gosh,
0:10:18 you know,
0:10:19 and I asked him,
0:10:19 I said,
0:10:20 does it make money?
0:10:21 And he says,
0:10:22 yeah,
0:10:23 it nets $30,000 a month.
0:10:24 Oh,
0:10:25 quickly I’m starting
0:10:25 to think,
0:10:25 all right,
0:10:27 I can do my real estate,
0:10:28 I can buy this gym,
0:10:29 I can do all these things.
0:10:30 This is still
0:10:30 while you’re on the hook
0:10:31 for the jack-in-the-boxes.
0:10:32 I am all the way
0:10:32 on the hook.
0:10:36 And how long
0:10:36 of a period
0:10:37 did you have
0:10:37 to like,
0:10:38 kind of resolve this?
0:10:39 What was your plan?
0:10:40 You’re going to start
0:10:40 opening up jack-in-the-boxes?
0:10:41 What were you going to do?
0:10:43 I couldn’t open up jack-in-the-boxes
0:10:44 because I went to
0:10:45 jack-in-the-box corporate
0:10:46 and I had recorded
0:10:46 a deed restriction
0:10:47 on these properties.
0:10:48 So basically,
0:10:49 I recorded something
0:10:50 before closing.
0:10:50 Again,
0:10:51 you learn later on in life.
0:10:52 Right.
0:10:52 Never do that,
0:10:53 but you know,
0:10:56 and so I was kind of stuck
0:10:56 with this.
0:10:57 It could only be that.
0:10:58 It could only be that.
0:10:59 And that was what the,
0:11:00 it was a random deed restriction
0:11:01 that we had created
0:11:03 and I couldn’t get it off
0:11:04 because the guy was still alive.
0:11:05 Yeah.
0:11:06 So I couldn’t quit claiming
0:11:07 I couldn’t do certain things.
0:11:08 It was kind of a
0:11:09 very unique situation.
0:11:10 Right.
0:11:11 And so,
0:11:11 you know,
0:11:12 so in essence,
0:11:13 I bought the gyms
0:11:14 to pay for my real estate.
0:11:15 And then,
0:11:16 you know,
0:11:17 the first month in,
0:11:18 you know,
0:11:18 I still remember.
0:11:19 Wait,
0:11:19 so how’d you buy the gym?
0:11:20 So the guy says,
0:11:22 it’s netting 30 grand a month.
0:11:22 The guy says,
0:11:23 I’m netting 30 grand a month.
0:11:24 I need to get out of this.
0:11:25 He says,
0:11:25 you know,
0:11:27 I have a big tax bill
0:11:28 so I don’t want to get paid up front.
0:11:29 How about you
0:11:30 take it on
0:11:31 and pay me over time?
0:11:32 Okay.
0:11:32 Oh,
0:11:33 okay.
0:11:33 Pay an installment.
0:11:34 It’s perfect.
0:11:34 All right.
0:11:35 I went home.
0:11:36 I asked my wife.
0:11:36 I said,
0:11:37 you know,
0:11:37 hey,
0:11:37 I want to buy the gym
0:11:38 we work out at.
0:11:39 And she laughed,
0:11:39 you know,
0:11:40 no way.
0:11:41 And then 30 days later,
0:11:41 sure enough,
0:11:43 we bought the gym.
0:11:43 Right.
0:11:44 And needless to say,
0:11:45 she doesn’t laugh at anything
0:11:46 I tell her we’re going to do now.
0:11:47 She’s,
0:11:47 you know,
0:11:48 so about the gym
0:11:49 and 30 days in,
0:11:50 you know,
0:11:51 I go to the bookkeeper
0:11:51 and I’m like,
0:11:52 hey,
0:11:52 where’s my check?
0:11:53 Yeah.
0:11:54 Where’s the 30 grand?
0:11:55 Where’s the money at?
0:11:55 Let’s go.
0:11:57 And she says,
0:11:57 actually,
0:11:58 you need to write a check
0:11:59 for $22,000.
0:12:00 I said,
0:12:00 what?
0:12:02 $22,000?
0:12:03 How?
0:12:04 Right.
0:12:05 I was going to make 30,
0:12:06 at least give me 15.
0:12:07 You know,
0:12:08 and so she just,
0:12:09 she showed me how.
0:12:10 Did you not diligence
0:12:11 the thing at the time?
0:12:11 I didn’t understand
0:12:13 how to read a profit,
0:12:14 a profit and loss.
0:12:15 There’s a difference
0:12:16 between cash and accrual
0:12:17 and all these things
0:12:18 that you show
0:12:18 and,
0:12:19 you know,
0:12:20 he had slimmed it down
0:12:21 not to show every manager.
0:12:21 Right.
0:12:22 He showed it,
0:12:23 you know,
0:12:23 and not in a bad way.
0:12:24 He just showed it the way
0:12:25 that it could have been.
0:12:25 He saw it.
0:12:26 Yeah.
0:12:27 It was what he saw.
0:12:28 It wasn’t what was actually there.
0:12:30 And how old are you
0:12:30 at this time,
0:12:30 roughly?
0:12:31 I am 28.
0:12:32 This is 2008.
0:12:34 And there was a period of time,
0:12:35 so the way my wife
0:12:35 tells the story,
0:12:36 so we’re brother,
0:12:37 you’re my brother-in-law.
0:12:38 The way my wife
0:12:38 tells the story is
0:12:40 you start dating her sister.
0:12:41 Yep.
0:12:42 And you’re this guy
0:12:43 that comes out of nowhere.
0:12:45 You are like
0:12:47 this hotshot real estate guy,
0:12:48 young, right?
0:12:49 Like I think you were pretty-
0:12:50 25, 26.
0:12:51 You were 25, 26
0:12:52 and you were making
0:12:52 millions of dollars
0:12:52 as a broker,
0:12:54 which is not common,
0:12:54 correct?
0:12:55 Like you must have been
0:12:56 a top, top performer.
0:12:57 Is that fair?
0:12:57 I mean, I don’t know much
0:12:58 about the broker world.
0:12:59 Yeah, at that time I was.
0:12:59 I mean, you know.
0:13:01 And you’re buying her nice gifts
0:13:03 and you’re living this great life.
0:13:04 And when the jack-of-the-box thing
0:13:04 happened,
0:13:05 at some point,
0:13:06 I don’t know if you’ve got
0:13:07 to this part of the story,
0:13:08 at some point you’re like,
0:13:09 you have to move back in
0:13:11 to the parents’ house.
0:13:12 You have to move back
0:13:13 into your childhood bedroom.
0:13:13 Has that already happened
0:13:14 or am I jumping the gun?
0:13:15 No, this actually,
0:13:16 so what happened was,
0:13:17 you know, basically,
0:13:18 you know,
0:13:19 long story short,
0:13:20 we’re paying for the real estate.
0:13:22 I have to go become
0:13:24 the general manager of the store
0:13:25 and we didn’t have enough money
0:13:26 to pay everybody
0:13:27 so my wife ends up
0:13:29 becoming the Zumba instructor.
0:13:31 I didn’t know this.
0:13:33 And so she’s teaching like,
0:13:33 you know,
0:13:34 she must have been teaching
0:13:35 30, 40 classes a week,
0:13:36 maybe more.
0:13:37 Oh my God.
0:13:38 And she was great at it
0:13:39 but, you know,
0:13:40 we’re just at the gym
0:13:40 all day long
0:13:41 and in order to pay
0:13:42 for our stuff,
0:13:42 you know,
0:13:44 we went from a Range Rover
0:13:44 to a Ford Fusion.
0:13:45 Right.
0:13:48 And we got out of our house
0:13:48 to pay for,
0:13:49 again,
0:13:49 we’re paying the bills.
0:13:50 We were always like,
0:13:51 let’s pay.
0:13:51 Right.
0:13:53 And so we then ended up
0:13:56 at my childhood high school room
0:13:57 and I still remember this
0:13:58 the first night
0:14:00 and my wife was
0:14:00 a little bit upset.
0:14:01 You know,
0:14:02 we went from this standard
0:14:02 down to this,
0:14:03 you know,
0:14:03 naturally,
0:14:04 you know,
0:14:06 it was a very big
0:14:06 culture shock,
0:14:07 right?
0:14:08 And what I didn’t tell you
0:14:09 was that in order for us
0:14:10 to buy the gyms
0:14:12 and not a lot of people know,
0:14:13 I had to come up
0:14:14 with a little down.
0:14:16 My wife pawned her wedding ring
0:14:18 for us to buy the gyms.
0:14:20 So she’s a ride or die.
0:14:21 When you talk about
0:14:22 a ride or die,
0:14:23 like that girl’s been
0:14:24 with me through it all.
0:14:25 And so,
0:14:25 by the way,
0:14:26 are these,
0:14:27 because I know her
0:14:28 but I don’t know her
0:14:29 back then,
0:14:31 her idea,
0:14:31 your idea,
0:14:32 you’re like,
0:14:32 hey,
0:14:32 you know,
0:14:34 if only there was a way
0:14:35 we could come up
0:14:35 with this one,
0:14:36 how did that conversation go?
0:14:37 I gotta know.
0:14:38 It was definitely
0:14:39 not her idea.
0:14:40 But,
0:14:40 you know,
0:14:41 she got on board
0:14:42 with it fairly fast
0:14:44 and she understood
0:14:46 that if we fail,
0:14:47 we fail together
0:14:49 and if we feast,
0:14:49 we feast together.
0:14:50 Right.
0:14:51 And so,
0:14:51 you know,
0:14:51 at that point
0:14:52 we were a feast
0:14:52 or famine,
0:14:52 right?
0:14:53 We’re either gonna be able
0:14:54 to try to figure out
0:14:55 how to eat
0:14:56 or we’re starving here.
0:14:57 And,
0:14:57 you know,
0:14:58 and in life,
0:14:58 you know,
0:14:59 it was a big up
0:15:00 and a big down
0:15:00 because,
0:15:00 you know,
0:15:01 you’re 27,
0:15:02 we’re driving
0:15:03 a brand new Range Rover,
0:15:03 we’re living
0:15:04 in an $800,000 house.
0:15:06 This is amazing,
0:15:06 you know,
0:15:07 she’s got a nice fancy,
0:15:09 and everything
0:15:09 on the outside
0:15:10 looked great.
0:15:11 On the inside,
0:15:12 we owe all these people money.
0:15:14 Who do you go to,
0:15:14 by the way,
0:15:15 when this stuff’s going down?
0:15:16 Because you didn’t,
0:15:17 you’re not a big mentor,
0:15:18 network guy,
0:15:19 like you’ve always been
0:15:20 a lone wolf
0:15:21 as long as I’ve known you,
0:15:21 really.
0:15:23 When shit’s hitting the fan,
0:15:24 obviously you’re telling your wife,
0:15:25 but how did you try
0:15:26 to get out of the pickle?
0:15:27 Because that’s an unbelievable
0:15:28 amount of money to,
0:15:28 oh,
0:15:29 you owed $15 million.
0:15:31 I mean,
0:15:32 and you know,
0:15:32 honestly,
0:15:33 I was crying
0:15:33 in the fetal position
0:15:34 at home.
0:15:35 My wife just literally said,
0:15:36 get out of here.
0:15:37 Get up.
0:15:38 I have this story
0:15:39 I tell my kids,
0:15:41 the light bulb story,
0:15:41 right?
0:15:43 And what it is,
0:15:44 is I’ll plug in a light bulb
0:15:45 for my kids,
0:15:45 a lamp,
0:15:48 and I’ll just turn the bulb
0:15:49 a hair,
0:15:51 and the bulb turns off.
0:15:53 And I ask my kids,
0:15:53 I said,
0:15:54 what does this mean to you?
0:15:55 And my kids look at me,
0:15:55 they’re young.
0:15:56 Oh,
0:15:56 I don’t know.
0:15:58 It means that success
0:15:59 is just this much far away.
0:16:01 The difference between
0:16:02 a successful light
0:16:03 and a broken light
0:16:05 is a hair.
0:16:06 And so,
0:16:07 I always had that
0:16:08 kind of mentality
0:16:09 that,
0:16:09 you know,
0:16:10 I’m almost there.
0:16:11 I might have not
0:16:12 always been there,
0:16:13 but my mentality,
0:16:14 oh,
0:16:14 baby,
0:16:15 I was let’s go.
0:16:15 I mean,
0:16:16 you know,
0:16:16 that was,
0:16:18 and so we lay down
0:16:18 at night,
0:16:19 and we turn the light off
0:16:20 when we’re the first night back,
0:16:21 and we look up,
0:16:23 and in my age group,
0:16:24 I’m a little older than you,
0:16:25 we used to do these stars
0:16:27 and like stickers
0:16:28 on the ceiling.
0:16:28 The glow in the dark.
0:16:29 You turn it off,
0:16:31 and the whole world appears,
0:16:33 and we turn off the light,
0:16:34 and we hadn’t stayed
0:16:34 in this room for,
0:16:35 you know,
0:16:36 forever.
0:16:36 We just,
0:16:37 we had our own place,
0:16:39 and we both just start
0:16:40 laughing out loud,
0:16:42 and I told her,
0:16:42 you know,
0:16:42 I said,
0:16:43 give me nine months.
0:16:45 Give me nine months,
0:16:46 I’ll figure it out,
0:16:47 and,
0:16:48 you know,
0:16:50 the switch kind of clicked
0:16:51 for me then.
0:16:52 You made a promise.
0:16:53 I made a promise.
0:16:54 I got to stick to it.
0:16:55 You know,
0:16:56 it’s almost like when people
0:16:58 take a weight loss challenge.
0:16:58 Right.
0:16:58 Right.
0:17:00 I’ve got a reason to do it.
0:17:01 This is my timeline.
0:17:02 Let’s do it.
0:17:04 But you have no plan yet,
0:17:05 or you have a plan,
0:17:05 or not?
0:17:05 Well,
0:17:06 you know,
0:17:07 I said I’m going to grow the gyms.
0:17:08 Yeah.
0:17:08 Right.
0:17:11 We started to turn it around,
0:17:12 the first one,
0:17:13 and then we’re like,
0:17:15 let’s open up a second one.
0:17:16 And,
0:17:17 you know,
0:17:18 we ended up being able to
0:17:20 build a second store.
0:17:21 It took us a long time.
0:17:22 It took us a little bit.
0:17:23 It took us about a year.
0:17:24 And,
0:17:25 you know,
0:17:27 we just started working harder.
0:17:28 And honestly,
0:17:28 like,
0:17:29 I just,
0:17:29 you know,
0:17:30 I would go to the gym
0:17:31 if we needed to pay a bill.
0:17:32 I would go to the gym
0:17:33 and sell memberships myself.
0:17:34 I had some nights work
0:17:35 till midnight,
0:17:36 till we closed.
0:17:36 You know,
0:17:38 we were 24 hour in the first store,
0:17:39 and so I would just,
0:17:41 if I needed to get it,
0:17:42 we had to go get it.
0:17:44 And we lived very,
0:17:44 very,
0:17:45 you know,
0:17:47 within our means.
0:17:48 You know,
0:17:48 we would,
0:17:49 I still remember
0:17:51 we would share food
0:17:53 for probably about five years.
0:17:54 We wouldn’t go anywhere
0:17:55 and eat,
0:17:55 you know,
0:17:57 two meals.
0:17:57 Right.
0:17:58 There would be one meal
0:17:59 she would eat,
0:18:00 whatever’s left,
0:18:00 I would eat.
0:18:01 And,
0:18:02 you know,
0:18:03 and vice versa some nights,
0:18:04 you know,
0:18:04 don’t get me wrong.
0:18:05 There was times when,
0:18:06 you know,
0:18:07 I ate first,
0:18:08 but most of the time
0:18:10 it was sharing
0:18:10 and trying to get there.
0:18:11 And so,
0:18:12 as we started to build
0:18:13 the gyms up,
0:18:15 that’s when we started
0:18:15 getting back to like,
0:18:16 okay,
0:18:17 we’re paying everybody,
0:18:18 good things are happening,
0:18:19 let’s go.
0:18:20 Could you not just
0:18:20 declare bankruptcy
0:18:22 with the jack-in-the-box
0:18:22 situation to at least
0:18:24 get to zero again?
0:18:25 I could have
0:18:26 and that may have
0:18:27 been the smarter path.
0:18:28 You know,
0:18:30 I went to law school,
0:18:30 so,
0:18:30 you know,
0:18:31 my law school professor
0:18:32 was always like,
0:18:32 you know,
0:18:33 bankruptcy is immoral.
0:18:34 No,
0:18:34 it’s not.
0:18:35 Right.
0:18:35 You know,
0:18:36 but,
0:18:36 but,
0:18:36 you know,
0:18:37 these thoughts
0:18:37 are putting your head
0:18:38 in life that,
0:18:38 you know,
0:18:39 you don’t know
0:18:40 where it came from.
0:18:40 By the way,
0:18:41 spoiler here is,
0:18:43 you end up creating,
0:18:44 I think at one point,
0:18:45 the largest gym chain
0:18:46 in California,
0:18:46 right?
0:18:47 In Northern California.
0:18:48 We were one of the largest,
0:18:48 we were definitely
0:18:50 the largest private operator.
0:18:51 We didn’t have partners,
0:18:52 so we ended up getting
0:18:53 to 82 stores
0:18:56 and we were growing
0:18:56 the business
0:18:57 and we had done
0:18:58 some really smart moves
0:18:59 along the way.
0:19:00 I would option properties,
0:19:01 which we can talk about
0:19:03 and like do certain things
0:19:03 in our leases
0:19:05 that we just started learning
0:19:06 and we built a great culture.
0:19:08 We had almost 2,000 employees
0:19:11 and it was a fun run.
0:19:13 Cutting your sales cycle
0:19:15 in half sounds pretty impossible,
0:19:16 but that’s exactly
0:19:17 what Sandler Training
0:19:18 did with HubSpot.
0:19:20 They used Breeze,
0:19:21 HubSpot’s AI,
0:19:22 tools to tailor
0:19:24 every customer interaction
0:19:24 without losing
0:19:25 their personal touch
0:19:27 and the results
0:19:28 were incredible.
0:19:28 Click-through rates
0:19:30 jumped 25%.
0:19:32 Qualified leads quadrupled
0:19:33 and people spent
0:19:34 three times longer
0:19:35 on their landing pages.
0:19:38 Go to HubSpot.com
0:19:39 to see how Breeze
0:19:40 can help your business grow.
0:19:42 So the brick by brick
0:19:43 is the first one,
0:19:44 the guy basically says,
0:19:45 pay me as you go,
0:19:46 give me a little down payment.
0:19:47 You pawn the wedding ring,
0:19:48 you get the down payment.
0:19:49 Yep.
0:19:50 You turn that gym,
0:19:51 you thought it was profitable,
0:19:53 turns out it really wasn’t,
0:19:54 the cash flow
0:19:54 really wasn’t there.
0:19:56 You start to squeeze it
0:19:57 by working your ass off.
0:19:57 Great.
0:19:59 A year later,
0:20:00 you get the second store.
0:20:01 Give me a sense
0:20:02 because I’ve never owned a gym.
0:20:04 A gym like this,
0:20:05 you know,
0:20:06 what do they,
0:20:07 what do they net?
0:20:07 Like if I go to a,
0:20:08 if I see a gym
0:20:09 around the corner,
0:20:10 I think these were
0:20:11 Gold’s gyms at the time.
0:20:12 Yeah, we went to five
0:20:12 with Gold’s
0:20:13 and then,
0:20:14 and then you created
0:20:14 your own concept.
0:20:15 Then we created
0:20:16 our own concept.
0:20:17 So give me a typical,
0:20:19 like a Gold’s gym.
0:20:21 What do these things make?
0:20:22 Revenue,
0:20:23 profit roughly?
0:20:24 I mean,
0:20:25 it depends on the Gold’s gym.
0:20:26 If you’re in Gold’s gym LA,
0:20:28 which was kind of like the Mecca,
0:20:29 they’re making
0:20:30 eight to 10 million a store,
0:20:31 you know,
0:20:32 and the gym is-
0:20:33 Revenue or?
0:20:34 Gross revenue.
0:20:34 I mean,
0:20:35 gym is a fixed cost business.
0:20:37 Once you’ve paid your employees
0:20:37 and your rent,
0:20:38 your lights,
0:20:39 it doesn’t really go up,
0:20:39 right?
0:20:40 I mean,
0:20:41 what may vary is if you do
0:20:42 personal training,
0:20:43 it may vary on certain services,
0:20:45 but generally it’s a fixed cost business.
0:20:46 So you want to get to
0:20:48 a certain number of members
0:20:49 and then after that,
0:20:51 everything is profit.
0:20:53 And so it’s a higher margin business.
0:20:54 You know,
0:20:54 most people,
0:20:54 you know,
0:20:55 gyms at one point
0:20:57 were 40% profit margin.
0:20:58 Now I’d probably say
0:20:59 they’re closer to 20,
0:21:01 25 because labor has increased
0:21:03 and membership prices
0:21:04 haven’t increased
0:21:05 as much as maybe
0:21:08 they could or should,
0:21:09 but there’s also
0:21:10 a lot of competition,
0:21:10 right?
0:21:12 There’s only so much pie
0:21:14 in every corner
0:21:15 or every other corner
0:21:16 there’s gyms being opened up.
0:21:17 So what did you figure out?
0:21:19 What did you do differently
0:21:20 that let you build
0:21:22 this 82 store chain?
0:21:23 Well,
0:21:23 we started out
0:21:24 as Gold’s Gym operators
0:21:25 and,
0:21:25 you know,
0:21:27 we realized that Gold’s Gym
0:21:28 was a bodybuilder model.
0:21:28 You know,
0:21:29 there was people
0:21:29 that would come in the gym,
0:21:30 they work out
0:21:31 for three hours a day,
0:21:33 heavy protein,
0:21:33 you know,
0:21:34 people are farting,
0:21:36 sitting there for,
0:21:36 you know.
0:21:37 It might be the worst
0:21:38 type of customer to have.
0:21:38 Yeah,
0:21:40 they abuse your weights
0:21:40 and then,
0:21:40 you know,
0:21:41 but they use it,
0:21:42 right?
0:21:43 And then you look,
0:21:43 you know,
0:21:44 you start to look at this model
0:21:45 called Planet Fitness
0:21:46 where they’re signing up
0:21:48 15,000 people
0:21:49 at a low price
0:21:50 and when we were
0:21:51 in the gym business
0:21:52 they were just coming up
0:21:53 and so we went
0:21:54 and saw one
0:21:54 and we said,
0:21:55 man,
0:21:56 this is actually interesting.
0:21:57 They were serving pizza
0:21:58 and bagels,
0:21:59 things that we just
0:22:00 never even like understood
0:22:01 like why.
0:22:02 Now we understand
0:22:03 it’s because people
0:22:04 will come and eat pizza
0:22:05 twice a month
0:22:07 or every week
0:22:07 and they’ll get
0:22:09 their $9.99 worth.
0:22:11 So they were smarter
0:22:11 than most.
0:22:12 They were already
0:22:12 ahead of the game
0:22:15 and we then started
0:22:16 seeing other brands
0:22:16 like we said,
0:22:16 oh,
0:22:16 well,
0:22:17 Gold’s has some good stuff
0:22:18 and so we started
0:22:19 combining the models
0:22:20 to create our own model
0:22:22 and we created
0:22:23 basically a large box
0:22:24 high volume
0:22:25 low price model
0:22:26 with classes
0:22:27 and group training
0:22:28 and we basically
0:22:29 combined Gold’s Gym
0:22:29 and Orange Theory
0:22:30 and a Planet Fitness
0:22:31 all in one
0:22:33 and in that process
0:22:34 we started doing
0:22:35 really well.
0:22:36 Did you figure out
0:22:37 any great insights
0:22:38 along the way
0:22:38 like,
0:22:39 you know,
0:22:40 my first business
0:22:40 was a restaurant business
0:22:41 and restaurant business
0:22:42 location really,
0:22:43 really matters.
0:22:44 One thing we figured
0:22:44 out very quickly
0:22:46 was Chipotle spends,
0:22:47 I don’t know,
0:22:49 $40 million a year
0:22:50 figuring out
0:22:51 the best locations to be.
0:22:52 You could just
0:22:54 go to every,
0:22:55 try to get next
0:22:56 to every Chipotle
0:22:57 is actually just like
0:22:58 now you spend zero
0:22:59 but you get the benefit
0:23:00 of all of their
0:23:01 location scouting,
0:23:01 right?
0:23:02 We figured out
0:23:02 that you could look
0:23:03 at the receipts
0:23:04 and if you understood
0:23:05 how to read the code
0:23:06 you would know
0:23:07 how many customers
0:23:08 this Chipotle gets
0:23:08 versus this one
0:23:09 so I could even compare
0:23:10 within that
0:23:11 which location
0:23:12 is better than the other,
0:23:12 right?
0:23:13 So like we started
0:23:14 getting a little smarter
0:23:14 about how to
0:23:16 play the game better.
0:23:17 Were there any moments
0:23:17 like that for you
0:23:18 in the gym business
0:23:19 that you started
0:23:19 to figure out
0:23:20 maybe how to
0:23:21 pick up members faster
0:23:22 or, you know,
0:23:23 how to take
0:23:24 the average value
0:23:24 of a customer
0:23:25 from $10 a month
0:23:27 to upsell them
0:23:28 in some interesting way?
0:23:29 Any good business
0:23:29 insights from that?
0:23:30 You know,
0:23:30 what we did
0:23:31 was we created
0:23:32 a really unique
0:23:33 referral mechanism
0:23:34 and so what we did
0:23:36 was we realized
0:23:36 people love things
0:23:37 for free,
0:23:37 right?
0:23:38 I mean,
0:23:38 a lot of the people
0:23:39 I’ve heard talk
0:23:40 on your podcast
0:23:40 is like,
0:23:41 give them a deal
0:23:41 that they can’t
0:23:42 ever say no to.
0:23:42 Right.
0:23:44 And I think
0:23:44 that’s always a great
0:23:45 business tool
0:23:46 of keeping the back
0:23:46 of your mind
0:23:47 and you’re starting
0:23:48 anything or doing
0:23:48 anything.
0:23:49 So, you know,
0:23:50 we created this,
0:23:51 me and John,
0:23:53 who’s my COO
0:23:55 and like family to me,
0:23:56 he’s been with me
0:23:56 a long time
0:23:58 and we sat in a room
0:23:58 and we’re talking
0:23:59 back and forth.
0:24:01 what would make
0:24:01 a member
0:24:03 want to refer someone?
0:24:05 And John said,
0:24:06 you know,
0:24:06 jokingly,
0:24:07 give it to him
0:24:08 for free.
0:24:09 You know,
0:24:09 I said,
0:24:10 yes,
0:24:11 that’s what we’re
0:24:11 going to do.
0:24:13 And so we’re like,
0:24:14 how do we do that?
0:24:14 And so we’re like,
0:24:14 all right,
0:24:15 well,
0:24:15 Sean’s paying,
0:24:16 you know,
0:24:17 let’s say this,
0:24:18 for every person
0:24:19 Sean refers that joins,
0:24:20 he could get a dollar
0:24:21 off his dues.
0:24:23 And so in that process,
0:24:25 Sean is $30 a month
0:24:26 or $20 a month.
0:24:27 Sean has to refer
0:24:28 $20 a month
0:24:29 for that $20.
0:24:31 And we found
0:24:32 that our members,
0:24:33 like when we did
0:24:33 our sales pitch,
0:24:34 we said,
0:24:34 hey,
0:24:34 Sean,
0:24:34 you know,
0:24:35 our membership’s
0:24:36 $39.99,
0:24:37 but you can get it
0:24:37 for free.
0:24:39 Would you like to know
0:24:40 how you get it for free?
0:24:41 People would be like,
0:24:41 yeah,
0:24:42 great.
0:24:43 Just refer your friends,
0:24:43 your family,
0:24:44 your coworkers,
0:24:45 anybody you want.
0:24:46 Here’s the pass.
0:24:46 We’re going to write
0:24:47 your name on it,
0:24:47 Sean.
0:24:48 How many passes
0:24:48 do you want?
0:24:49 Sean’s like,
0:24:49 I want,
0:24:50 I want 40
0:24:51 because I’m paying $40.
0:24:52 Right.
0:24:52 Great.
0:24:55 And now when they sign up,
0:24:55 they come in
0:24:56 and give us Sean’s pass.
0:24:58 we would connect it
0:24:58 to their membership.
0:25:00 Sean’s dues would now
0:25:01 go down by a dollar.
0:25:02 It was amazing
0:25:02 what we saw
0:25:03 where people were
0:25:03 so motivated.
0:25:04 Even for a dollar,
0:25:05 that worked.
0:25:07 And it was amazing
0:25:07 for people for even
0:25:08 for like,
0:25:08 you know,
0:25:08 because you’d have
0:25:09 people that would
0:25:11 go down from 40 to zero
0:25:12 and all of a sudden
0:25:13 two people would quit.
0:25:14 so their membership’s
0:25:15 now two bucks.
0:25:16 Who’s the two people?
0:25:17 You know,
0:25:17 and you’re like,
0:25:18 well,
0:25:19 okay.
0:25:19 They start shaking
0:25:20 people down.
0:25:21 They start calling people
0:25:21 and be like,
0:25:22 how did you,
0:25:22 how did you get out
0:25:23 of the gym?
0:25:23 I mean,
0:25:24 I watched it happen
0:25:24 myself.
0:25:25 So we created
0:25:27 this referral concept
0:25:29 that was really good
0:25:30 and,
0:25:30 you know,
0:25:31 that kind of
0:25:32 escalated us.
0:25:33 And then we started
0:25:33 to realize,
0:25:33 look,
0:25:34 we got to,
0:25:36 as we grew the gyms,
0:25:36 right,
0:25:38 we learned what we did
0:25:39 right and we learned
0:25:39 what we did wrong.
0:25:40 For example,
0:25:40 like,
0:25:41 you know,
0:25:42 we would build pools
0:25:43 in some of our gyms.
0:25:43 Well,
0:25:44 there’s nothing wrong
0:25:45 with having a pool,
0:25:46 but the reality is
0:25:46 you’re going to have
0:25:47 two to three,
0:25:48 maybe four people
0:25:48 in at a time.
0:25:49 It’s going to take
0:25:50 10,000 square feet,
0:25:51 right?
0:25:52 6,000 to 10,000 square feet.
0:25:54 That’s a lot of footage
0:25:54 for four people,
0:25:55 right?
0:25:56 And so we started
0:25:57 just realizing
0:25:58 what our model was
0:25:59 as we went forward
0:26:00 and then we just decided,
0:26:00 okay,
0:26:01 we’re going to give
0:26:03 a great value
0:26:04 at a great price
0:26:05 and then we’re going
0:26:06 to incentivize you
0:26:07 to refer people,
0:26:08 right?
0:26:09 And it worked.
0:26:10 So how long did it
0:26:10 take you to get out
0:26:11 of the holes?
0:26:12 So the initial mistake
0:26:13 was big.
0:26:14 Fast forward to 2011,
0:26:15 okay?
0:26:17 I now have 12 gyms
0:26:20 and I’m with Gold’s Gym.
0:26:21 12 Gold’s Gym,
0:26:22 2011,
0:26:24 I had bought
0:26:25 some property
0:26:27 and one property
0:26:28 I had,
0:26:29 I paid $4 million,
0:26:30 okay?
0:26:31 I owed $750.
0:26:32 I’d been paying
0:26:34 them every month
0:26:35 at 13%
0:26:36 for three years.
0:26:38 And so I go
0:26:38 to this lender,
0:26:39 I actually went
0:26:39 to high school
0:26:40 with this guy’s
0:26:41 granddaughter
0:26:41 and they were
0:26:42 good old boys
0:26:43 from where I grew up,
0:26:44 you know,
0:26:46 and I went to them
0:26:46 and I said,
0:26:47 hey,
0:26:47 look,
0:26:49 if I give you $50,000
0:26:50 and for me,
0:26:51 $50,000 at that time
0:26:53 was all I had,
0:26:53 right?
0:26:55 Will you rewrite my note
0:26:56 and give me another year
0:26:57 and change my interest rate?
0:26:58 Because I’m now starting
0:26:59 to climb up
0:26:59 on the cash,
0:27:00 right?
0:27:02 And my sales,
0:27:03 I have 12 gyms,
0:27:03 they’re all doing well
0:27:05 and so the guy says,
0:27:05 sure,
0:27:06 Chopra,
0:27:07 bring us a $50,000
0:27:09 cashier’s check tomorrow.
0:27:10 I said,
0:27:11 okay,
0:27:11 let me have my lawyer
0:27:12 draft up a document.
0:27:14 You don’t trust us,
0:27:14 Chopra?
0:27:15 You need a lawyer?
0:27:18 Yeah,
0:27:18 again,
0:27:19 no mentor,
0:27:20 no coach.
0:27:21 Go,
0:27:23 get the $50,000
0:27:24 cashier’s check,
0:27:24 bring it in,
0:27:25 put it on their desk.
0:27:26 Two weeks later,
0:27:27 I get a foreclosure notice.
0:27:29 Now,
0:27:30 call them,
0:27:30 what’s going on?
0:27:31 Say,
0:27:31 oh,
0:27:32 we think this property’s worth
0:27:34 $4 million.
0:27:35 So,
0:27:37 we’re going to take it from you.
0:27:39 Whoa.
0:27:40 So,
0:27:41 in the initial time,
0:27:43 I start calling around
0:27:44 and then I go to Gold’s Gym
0:27:45 the next week,
0:27:45 I go,
0:27:47 and the guy has now passed away,
0:27:48 but he’s the president
0:27:49 of Gold’s Gym at the time
0:27:50 and I go in
0:27:51 and there’s this big
0:27:52 Gold’s Convention every year,
0:27:53 whether it was Vegas,
0:27:53 LA,
0:27:54 San Diego,
0:27:54 it was at the time
0:27:55 I was in Vegas.
0:27:56 I still remember
0:27:57 I went and met with them
0:27:57 and I said,
0:27:57 hey,
0:27:57 look,
0:27:58 I’ve opened up 12 stores
0:27:59 in three years.
0:28:00 You know?
0:28:02 I’d like to open up 50.
0:28:05 And he laughed.
0:28:07 I’m my favorite.
0:28:08 You can’t open up 50.
0:28:10 We can’t even open up 50.
0:28:12 He said,
0:28:12 but look,
0:28:13 I’ll do you a favor.
0:28:14 I said,
0:28:15 you can have,
0:28:16 open up a gym
0:28:17 for every time
0:28:18 you have $1 million
0:28:19 in the bank.
0:28:20 So,
0:28:20 you want to open up 50?
0:28:22 Show me 50 million.
0:28:23 Remember,
0:28:24 50,000 for me was,
0:28:25 ooh.
0:28:26 So,
0:28:28 I had this franchise agreement
0:28:30 and so I called this lawyer
0:28:31 really trying to save
0:28:32 the property,
0:28:32 right?
0:28:33 I called somebody
0:28:34 I knew from law school
0:28:35 and said,
0:28:35 hey,
0:28:35 man,
0:28:36 I got this property,
0:28:37 you know,
0:28:38 can I sue the lender?
0:28:39 What can I do?
0:28:39 And we’re not really
0:28:41 in the lawsuit type of thing
0:28:42 at that point.
0:28:42 so,
0:28:44 he said,
0:28:44 file bankruptcy.
0:28:45 I said,
0:28:46 no,
0:28:48 tomorrow I can’t do it.
0:28:50 And then we started
0:28:51 looking at the benefits
0:28:51 at the time.
0:28:52 We were paying everybody
0:28:53 and,
0:28:54 you know,
0:28:55 long story short,
0:28:56 we ended up filing
0:28:56 Chapter 11.
0:28:58 We were able to rebrand.
0:28:59 We paid everybody
0:29:01 100 cents on the dollar
0:29:01 that was secured
0:29:03 and we started growing
0:29:04 the gyms after that.
0:29:06 And in the process,
0:29:08 we reorganized our life.
0:29:11 We paid all the people,
0:29:12 all the 15 million
0:29:12 we owed,
0:29:13 we paid with interest.
0:29:16 But that also built me
0:29:16 on the next round
0:29:17 that we’ll talk about,
0:29:18 right?
0:29:20 I was very,
0:29:20 like some of those lenders
0:29:22 are still great friends
0:29:22 to today
0:29:23 where I can pick up the phone
0:29:24 and call and say,
0:29:24 hey,
0:29:26 we’re from the Bay Area,
0:29:26 right?
0:29:26 Like,
0:29:27 so I call them and say,
0:29:27 hey,
0:29:28 can I get a loan?
0:29:29 I just called one
0:29:31 and they said,
0:29:31 yeah,
0:29:31 we’ll do it for you
0:29:32 in a heartbeat.
0:29:33 You don’t need anything?
0:29:33 No,
0:29:34 we know.
0:29:35 You stood behind.
0:29:36 And so,
0:29:37 you know,
0:29:38 so we started building the gyms
0:29:39 and we started building
0:29:40 more gyms
0:29:41 and then really we had
0:29:42 no real estate
0:29:42 at this point.
0:29:43 We had sold our house,
0:29:44 we had sold our cars,
0:29:45 we just had gyms.
0:29:47 We were just a gym operator.
0:29:50 And I think by 2015,
0:29:52 we’d gotten up to about
0:29:53 33 stores
0:29:55 and
0:29:58 decided to tell my wife,
0:29:58 like,
0:29:59 I want to get back
0:29:59 into real estate.
0:30:00 and,
0:30:01 but I didn’t have the,
0:30:02 I didn’t have the seed capital.
0:30:02 Real estate was always
0:30:04 capital intensive.
0:30:05 And so,
0:30:06 I looked through my portfolio
0:30:07 and sure enough,
0:30:07 I remembered,
0:30:09 I optioned that second
0:30:10 gym in Oakdale.
0:30:11 So,
0:30:12 I basically
0:30:14 used that option
0:30:15 to buy
0:30:16 the center
0:30:18 and then I sold it
0:30:18 to someone else
0:30:19 based on my new lease.
0:30:20 Sorry,
0:30:21 so explain how this works.
0:30:21 So,
0:30:23 if I’ve never done real estate,
0:30:24 I understand how this option,
0:30:25 buy,
0:30:25 sell,
0:30:26 what do you mean?
0:30:26 So,
0:30:27 in our lease,
0:30:28 we put this option,
0:30:29 let’s say you’re Mr. Seller.
0:30:29 Right.
0:30:30 And we say,
0:30:30 Mr. Seller,
0:30:32 we have the right to buy this at.
0:30:33 We’ll rent it for now.
0:30:33 Correct.
0:30:34 But we have the right to buy
0:30:35 at a defined price.
0:30:36 Correct.
0:30:36 Okay.
0:30:37 At this defined time.
0:30:38 Okay.
0:30:39 And,
0:30:41 in order for us to do that,
0:30:41 we just have to tell you
0:30:42 we’re buying it
0:30:43 and we have 60 days,
0:30:44 90 days to close.
0:30:45 Right.
0:30:46 So,
0:30:47 we knew there was a buyer
0:30:49 who wanted to buy gyms
0:30:50 and do other stuff
0:30:51 in the market.
0:30:52 Broker approached us
0:30:52 and said,
0:30:52 hey,
0:30:53 would you sell this?
0:30:54 They didn’t know
0:30:54 I didn’t own it.
0:30:56 They said,
0:30:57 would you sell it?
0:30:57 And I said,
0:30:57 actually,
0:30:58 you know,
0:30:59 and so we had optioned that
0:30:59 at like,
0:31:00 I think it was like
0:31:01 three or four million bucks.
0:31:03 We sold it at seven million.
0:31:03 And so,
0:31:05 you knew risk-free in a way
0:31:07 because you have the option
0:31:08 to buy at a defined price.
0:31:09 You already know
0:31:10 there’s a buyer lined up.
0:31:10 So,
0:31:12 you’re not speculating as much
0:31:12 as long as you believe
0:31:13 that they would close,
0:31:14 that they would actually
0:31:15 buy the thing.
0:31:15 Yeah.
0:31:16 And there’s no such thing
0:31:16 as risk-free
0:31:17 because if that buyer blows out,
0:31:18 I didn’t have the money
0:31:19 to buy the thing anyway.
0:31:19 So,
0:31:21 you know.
0:31:22 But you did like
0:31:23 a double escrow basically.
0:31:23 In essence,
0:31:27 several million dollars
0:31:27 and we’re like,
0:31:27 wow.
0:31:28 And so,
0:31:29 now that I’ve invested with you,
0:31:30 you do this a bunch.
0:31:31 And it is like
0:31:32 the two sweetest worlds
0:31:33 in the English language
0:31:34 are double escrow.
0:31:34 Yeah.
0:31:35 Which basically is like,
0:31:36 we agree to buy a thing,
0:31:38 but before we even have to
0:31:39 take the money out of our pocket,
0:31:40 we sell it.
0:31:41 So,
0:31:42 the same day they ask us
0:31:42 for the money,
0:31:43 we just take the money
0:31:44 from this guy,
0:31:45 we give them their share,
0:31:46 we pocket the profits.
0:31:46 Yeah.
0:31:47 You bought the thing
0:31:48 and sold the thing
0:31:49 on the same day
0:31:50 without ever having to take
0:31:51 the money out of your pocket.
0:31:52 Beautiful.
0:31:54 And you do this all the time now.
0:31:54 It’s great.
0:31:56 I’ll do a deal with you
0:31:56 and you’re like,
0:31:58 by the time we get to buy this,
0:31:59 we’re already going to have sold
0:32:00 10 million,
0:32:01 7 million dollars worth
0:32:02 of the equity,
0:32:02 you know,
0:32:04 because we already have
0:32:04 buyers lined up.
0:32:05 Yeah.
0:32:06 And so,
0:32:06 you did this for the,
0:32:07 so that’s how you did
0:32:08 your first deal.
0:32:08 That’s how I got my first
0:32:10 seed money to buy real estate
0:32:10 and then I just started
0:32:11 buying and flipping
0:32:12 for,
0:32:13 you know,
0:32:14 for years.
0:32:15 And you were doing it
0:32:16 the same way,
0:32:17 gym options or no?
0:32:17 That was just like that one.
0:32:18 I did a few gym options
0:32:20 and I did a few gym sales.
0:32:21 Then I got enough money
0:32:22 to go buy a property
0:32:23 and build a gym.
0:32:24 And then I ended up
0:32:25 hooking up with this company
0:32:26 called Harbor Freight Tools.
0:32:27 And so,
0:32:28 as I started getting
0:32:29 into 15,
0:32:29 16,
0:32:30 we started getting
0:32:31 in the higher number
0:32:31 of gyms.
0:32:32 We’re like 65,
0:32:32 70.
0:32:34 We bought this building
0:32:35 in San Francisco.
0:32:36 Yeah,
0:32:37 I remember on Market Street.
0:32:37 Market Street.
0:32:38 Yeah,
0:32:38 1,
0:32:38 2,
0:32:38 3,
0:32:39 4 Market Street.
0:32:40 I think you actually
0:32:40 came there once.
0:32:40 Yeah,
0:32:41 the vanity,
0:32:42 the address.
0:32:43 I remember just thinking,
0:32:43 you got 1,
0:32:43 2,
0:32:44 3,
0:32:44 4 Market?
0:32:45 I was,
0:32:45 yeah,
0:32:45 I know.
0:32:46 And there was,
0:32:46 you know,
0:32:47 every day we’d go out
0:32:48 and pick up the needles
0:32:49 that were outside.
0:32:50 It was crazy.
0:32:50 But,
0:32:50 you know,
0:32:51 like,
0:32:52 at that time,
0:32:53 we had a store there
0:32:54 and a non-profit,
0:32:56 a mosque,
0:32:56 you know,
0:32:57 approached us
0:32:57 and said,
0:32:58 we’d like to put
0:32:58 our church here.
0:33:01 And we negotiated a deal
0:33:01 and we said,
0:33:01 well,
0:33:02 we wouldn’t make that money
0:33:04 in probably like 10 years.
0:33:04 Running a gym.
0:33:06 15 years of running the gym.
0:33:07 So we sold it.
0:33:08 And then,
0:33:08 you know,
0:33:08 like,
0:33:08 we’re like,
0:33:08 oh,
0:33:09 wow,
0:33:09 we’ve made some money here.
0:33:11 And as I was building
0:33:11 my next store,
0:33:14 somebody from Harbor Freight Tools
0:33:15 randomly called me
0:33:15 and said,
0:33:15 we’d like to,
0:33:17 we’d like to lease that box.
0:33:18 So I go home
0:33:19 and tell my wife,
0:33:20 what do you think?
0:33:21 You know,
0:33:22 I want to build this gym.
0:33:22 I’m used to building
0:33:23 all these gyms.
0:33:24 She says,
0:33:25 well,
0:33:26 why don’t you just do it?
0:33:28 And so we did it
0:33:29 and we ended up building
0:33:31 a very big relationship there.
0:33:32 I’m a big relationship guy.
0:33:34 A lot of the tenants
0:33:34 we work with,
0:33:36 we’ve worked with for years
0:33:38 and we ended up doing
0:33:38 over a hundred
0:33:39 for those guys
0:33:40 as time went on.
0:33:41 But,
0:33:43 but yeah,
0:33:43 it’s just kind of,
0:33:44 kind of evolved
0:33:45 as time went on.
0:33:47 And then we got to 17
0:33:49 and,
0:33:49 you know,
0:33:51 my dad was not really the,
0:33:52 I won’t say bad things,
0:33:53 but he wasn’t a loving type.
0:33:54 A little bit abusive,
0:33:56 a lot abusive at times,
0:33:57 but,
0:33:57 you know,
0:33:58 he was just a different character.
0:33:59 So,
0:33:59 you know,
0:34:00 my thing was
0:34:01 whenever I have kids,
0:34:02 you know,
0:34:03 we can’t change the past,
0:34:04 but we can sure as hell
0:34:05 change the future,
0:34:05 right?
0:34:07 Yesterday’s gone,
0:34:08 but tomorrow
0:34:09 has not been written yet.
0:34:10 And so,
0:34:11 I kind of always had
0:34:12 that philosophy,
0:34:13 but I wanted to be
0:34:14 a great dad.
0:34:15 But during this time
0:34:16 from 2008
0:34:17 to 2000
0:34:18 and probably 16,
0:34:20 I worked seven days a week,
0:34:23 probably 80 to 100 hours
0:34:23 every week.
0:34:24 I mean,
0:34:25 I would get up at 530
0:34:26 and be in the gyms
0:34:27 and then I’d come home
0:34:28 by midnight.
0:34:29 I’d come home every night
0:34:30 to want to see my wife
0:34:31 and kids.
0:34:32 And I’m thinking
0:34:33 I’m doing a good job
0:34:35 because I’m busting my butt,
0:34:35 but I’m still,
0:34:36 you know,
0:34:38 I’m still trying,
0:34:40 but my table was wobbly.
0:34:40 You know,
0:34:41 we talked about this,
0:34:42 you know.
0:34:43 give the table metaphor.
0:34:43 So,
0:34:44 I always have this belief
0:34:45 that there’s three,
0:34:46 your life is like
0:34:47 there’s three legs
0:34:47 to a table,
0:34:48 right?
0:34:50 Your family,
0:34:51 your job,
0:34:52 and your faith.
0:34:52 And your faith
0:34:53 doesn’t have to be God.
0:34:54 It could be your faith
0:34:55 in fitness.
0:34:56 It could be your faith
0:34:57 in the way you eat.
0:34:58 It could be the faith
0:34:59 the way you treat people.
0:34:59 A code.
0:35:01 A code you live by.
0:35:02 It’s whatever you believe
0:35:03 your faith is in
0:35:04 for you to feel
0:35:04 like you are
0:35:06 foundationally sound.
0:35:06 Well,
0:35:08 if any one of those legs,
0:35:08 you know,
0:35:09 let’s say my job
0:35:10 is strong,
0:35:11 but my family life
0:35:12 is weak.
0:35:13 What happens to the table?
0:35:14 It wobbles.
0:35:17 My faith may be weak
0:35:18 and my job may be strong.
0:35:20 My table wobbles.
0:35:21 And so,
0:35:22 for me,
0:35:23 I was,
0:35:23 you know,
0:35:24 I was working a lot.
0:35:26 I was making money.
0:35:27 There was a great relationship
0:35:28 with my wife,
0:35:29 but one day I’m driving home
0:35:30 from this,
0:35:31 from Santa Maria.
0:35:32 I had a gym in Santa Maria.
0:35:32 It was probably
0:35:33 on the coast.
0:35:34 It was probably,
0:35:35 gosh,
0:35:36 I’d say 400 miles
0:35:37 from my house.
0:35:38 Three,
0:35:38 four,
0:35:38 and I would drive
0:35:39 in the morning
0:35:40 and I would come back
0:35:40 the same night.
0:35:42 I’d go train.
0:35:42 I’d go meet the managers.
0:35:43 I’d walk my store.
0:35:45 I wanted to see
0:35:45 and touch and feel.
0:35:47 And,
0:35:49 anyways,
0:35:51 my second son,
0:35:51 Chase,
0:35:53 your nephew,
0:35:54 calls me.
0:35:55 He’s crying hysterically.
0:35:56 Put your mom on the phone.
0:35:58 My wife gets on the phone.
0:35:59 Honey,
0:35:59 what’s he saying?
0:36:01 And she’s crying.
0:36:02 Says,
0:36:03 you know,
0:36:04 he really misses you
0:36:05 and he wants you
0:36:06 to come visit.
0:36:07 He doesn’t think
0:36:08 you live at home.
0:36:11 And I’m going home
0:36:12 every night on purpose,
0:36:13 right?
0:36:13 Like,
0:36:14 I’m driving 400 miles.
0:36:14 I’m like,
0:36:15 I’m going to be there.
0:36:18 I think I’m being a good dad.
0:36:18 You know,
0:36:20 I’m kissing him every night.
0:36:21 I’m watching them.
0:36:22 And, you know,
0:36:24 and so the whole day
0:36:25 it didn’t sit right with me.
0:36:28 And that’s when I decided
0:36:28 for myself,
0:36:29 I said,
0:36:30 I built this great business,
0:36:32 but I can’t do this long term.
0:36:35 Because for me to do it right
0:36:36 or the way I wanted to do it,
0:36:38 I was unable to do it
0:36:39 and be a good father.
0:36:41 And so that kind of changed
0:36:42 my path of where I started
0:36:44 focusing more on real estate.
0:36:44 Right.
0:36:46 And the type of real estate
0:36:47 you would do,
0:36:49 because real estate’s a big word,
0:36:49 broad word,
0:36:50 could mean anything.
0:36:52 You do shopping centers,
0:36:53 mostly.
0:36:54 You’ve done other stuff too,
0:36:55 but now you do
0:36:56 retail shopping centers.
0:36:57 Yeah.
0:36:58 And as a tech guy
0:36:59 in Silicon Valley,
0:37:00 that always felt super random.
0:37:02 like retail shopping centers
0:37:02 is like,
0:37:02 okay,
0:37:03 oh,
0:37:05 you’re like an archaeologist.
0:37:06 You do dinosaur things.
0:37:07 I get it.
0:37:07 Like,
0:37:08 what are you talking about,
0:37:09 dude?
0:37:10 But it’s this incredible,
0:37:12 and now I invest a ton
0:37:12 of money with you
0:37:13 because I’m like
0:37:14 blown away by this.
0:37:16 So just explain
0:37:16 kind of like
0:37:17 even just the space,
0:37:18 the sandbox you play in,
0:37:20 why you play in that sandbox
0:37:21 and like,
0:37:21 you know,
0:37:22 what’s your model?
0:37:22 What do you do?
0:37:23 You know,
0:37:23 2010,
0:37:25 all the news was
0:37:26 retail’s dying,
0:37:27 you know,
0:37:28 but what it really did
0:37:29 was it insulated retail.
0:37:30 Because what happened
0:37:31 after 2010,
0:37:32 people started building
0:37:34 way more multifamily,
0:37:34 storage,
0:37:35 industrial,
0:37:37 but they didn’t build
0:37:38 retail shopping centers.
0:37:39 No,
0:37:40 they built these pads
0:37:41 a lot more post-COVID
0:37:42 because what happened
0:37:43 in COVID,
0:37:43 right?
0:37:44 You were closed
0:37:46 unless you had a drive-thru.
0:37:46 Right.
0:37:48 And so those businesses
0:37:49 that had a drive-thru,
0:37:50 they crushed it.
0:37:52 And as time went on,
0:37:52 you know,
0:37:53 there’s been a lot of retailers
0:37:53 that have left.
0:37:54 It’s no doubt,
0:37:56 but retail has sustained
0:37:57 and it’s kind of become
0:37:58 a supply and demand thing
0:37:58 where it’s like,
0:37:59 you know,
0:37:59 and what we are
0:38:01 is we’re a value-add retailer.
0:38:02 So we’re a developer.
0:38:03 So basically what we do
0:38:04 is we find things
0:38:05 that we feel
0:38:06 we can add value to,
0:38:07 whether it’s new tenants,
0:38:08 whether it’s breaking it up
0:38:09 and selling it in pieces,
0:38:10 whether it’s construction.
0:38:13 We always have a game plan
0:38:14 to go in and do something,
0:38:15 you know,
0:38:15 and I often get asked,
0:38:16 why didn’t the other guy
0:38:17 do it, right?
0:38:18 Why didn’t the guy
0:38:18 before you do it?
0:38:19 I don’t know.
0:38:20 You know,
0:38:21 sometimes it’s just there
0:38:23 and sometimes people
0:38:23 have just been in a project
0:38:24 too long.
0:38:24 You know,
0:38:25 I give you times,
0:38:25 I’ve times,
0:38:26 there’s been times
0:38:27 I’ve been in a project
0:38:27 for five,
0:38:28 six years
0:38:28 and I’m like,
0:38:29 I just want to be done.
0:38:30 Right?
0:38:31 And then there’s been projects
0:38:32 I’ve been in for five minutes
0:38:32 and I’m like,
0:38:33 let’s go.
0:38:35 It just happens in that,
0:38:36 in this business.
0:38:37 And so,
0:38:38 you know,
0:38:39 we’ve built a lot
0:38:39 of good relationships
0:38:40 with a lot of tenants
0:38:41 and,
0:38:41 you know,
0:38:42 the good part is
0:38:43 is that we can email
0:38:44 these tenants
0:38:45 or their brokers
0:38:45 within,
0:38:46 you know,
0:38:46 we buy,
0:38:47 we’re looking at a center,
0:38:48 we can find out
0:38:49 generally who wants to be.
0:38:51 Give a sense of
0:38:54 what good looks like
0:38:54 in real estate.
0:38:55 What have you been able
0:38:56 to do in your track record?
0:38:57 You know,
0:38:58 I,
0:39:00 typically what we see
0:39:00 is we see people
0:39:02 trying to compare
0:39:02 or,
0:39:03 you know,
0:39:04 match the S&P
0:39:05 or kind of be standard,
0:39:05 you know,
0:39:06 seven,
0:39:07 eight percent a year,
0:39:08 they get some depreciation,
0:39:09 you know,
0:39:10 and they’re happy.
0:39:11 They’re diversified.
0:39:12 They’re diversified.
0:39:12 They,
0:39:12 you know,
0:39:13 they can do certain things
0:39:15 and we’re more,
0:39:16 we target for
0:39:17 our folks now,
0:39:19 mid-20s to low-30s,
0:39:20 IRR annually.
0:39:22 And in order for us
0:39:22 to get there,
0:39:23 we actually have to go
0:39:23 do something.
0:39:25 You went from having
0:39:27 zero real estate assets
0:39:28 to over a billion dollars
0:39:29 in real estate assets
0:39:30 in 10 years.
0:39:32 How do you do that?
0:39:33 Don’t we all want to know?
0:39:34 I mean,
0:39:35 I think
0:39:37 you have to find someone
0:39:38 who’s already kind of
0:39:39 figured out that game
0:39:40 and kind of run with them,
0:39:40 I would say.
0:39:41 I’d also say that,
0:39:42 like,
0:39:42 it’s,
0:39:43 it’s compounding.
0:39:45 You know,
0:39:45 it’s,
0:39:46 you buy one deal
0:39:48 and you sell it,
0:39:48 you made some money.
0:39:50 now it’s when you do it
0:39:51 again and again
0:39:52 and again and again
0:39:52 and again.
0:39:53 And so in our business,
0:39:55 I was able to compound it
0:39:56 by doing it again
0:39:56 and again and again
0:39:57 and again and again
0:39:59 for many years.
0:40:00 And so I would tell
0:40:01 anybody who’s young,
0:40:02 like,
0:40:02 you know,
0:40:04 you’re going to start
0:40:04 with something,
0:40:05 right?
0:40:06 And then you,
0:40:07 you got to figure out
0:40:07 how to make that
0:40:08 make money
0:40:09 and move on to the next.
0:40:10 Because if you stick
0:40:11 to just one,
0:40:12 there’s a lot of people
0:40:13 out there,
0:40:14 they have one building,
0:40:15 they enjoy it,
0:40:16 but they didn’t compound it
0:40:17 to really get to where
0:40:18 they could have gone.
0:40:19 You,
0:40:20 you had also told me
0:40:21 one of the deals we did,
0:40:22 you know,
0:40:23 I’m learning about this
0:40:23 as you go.
0:40:23 And you’re like,
0:40:24 oh,
0:40:25 we’re buying this center
0:40:25 and you’re like,
0:40:26 there’s a so-and-so
0:40:27 grocery store.
0:40:29 And one of the reasons
0:40:30 we’re getting this price
0:40:31 is that that grocery store,
0:40:33 they only have like a year
0:40:34 left on their lease,
0:40:35 but they have an option
0:40:36 to extend it like 12
0:40:37 or 15 years.
0:40:38 But they,
0:40:38 you know,
0:40:39 they’re not picking it up
0:40:39 because they don’t have to yet.
0:40:40 They have one or two years
0:40:41 left right now.
0:40:42 And I was like,
0:40:43 okay,
0:40:43 so what’s the plan?
0:40:43 You’re like,
0:40:44 I’m going to get them
0:40:45 to extend it.
0:40:46 And I was like,
0:40:47 but why?
0:40:48 Why would they do that?
0:40:48 How do you know?
0:40:50 And it was a combination
0:40:51 of intelligence.
0:40:51 You were like,
0:40:51 well,
0:40:52 I know it’s a high-performing store.
0:40:53 I know they should want
0:40:54 to extend it,
0:40:55 but they don’t have
0:40:56 to do it proactively.
0:40:57 But I do know the person
0:40:59 who’s like runs their real estate,
0:41:01 she used to run real estate
0:41:01 for this other company.
0:41:02 And actually,
0:41:04 one time she left me
0:41:05 holding the bag.
0:41:06 She pulled out of a deal
0:41:06 last minute
0:41:07 and I ate the loss
0:41:08 and I didn’t,
0:41:09 I didn’t hold it against her.
0:41:11 I treated her well
0:41:13 even though we took
0:41:14 a big financial loss on that.
0:41:16 I believe she’s going
0:41:17 to treat us well here
0:41:17 and then sure enough,
0:41:18 we buy this thing
0:41:20 and suddenly we got
0:41:21 a 15-year lease extension
0:41:22 and that property’s value
0:41:24 skyrockets from that.
0:41:25 So sometimes it’s also
0:41:26 about taking a loss well,
0:41:28 not just when somebody wins.
0:41:28 Yeah,
0:41:30 it’s easy to high-five
0:41:31 when things are going great,
0:41:33 but how you act
0:41:34 when things don’t go your way
0:41:36 defines the character
0:41:37 and defines the relationship,
0:41:37 right?
0:41:38 100%.
0:41:41 How you act on a loss
0:41:42 is almost more important
0:41:43 than how you act on a win.
0:41:43 Right.
0:41:44 Well, your kids play sports.
0:41:45 Do you teach them this
0:41:46 and when it comes
0:41:47 to their baseball,
0:41:47 their pitching,
0:41:48 what they’re doing?
0:41:49 They try.
0:41:50 I mean,
0:41:50 they’re young.
0:41:51 They got a lot of emotions
0:41:53 so it’s kind of a fine balance
0:41:54 because you don’t want them
0:41:55 to want to lose,
0:41:56 but you want them
0:41:58 to understand how to lose
0:41:59 because in life,
0:42:00 in order for most entrepreneurs
0:42:01 out there,
0:42:03 most guys have had
0:42:04 some sort of failure
0:42:04 in their life
0:42:06 and then boom,
0:42:07 it clicks.
0:42:08 and they use that
0:42:09 as like a catalyst
0:42:10 to just skyrocket,
0:42:11 right?
0:42:12 Not every business person
0:42:14 is super successful
0:42:14 right out the gate
0:42:16 and most guys
0:42:17 who have made it really far
0:42:19 have had to grind
0:42:19 their way through.
0:42:20 Right.
0:42:21 And so, you know,
0:42:23 I’m, for my kids,
0:42:24 that’s what I want.
0:42:24 I want to see them,
0:42:25 I want to do baseball.
0:42:27 Baseball’s a sport of failure,
0:42:27 right?
0:42:28 You hit three out of ten,
0:42:29 you’re in the MLB.
0:42:31 You’re a Hall of Famer, right?
0:42:33 That’s 30% of the time
0:42:34 you’re touching the ball
0:42:35 or hitting the ball.
0:42:37 So, I like the sport
0:42:38 because it’s mentally
0:42:39 and I also believe like,
0:42:39 you know,
0:42:40 sports are a great way
0:42:41 for kids to learn to compete,
0:42:42 you know,
0:42:44 and have healthy competition.
0:42:45 But at the same time,
0:42:46 you have a lot of people
0:42:47 teaching their kids
0:42:47 that I’ve seen,
0:42:49 they think they’re competing
0:42:50 with other kids.
0:42:52 I try to teach my kids
0:42:52 that you’re competing
0:42:54 and I would tell any adult this.
0:42:55 Not to look at everyone else.
0:42:56 Right.
0:42:57 Because I can only do
0:42:58 what Sanjeev can do.
0:43:00 I’m competing with me.
0:43:02 Yeah, there’s a guy
0:43:03 who came on this podcast,
0:43:04 he had this great phrase,
0:43:04 he goes,
0:43:06 he’s an investor
0:43:06 and he talks about
0:43:07 investing and founders.
0:43:08 What do you look for, man?
0:43:10 What are some of the key things?
0:43:11 And he goes,
0:43:11 I want to know
0:43:12 if they’re pre-fall
0:43:13 or post-fall.
0:43:14 He said,
0:43:15 all great men have a fall.
0:43:17 I love it
0:43:18 if they’re already post-fall
0:43:19 because I know
0:43:20 that they know
0:43:21 what it takes
0:43:22 to come back up.
0:43:23 I know that they’re going
0:43:23 to have a certain level
0:43:25 of maturity and humility
0:43:26 because they’re post-fall.
0:43:26 Right.
0:43:28 And pre-fall,
0:43:29 you always have to be wary
0:43:30 because somebody
0:43:32 who’s only ever seen the ups,
0:43:32 you don’t know
0:43:33 how they’ll handle the downs.
0:43:34 You don’t know
0:43:35 if they’ll even anticipate
0:43:36 that there can be downs.
0:43:38 They might get so full of themselves
0:43:39 that they don’t actually see
0:43:40 that that’s a possibility
0:43:41 and they don’t guard for it
0:43:42 and, you know,
0:43:43 watch for the wall
0:43:44 and make the turn
0:43:44 as you need to do
0:43:45 when you’re riding the race.
0:43:47 So, I’ve always remembered that.
0:43:49 And guys that redline
0:43:49 or push the limits,
0:43:51 they’re going to have some falls.
0:43:51 Yeah.
0:43:54 Until you get to the edge,
0:43:54 it’s kind of like
0:43:55 one of those things.
0:43:55 So, you know,
0:43:56 some of those people
0:43:57 who have never had a fall,
0:43:59 maybe they’re playing it,
0:44:00 they’re playing the game
0:44:02 as hard as they maybe could be.
0:44:02 Right.
0:44:03 What are some other,
0:44:04 like, core,
0:44:04 I don’t know,
0:44:05 philosophies that you have?
0:44:06 Yeah.
0:44:06 I mean,
0:44:08 I think core philosophy
0:44:10 I always think of this.
0:44:11 What would I advise my son to do?
0:44:13 What’s an example where
0:44:15 maybe if you had just been thinking
0:44:16 from your own perspective,
0:44:16 eh,
0:44:17 you could kind of talk yourself
0:44:18 into something,
0:44:18 but when you think about it,
0:44:19 like,
0:44:20 what would I advise my son to do?
0:44:21 The answer’s much more clear.
0:44:22 Can you think of an example?
0:44:23 Yeah.
0:44:23 I mean,
0:44:26 like when a tenant burns you
0:44:27 or when people burn you
0:44:28 and you say,
0:44:28 man,
0:44:29 I want to call that person
0:44:30 and tell them
0:44:31 I’m not going to do
0:44:32 any more business with you.
0:44:32 You know,
0:44:34 we’re going to use the stick.
0:44:35 Right.
0:44:38 And what do you gain with that?
0:44:38 Right.
0:44:39 What would my son,
0:44:40 what would my son Shaden
0:44:41 gain from that?
0:44:43 Okay.
0:44:43 The other person knows
0:44:44 you don’t like them.
0:44:45 They’re not going to bring you
0:44:45 any deals.
0:44:46 They’re not going to do anything.
0:44:47 Or you could say,
0:44:47 hey,
0:44:47 you know what?
0:44:49 This one didn’t work out.
0:44:51 Let’s find another one
0:44:52 to win together on.
0:44:52 Right.
0:44:54 It’s a long game.
0:44:55 It’s not a short game.
0:44:56 Life is a long game.
0:44:56 You know,
0:44:56 that’s,
0:44:58 it’s like things go full circle.
0:44:59 Right.
0:45:00 People say,
0:45:01 what does going full circle means?
0:45:02 It means,
0:45:04 as you’re going on
0:45:04 longer and longer,
0:45:06 different opportunities come up.
0:45:07 It comes all the way around.
0:45:08 And,
0:45:10 and so for that,
0:45:11 it would be an example
0:45:12 where I would probably tell him like,
0:45:12 hey,
0:45:12 look,
0:45:13 you know,
0:45:15 don’t kill the relationship.
0:45:17 Build the relationship.
0:45:19 Find another way to win
0:45:19 with that person.
0:45:21 And don’t hold on to the,
0:45:21 you know,
0:45:22 that’s the problem
0:45:23 is most people hold on
0:45:25 to memories that are,
0:45:26 you know,
0:45:28 the right word,
0:45:28 I would say,
0:45:29 the memories that
0:45:31 affected them in a negative way.
0:45:32 so they carry
0:45:33 these negative ways.
0:45:34 Instead,
0:45:37 you can forgive,
0:45:39 you don’t have to forget.
0:45:39 Right.
0:45:40 Right.
0:45:40 I mean,
0:45:42 and so it’s,
0:45:44 so there’s been times
0:45:44 in my life
0:45:45 that I’ve even had
0:45:46 to use this for my own.
0:45:46 Like,
0:45:48 I tell people a lot of times,
0:45:48 like,
0:45:48 you know,
0:45:49 I will sometimes
0:45:50 have to make a decision
0:45:51 and I will think
0:45:52 as if my sons
0:45:53 or my daughters
0:45:54 are the ones
0:45:54 having to make
0:45:55 that decision.
0:45:56 and I ask,
0:45:57 what would I tell them?
0:45:59 And most times
0:46:00 it takes me five seconds.
0:46:01 And this is something
0:46:02 that I have a conundrum
0:46:03 about in my head
0:46:04 for weeks.
0:46:05 You know,
0:46:06 oftentimes I talk to you
0:46:06 and we’re outside
0:46:08 and you say things
0:46:09 so commonsensely,
0:46:09 you know,
0:46:09 like,
0:46:10 well,
0:46:11 why have I been thinking
0:46:12 about this for two weeks?
0:46:13 Sean got this to me
0:46:14 in like 30 seconds,
0:46:15 right?
0:46:17 All right,
0:46:17 listen,
0:46:18 the two most beautiful words
0:46:19 in the English language
0:46:21 are email subscribers.
0:46:23 You need more email subscribers,
0:46:23 I guarantee it.
0:46:24 I don’t care how many you have,
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0:46:26 I need more of them,
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0:46:28 we all need more email subscribers
0:46:28 because email
0:46:30 is an amazing way
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0:46:44 That’s how you build
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0:46:46 And so email subscribers
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0:46:47 And they’re free.
0:46:48 It’s an amazing tool.
0:46:49 And the tool I use
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0:46:52 is Beehive.
0:46:52 It’s a tool that was built
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0:46:54 who were actually running
0:46:54 Morning Brew.
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0:47:04 It helped it grow faster,
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0:47:06 helped it nurture
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0:47:11 could we provide those
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0:47:15 and not just Morning Brew?
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0:47:16 they made it available
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0:47:18 because before Beehive,
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0:47:55 What have you seen
0:47:57 just because you’re in retail,
0:47:58 like what have you seen
0:47:59 as the trend?
0:47:59 What’s going on?
0:48:01 Like what’s changing?
0:48:03 Maybe what’s dying?
0:48:03 What’s exploding?
0:48:04 Yeah.
0:48:05 What can you teach us?
0:48:06 Because you see a different
0:48:06 part of the world
0:48:07 than we do.
0:48:08 And you see more
0:48:09 of the leading indicators.
0:48:10 You know who’s expanding.
0:48:12 You know who’s contracting, right?
0:48:13 You know which locations
0:48:14 are thriving
0:48:15 and which ones are struggling.
0:48:17 What have you seen, I guess?
0:48:18 What’s going on?
0:48:19 So for retail specifically,
0:48:21 there’s been a lot of new things
0:48:22 called experiential retail.
0:48:23 It’s come out, you know,
0:48:24 in fitness centers.
0:48:26 We’ve been there for a long time,
0:48:27 but now there’s pickleball,
0:48:28 trampoline parks.
0:48:30 You know, retail is important
0:48:31 for any centers
0:48:32 to drive traffic.
0:48:33 So retail used to be like,
0:48:35 you know, where that,
0:48:36 now it’s, let’s say,
0:48:38 pickleball or a trampoline park.
0:48:39 It would have just been
0:48:41 go buy clothes at the store, right?
0:48:43 Basically, that’s the shift
0:48:44 that’s happening is like
0:48:46 people buying, you know,
0:48:47 maybe more of that stuff
0:48:48 is being bought online,
0:48:48 but you can’t buy
0:48:49 the experience online.
0:48:51 Yeah, and there’s places
0:48:52 that are thriving like,
0:48:54 Ross Dress for Less
0:48:55 or Burlington Coat
0:48:55 or TJ Maxx.
0:48:56 My wife loves home goods
0:48:57 or TJ Maxx.
0:48:58 Your wife loves it.
0:48:59 It’s like a treasure hunt
0:49:01 every time you go, right?
0:49:02 And they’re sourcing things
0:49:03 that people can go
0:49:03 and they’re looking
0:49:04 for that treasure.
0:49:05 Look at all the junk we bought
0:49:06 but the deal we got
0:49:06 on the junk.
0:49:06 The deal was amazing.
0:49:08 So the experience for that,
0:49:10 so that also becomes experiential
0:49:11 but it also becomes where
0:49:13 it’s not stuff
0:49:15 you could easily find online, right?
0:49:18 And so online has definitely
0:49:19 had some form of effect
0:49:21 where you’ve had some brands
0:49:22 that are going away.
0:49:22 For example,
0:49:23 as of recent,
0:49:24 Big Lots went away,
0:49:26 Joann’s went away,
0:49:27 you know,
0:49:28 Right Aid is in bankruptcy
0:49:29 and you say,
0:49:29 when’s the last time
0:49:30 I went to a Big Lots?
0:49:31 When’s the last time
0:49:33 I went to a Joann’s?
0:49:34 They never adapted
0:49:36 into today’s market
0:49:38 to be able to do both
0:49:40 because really all retailers
0:49:43 should have their retail
0:49:44 also being their distribution.
0:49:44 Right.
0:49:47 And so an e-commerce person
0:49:47 needs distribution.
0:49:50 So now if you can do both
0:49:51 and that’s where
0:49:52 the smarter retailers
0:49:52 have gotten
0:49:53 where they’ll ship
0:49:54 out of stores.
0:49:54 Yeah.
0:49:55 They’ll do certain things
0:49:56 to create where now
0:49:56 they have a,
0:49:57 they don’t have to do
0:49:59 a 150,000 square foot
0:49:59 distribution
0:50:01 because they got a Best Buy
0:50:03 in this part of Wisconsin.
0:50:04 That part can ship everywhere.
0:50:07 And I think retail
0:50:07 has also changed
0:50:08 in the fact that
0:50:08 you’ve got more,
0:50:09 you know,
0:50:11 offices uses
0:50:13 now going to retail.
0:50:13 You know,
0:50:14 you have lawyers
0:50:14 and shopping centers,
0:50:16 you have insurance people,
0:50:17 you have doctors.
0:50:18 They’re going where
0:50:19 the foot traffic is.
0:50:19 Right.
0:50:20 Right.
0:50:20 And so,
0:50:21 and then food has become
0:50:22 a big component.
0:50:23 Right.
0:50:24 And the experience of food
0:50:24 is what,
0:50:25 you know,
0:50:25 and you can DoorDash
0:50:26 anything you want,
0:50:27 but even,
0:50:28 you know,
0:50:29 the ghost kitchen concept
0:50:30 has been tested.
0:50:32 DoorDash did ghost kitchens.
0:50:33 They closed majority of them.
0:50:35 The reason is because
0:50:36 people like the experience.
0:50:37 They want to pick
0:50:37 what they want.
0:50:38 And yeah,
0:50:39 you can order it
0:50:40 from your house.
0:50:41 you can go there,
0:50:42 your forte,
0:50:43 but you can get it.
0:50:45 The kitchen has value.
0:50:46 And so I think it’s,
0:50:47 the fundamental is
0:50:48 that the locate,
0:50:50 and when we see things,
0:50:51 we also see
0:50:54 where retail is
0:50:57 over 90% lease right now.
0:50:58 A very high occupancy.
0:51:01 And there’s certain parts
0:51:02 of retail
0:51:03 that are no longer viable.
0:51:04 You know,
0:51:05 you think about the old town
0:51:06 like where I grew up.
0:51:07 There was a small town
0:51:09 and there was a JCPenney’s
0:51:10 on one side,
0:51:11 right?
0:51:13 And then Lowe’s,
0:51:13 TJ Maxx,
0:51:14 HomeGoods,
0:51:15 all went to the other side
0:51:15 of the freeway.
0:51:18 Everybody went on the other side.
0:51:18 Target,
0:51:19 everybody’s there.
0:51:20 Well,
0:51:21 that other side of the retail,
0:51:23 it’s hurting
0:51:24 because it’s not
0:51:24 in the right location.
0:51:26 So location’s also
0:51:27 another key thing
0:51:28 that I didn’t really understand
0:51:29 when people would tell me
0:51:30 when I was younger,
0:51:30 location,
0:51:30 location,
0:51:31 location.
0:51:32 Now,
0:51:33 yeah,
0:51:33 location,
0:51:34 location,
0:51:34 location.
0:51:35 And,
0:51:35 you know,
0:51:37 I think in any real estate,
0:51:38 it’s important to understand
0:51:39 like when you’re trying
0:51:40 to make money
0:51:41 in real estate
0:51:41 or I would say
0:51:42 any business,
0:51:44 you really make money
0:51:44 on the buy.
0:51:46 If you’re thinking
0:51:46 you’re going to make money
0:51:48 on the sale immediately,
0:51:49 you’re speculating.
0:51:50 But if you bought
0:51:51 something right,
0:51:53 I buy,
0:51:54 I could buy a car
0:51:56 and I know the car’s
0:51:57 worth $30,000
0:51:58 and I buy it for $28,000,
0:51:59 $29,000,
0:52:00 whatever that is.
0:52:01 I did all right.
0:52:04 I made money
0:52:04 on the buy
0:52:05 whereas people
0:52:06 buy things
0:52:07 on speculation
0:52:08 and
0:52:10 when that speculation
0:52:11 doesn’t come to fruition,
0:52:13 that’s when we get hurt.
0:52:14 Exactly.
0:52:16 And you’ve also,
0:52:18 like,
0:52:18 you’ve done a bunch
0:52:19 of all these
0:52:19 like electric car
0:52:20 charging stations
0:52:21 and stuff like that,
0:52:23 like new retail uses
0:52:23 that are,
0:52:23 you know,
0:52:24 coming up as well,
0:52:24 right?
0:52:25 Electric cars,
0:52:28 we do recycle stuff,
0:52:30 we’re doing fireworks
0:52:31 everywhere,
0:52:32 anything that we can
0:52:33 bring traffic in,
0:52:34 you know,
0:52:35 and we want you
0:52:35 to bring your,
0:52:36 you know,
0:52:37 your Tesla
0:52:38 to the shopping center
0:52:38 because you plug in
0:52:39 and you’re going
0:52:40 to go eat for 20 minutes.
0:52:42 You’ve got time
0:52:43 to go do something,
0:52:43 right?
0:52:44 And so,
0:52:45 you know,
0:52:47 but the number
0:52:47 of retailers
0:52:48 has reduced
0:52:49 over the years
0:52:50 because a lot
0:52:51 of those concepts
0:52:51 were either,
0:52:52 you know,
0:52:53 the kind of tough part
0:52:54 for retailers,
0:52:54 there’s been a lot
0:52:55 of private equity
0:52:56 that buys them,
0:52:57 they put heavy debt
0:52:59 and then when any change
0:53:00 in the market happens
0:53:01 or they don’t adapt
0:53:01 to anything,
0:53:02 can’t survive,
0:53:03 can’t survive,
0:53:03 right?
0:53:05 And that’s what happened
0:53:06 to like Joann’s
0:53:06 or,
0:53:07 you know,
0:53:07 even,
0:53:08 you know,
0:53:09 Big Lots,
0:53:10 Big Lots had the $2 billion
0:53:11 in debt and,
0:53:13 but they also never adapted.
0:53:14 One of the things
0:53:16 I always wanted to do
0:53:16 was you do,
0:53:18 when you own the gyms,
0:53:18 you would do these
0:53:19 like sales trainings,
0:53:20 you do this like
0:53:20 motivational talks,
0:53:21 you do a lot
0:53:21 of these things
0:53:22 that,
0:53:22 you know,
0:53:23 maybe you,
0:53:24 I don’t know
0:53:24 if you like doing them,
0:53:25 but like at some point
0:53:26 you probably were happy
0:53:27 to be done doing it
0:53:28 for a little bit,
0:53:29 but what would have
0:53:29 been the highlights?
0:53:30 What were the,
0:53:31 what were your best,
0:53:32 what were your best bits?
0:53:33 I’d often talk about
0:53:33 Kobe Bryant,
0:53:34 right?
0:53:35 I always loved,
0:53:35 you know,
0:53:36 Kobe Bryant’s analogies
0:53:37 where he would say,
0:53:37 ah,
0:53:37 you know,
0:53:39 I look at it like this.
0:53:41 I work two hours extra a day
0:53:42 every day.
0:53:43 Now you got to take
0:53:44 that time five days,
0:53:45 it’s 10 hours,
0:53:45 you know,
0:53:46 a week.
0:53:47 Take that times four weeks
0:53:48 a month,
0:53:49 there’s 40 hours.
0:53:49 Take it times 12,
0:53:51 it’s 480 hours.
0:53:53 Over my 15-year career,
0:53:54 I’ve almost done
0:53:56 8,000 more hours
0:53:57 or 10,000 more hours
0:53:58 than anyone else.
0:53:59 You stack days.
0:54:01 So a lot of my motivation
0:54:03 was how do you stack days?
0:54:04 The other thing
0:54:05 that I was always
0:54:05 very important on
0:54:06 and training
0:54:07 was
0:54:09 when you’re there,
0:54:10 be there.
0:54:12 What does that mean,
0:54:12 right?
0:54:13 Well,
0:54:14 when you’re at work,
0:54:15 be at work.
0:54:16 When you’re at home,
0:54:17 be home.
0:54:18 Don’t be at work
0:54:19 thinking about home
0:54:20 and at home
0:54:21 thinking about work.
0:54:23 And people don’t get that often
0:54:25 because you only get
0:54:26 so much time.
0:54:26 So when I,
0:54:27 when my game face is on,
0:54:28 let’s go.
0:54:30 And when I’m with my kids,
0:54:31 let’s go.
0:54:32 When I’m on my own,
0:54:34 that’s what I get to do,
0:54:34 let’s go.
0:54:35 Right.
0:54:35 For myself,
0:54:37 but a lot of people
0:54:38 don’t understand that
0:54:38 like when I talk about
0:54:39 the commodity of time,
0:54:40 right,
0:54:41 it’s limited.
0:54:42 And now,
0:54:43 so if you’re here
0:54:44 thinking about here,
0:54:45 you’re here thinking about here
0:54:46 and you’re doing all this stuff,
0:54:46 like,
0:54:48 so that’s something I think
0:54:49 that every entrepreneur
0:54:50 or young person
0:54:52 should focus on themselves.
0:54:53 Right.
0:54:54 And then I also would teach them
0:54:56 to have a game plan.
0:54:57 Make a list.
0:54:58 Some people say,
0:54:58 oh,
0:54:59 I don’t need a list.
0:55:00 When you write it down,
0:55:02 majority of people
0:55:03 are visual learners.
0:55:04 I’m,
0:55:04 for me,
0:55:05 I’m a visual guy.
0:55:05 if I write it down,
0:55:06 I’ll remember it.
0:55:07 You tell me that
0:55:09 there’s a good chance
0:55:09 I forget it.
0:55:10 Right.
0:55:11 So what’s the way
0:55:12 you remember?
0:55:12 What’s the way
0:55:13 that you’re going to remember
0:55:14 what you’re doing?
0:55:15 Because you’ve got to
0:55:16 write down your goals
0:55:17 and kind of get to the next step
0:55:19 of taking that time
0:55:19 and really pushing it.
0:55:20 Were you big on that,
0:55:20 like,
0:55:22 kind of writing down a vision
0:55:23 or writing down,
0:55:24 whether it’s affirmations
0:55:24 or a vision
0:55:25 or a goal,
0:55:25 like,
0:55:27 were you a big
0:55:27 kind of like
0:55:30 self-motivator
0:55:30 in that way?
0:55:31 Did you have any habits
0:55:33 that served you well?
0:55:35 I never really wrote down
0:55:35 affirmations
0:55:36 or any of that stuff,
0:55:37 but I would always
0:55:39 ask myself why.
0:55:41 Why am I doing this?
0:55:42 What is my goal here?
0:55:44 And for sometimes
0:55:44 it was my goal
0:55:45 was to make money
0:55:46 because I got to pay bills.
0:55:47 You know,
0:55:47 I’d be at the gym
0:55:49 at 1030 at night
0:55:50 calling someone randomly
0:55:50 saying,
0:55:50 hey,
0:55:51 if you come in
0:55:52 with your entire family
0:55:54 tonight by 11 o’clock
0:55:55 and spend $2,000,
0:55:57 we’ll give you an extra year
0:55:57 for free.
0:55:57 Right.
0:55:58 whatever it was,
0:55:59 right,
0:56:00 because I needed
0:56:01 the $2,000.
0:56:02 So at that time
0:56:03 it was money motivated.
0:56:04 Other times
0:56:04 it was because
0:56:05 I wanted to actually
0:56:06 like for my employees
0:56:07 or even my kids,
0:56:09 I really want to see
0:56:09 them succeed
0:56:10 and I wanted them
0:56:11 to learn a way.
0:56:11 I mean,
0:56:12 there was employees
0:56:13 that we had come in
0:56:14 and never had made
0:56:15 more than $8,
0:56:16 $10 an hour
0:56:17 at that time
0:56:18 and they started
0:56:19 making $150,
0:56:20 $200 grand a year
0:56:22 and it wasn’t just sales.
0:56:22 It was also treating
0:56:23 people right.
0:56:24 It was also understanding,
0:56:24 you know,
0:56:26 what motivates people
0:56:26 and,
0:56:27 you know,
0:56:28 I always tell a story
0:56:28 like sometimes
0:56:29 I would tell
0:56:30 when I was young,
0:56:31 my dad used to
0:56:32 always do a thing
0:56:33 that was pretty,
0:56:33 you know,
0:56:34 when I say abusive,
0:56:35 what does that mean?
0:56:36 My dad would take me,
0:56:36 you know,
0:56:37 he’d have a few drinks,
0:56:38 he was an Indian guy,
0:56:38 he’d come,
0:56:39 he’d be sitting
0:56:40 at the table doodling
0:56:40 until I was probably
0:56:41 like 12 or 13,
0:56:42 he would come
0:56:43 and grab you by the neck
0:56:44 and he’d take you
0:56:45 to the restroom
0:56:46 and he’d put your head
0:56:46 near the toilet
0:56:47 and he’d say,
0:56:47 see that?
0:56:49 That’s what you are.
0:56:50 And I,
0:56:50 you know,
0:56:52 and I always tell people,
0:56:52 you know,
0:56:53 that could have affected me
0:56:54 in two ways.
0:56:56 it could have completely
0:56:57 demotivated me
0:56:59 or I could have used it
0:57:00 as I never want
0:57:01 to be that.
0:57:03 And so,
0:57:05 everybody’s experience
0:57:06 is different
0:57:06 from the others.
0:57:08 That’s why I always tell people
0:57:08 you’re not competing
0:57:09 with someone else.
0:57:10 Yeah,
0:57:10 I like your,
0:57:11 kind of the,
0:57:14 be there wherever you are,
0:57:14 be here now,
0:57:16 is so,
0:57:18 I think even more underrated now
0:57:19 because in a world
0:57:21 of distraction,
0:57:22 on tap,
0:57:24 I’m bored,
0:57:26 I can solve it right away.
0:57:27 I’m half here,
0:57:28 I’m tired,
0:57:29 I can solve it right away.
0:57:30 I’m annoyed,
0:57:30 I can do,
0:57:31 I can,
0:57:33 I have this pacifier
0:57:34 in my hand.
0:57:34 Like,
0:57:35 I have a little baby,
0:57:35 I have a one-year-old,
0:57:37 so I have a paci
0:57:38 right here.
0:57:38 At any time,
0:57:40 I could just suck on this
0:57:41 and I’m going to have,
0:57:42 I’m going to have my problems
0:57:44 soothed for a moment.
0:57:45 And so,
0:57:48 being able to just be
0:57:49 wherever you are,
0:57:50 but be there fully,
0:57:50 and like,
0:57:51 there’s a,
0:57:53 my sister had this situation
0:57:54 where she was
0:57:55 in business school
0:57:57 in Indiana.
0:57:57 She went to
0:57:58 Indiana University
0:57:59 for business school.
0:57:59 So,
0:58:00 they’re in Bloomington,
0:58:00 Indiana.
0:58:01 Now,
0:58:02 Bloomington,
0:58:03 Indiana is not the nicest place,
0:58:04 didn’t want to be there.
0:58:05 And the next semester,
0:58:06 they were going to go to Italy.
0:58:06 So,
0:58:07 they had this like,
0:58:08 next semester,
0:58:08 we’re in Italy.
0:58:10 But while they’re in Bloomington,
0:58:11 they didn’t bother going out
0:58:12 and making friends.
0:58:13 They didn’t bother like,
0:58:13 checking out the area.
0:58:14 They didn’t,
0:58:15 you know,
0:58:16 they were just kind of
0:58:16 going through the motions.
0:58:18 And the reason why was,
0:58:19 they thought,
0:58:19 oh,
0:58:20 Bloomington’s lame.
0:58:21 Italy’s going to be amazing though.
0:58:22 Can’t wait.
0:58:22 Do you know how we’re going to be
0:58:23 when we’re there?
0:58:23 We’re going to be,
0:58:24 oh,
0:58:25 I’m going to be speaking Italian.
0:58:26 I’m going to be gelato
0:58:27 and cafes.
0:58:28 And I’m going to be so,
0:58:30 it’s going to be so amazing.
0:58:30 And I was like,
0:58:31 that’s great.
0:58:33 You’re not there yet.
0:58:35 And while you’re in Bloomington,
0:58:36 you wish you were in Italy.
0:58:37 Guess what?
0:58:37 When you’re in Italy,
0:58:38 you’re probably going to wish
0:58:39 you were back in the States,
0:58:39 you know,
0:58:40 because you’re going to miss
0:58:41 certain other things.
0:58:43 If you’re in Bloomington,
0:58:44 be in Bloomington.
0:58:45 Make this your Italy,
0:58:46 right?
0:58:47 You can choose to have
0:58:48 that Italian experience.
0:58:49 You can have whatever experience
0:58:50 you want in the place
0:58:50 you’re at.
0:58:52 And I’ve now seen over time,
0:58:53 this has become a superpower
0:58:54 where,
0:58:55 like you said,
0:58:55 like,
0:58:56 you know,
0:58:56 you’re at work,
0:58:57 you’re thinking about home,
0:58:57 you’re at home,
0:58:58 you’re thinking about work,
0:58:59 you’re with your kids,
0:59:00 but you’re half thinking about work,
0:59:00 you know,
0:59:01 the half in,
0:59:02 half out,
0:59:03 the dim light
0:59:05 versus being able to go off
0:59:07 and then shine bright
0:59:08 when it’s time to shine bright.
0:59:09 But if you’re always flickering
0:59:11 at this sort of dim level
0:59:11 on all things,
0:59:13 you’re just going to feel
0:59:14 unsatisfied in all aspects
0:59:15 of your life,
0:59:15 right?
0:59:17 And so I think that’s a great,
0:59:19 simple reminder
0:59:20 that’s in everybody’s control.
0:59:22 Doesn’t take any talent
0:59:22 to really do that.
0:59:23 No?
0:59:23 Yeah,
0:59:24 it just takes a little bit
0:59:24 of awareness.
0:59:25 And so that’s the one
0:59:26 I’m going to take with me
0:59:28 the most out of this whole thing.
0:59:29 I think we hit everything.
0:59:29 I think we hit the highs,
0:59:30 the lows,
0:59:31 and then the build back up.
0:59:32 Dude,
0:59:33 I appreciate you doing this.
0:59:35 I know you’re not a big
0:59:36 kind of get out there
0:59:38 and go toot your own horn,
0:59:39 but I appreciate you doing this.
0:59:41 It’s great to be here
0:59:43 and I appreciate it.
0:59:43 All right.
0:59:43 That’s a wrap.
0:59:46 I feel like I can rule the world.
0:59:48 I know I can be what I want to.
0:59:50 I put my all in it
0:59:51 like my days off.
0:59:52 On the road,
0:59:52 let’s travel,
0:59:54 never looking back.
0:59:54 All right,
0:59:55 my friends,
0:59:56 I have a new podcast
0:59:57 for you guys to check out.
0:59:58 It’s called
1:00:00 Content is Profit
1:00:01 and it’s hosted by
1:00:02 Luis and Fonzie Cameo.
1:00:04 After years of building
1:00:05 content teams
1:00:05 and frameworks
1:00:06 for companies like
1:00:06 Red Bull
1:00:08 and Orange Theory Fitness,
1:00:09 Luis and Fonzie
1:00:10 are on a mission
1:00:11 to bridge the gap
1:00:12 between content
1:00:13 and revenue.
1:00:14 In each episode,
1:00:14 you’re going to hear
1:00:15 from top entrepreneurs
1:00:16 and creators
1:00:16 and you’re going to hear
1:00:17 them share their secrets
1:00:18 and strategies
1:00:19 to turn their content
1:00:20 into profit.
1:00:21 So you can check out
1:00:23 Content is Profit
1:00:25 wherever you get your podcasts.