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We're snorting cap rates and shooting up cash flow here at field truck. Welcome back to deal junkies. I'm gabe johansson here in the studio with dane mckini, trevor howard, mark ayos, and our very special guest, Jordan Tampien. Jordan, you're a powerhouse, man. Thanks for coming all the way here from Spokane to be with us. Oh, anytime you have no rain on the west side of the State, we head this way. It's like you're fleeing for some sun. Okay. So, we'll see you like 3 months out of the exactly. We get over here about four times. So, jordan is uh correct me if I'm wrong, you're you're owner, founder of four degrees real estate, correct? Correct? Yep. Yep. Uh big brokerage, property management division, and you guys are developing, building stuff. So, we want to we're going to dig into your operation and get your story.
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You missed um author, gym owner, um it's part of the story. It's a good narrative as we move through. You do a lot of stuff. Serial entrepreneur is what you called it, right? Soon to be 100 mile runner. I just got to listen more of your episodes. I'm getting slowly and motivated. Every story sounds worse. I'm like, I just drove almost 100 miles. I'm like, imagine running that. That was enough. Oh, and it was flat. I was like, geez, even the bmw had trouble going up the hill. So, I'm I'll work up to that one. All right. Well, thanks for being on the show with us today. We want to dig in and get to know you a little bit. Can you take us back in your story, and we'll let you talk as long as you want to talk, but take us back to who is jordan? Like, how did this happen? Did you were you born this way? Did something affect your life somewhere along the way? Were you raised in a certain way? How did you become jordan champion? Champion? Yeah, I think it's funny. You eventually in life, you look back and there's these moments that define the decision that goes left or right. And we did, my family wasn't entrepreneurial. My dad was a private school teacher. I'm one of seven kids. And so he we kind of had this close-knit family in moses lake, Washington, center of nowhere, but center of Washington State.
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And kind of going through it, well, it was fast forward. Um, I was like, my dad's like, "well, what do you go do?" he's like, "well, whatever makes the most money. Go be a lawyer." I'm like, "well, that doesn't sound fun, but I guess it makes money and I don't want this situation." so kind of went on that law went to witworth university in Spokane. That's where I met my wife. And then gonzega for law school and I was in law school the first year. I had just written a $45,000 check for the first year and you're sitting in their listing and I'm falling asleep. This is the most boring stuff ever. And I'm like, god, I know myself well enough. This is not going to be for me. And so luckily I have the most amazing wife, but she's like, let's get out of here. Like do a study abroad. So I we I got accepted to the university of london and I was like, you know what I want to do is I want to help businesses buy and sell. I want to do mergers and acquisitions, but I want to do big ones like international. And so I studied in london. Well, in london, you I saw what the world looked like for the first time.
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Time. And I saw, wait a second, this building's been here 500 years. Why are we trying to recreate this stuff? The architecture is awesome. This is awesome. And so I kind of came back with this idea, well, okay, you could earn money. That's great. But I think you could also go build wealth in different ways. And at that point, my parents had bought their first flip. And so I was in law school and I'm like, "well, I need money. I'm broke." and so I'd go over and hang drywall, do all that stuff. And luckily, my dad throughout the whole time taught us how to do it. Like I can tell you the screw we use on our apartment building and why. Like I know every building we have down to why we chose that part. And kind of fast forward that, my wife came back and uh we were at a wedding and there was this random curtain and a camera and these people were having a blast going and out. It was one of the first photo booths in Spokane. You have them on weddings or event style. And I'm like, why don't we do that? You're already a photographer. Let's just try this. And so went online, found this awesome photo booth for eight grand. And I was like, okay, we have zero.
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How's this actually work? So I went to her parents. I'm like, can you loan us money? They're like, no. I'm like, okay, well, this doesn't work. And I'm like, well, let's just sell some of them. And so we sold 20 events without ever buying it. And then bought it, built it, and within 4 years it was doing 300 events at 1,200 bucks an event. And it was a all it cost us was paper, 40 bucks an event. And so at that time, I was trying to go through this public interest loan forgiveness to get rid of these stupid loans I took for school. And so I was working at a nonprofit building their entire nonprofit portfolio of real estate. And so I was retooling these like picture the worst financing things you can get. Litec, uh, hap grants, State funds, housing, and you're just like this is not real. This is terrible. And so my wife was like, "well, I'm going to go back to school. Like, photography is great, but I'm going to get my masters in teaching." and she's like, "well, you already help all these people anyway. I'm not going to be home. Why don't you go sell some real estate? If you get your law degree, come to find out, you don't even have to take classes." and so I was like, "well, you know, that'd be fun. I'm already I like this." so, first year sold 10. Next year sold 60. Next year sold 100 properties. And you sold 60 in your second year and then a hundred. And I'm like, "wait a second. So, I'm making a half a million dollar here. I'm making 40,000 a year at this nonprofit. And I was like, but I can actually kind of do them both.
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And so just kind of at that point, Spokane, now I feel really old, but you could buy a house. This is post recession. So timeline is about 2010, for 50 grand. And so every time I closed a deal, I bought a house. Closed a deal, bought a house. And so we just lived off the 40 grand. And so accumulated like 40 houses. And then Spokane hit this massive spike of a 5year stretch. It went up 22% per year. And so you kind of do the story like big it's a bigger pocket story. And you're like wait a second. So I don't like 30 houses. This sucks. Like why don't I have one with 30 doors? And that kind of started that path for me at least down that way. And so you hit this point where I have no overhead. You're making 500 doing that. You're making rental income. I'm trading businesses. The issue is my tax bills are high. So I run into a really good friend and he's like well I run restaurants. So I'm like, well, I like commercial, so I'll do the buildings, you do the restaurants. So we accumulated nine of those. Then it was like, well, you don't make any money off food. The guy who sells us the beer makes all the money. So then we created a brewery to sell beer to our own places. And then you start in the field and what it's why I love being a broker is then you get introduced to deals. And so we go into this gym that's been there for 40 years. It's had the same ibida for 20 of them and it's this prime piece of real estate. And he goes, "well, I've been trying to sell for 5 years." like, I go, "I'll I'll I'll buy it." and uh I go, "but right now, like, you got to owner finance it. There's just going to be too much work to get all this done." so, owner finance at 2%. So, that was the first gym. I'm like, "well, we're going to have one gym. Nobody's going to buy one gym. You need three." so, then we bought another gym because it was on multif family land. So, we
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Just finished 107 units on it next to a gym. And so, it just kind of my life is a little bit more like slum dog millionaire, right? You can answer the question because you lived the experience. Yeah. And so really for me it's just been a story of that and kind of in the meantime was a professor at wsu. So I always had this kind of day job piece to my life and then it wasn't until 2015 that was just like nope we're going all in. And fortunately it was 2015 when I went all in. It was a sweet time doing it. So fortunately now you fast forward and um the author thing came from when you're a professor you have to write this big published work. And so I wrote a book to get the published work because then they can't really fire you if you have that behind you. And so that now I'm an author from that and then wrote another one kind of what I went through. Through. What did you write on? So that was back where I don't think millennials got a good head start. I actually think it's be really hard especially for our gen next generation even to create wealth. And so what I found though but if you could get into learning businesses and value. So it was a really like a hack on how you get there. And then it had a really big section on how to forgiveness programs and things on student loans.
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What's your book called? If somebody wants to find it. First one was called living at zero and the idea was hey set a budget rand it's a mix of everybody that way but it was like in my head it was like we only have 40,000 but I was making 600 it's just 400 and or 560 of it was going to investments so the idea was just build these three buckets that you can use and then that way you can kind of slowly develop that passive income over time and so yeah I mean it was good it sold I don't know 5,000 copies or 6,000 it was through the school so it was through the publish thing there and so it's really just been a life of this chance and seeing opportunities and connecting dots. And I think that's been really where it's helped me the most. And then it just kind of scaled up from there. We started four degrees and all uh which is a real estate management company. A buddy says, "hey, I got this guy that's selling a $22 million piece p piece of property. He's just going to pay the 8 million in tax. Go away." and he goes, "I think you should talk to him about 1031." so I grab my phone. I'm like, "what is a 1031?" 1031?" I still remember this day. And then he's like, "okay." he's going to stop by your office. Well, at the time it was me, my brother, and my mom. My mom was what broker. And then I was like, "mom, you have to sit at the front so it looks like we have a receptionist at least." I said, "I'll have the conference room. Me and joel will look busy when he comes in as this whirlwind best guy." and he comes in and he's like, I pitch him this idea. I'm like, "why pay the tax? Look, you can actually get a pretty good basis on this land. Just the noi, the day one noi will return you more than the russell sherwood. Nothing." he leaves.
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I'm like, "well, that makes sense." calls me that next day and he's like, uh, he's like, "I'm coming down. We wrote 30 lois and spent $36 million in the next 3 months. Scaled our management from my doors to almost 700 and then it just kind of went from there. So that's a long-winded version. In the middle there was like I've always had this dream of owning a sports team. So I bought it the sports team, the professional sports team in Spokane. And like little things like that, but it's like as I lift the tide with one thing, my rents got better. Better. What sports team is that? So the so Spokane velocity and zephyr. So, it's a usl um d1 team and then a division 3 team. So, so that's the breadth of kind of what I covered and I'll explain why you should never do that. That. So, cuz it sounds really cool, but I'll explain the pain of the last two years when you do too much, but also I think there's some community elements into everything we do. So, yeah. Could you speak to how you sold 60 houses or 60 deals in your second year in real estate? Cuz I think there's there's a lot of real estate people that listen to this and that is mindblowing cuz they hear 10 and they're like, "that's the goal. Good year." yeah.
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What year was that? So that would have been uh 200910. So what I did right away was I don't like actually working a ton with friends uh and buyers that way. So I just find investors. So then I'm sell I'm selling blocks of houses. And so the downside then was the average home price was only like 200. Actually my average home price was probably 150. So you had to sell 100 bunch of them to even get there. And then same thing, right? I guess my story is just this that was a lot of work. I'm like, why am I not just selling one 100 unit building for that? And so kind of my biggest year was 125 million in commercial sales um that you did, but that's 12 transactions. Transactions. Yeah. Yeah. And so it's just kind of this morphis. But I think a lot of people avoid the investor because they don't know what they're talking about. And I would argue get in get really knowledgeable and find them because they're going to they're your recurring kind of revenue piece and then your friends will buy, people will buy. But it really did help me kind of bridge because nobody was really buying then.
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Then. So you're trying to convince them to buy and they're like, "is this the bottom? I'm like pretty sure it's the bottom. The land's got to be worth more than this. Like I'm like what are we arguing here? So it's it was kind of a change from that and then it's just managing time and at that time we had no kids so it was just you just go work. So how did you manage all that time cuz that's a lot of things you did and jump between. Yeah. So you just kind of uh especially with real estate again investors didn't need to see the house. I could walk a house and they would put an offer so you build a relationship where I'm just making them money that way. Um, and then every weekend was usually when I would show houses. And then that's why I got my mom in the business. So then she kind of became my buyer's agent before there was really the team concept. So she would go out and show the houses and do that part and then I would negotiate and close the deals. So it fit really well and that's kind of how our brokerage even started. It was like, "wait, we'd love to come hang our hat here." and I'm like, "please don't." and then it just escalated. So are you building out systems and hiring more employees for each business and then starting the next one? Cuz that's a and running them all at once still.
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Still. Yeah. So what I did I think learned early on was uh learning what I don't know really well. So then I would go find a partner. So how this four degrees happened was I had about 40 of these. So I'm selling real estate working full-time and then trying to run and maintain like you 50,000. Let's be honest here, right? This is what everybody talks about. Go buy a $50,000 house in mississippi. Those are not nice homes. They have problems if significant problems. So then I'm over there fixing knob and tube wiring, old plumbing. And so I remember painting doors at 2 a. M. Just to get it turned ready. And so my brother was uh ex special forces in the military and I'm like, "wow, that doesn't translate to many things, but you probably collect rent pretty well." so I was like, "hey, bro, I got an idea, something novel. We're going to throw let's create a management company." what branch was he? So he was army rangers. Yeah. And so he uh still does the kind of uh the reserves, but brought him over. And so he's like he's logistics, he's planning, and then lets me go do what I do. And then my the restaurant piece was because I found the best operative restaurants in Spokane.
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Let me build you the building, you run them, and then I get to collect revenue and bring people here to eat. And so it just kind of was finding the right operators and then I just go do my side of it. So you're electric, too. Oh, it's fun. It's because you get excited about it, but then if you ever want to make me cry, just ask what happened in 23 to 25 and I'll start 23 to 25. Oh, man. So escalating, right? This is just an upward hockey stick. Wait, give me yeah, give me 2015 to 23 first. Oh, it was just you bought all the houses, started building somewhere in there. You were developing yourself somewhere in there. Just decided you could do that for sure. Same thing, right? We first office. Yeah. Yeah. Got my bid from the contract. I'm like, we're not paying that. So, we fixed it. I can do that. And then we the day I finished it, we added we went from four agents to 44 agents. I'm like, shoot, this is too small. And our whole model is collaboration cuz I believe you can't do this remote. Just remote work will never work. It's you got to be together. So we get a bigger building one year to fix that one. I hire somebody for that one and then 6 months after we add 40 more agents with not enough parking. So I find the next building. So I 4x it now cuz I'm like wait we've only doubled each time.
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I'm like I'm going to plan for 4x. By the time we finished it we were full and running kind of out of a 20,000 foot. And so as we're building those I'm like well wait a second. I bought this for 500. I put 600 in and my appraisal is three. Like that math works pretty well. And this one I didn't even build it. I just found the deal and then I'm the tenant. So I'm a creditw worthy tenant. So it sets up really well. And so that was kind of our fora into it. And then I was helping a guy develop about 50 million a year over here. And then I would build a 24 unit. And I'm like that's great, but my management team hates it. So we got to go bigger. Then I would take another one. And so now we do kind of minimum 72 units. Ideally uh 96 unit buildings. But is that in-house construction then? Like you're the gc on it or you third party? No. So we ended up uh not taking that in house just the liability of it. Um I think you find the right gc and they can they'll save you more than you think you'll save yourself.
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And so now it's just we have our own internal kind of financing, audit, compliance, management, asset management, and then we farm out everything else from our like everybody's like well bring in your own architect. I'm like well I don't want to be forced to do a project. I'd rather pay this guy a premium when we need him. And so it just really we third party a lot of our stuff just for that reason. So talk a little bit about um 7296. Obviously you're building six plexes and 12 plexes and you're just maximizing there 18. 18. Oh no. So we'll do a we so we'll do up to a 36 block. So we do build them in towers. So they're all three and fourtory gu three and four story garden style walkups. Our build cost in Washington's a little more expensive, but we're roughly able to put a unit on the market for about 140 grand a door. Damn. Damn. So, so, mark, uh hard cost construction, right? That's not carry cost.
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What size of a unit is that? So, then we're 22s are 920. Uh it's a little smaller, but they have big walk-in closets. And then our one ones are about 570 to 620. Yeah. You're bu so, you're building like what 150 a square foot or something like that. Yeah. Hard cost. Hard cost and we have sales tax in Washington. We have things like that. That. So to my question, what how did you land on the 72 to 96? What hits that sweet spot? It's just the return metric. Um so 7296, some of it's limited by density, but then most of it is that we need to be able to afford a full-time manager and full-time maintenance on so it's a rent roll. It's rent roll. Yeah. It's all so it's actually dollar amount. So we have a project that's 50 units downtown, but we're getting three bucks a foot. That actually pencils the same as my suburban 96 unit. Are you still doing fourstory walk up on that though? Um so fourstory walk up we've built we're building our third one now. Uh we were afraid of somebody trying to walk up four flights of stairs but actually that rents pretty good. The third floor is the one that doesn't rent as well cuz you now you have somebody above you and below you walk stairs. So uh but fortunately we haven't seen too much of a drop off in those. Uh again we try to finish them at condo quality. So you're talking about like real quartz slabs, you're talking about undermount nice pretty much all the stuff you would see in a nice condo.
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You're still at 160. Yeah, but and so we're just getting buying power, right? So I'm able to buy I'm buying 600 sets of appliances. Yeah. Yeah. I'm buying loves you 300,000 square ft of flooring in like a two-mon stretch. And so it works out really well. And so there's just a lot of lessons learned supply chain things. So we're more conscious of that. Like I own like 10 of these main disconnects for buildings that are just sitting in storage. And so it's just like little things like that we're trying to be just trying to see around corners. And I think the only corner we didn't see well around or at least I my assumptions were just way off was how fast an interest rate would go up. Up. That's probably the biggest. Well, if it makes you feel better, there's a lot of other people in that exact same boat including almost say every real estate I mean commercial investor at least. Yeah. And I think it was just how much how many chips did you have on the table when the music stopped? And I think that's where my mind shifted to where I'm like no we're in a really good spot honestly. Yeah. But we every time we stacked it was to stack because I was selling these. So, by the time they were done, I they were I was transacting them.
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Them. And so, uh by the time those hit, I had this um basically almost 140 of my own units, like my cash to like my brothers. And I get them under contract March of 22. 22. Oo, bad time. Oh, that was sad. Market rate I'm at 260 a door. I would hit high water marks. I think they couldn't close before their completion. Yeah. So, there's no lock of that. And I'm like, okay. So, I was like, wait, rates are going to go up. But I'm like, what? Two points, maybe? Maybe two, right? That's enough to do this. No, they go up six. And so they retrade what would have been a 7 $10 million profit down to one. So we sell them, but I've already spent four thinking seven was coming in. And so there's just this like then I'm playing catch-up and then all the buildings we have there, it's like, wait a second, instead of you buying this now, I have what a refi is 30% more down on 20 million. That project needs $6 billion and I need to be able to hold it for 24 months because lease up slowed that far down.
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And so that's really like the jux position. So it's like all right, where else are you finding revenue? Lucky we had management. We had some of these other sources, but that's really kind of I think the people that get pinched and it was just how many did you have on there? Well, now we've stabilized all of them and I think in two years I'll sell them for exactly what I thought I was going to sell them for. So what's the goal with selling them rather than keeping them and your philosophy around that? Yeah. So my goal is to get to a thousand doors. We can't get to $1,000 if you keep all your money in each deal. Mhm. Mhm. And I don't like taking money out of the deal once we do it. So, the idea was to stack up as much cash than we would take on that portion. But remember, I was that was back when you could do they were doing arv loans. Mhm. Mhm. And we're building at 140 a door and they're worth 250. Mhm. Mhm. So, I'm all in at 180. Yeah. Yeah. Like everything I built had 60,000 a door in margin. It was like I was flipping a 100 homes at one. What do you what would you be at today, do you think? Uh with how much expenses have gone up?
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No, that uh so I'm about that now. So I just had to tweak I tweaked the design. Yeah. So we tweaked the design to accommodate it. Yeah. What's your layout now? Um so we actually we got more square footage because you have to understand during that time that here's a good example. So it's the best story. If you ever build an apartment building, there's this main disconnect, right? Power company has to connect to your building, but it's through this one piece of equipment. Yeah. Can't get them. Made in mexico in an undisclosed location. Ship dates undisclosed. You have no idea when they're showing up, but you can't get certifi any kind of certificate of occupancy till it's installed. Installed. Yeah. Yeah. And so basically, we're sitting there on the 72 unit. I'm supposed to be closing with these guys. And I'm like, let's just close this. Like, I know I can't refi it. And we're sitting there and I'm like, I'm shopping every black market site you can for this thing. And I'm like, can I go make one? They're like, no, you can't make it. It's got to be signed off. And we get down, we end up, they cost 7,500 bucks a piece, right? I end up paying 87,000 for two of them to get them there on one project. The next project I'm like, I can't find more of these. Jesus, I can't sell my child. Like, this isn't going to work. And so, we redesigned the entire electrical layout to go from a three-phase to a one-phase just to not have that disconnect and then closed them all on time. It's like the greatest accomplishment I ever did in during that stretch. But the issue was that so that was inflated pricing up. It actually has come down because now like we have a rule we can't buy anything that's can sit in a port.
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So I know I can get cabinets in china cheaper but I but we had cabinets sitting in a shipping container. Yeah. Yeah. And so now our port actually I come out of uh portland but I could hop in a big box truck and get cabinets there. So we've literally switched our design to where nothing outside of those disconnects and maybe some small like oh even those we have. So yeah it's mostly those disconnects were the ones that you just can't control. You should just start stocking those up. We do. I have 10 of them. Yeah. And so then what we'll do is so then we broke ground on 300 more units. They are locked in my safe. Those aren't in a warehouse. A million bucks worth of disconnects in the right market. That is a good investment. Crazy. I didn't think about it. I'm like on the balance sheet on your I'm losing over here, but I'm winning on the disconnect. Disconnect. Your ps has the disconnect. It's like the guys selling jeans to the gold miners, right? That's the money.
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That worked out. So, you mentioned you didn't like the idea of taking money out of the projects to hold them. Why? Uh just cuz I think that where they got to perform and I think the issue is that we get strapped with the cash and no most of the loans we were getting at had 5 year sevenyear notes and I'm like I don't like where we're heading five seven years. The last thing I want to do is be forced to do something. And so we and we already had higher leverage. That was the other thing. So I remember vividly I sent a text we were using debt funds. It was like but when they re first came on the market so I could prove it up to 100 million for any project that worked right and they're taking arvs. So all I'm doing is penciling this thing down. Yep. Farmer joe sell me the land. My builder said we can do it. I can get permits in three months. Months. And are you having to bring money down on that or the debt fund is I'm rolling my commission in and that's it. And then they're taking our equity that we're creating between the two. Right. So they're doing an ltv loan instead of an ltc which they do now. Yeah. Yeah.
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And so it just it's stupid. You can't give somebody that much rain. And so basically yeah. Wait, break that down easier, right? Let's do they're giving them all the money to build it. It sounds like what? Yeah. It's let's call 100 unit building, right? So, I'm going to be all into that thing even with their expensive debt for 200 a door. So, 20 million bucks. It's worth 25 with an appraisal. Mhm. Mhm. Well, I'm over 10% of 25 already. Actually, I'm at 20% of arv. Yeah. Yeah. And so then what they're like, "hey, we need something." so, I remember putting like 200 grand down on a 72 apartment building. Building. Does this still exist? No. No. That was gone. Those are the anybody who's burned did that. Yeah, yeah, they did that when they expected a sale or they expected something. So that same project to keep it I had to bring another 4 million what I should have brought. What I should have brought that cover at that point and so bring it later instead of up front and I would prefer not to do it when you're accumulating 10% interest on 15 20 million. That's that's kind of where it hit. But at the other side is like also wouldn't have scaled this fast.
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There's no way to I just think there's a responsible way to do that. But it might just be do one project. Yeah. Yeah. Somebody told me that. My mom told me that the other day. I'm like what one? Who does one? I'm already out here working. Why don't I just throw five on the table? What am I going to do with the rest of my time? So what do you use as your debt structure today on the stuff you're building? Building? Yeah. So the two we just closed. So what we'll end up doing, we so we created a fund to help us raise. So rather than us put every dollar in, we brought a fund together to do it. And so um it's a single asset raise. And so what we'll end up doing is finding 65% ltc on the project on a three-year note, two-year fully funded ir, and then um usually we'll do is we'll bridge into a basically a bridge to hud. So we're designing all of them now. They took away green standard stuff. So we're we're designing them all for that takeout. So before we break ground, we have an estimated takeout with kind of a better sensitivity test to rate volatility and those will be to hold then they'll hold now. Yep. Yep. And again, I say that, but the right offer comes. I just it's just going to be an interesting market because what's happening is your supplies going down again just like it's supposed to. And so all of a sudden, I'll be sitting on 600 of these doors. So you give me 250 a door, I'm back to the same number I thought I would have.
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So is that fund for those two deals then specifically or each one of them had their own? Yeah. And so kind of over the course of those I'm trying to think it's probably 30 40 million raised uh into those assets. But then again, you had frustrated investors. They're like, why aren't we breaking ground? I'm like, "look, I have this project we can't lease." and you're asking me to build it. Build another one. Yeah. Yeah. And so it's just it there was a year and a half of I'm not a great communicator cuz like I'll be in a meeting like this most the day. Mhm. Mhm. Yeah. You're frustrated. Want to get a hold of me? I'm like, do I call you at 6 p. M. And so we've really had to this last two years has been like, "how are we communicating better?" because we didn't do a good job of that. And I think anybody trying to ever take someone's money, you need to figure out your communication plan. Yeah, I could have solved most. It would have just been a simple text of, "hey guys, this is not the market to put this building in the ground. We own the land. Just hold tight with me because it's a five year. We take it's five, seven years on the money anyway." if I would have just sent that email, no problem.
[00:26:25]
Yeah. So, what do you do differently today to communicate better with your I send so, I send an update now every Friday on a project whether it did something or didn't do something. And then um now we've set a better portal so our tech stacks better. So you get very inside kind of transparent access to what we do now. And then um and then we started adding video, more video walkthroughs. You feel like your investors start to feel like they're part of the project. Yeah. Silence kills everything. And I wish somebody would have told me that. In my head, I'm like, "no, I'll fix it and then I'll update you." one of the things I've seen of people who have failed over the last few years is um they did a really great job communicating when there was good news, but then when there was bad news, they went silent. So that was I mean cuz it's really hard to share bad news. I mean it puts you in the hot seat and if you got lots and lots of people that you're bound to and you should be bound to them. You took their money, you need to make sure you're communicating that and I think it g and so what I learned through that. And so the cool part is now the debt's great. Um in the meantime learned the importance of like lobbying.
[00:27:30]
So we created a program. So I don't know how we did this. Take any unimproved site in Spokane. They called it a parking lot rule, but it really applied to anywhere you could park a car, which is land, right? And they gave us a sales tax waiver. Uh so on this last project we just built, it saved us 1.5 million. Wow. Wow. And then we had them increase the income limits for our MFTE. So then we'd saved no property tax for basically 12 years. So we're building this product now. It's about 12 grand a door less with 10% less opex. Opex. Wow. Wow. Like this is what we need to be doing. And so kind of it's allowed us to tweak our model there. There's still like a bunch of hair. Like I had a front page article jordan what is it? This is how small Spokane is too, right? That this is a front page article. It's like developer Jordan Tampien faces foreclosure at brick west. Front page article. Like the three projects I had that were like how do I fix these? All hit the front page of the paper.
[00:28:21]
That's not the communication you want with your investor. So, I started communicating from that day on. It was kind of the trigger one. I'm like, "oh my god." like, they all knew that, hey, there's two buildings that are restaurants that it's just they're going to be hard ones to save. Like, I these apartments will be worth it the next day. This one I had tough partnership that I was trying to navigate. And I'm like, and so, but that's kind of where I was like, "wait a second. You can't hear my news from the p. If you're in the circle, you should be in the circle." so, best thing we ever did, we changed that piece. And then um and then I'm going direct kind of the debt funds and figuring out kind of the so when you say lobbying, you're getting political. So were you championed this parking lot waiver? Yeah. So just with the City cuz it's it's expensive to build in Washington State. Um and I think our rents are pretty high for where they're at now. I mean you're that 22 that I was talking about. I mean we're getting 1725. That's not sustainable. Should be$,550,600 I think would be fair. And so if we can implement things like this, it encourages me to build and then it's there's no additional cost. Like that's a vacant piece of land that brings in a th000 a year in taxes. Yeah.
[00:29:20]
Yeah. My building will be now 130,000 in 10 years. Years. Yeah. Yeah. Pretty easy math if you're not shortsighted. So why are you doing funds on these projects rather than syndication? It is. Sorry. I was saying I was want to move to funds. So it's all single asset so you know what asset you're in. Uh I was saying that it's difficult to do every one of those raises. Yeah. Uh, and so unless we do what my mom said, scale back to one project every other year, the fund piece was what we were looking at next, cuz then you can kind of be in it a little longer term. Um, I'd want to work on some of the liquidity language and kind of redemption language, but um, I think that's probably our the next evolution of it. Yeah. And is that 30 to 40 million raised? Is that what's the typical investor look like? Like $100,000 chunk and you got a ton of them or you getting like million, $2 million chunk? It's it's a mix. So, we did one project that probably wrecked my brokerage the most because it was a project that stalled was we actually I think agents should invest. It's the weirdest thing to me that your only thing you're supposed to be good at, you don't even take advantage of. It's the craziest thing to me. So, me too.
[00:30:17]
We built an apartment one and again this is still based on a model of I had the buyer lined up for it. So, I'm like look guys of all the ones this is the one I would do. So, we let them go down to 25 grand. So, we had to do a special exemption de uh filing and so that's the only one. It was never that low but I had 25 agents in it. Wait, why did you have to do a special exam? Uh because they're not accredited. Oh. Oh. So you can only have so many unacredited investors. And so we built that's the only one I ever did. Otherwise, it's typically 250. And then now my new minimum will be 500. And then probably by next year it'll be 1 million. And then one day it will be 5 million and it'll be one check. Like I think it's just the hardest one of like how much time we spend communicating the piece to it. Um that I think we're we're pretty good at finding the deals and I pretty positive if I frame it or put together big enough packages that it'll appeal to the right buyers. So, are you personally raising all that capital or do you have a team of people? We don't have teams yet. So, like kind of it's it was just me, we had me and then my brother kind of runs the asset management back inside of it and so it's me right now. Yeah. Doing that.
[00:31:15]
Yeah. That's a lot of money to raise. Yeah. And it's fortunately when you do that many projects create that much wealth like it's not that it's text like here's a deal right so I was just driving over I'm looking at we're looking really big into covered land plays right now something that I can develop in 5 years I just think the market will know what we know in 5 years and so found this building has that same credit same mftte it's in an a pocket I can has no density limits it has an existing threetory brick building on it they want an eight cap to buy it now and the it's a aaa credit. They have four more years left on their lease and with an option to renew. If they renew it goes up 20%. On a property like that, you're going to go pretty tall though, right? So, are you starting to change your designs? Uh tallest we did is a 50 over2 podium. Yeah. Okay. So, seventory. I'll explain that. But like that's what we're buying now. So, then I would then that's a text to like some friends. Hey, we need 500 grand. I have this financing lined up. I don't collect any cash flow from it. So, whoever brings the 500 gets whatever the return is and then I'm just the developer when we build it and then I hold my equity piece.
[00:32:21]
Do you have a specific return you're trying to hit for investors? 22 to 24. I don't think you can actually offer anything if you're not over 20 like you should that you probably shouldn't do the deal after. Is it ir or ar? Yeah. Or irr? Sorry. Yeah. And I'm thinking about actually listening to your podcast. I might actually switch how we eval is that based yeah, I was going to say is the ir based on the sale and five. Five. Five. They're all based on sales and five up to seven depending on the asset. Um, some of our newer uh, podium style buildings just take longer to build and to kind of get in the market. When you hold for five, are you refing at two? Yep. Yep. Okay. So, do you pull cash out at the refi if we can? Yeah. So, ideally, so there's you I can send you sometime, but we send three basically performers out. Okay. So, you're calculating ir based on the cash out in two years as well. Exactly. So, when I say 22 though, that's just based off cash flow and a sale in five. So that probably be like half of your investments getting recaptured at the refi maybe. You think?
[00:33:16]
Uh so that's a version but then my irra would be 30ish. Okay. That's what I was going to ask. It' be way higher. So all I'm basing it on is one redemption, right? It's cash flow and oh, so then that is more like a ar it cuz ir would be calculated if you on the recapitalization in two years. Well, if you recap. So what I'll do is I'll send out three performance three options of what this could look like, right? But we're never going to exceed a dscr. So that's what we're capping it on. Then we have sale parameters that have to be below a five cap, which may or may not happen with before 5 years. So that's when we would look explore selling if it drops to a five cap or below. Below. And so then I'll send you three options, but we're basing the investment model off of you only get well, you get no cash flow for two years really cuz that put in stabilize and then the next three cash flow returns and then a sale. But then you'll see a model of hey actually rates went down year two here's a redemption and the ir just goes up from there. So how much do you target that you want to own as the gp of the deal and split lp?
[00:34:15]
It's a crazy one. I'm just a curious developer. I just like doing it. And so for me a typical deal we'll own 20%. Okay. Okay. And then we have a gp lp structure. So that will go anywhere from 10 to 20 and then we like to put cash in the deal. So it'll be a limited partner and a general partner in the same deal. Yeah. Typically that's what we'll do. Will take minimum 30 on it is what we target right now. But it's hard to do the deals cuz we're hitting like raising funds 40 to 50% return on the deal level itself to then go to a 20 to investors because you're taking 30 off the top and then we're buying lp shares too. Yeah. And I found they like I mean most investors like having some skin in the game. I mean there's a couple deals we'd put zero in. We got our 20%. I mean it's a lot of work. I mean especially the last year financing used to be a text. Now I'm spending six months. Yeah. Yeah. It's a way different operation. So even why we're so lean was I didn't need them. Mhm. Mhm. Like our broker handled everything. Yes. And we're guaranting everything.
[00:35:06]
So back in the heyday period where you could get that, you know, zero down kind of scenario. Are you bringing investors in at that like it was totally just you just getting reps, building that brand, people are like bugging you, can I get in? So when the time came where actually you needed to inject equity, you had either maybe the guys that bought all those houses when you were early on and now they're watching and they want to get in. Like what is that evolution of building that brand through reps and then needing capital and being, you know, a facilitator? Like did that have a clear milestone in your no, I think that was the issue. I didn't have anything clear. It was just you could. Could. Yeah. Yeah. And when your goal is $100 million, you go until someone tells you can't. Like that's such a terrible idea. God, my I just remember vividly thinking so I grew up in a pretty poor house. Um I think my dad made like 26 grand a year to feed seven kids. And so like 20s to 30s I remember vividly writing this down. 20s to 30s was like how does money even work?
[00:36:03]
I thought credit card credit cards were income and I'm at school here and being like dude keep giving me money. I'm like no they're acrewing a balance at 7% interest. And so in that time I'm like wait a second I really like this real estate game. I think I can make something here and I think you need to own businesses. Some type of affiliation because of the write-offs and the daily cash flow. And I was like, well, from 30 to 40, I'm going to risk every dollar every day. And so my I bought the soccer team when I was 39. And it's like I told you I was going to like this isn't a surprise. Like the same article that was bad there, there was 19 of them of jordan buys another I bought 52 buildings in four years. And so it's like there was that runup. But I was like if you knew what I was trying to do, but I wanted to learn them all. Like my goal is in 10 years that I actually fund like a company like this but from a strategic level and operational and so then I need my cash to do that and then I'm just coming in and helping you guys I've seen this one before or hey call this person or do this and target service related companies and then just use my own money to be your 250 seed fund to get it going and then just back operators. So I'm like well if that's your plan I had to do what I did because I wanted to learn all of these things.
[00:37:10]
But again I can tell you how to build a 5 over2 podium and why you don't build the eighth floor. I can tell you what elevators to use. I can tell you what how to orient them to the sun, right? And it's things like that. Then that's what I think drove me most of the time. And then the whole time I'm like, well, I don't want anybody in these deals. I don't have to call people. And we could do it. And then when that kind of we saw that tide shifting, wait a second, we should hold some of these. Like I don't want to have to keep recreating this wheel every day. I don't know if that was the right decision actually cuz that's that's it was mostly the market change. But that's really when we started shifting and bringing funds on. So, we'll have a we have a couple hundred investors and now I'm just we're paying them off and then limiting it down. Paying them off, closing the circle. Paying them off, closing the circle. And then my goal is to have five to 10 people who understand it and they think a little longer term because I can build a 2,000 unit portfolio if you give me the access. And it's like, okay, let's just find one group and do something like that. So, where'd you get your education? Is I mean, how I'm guessing your law background helps a little bit, but you've learned a lot more stuff since then. Is this just a was there any one main source that you went to figure this all out?
[00:38:12]
I'm just a doer like you throw up sheetrock the wrong way and put the wrong texture on have to rip it out. You don't do that again and it's a lot of that and then bigger pockets could write kind of came on the scene there. It's probably a traditional story that way of I think everybody should read rich dad poor dad. Just a mindset shift of what it does to how you think about it. And I also don't think everybody should do this. Actually, I'm a firm believer now. Everybody should if you can't stay awake at night and not sleep like this is not for you. Go work for somebody. Come learn from you. What if I could have switched I would have come and worked for you guys for 5 years and been like okay let's learn what are we doing here cuz a lot of it was just assumptions and I built terrible habits in a good market. Yeah. It's just the ability to see it and do it and so many other people are taking 5 years to go do it you know and you're just like opportunity. You just don't say no for a while. You uh you get pretty experienced. 2015 was a good time to figure it out. And then I had a big developer so I was developing his building. So the podium style wasn't any of my money, but I developed it for free. Yeah.
[00:39:09]
Yeah. And I learned all of it. And so then it's like, okay, what size of sewer pipe do you need for 50 units as seven stories? Stories? Well, you don't need a 6 in. You need an 8 in because the flow is different. And then it's like, well, wait a second. What about your trash shoots? Well, they make echo chambers if you don't put the right compactor at the bottom. Like, it's just the littlest things. And then we own a management company. If I was just a developer, I wouldn't have understood that. But now I get the complaints. Complaints. Yeah. Sounds like a thunder's rolling down when somebody's dropping a trash shoot and I'm like, "oh, jesus." all right, new trash shoot, guys. And so, it's allowed that. So, four degrees came from the idea of those companies should all work together. Management should be informing development. Development should be informing brokers and that side and then we have a foundation that gives away what we make. So, it's so, that's the name four degrees. Got it. It. So, yeah. No, it's been I've been feel fortunate and then Spokane kind of was the perfect time of any time you could have been in Spokane. Um, and it's it's fun to be a part of some of that growth actually. So, still learning a lot. I think actually now I'm realizing I'm need a lot more to learn. It's just what did you learn a lot about partnerships during that time? Cuz I imagine there's a lot of people pulling at you that are, you know, on the operations side or on the trade partner side that have a lot of value and maybe that allowed you to create that velocity and learning, but I imagine it created a lot more drama as well. Yeah, I think actually was from this podcast you say is like don't bring somebody in if they don't write a check. Like that's a new rule because I brought him on because I'm like I know I don't I'm terrible with employees because in my head I'm like why aren't you guys working? You're taking a break right now. We have so much to do and then I'm like nope. So my brother does all that. So the idea was hey I'm going to bring on somebody that does that. Well those partnerships failed. So guess what I'm doing? I'm
[00:40:46]
Down at my brewery counting the till to make sure nobody's taking money. And I'm like this is the worst possible use. And so for me now it's I've become so selective. I'd rather not do the deal at this point. And so as I've gone through it, it's just I'm too much of a salesman to be the money ra. So it's it's just setting up systems and structures so that you will hear from me of why I believe it's going to change the City of Spokane. And then you should have somebody come in right behind be like, "but you could lose your money." like you almost need that yin and yang. And it was just me out in front doing it. So of course I raised it and now it's like, "okay, but I told you bring back 10%. I need to make sure this brings back 10%. And so I think it was just a matter of let's slow down. Uh we realized we filled gaps with people really fast instead of understanding the system better. So we kind of cut back on staffing across the management company and across the brokerage and pieces. And so I think I'm really excited because it's just the most clarity I think I've had in the development world. And I think if you can build a system for the last year and still make things work, you I think you'll do really well in the game. So what's your why?
[00:41:50]
Um that was good. That's a good question actually. We uh we are entertained this option to basically like 10x our management company and I sat in the meeting for the first time like I don't know if we want this and I think for the first time I'm asking what the why. It was just fun. Mhm. Mhm. And it was because people said you couldn't and I'm like this is the worst michael jordan trying to push people out. I'm like I need what are you doing it for? And what I love is like I literally will sit in our patio have a thousand people. We got negotiated a deal with the City where we have our building. They had to put something underneath it under pund billions. We lease this entire park for a dollar that our brewery license extends to. And so like sometimes I'll just sit out there and watch 900 people that never would have been in that part of town if it wasn't there, let alone drinking our beer that was never there. And so there that was always been kind of the why. And now I think it's just I need to figure out a way to give back better. Like I said, I think it's going to be now three years of just learn me better so that I can do what I do better. So it's just it's been a lot of self-reflection on it. And again, when you go to zero or actually when you go severely negative and you're not sleeping, you do those you do a lot of self-reflection. I'll tell you that much. So, so you hit that point in 23, you're saying?
[00:42:56]
Saying? So, yeah, 23 to 25 probably. I mean, if I lost 10 million, I mean, I don't even know what I lost. And that was just mostly mine because it was like I have to sacrifice my project to keep this one alive. Alive. And so, you're selling, but I had 22 development projects going and so you're just like picking through them. And I remember I had this schedule once where wife luckily she stayed with me and I'm amazing daughter but like I would be I couldn't sleep well. So then it would be run all day and then as soon as I felt tired like I could go to sleep. It could be 6:00 p. M. 5:00 p. M. 9:00 p. M. Whatever it was. I'd go lay down cuz I knew I was waking up at 1:00 and then I'd work from 1 to 6 and then I'd go lay down cuz I was like I got I need an hour another hour or 1 to 5 and then I go lay down and I'd get up at 6:00 and go to work. And that's the stuff that nobody tells you and you're like, "yeah, sure. It's cool. You want to build it like it's fun till it's not." and then what do you do? What do you do when it gets really hard? And so it's been that side of it where for 10 years, I mean, it was really actually I would argue it was harder cuz it was moving so fast. I was working way more, but I was winning.
[00:43:57]
And so it was super easy. But it was the first time where I'm like, and so the second book I wrote was like I had nobody that could help me in that situation. Couldn't go to my dad's aid. Dad, I have a capital call of $4 million. What do you do here? You would give me a sweet john wooden quote, but it's like what I realiz like you hit this point where like I just what we were building was bigger than the circle I built it on. Mhm. Mhm. And so now it's been like intentionally like this one. Yeah, I probably could have phoned it in over which would been great, but like why not come learn? Why not come meet people and just really try to soak that part in, but it was yeah. And it's still getting out of it, right? You know, get out of something like that in a day, but it's been make the phone calls. They're going to be really hard. Make them, keep them going, keep building. And so it was super exciting. And we um two projects that have been delayed for almost 2 years now uh broke ground. So it was 88 unit, a 72 unit, and then we're securing our final financing on a $30 million loan uh for a downtown office rehab uh that should close in March. So it's like all of them are coming back and I'm like, "okay, but we're not out of it yet.
[00:44:56]
Had to keep showing up. Had to keep being that person." and yeah, it's it's a lot. So basically, I was like taking all these journals. We started a podcast about the same time. Um we're not as funny so we actually only have like a few listens but what's the name of your podcast? Podcast? I think it's my mom listening 10 times but that's how it all starts. Uh it was called it's called chess not checkers and so the idea was how who are people doing it at a different level and how what do you learn from them and what you find is everybody has the same story some point it got hard and the ones that won stuck with it even when it got harder and so it's uh it was kind of those so I'd be journaling so we are on our 60th episode so I'm just taking notes journaling I'm journaling every day and then finally I'm like I need like structure to this cuz I'm just facing the hottest flame. Mhm. Mhm. Yeah. So gabe's yelling at me the most, but if I could just look past you, I know if I get this building going, I'll solve all three of your problems. And so I literally was like, "hey, put in chad g. Put this in some format. Take everybody's advice. Put it in some format that I can use every day." and so it's a book called stacking bricks and it's based off bill arian's comment where he's like when he lost four billion and he's like, "you can't look back up at everest. How that was probably cool up there. It was a blast.
[00:46:03]
But if you're never going to get back up there if you look." so just take one step. Make one phone call. One thing and I started doing that and then it's like wait I closed that deal finally cuz I wasn't trying to fix things inch it along and it was best advice and so then that book is just full of everything I did to kind of get through those pieces and then kind of at the back part is like what my new wealth strategy looks like so how do you manage your stress that's the hardest one that's such a good question I'm terrible at it u big believer in god so like I feel like I'm I'm not in control of it anyway um but what really helped me was when I just started limiting down so every morning I pick three things they got to do that day. Day. So, that's funny. Break it up into small chunks. I got two pieces of dad advice that one you've already touched on, but my dad uh he says every morning for the last 25 years, he or every night, sorry, before he leaves the office, he writes down his three things. So, he's got a sticky note that's on his desk and he says, "cuz I used to be extremely stressed." yeah.
[00:47:00]
Yeah. He says, "when I started working, like I just could work all the time." he's like, "I'd work for 12 hours a day. It didn't matter. Like, I loved it. I was addicted." and then he said, "but what happens is then you get home and you can't fall asleep cuz you're thinking, "what do I got to do tomorrow?" and so he would write down his three things on a sticky note. Still does it to this day. He sets it on his keyboard. He says, "that means I can't touch my keyboard. I can't log in until I've looked at the three things that I have to do that day." he said, "man, if I do those three things today, I won. I did my day, right?" like, and as long as I do those three things, I moved the three things forward that I needed to move forward, I know I won. And so if I do it the night before because I've already I've done my whole day, then I'm thinking of all the top three things where it's like, man, I'm leaving the office. What do I need to make sure that I get done tomorrow? So on that note, he really he reduced a lot of stress. We try to implement that I would say between uh we trevor and I being we um within our own companies and now we've kind of moved that way where we you just have a task list and it's like what's the three things that like I can get done. Then two, on the note of communicating to investors, I feel like I got super lucky and not that this is this is all on jordan, but I got lucky that I had uh I had both parents, but frankly mostly my dad um in the in terms of who I was really afraid of. I just don't tell my mom when like bad stuff. But uh but he always said um if you tell me something that went wrong, I'm never going to get mad at you. I'm never going to blow it out of proportion. I'm never gonna but if I find out from somebody else what went wrong and that was from like a super young age and like to this day you know when something it's like okay I know that it's always going to be better
[00:48:39]
That I brought it to him or that I brought it to an investor or that I brought it to one of my business partners. It's like it's always better. It's always been better. And like if that person isn't going to react in a way that's better that they heard it from me than they heard it from somebody else then I shouldn't be interacting with them anyways. And like that's never going to be the case, right? Like they're always going to be a crazy person, right? They want to hear it from you. Um, and so I just got lucky that I was trained that way, I guess. And not to but you had to learn that a much harder way, it sounds like, but I don't know that everybody has that uh, you know, uh, what is it? What's the word for it? I don't know. Um, honesty. Honesty. Honesty. Yeah. Right. I mean, that's the thing is like the withholding information can also be dishonest. Dishonest. Correct. Correct. Yeah. Omitting. And so omitting yeah. And so to be an honest person, you have to be willing to have hard conversations. And that's it takes I mean it takes backbone. It takes there's a lot of pressure. You know, it's a hard phone call to make, but you got to make it. Yeah. And I think stress also comes from the vision we play in our head. And I was doing that a lot. I was like, okay, I know I gave a call. I know he owes 100. He's going to be so mad that I didn't do or did do or didn't do. And then you don't call for a day. Well, guess what happens the next day? Now that pressure gets worse. Yeah.
[00:49:54]
Yeah. And so what happened was I'd build up these narratives and how what's even harder. Like it wouldn't have been as big a hole, but I was paying back people what they put in plus what I told them they'd make. And I had one investor, he goes, "why don't you just tell me?" he goes, "I would have just taken back what you owed me. We would go try another one." and I was like, "damn it. I should have just made the phone call instead of trying to fix it and make it work. I should have just picked up the phone the day in 2023. Should have picked up the phone like, "all right, guys. This is going to be a ride, but I'm not going anywhere. Here's what I'm going to do for you every day, though, until we get there. Talk a little bit about the stress of losing your own money versus losing an investor's money. Yeah. So, I have a weird connection to money. It doesn't really mean anything to me in that sense. Like I'm a guy that like if you ask me what I want, I just want my credit card to swipe and not look at the right side of a menu. Like that's how simple I am. I don't need a nice car. I don't need to do a lot of things. My life wife loves traveling but like and so for me that part the detachment from it is just a sunk cost. I'm like I'm just learning like I'm working on a $90 million build now. So if I lost five to learn how to build 90 was it worth it? Yeah. Mhm.
[00:50:59]
Mhm. I'm going to build a billion dollars of real estate. I mean I'm at 300 million now in 5 years. I'm like I can build it. If I lost five to learn how to build a billion, was that worth it? Yep. Yep. Yeah. The people who lose sight of money think that was the last dollar they had. Had. And that's what I realized was not everybody looks at money like I look at. Like if I lost I did it. I invested in a buddy. He's a serial entrepreneur. He finally got one going. That's good. It's like taking old costco pallets and monetizing into a bid auction site. Should have invested in that one, not the other one. But and so I gave him 200 grand. And then he calls and goes, "jere, we lost it." oh, okay. I probably should have asked you a few more questions of where I thought it was going. I'm like, "okay, so next time, it's not that I'm not going to invest. It's just before I put money in. Maybe I do in tr is or maybe I ask what the kind of exit is. And I think in my world that's why for me losing mine was easier than telling you lost yours. And so that's been the bigger part of the journey was I realized it wasn't even the buildings. The buildings, none of them were wrong.
[00:51:56]
I just had a point I was paying 600 grand a month in carry costs. You're going to eat through a lot of reserves very quickly on a development project if you have 600 grand in carrying cost. So when you're waking up in the middle of the night, I'm guessing you're not doing that anymore or you still should. No, that's it. I just had no structure because everything like I said was a fire and I was like that's what the first thing I would do if you ever and it as soon as it gets hard just stop. But you weren't setting an alarm to get up and work at 1. I don't set alarm. You're waking up at 1:00 about ready to have a heart attack and said I got to go sit at my computer and get soon as I wake up it's like the first three things would go through my head and I'm like well I might as well just go get this done. Nobody's emailing me back at 1:00 a. M. And it worked. Like, so actually I have one new york. We most of our funds come from new york now. And they called and they go, "actually, we did the loan cuz you were up at 2 a. M. We know you're grinding." so, one weird one, if you ever want to schedule, send a couple at like 3:00 a. M. Just cuz they know you're thinking about it that much. And we closed all those loans and it was great. But I've never met more special assets people, more workouts with banks. And so I've been fortunate to have really good lending partners so far that have kind of been like, "okay, we still want it back, but here's what we can do to do versus we're taking it back." so, it's been that part of it is I feel more fortunate now having gone through it of understanding that and but the same thing they would say just call me.
[00:53:08]
Me. I'm like what am I going to call and tell you I can't pay you? Oh, that's that's not fun. They're like yes just call. Call. Just call. When you go silent then we just then we don't care anymore. Yeah. Yeah. Best advice I ever got. So 23 to 21. So the last 3 four years have been pretty tough in real estate. I would say Spokane from what you're telling me and what I've heard was really kind of one of these emerging markets. Like you hit the timing really good on that which benefited you on one hand cuz you could scale but it also got you in trouble because you could scale. Talk a little bit about the pain of the last few years, especially with just expenses going up, interest rates going up, you're having cash in refies, you're trying to manage, you're losing money, you're doing I mean, h how did you move all those parts around and how do you feel like that maybe leveled you up as a person and as a developer? And then where do you think we're at going forward?
[00:54:01]
Forward? Yes, it's really good. And I mean the say I don't know who saying it is, but if you owe somebody $10, it's your problem. You owe them 10 million, it's their problem. I fortunately benefited from that logic cuz we had so many assets in Spokane. And so what I was able to do was say, "all right, here's our good ones. Here's our decent ones and then here's our bad ones." and so I'd have to offset them and I'd just kind of laid them all out like a monopoly board and be like, "all right, unfortunately these were supposed to be my legacy assets. We're going to have to trade those three to get these ones done." and so just and anybody I owed I said, "hey, look, here's about 20 million of equity. I can trade you shares of this for that." and so basically spent about four months just saying, "hey, look, this still has the same thing because I do believe this market comes back. We just spokan can absorb about 700 units a year. It's what it's supposed to do. It's designed to do that. It adds 5,000 people a year. We put in 1,900 two years in a row. And then the issue is we have these builders that bu have their own construction company and they're billionaires that all already own the land. Mhm.
[00:54:57]
So if you build next to them, they could drop 400 bucks off the rent. Yeah. Yeah. Cuz they don't care. Can't compete. Can't compete. And so then you're learning the value of those. And so I think what happened was I took a very micro perspective and now it's only macro. Macro. And I think that was the best change for me because I went from a flipping background where I just had to know what the block looked like. Yeah. Yeah. And I tried to scale a flipping background to a 100 unit apartment building. It doesn't scale. It gets lost at five units basically at four units. And you need to level up yourself from that 5 to 20, the 20 to 100. And I think as we were looking at it further, I just got blinded by 22% appreciation. You're like, how do you go wrong when you're doing that? Can't lose. Can't lose. And I was like, I mean, idiot. I mean, I'm saying out loud. I'm like, what was I thinking? And I remember vividly in 2020, um, when co hit, I was like, all the money left the table. And I said, we are either going to double down and I will get us to 300 million or we stop now. And I retire. We scale way back. We shore up. We shore up retained earnings. And obviously, and I'm like, we're going, man. I got to get to a billion. And I'm like, again, driven by stupid logic. But I think the issue that we're running into is like, you're not going to be able to build these for less. Everybody keeps thinking something's going to come replace the cost to build them.
[00:56:09]
It's not. Even if a robot comes does it, that robot still costs money and maintenance. Maintenance. It just it's not. And so what I'm running into now is I'm becoming more bullish on long-term. And so, yeah, yeah, I think we're gonna become a rent Spokane spec specifically become a renter community. Yeah. Yeah. Um, I don't think apartments are the answer. Our code just doesn't have very many fixes otherwise, but it's not town home. So, we're working on kind of some exploratory like mixed concept buildings right now. Um, concept development. So, um, um, so working on one right now. It's 520 units, but it's going to be 520 with like a swimming pool aquatic center in the middle of it. So, we're going to have a retail component. You're going to have coffee shops. We're going to build a community within an apartment community. So, you see it a lot in subdivisions. Subdivisions. They'll have this kind of master plan subdivision. We want to do it in a tighter space. And so, what we'll do is basically we can absorb it across 500, 40 units, you can't, right? You need a number of units to do it. So, it'll be what kind of amenities can we do where you basically within your halo have everything you need.
[00:57:10]
Need. Where would parking go? Are you multi-level basement or something? I it's one of the arguments I believe. I think parking becomes a nonsequitary as we go forward. Like I think that'll be one that gets replaced with um self-driving cars, self-driving and just the need for it. And I think if you can create a community where you'd have to drive less, it makes a lot more sense. And so and offsite I guess too like valley. There's a lot of those complexes in dc too. And those are insane where it's 500,000 units. They took up multiple blocks and then they have their basketball gym, multiple swimming pools, the dog park in like office, everything just in this one thing with the grocery store at the base and they're insane when you go over there and start looking at them. Well, it's great. And then now what are you selling when you're getting there? Cuz the other thing we're running into is competition. Like I also think we're going to have a generation that just doesn't want 5,000 foot homes. Yeah. Yeah. And they're going to have people that can't actually afford said 5,000t home. And so for us it's like well then build a community that limits your cost to live. And so what obviously why to buy a gym? Because what's going to go in there? A gym. Why do I have a brewery?
[00:58:09]
What's going to go in there? A brewery. Like all the things we already operate on, we're going to put into those communities. And then just vertically scale that side of it. And so you'll have a mix of town homes, cottage, um, apartment, true traditional apartment, and then interior controlled corridor housing. So within this one community, you can have 55 plus, you could have families, you could have all those parts. But with that many units, cuz you're talking about 100 million build, you could actually af a afford to put these other amenities. And I think Spokane before you could just put up a building. Now you can't. Yeah. Yeah. And I think that's going to be most communities where people want to be. That's what I was going to ask. So what's the msa in Spokane? Um, so we do you know boise very well? Yeah. Yeah. Yeah. We think of it a lot like boise. So boise's treasure valley is just over a million. It's like a million two. Spokane valley, not the City, but the valley is about a million. Okay. Gotcha. And I see it getting about5 to two just with because we already have the natural resources. So you just got to give people a great place to live they can afford.
[00:59:02]
Have you thought about population decline? Not that's something that we want to talk about as developers, but that makes me nervous long term as a developed country is it's like we're not having nearly as many babies. Obviously we're people are immigrating from out of country as well as in country to the right places. And so is your take just that Spokane will be desirable enough or do you even think about I assume you have yeah. I mean so then what you look at is what do you have someone else can't offer? Offer? Mhm. Mhm. So we don't have any natural disasters for the most part outside of forest fires but they usually are obviously out in the periphery. We have cheap water. Cheap power. Abundant water. We have 42 lakes within an hour. We have seven ski hills within an hour. And then we have an international airport that they're put and then the City's putting money in the infrastructure. We also have a lagging inf. So then now you're looking for barriers to entry, right? We also have a lagging infrastructure problem which means we can't develop like a boise cuz that's my bigger fear. Where I got hurt the most was in boise because I bought a $9 million piece of dirt here went to develop well roundhouse went and bought the one next door and developed a better one. And you're like how do I compete with this? And so I'm starting to look for markets where it lacks that competition or where I have an advantage in that.
[01:00:18]
And so for me, uh, population decline, I think, is a big deal, but I think in areas like where we're at, and I think here is probably very similar. I think if we can get the politics piece of it figured out, but that politics will also attract dwellers. Right. It sucks sometimes for landlords, but it's also a place people will retreat to as well because that's what they want. And it restricts development, too. So there's less people. Exactly. So I think what we have to start really looking at is the type of unit we're putting out. And that's the bigger one. That's what I was going to say. So on that 500 unit development, I mean, what's the mix? They're not doing two twos and one on one's all over. No, no, that's what I was saying. So in that one, we'll have a massive commercial drop in the middle. So multi-mix twotory, but it'll be like a ymca you dropped just for these residents, plus retail, patios, the whole works. Then you're going to have a traditional, which would be built first because it's the easiest to get financed. Then we'll have a fourale town home cottage style. And then we'll have like a senior living which is controlled corridors. So then your elevator is kind of the little nicer. So you're going to give four different five different types and pricing units within that one housing development. Whoa.
[01:01:24]
Whoa. That's amazing. It's getting me fired up. Yeah. Super fun. But you just have to think of a little different. And then the hard part is it's like well it's 100 million. Well, it's almost harder to get 10 million right now than it is to get 100. 100. And so it's just like as you're looking at does that make sense? And can you build it for that amount? So, yeah. No, that makes total sense. So, I kind of want to we're we're we're close on time. Not that it really matters at all. Um cuz we run the thing, but I want to go back to your thought on how you view money really quick and why you don't care about it. Do you think part of that is because of your upbringing or do you think part of it's maybe because of religion too? It's not your money. It's just your job is to do as much as you possibly can. I'd say it's religion, but I also think uh some of my happier times was our very first three bed, one bath, 700 foot, and we're playing beer pong on the top of our hot tub cover. I would argue I was probably happier then. I just didn't know what h like what was out there. I think the more I keep seeing that's out there, I think that's what's causing me to be less happy. And it's like, wait, I don't want that. Mhm.
[01:02:22]
Mhm. I think I'm going back to portland, going to hop on first class at alaska and fly home in 45 minutes. Do I need a private jet to get here? No. And I think what I'm starting to really realize is I see more need in the world than I've ever seen. And I feel like we're in a position where we should be able to affect that. Not just drive profits, but affect change. And so it's just really put on my heart to go that route. And I just think we're put on earth to learn. You should be curious. It's just the hard part. Like I had people, it was the most mixed results ever when that article came out, too. Again, I have to call every lender, every investor. And then in a City where again, it's not huge, but a few people know who I am. It's like half hated me. And I'm like, you know, why did you hate me for? I did a startup brewer on a part of town and aluminum went up 30%. Of course, it was bad. And then I had half that were like, just keep going. This is what it looks like. And I think too many times we listen to the other half. Yeah. Yeah. And I think the more people that could be like, wait, you get one shot at this life.
[01:03:15]
Life. Do it. Yeah. Yeah. And you're going to have hard moments. That's all I'm that's all I know is I think anybody who builds a 100red units will have this problem. Yeah. Yeah. You will. The only way you wish what you wish for. I this is everything I wish for. I've built 800 units in two years. Everything I wish for, I'm getting. I'm also getting all the things I didn't know come with it. I think too often we avoid trying to shoot for something. And so, no, I just, like I said, big believer in god that has a path. And so, now it's just like one of those I'll have one where I don't have the answer. It's happening more and more. But it's like I'm like, "all right, just let me know. I'll make the phone call. If you give me an angle, I'll I'll find it and then I'll just keep going." I think it's really interesting that you talked about learning is fun. And I think that is um probably the most fun we can have as human beings is to learn. The problem for me is I only learn when my ass is on fire. And so then I start to wonder like, well, is that when I have I only have fun when my ass is on fire.
[01:04:14]
It's like there's this double-edged sword to it. It's like I want to learn. I'm having so much fun, but then it's like I want to have fun when I'm winning. Like to your point, you're like, "oh, I was going through this thing and I was working all the time, but I was winning." yeah. And then when you're working all the time and you're learning and then you're learning the most valuable lessons of your life, that's when you're up at 1 in the morning and you're stressed out, you know, and you're just like, how am I even going to survive through this? And that's when the biggest growth comes. But it's not necessar it doesn't feel fun in the moment. Oh, no. You if you feel every emotion, it is the worst feeling you'll ever feel. Feel. And like you said, not everybody should do this cuz not I mean this is not for the faint of heart. I mean because the easy answer I mean that's why they created bankruptcy. Yeah. The easy world, I would have just said, "sorry guys, this is in the ppm. Yeah, yeah, we're gonna I'm gonna sell these at a break even or a loss and then oh, I had a personal guarantee. Sorry, I'm just going to reset." and I think choosing not to do that was the best decision I ever did. It's cost me more. It's going to cost me 5 years of my plan. But at the end of it, I think I feel better and I feel like you get put in a situation you think you can't do anymore. I saw this awesome clip when I was coming down here. It shows who won the gold medal in 1946 doing the uh oh what's the bar where simone biles bounce off and does the flips and stuff.
[01:05:27]
Yeah. And all this it's a gymnastic ones but it's the bar and then bounce off it and uh this person does it handstand and then falls on her feet. Simone biles does a triple flip with a spin and they're like when you think that's the standard there is more. And I think that pursuit of better is what I enjoy. And then how do you distill it down so that a you 10 years ago would hear it. Yeah. So, my challenge in the next 3 years is how do I distill down all of this into something my daughter would understand? Cuz she's going to have the same stubborn as I have and I would not. You told me this and you would have said, "jordan, you're overlevered." overlevered." okay. Okay. Whatever. Sure. Sure. I'll figure it out. I'm doing it different. No, you're not. Nobody's doing it different. Now, your strategy could be different, but like it's it's your mindset of how you approach it and what you put in. And then I think everybody has different risk tolerance. And so what I have to do is adjust mine then if I'm bringing people's money on. So my goal will be to get to where I don't bring people's money on and I'm going to go tackle the most crazy stuff out there because I enjoy it. So I think that's been the biggest one is just getting to know yourself through it and put yourself in a hard spot. And the more you can simulate that, the better. And if it's a hard call, do it now because it's only going to get harder. And it's just like those things of like just pick up the phone and go. And so no, I think it's good. And I think vehicles like this, the issue is that there's like 5,000 podcasts. And it's be cool if some people can just distill down to where you're hearing that information cuz I think you could sim simulate a lot of this pain. Yeah.
[01:06:50]
Yeah. And build a model that actually has the fund without the pain. Yeah. Yeah. Like let's build with cash. There's no pain if we're building with cash. There we go. So I'm going to raise $100 million of cash and then that project would be fun. It'll still have hard pieces within it. And I think that's what as I'm getting to this point I'm like every day I have to put out fire somewhere somehow. It's like sitting out here waiting for you for 15 minutes I put out four and it's like and there's half of me that's going to be the most relieved i' ever been and then there's half me that's sad. Yeah. Yeah. It's the weirdest feeling. Like you asked me two years ago I'd be like take it all. Look it I don't need any of it. Just let me start over. And now I'm like man there is a there's an element to growth that only happens with fire. Yeah. Mark always tells us to be thankful for the problems because that's what we were put on earth for. Mark has a lot of problems though. Yeah. Mark is a lot more relevant. He has the harder side. He loves it. I love it. But the what I've learned about this entrepreneurial wiring that we have is like you move from chaos to chaos and that's when you actually feel like you've done your part of it.
[01:07:48]
Cuz every day I walk in the office, I have this tempt to be like, what's the biggest problem right now? Like what can I solve? I'm like so antsy to just then and you get a little bit of like stalled out and you start to feel it. You're like this is kind of weird. Like there's not anything going wrong like I need to go solve it. Um, but I remember telling gabe like about that theory I had a couple years ago and we had a lot of problems was uh I was like I feel like we've graduated to the next level and gab's like I'm I don't want another level. Level. I was like I like high level. He's like I don't want to get any better at this. Like I don't want these problems to get harder. But that's really what happens is we get so much better at dealing with it. It's almost laughable when you think of the old problems you had. Count it all joy when you encounter various trials. So true. Well, okay. Yeah. And like that we took on this historic rehab 96 unit redevelopment. I stayed in portland last night and it's like such a cool downtown. I don't see how you guys think it's coming back yet, but we'll explain that later.
[01:08:46]
You should have seen it a couple years ago. Ago. Oh man, that still looks rough. Super rough. But you just look at like when you look past that and see the other parts. Some of the coolest architecture rebuilds in this in the I mean in the nation. It's the coolest. Um, and so I think as we dive in, well, now all of a sudden I'm learning about moreest, right? You're real estate. You're always going to learn something. Even when you're good, you're going to learn something new. You just got to the difference is you don't panic. Yeah. Yeah. And you start to look ahead of all right. So my dd list, I remember the first one, I was probably written down in handwriting. It was like 10 things long. My new one is like 10 pages. Yeah. And now it's at least check it off. So it's not that you even get better. It's just like, all right, did we check for asbestous? All asbestous anywhere like it's did the surveyor actually do their job can we sue them if they didn't right and so it's just this whole thing and but I made the mistake therefore it became a check we had a guy come on uh a couple months ago who initially when I met him he was like I mean he's he does well he's in self storage though but he does it nationwide and uh he was telling me that he had like a pretty good dd checklist he felt like built out um and I was like I'd love to just like take a look at it right? Cuz I just get to kind of learn the lessons that you didn't learn. I still I'm going to have to learn them on my own nonetheless, but I can look at it. And I was like, "can you like send it over to me?" I was, "yeah, yeah, yeah, for sure." he sends it over to me. It's 750 checkpoints.
[01:10:10]
And he has it broken down by like the feasibility piece, physical, legal, financial, and it's like, "did we check for I mean, it's everything stuff that I was looking at. I was like, I don't even think that applies in oregon." and he was like, "no, no, no. That's just for georgia, but we're going to have it on there. Like, we can't forget. You got to do the hardest standard for all of them. Yeah. Yeah. Yeah. Like I had to do my first this last lender for the big loan required a rate cap. Uh no, a rate cap endorsement. And I remember on the call, yeah, we'll get that lined up. And I'm like I got off and I'm like got to find a rate. A rate cap. I'm like I understand a rate cap, but it was like even different. So it's this insurance against yeah, it's essentially insurance I get against the cap rate going up. That's awesome. Or the interest rate going up. And I was like, oh, okay. I learned that one. Checklist item. Should probably add that to our checklist. So, there's one point I want to drive home, too. We had um rob beardsley, you know him on lonear capital.
[01:11:02]
Oh, yeah. Yeah. Yeah. Really awesome. Really sharp guy. And uh when we were talking through his strategy because he had a really ramped up, you know, couple year compression there and a lot of his investors are big check guys. And it really drove home to me because the strategy that he put forth on day one was that long-term strategy despite the turmoil in the middle there. And I felt like so many times younger guys or you know that haven't quite figured out what you figured out with just sticking to the plan and training the investors on what the plan is despite the headwinds and things and he said it really well and I can't repeat it exactly but it was essentially he is leading you know the ship. He is driving it and despite some investors with some experience, some with, you know, he has to continue to keep that message and stick to the business plan despite all the headwinds. And when you mention the, you know, I'm just going to make a fund of cash and that's going to be the plan and all my investors know the plan and despite all the challenges like other people think is that's a terrible deal.
[01:12:07]
It's like that's not your deal. This is our deal. This is the plan. Stick with me. That message only really works when you exercise that communication along the way because they're going to probably feel the outside influence, see the newspaper, see whatever. And I think that as a fiduciary, we got in that position because we have the vision. We have to just stay strong in that and understand our principles in that. And I it's just changed the way I've looked at the these deals because there's just so much adversity at every corner. And the second you waver a little bit, you know, it's huge. I mean my brother joel gave me the example. Do you ever watch the big short? Short? Yeah. Yeah. So the scene where yeah. So he has character right he makes this big play believes in the fundamentals but is losing 200 million investors are banging on his door and then he walks out and writes what was it a 1500% return right and I think that the big one then if you take that approach is you need to be the best at what you do. Yeah.
[01:13:01]
Yeah. The confidence in yourself because you have that confidence can't lack but it's got to be based on what you do well. And I think that's where too many people skip over and they try to like I said I think that scale p piece is bigger than I gave it credit for anyway. But yeah I think it's just and then you got to communicate. Yeah. Yeah. So all right we're going to wrap this one up. We're going to come back. We didn't make you cry this time. So we're going to try to make you cry on the next episode. Episode. Don't make me cry though. I think we'll all cry with this one. Yeah. Yeah. All right guys. Jordan Tampien on deal junkies. Jordan, you are an amazing guy. Uh it's been really fun to get to know you. Thanks for being on the show today. We hope to have you back again and we will come back and do another episode and talk about deals. And if people want to reach out to you, what are you looking for and how do they get a hold of you? Please don't right now. If you have 100 million cash, your real name is not jordan taylor. Uh no, I mean it just I think on instagram, facebook, we have website just there. It's pretty easy to find my number. But yeah, I think we're still building that ship and I want to be, like I said, super confident on phase two of this thing.
[01:14:03]
All right, Jordan Tampien, four degrees real estate deal junkies, we love you.
Source: https://www.youtube.com/watch?v=edRWY583RSY
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[00:00:00]
We're snorting cap rates and shooting up cash flow here at field truck. Welcome back to deal junkies. I'm gabe johansson here in the studio with dane mckini, trevor howard, mark ayos, and our very special guest, Jordan Tampien. Jordan, you're a powerhouse, man. Thanks for coming all the way here from Spokane to be with us. Oh, anytime you have no rain on the west side of the State, we head this way. It's like you're fleeing for some sun. Okay. So, we'll see you like 3 months out of the exactly. We get over here about four times. So, jordan is uh correct me if I'm wrong, you're you're owner, founder of four degrees real estate, correct? Correct? Yep. Yep. Uh big brokerage, property management division, and you guys are developing, building stuff. So, we want to we're going to dig into your operation and get your story.
[00:00:57]
You missed um author, gym owner, um it's part of the story. It's a good narrative as we move through. You do a lot of stuff. Serial entrepreneur is what you called it, right? Soon to be 100 mile runner. I just got to listen more of your episodes. I'm getting slowly and motivated. Every story sounds worse. I'm like, I just drove almost 100 miles. I'm like, imagine running that. That was enough. Oh, and it was flat. I was like, geez, even the bmw had trouble going up the hill. So, I'm I'll work up to that one. All right. Well, thanks for being on the show with us today. We want to dig in and get to know you a little bit. Can you take us back in your story, and we'll let you talk as long as you want to talk, but take us back to who is jordan? Like, how did this happen? Did you were you born this way? Did something affect your life somewhere along the way? Were you raised in a certain way? How did you become jordan champion? Champion? Yeah, I think it's funny. You eventually in life, you look back and there's these moments that define the decision that goes left or right. And we did, my family wasn't entrepreneurial. My dad was a private school teacher. I'm one of seven kids. And so he we kind of had this close-knit family in moses lake, Washington, center of nowhere, but center of Washington State.
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And kind of going through it, well, it was fast forward. Um, I was like, my dad's like, "well, what do you go do?" he's like, "well, whatever makes the most money. Go be a lawyer." I'm like, "well, that doesn't sound fun, but I guess it makes money and I don't want this situation." so kind of went on that law went to witworth university in Spokane. That's where I met my wife. And then gonzega for law school and I was in law school the first year. I had just written a $45,000 check for the first year and you're sitting in their listing and I'm falling asleep. This is the most boring stuff ever. And I'm like, god, I know myself well enough. This is not going to be for me. And so luckily I have the most amazing wife, but she's like, let's get out of here. Like do a study abroad. So I we I got accepted to the university of london and I was like, you know what I want to do is I want to help businesses buy and sell. I want to do mergers and acquisitions, but I want to do big ones like international. And so I studied in london. Well, in london, you I saw what the world looked like for the first time.
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Time. And I saw, wait a second, this building's been here 500 years. Why are we trying to recreate this stuff? The architecture is awesome. This is awesome. And so I kind of came back with this idea, well, okay, you could earn money. That's great. But I think you could also go build wealth in different ways. And at that point, my parents had bought their first flip. And so I was in law school and I'm like, "well, I need money. I'm broke." and so I'd go over and hang drywall, do all that stuff. And luckily, my dad throughout the whole time taught us how to do it. Like I can tell you the screw we use on our apartment building and why. Like I know every building we have down to why we chose that part. And kind of fast forward that, my wife came back and uh we were at a wedding and there was this random curtain and a camera and these people were having a blast going and out. It was one of the first photo booths in Spokane. You have them on weddings or event style. And I'm like, why don't we do that? You're already a photographer. Let's just try this. And so went online, found this awesome photo booth for eight grand. And I was like, okay, we have zero.
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How's this actually work? So I went to her parents. I'm like, can you loan us money? They're like, no. I'm like, okay, well, this doesn't work. And I'm like, well, let's just sell some of them. And so we sold 20 events without ever buying it. And then bought it, built it, and within 4 years it was doing 300 events at 1,200 bucks an event. And it was a all it cost us was paper, 40 bucks an event. And so at that time, I was trying to go through this public interest loan forgiveness to get rid of these stupid loans I took for school. And so I was working at a nonprofit building their entire nonprofit portfolio of real estate. And so I was retooling these like picture the worst financing things you can get. Litec, uh, hap grants, State funds, housing, and you're just like this is not real. This is terrible. And so my wife was like, "well, I'm going to go back to school. Like, photography is great, but I'm going to get my masters in teaching." and she's like, "well, you already help all these people anyway. I'm not going to be home. Why don't you go sell some real estate? If you get your law degree, come to find out, you don't even have to take classes." and so I was like, "well, you know, that'd be fun. I'm already I like this." so, first year sold 10. Next year sold 60. Next year sold 100 properties. And you sold 60 in your second year and then a hundred. And I'm like, "wait a second. So, I'm making a half a million dollar here. I'm making 40,000 a year at this nonprofit. And I was like, but I can actually kind of do them both.
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And so just kind of at that point, Spokane, now I feel really old, but you could buy a house. This is post recession. So timeline is about 2010, for 50 grand. And so every time I closed a deal, I bought a house. Closed a deal, bought a house. And so we just lived off the 40 grand. And so accumulated like 40 houses. And then Spokane hit this massive spike of a 5year stretch. It went up 22% per year. And so you kind of do the story like big it's a bigger pocket story. And you're like wait a second. So I don't like 30 houses. This sucks. Like why don't I have one with 30 doors? And that kind of started that path for me at least down that way. And so you hit this point where I have no overhead. You're making 500 doing that. You're making rental income. I'm trading businesses. The issue is my tax bills are high. So I run into a really good friend and he's like well I run restaurants. So I'm like, well, I like commercial, so I'll do the buildings, you do the restaurants. So we accumulated nine of those. Then it was like, well, you don't make any money off food. The guy who sells us the beer makes all the money. So then we created a brewery to sell beer to our own places. And then you start in the field and what it's why I love being a broker is then you get introduced to deals. And so we go into this gym that's been there for 40 years. It's had the same ibida for 20 of them and it's this prime piece of real estate. And he goes, "well, I've been trying to sell for 5 years." like, I go, "I'll I'll I'll buy it." and uh I go, "but right now, like, you got to owner finance it. There's just going to be too much work to get all this done." so, owner finance at 2%. So, that was the first gym. I'm like, "well, we're going to have one gym. Nobody's going to buy one gym. You need three." so, then we bought another gym because it was on multif family land. So, we
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Just finished 107 units on it next to a gym. And so, it just kind of my life is a little bit more like slum dog millionaire, right? You can answer the question because you lived the experience. Yeah. And so really for me it's just been a story of that and kind of in the meantime was a professor at wsu. So I always had this kind of day job piece to my life and then it wasn't until 2015 that was just like nope we're going all in. And fortunately it was 2015 when I went all in. It was a sweet time doing it. So fortunately now you fast forward and um the author thing came from when you're a professor you have to write this big published work. And so I wrote a book to get the published work because then they can't really fire you if you have that behind you. And so that now I'm an author from that and then wrote another one kind of what I went through. Through. What did you write on? So that was back where I don't think millennials got a good head start. I actually think it's be really hard especially for our gen next generation even to create wealth. And so what I found though but if you could get into learning businesses and value. So it was a really like a hack on how you get there. And then it had a really big section on how to forgiveness programs and things on student loans.
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What's your book called? If somebody wants to find it. First one was called living at zero and the idea was hey set a budget rand it's a mix of everybody that way but it was like in my head it was like we only have 40,000 but I was making 600 it's just 400 and or 560 of it was going to investments so the idea was just build these three buckets that you can use and then that way you can kind of slowly develop that passive income over time and so yeah I mean it was good it sold I don't know 5,000 copies or 6,000 it was through the school so it was through the publish thing there and so it's really just been a life of this chance and seeing opportunities and connecting dots. And I think that's been really where it's helped me the most. And then it just kind of scaled up from there. We started four degrees and all uh which is a real estate management company. A buddy says, "hey, I got this guy that's selling a $22 million piece p piece of property. He's just going to pay the 8 million in tax. Go away." and he goes, "I think you should talk to him about 1031." so I grab my phone. I'm like, "what is a 1031?" 1031?" I still remember this day. And then he's like, "okay." he's going to stop by your office. Well, at the time it was me, my brother, and my mom. My mom was what broker. And then I was like, "mom, you have to sit at the front so it looks like we have a receptionist at least." I said, "I'll have the conference room. Me and joel will look busy when he comes in as this whirlwind best guy." and he comes in and he's like, I pitch him this idea. I'm like, "why pay the tax? Look, you can actually get a pretty good basis on this land. Just the noi, the day one noi will return you more than the russell sherwood. Nothing." he leaves.
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I'm like, "well, that makes sense." calls me that next day and he's like, uh, he's like, "I'm coming down. We wrote 30 lois and spent $36 million in the next 3 months. Scaled our management from my doors to almost 700 and then it just kind of went from there. So that's a long-winded version. In the middle there was like I've always had this dream of owning a sports team. So I bought it the sports team, the professional sports team in Spokane. And like little things like that, but it's like as I lift the tide with one thing, my rents got better. Better. What sports team is that? So the so Spokane velocity and zephyr. So, it's a usl um d1 team and then a division 3 team. So, so that's the breadth of kind of what I covered and I'll explain why you should never do that. That. So, cuz it sounds really cool, but I'll explain the pain of the last two years when you do too much, but also I think there's some community elements into everything we do. So, yeah. Could you speak to how you sold 60 houses or 60 deals in your second year in real estate? Cuz I think there's there's a lot of real estate people that listen to this and that is mindblowing cuz they hear 10 and they're like, "that's the goal. Good year." yeah.
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What year was that? So that would have been uh 200910. So what I did right away was I don't like actually working a ton with friends uh and buyers that way. So I just find investors. So then I'm sell I'm selling blocks of houses. And so the downside then was the average home price was only like 200. Actually my average home price was probably 150. So you had to sell 100 bunch of them to even get there. And then same thing, right? I guess my story is just this that was a lot of work. I'm like, why am I not just selling one 100 unit building for that? And so kind of my biggest year was 125 million in commercial sales um that you did, but that's 12 transactions. Transactions. Yeah. Yeah. And so it's just kind of this morphis. But I think a lot of people avoid the investor because they don't know what they're talking about. And I would argue get in get really knowledgeable and find them because they're going to they're your recurring kind of revenue piece and then your friends will buy, people will buy. But it really did help me kind of bridge because nobody was really buying then.
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Then. So you're trying to convince them to buy and they're like, "is this the bottom? I'm like pretty sure it's the bottom. The land's got to be worth more than this. Like I'm like what are we arguing here? So it's it was kind of a change from that and then it's just managing time and at that time we had no kids so it was just you just go work. So how did you manage all that time cuz that's a lot of things you did and jump between. Yeah. So you just kind of uh especially with real estate again investors didn't need to see the house. I could walk a house and they would put an offer so you build a relationship where I'm just making them money that way. Um, and then every weekend was usually when I would show houses. And then that's why I got my mom in the business. So then she kind of became my buyer's agent before there was really the team concept. So she would go out and show the houses and do that part and then I would negotiate and close the deals. So it fit really well and that's kind of how our brokerage even started. It was like, "wait, we'd love to come hang our hat here." and I'm like, "please don't." and then it just escalated. So are you building out systems and hiring more employees for each business and then starting the next one? Cuz that's a and running them all at once still.
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Still. Yeah. So what I did I think learned early on was uh learning what I don't know really well. So then I would go find a partner. So how this four degrees happened was I had about 40 of these. So I'm selling real estate working full-time and then trying to run and maintain like you 50,000. Let's be honest here, right? This is what everybody talks about. Go buy a $50,000 house in mississippi. Those are not nice homes. They have problems if significant problems. So then I'm over there fixing knob and tube wiring, old plumbing. And so I remember painting doors at 2 a. M. Just to get it turned ready. And so my brother was uh ex special forces in the military and I'm like, "wow, that doesn't translate to many things, but you probably collect rent pretty well." so I was like, "hey, bro, I got an idea, something novel. We're going to throw let's create a management company." what branch was he? So he was army rangers. Yeah. And so he uh still does the kind of uh the reserves, but brought him over. And so he's like he's logistics, he's planning, and then lets me go do what I do. And then my the restaurant piece was because I found the best operative restaurants in Spokane.
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Let me build you the building, you run them, and then I get to collect revenue and bring people here to eat. And so it just kind of was finding the right operators and then I just go do my side of it. So you're electric, too. Oh, it's fun. It's because you get excited about it, but then if you ever want to make me cry, just ask what happened in 23 to 25 and I'll start 23 to 25. Oh, man. So escalating, right? This is just an upward hockey stick. Wait, give me yeah, give me 2015 to 23 first. Oh, it was just you bought all the houses, started building somewhere in there. You were developing yourself somewhere in there. Just decided you could do that for sure. Same thing, right? We first office. Yeah. Yeah. Got my bid from the contract. I'm like, we're not paying that. So, we fixed it. I can do that. And then we the day I finished it, we added we went from four agents to 44 agents. I'm like, shoot, this is too small. And our whole model is collaboration cuz I believe you can't do this remote. Just remote work will never work. It's you got to be together. So we get a bigger building one year to fix that one. I hire somebody for that one and then 6 months after we add 40 more agents with not enough parking. So I find the next building. So I 4x it now cuz I'm like wait we've only doubled each time.
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I'm like I'm going to plan for 4x. By the time we finished it we were full and running kind of out of a 20,000 foot. And so as we're building those I'm like well wait a second. I bought this for 500. I put 600 in and my appraisal is three. Like that math works pretty well. And this one I didn't even build it. I just found the deal and then I'm the tenant. So I'm a creditw worthy tenant. So it sets up really well. And so that was kind of our fora into it. And then I was helping a guy develop about 50 million a year over here. And then I would build a 24 unit. And I'm like that's great, but my management team hates it. So we got to go bigger. Then I would take another one. And so now we do kind of minimum 72 units. Ideally uh 96 unit buildings. But is that in-house construction then? Like you're the gc on it or you third party? No. So we ended up uh not taking that in house just the liability of it. Um I think you find the right gc and they can they'll save you more than you think you'll save yourself.
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And so now it's just we have our own internal kind of financing, audit, compliance, management, asset management, and then we farm out everything else from our like everybody's like well bring in your own architect. I'm like well I don't want to be forced to do a project. I'd rather pay this guy a premium when we need him. And so it just really we third party a lot of our stuff just for that reason. So talk a little bit about um 7296. Obviously you're building six plexes and 12 plexes and you're just maximizing there 18. 18. Oh no. So we'll do a we so we'll do up to a 36 block. So we do build them in towers. So they're all three and fourtory gu three and four story garden style walkups. Our build cost in Washington's a little more expensive, but we're roughly able to put a unit on the market for about 140 grand a door. Damn. Damn. So, so, mark, uh hard cost construction, right? That's not carry cost.
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What size of a unit is that? So, then we're 22s are 920. Uh it's a little smaller, but they have big walk-in closets. And then our one ones are about 570 to 620. Yeah. You're bu so, you're building like what 150 a square foot or something like that. Yeah. Hard cost. Hard cost and we have sales tax in Washington. We have things like that. That. So to my question, what how did you land on the 72 to 96? What hits that sweet spot? It's just the return metric. Um so 7296, some of it's limited by density, but then most of it is that we need to be able to afford a full-time manager and full-time maintenance on so it's a rent roll. It's rent roll. Yeah. It's all so it's actually dollar amount. So we have a project that's 50 units downtown, but we're getting three bucks a foot. That actually pencils the same as my suburban 96 unit. Are you still doing fourstory walk up on that though? Um so fourstory walk up we've built we're building our third one now. Uh we were afraid of somebody trying to walk up four flights of stairs but actually that rents pretty good. The third floor is the one that doesn't rent as well cuz you now you have somebody above you and below you walk stairs. So uh but fortunately we haven't seen too much of a drop off in those. Uh again we try to finish them at condo quality. So you're talking about like real quartz slabs, you're talking about undermount nice pretty much all the stuff you would see in a nice condo.
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You're still at 160. Yeah, but and so we're just getting buying power, right? So I'm able to buy I'm buying 600 sets of appliances. Yeah. Yeah. I'm buying loves you 300,000 square ft of flooring in like a two-mon stretch. And so it works out really well. And so there's just a lot of lessons learned supply chain things. So we're more conscious of that. Like I own like 10 of these main disconnects for buildings that are just sitting in storage. And so it's just like little things like that we're trying to be just trying to see around corners. And I think the only corner we didn't see well around or at least I my assumptions were just way off was how fast an interest rate would go up. Up. That's probably the biggest. Well, if it makes you feel better, there's a lot of other people in that exact same boat including almost say every real estate I mean commercial investor at least. Yeah. And I think it was just how much how many chips did you have on the table when the music stopped? And I think that's where my mind shifted to where I'm like no we're in a really good spot honestly. Yeah. But we every time we stacked it was to stack because I was selling these. So, by the time they were done, I they were I was transacting them.
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Them. And so, uh by the time those hit, I had this um basically almost 140 of my own units, like my cash to like my brothers. And I get them under contract March of 22. 22. Oo, bad time. Oh, that was sad. Market rate I'm at 260 a door. I would hit high water marks. I think they couldn't close before their completion. Yeah. So, there's no lock of that. And I'm like, okay. So, I was like, wait, rates are going to go up. But I'm like, what? Two points, maybe? Maybe two, right? That's enough to do this. No, they go up six. And so they retrade what would have been a 7 $10 million profit down to one. So we sell them, but I've already spent four thinking seven was coming in. And so there's just this like then I'm playing catch-up and then all the buildings we have there, it's like, wait a second, instead of you buying this now, I have what a refi is 30% more down on 20 million. That project needs $6 billion and I need to be able to hold it for 24 months because lease up slowed that far down.
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And so that's really like the jux position. So it's like all right, where else are you finding revenue? Lucky we had management. We had some of these other sources, but that's really kind of I think the people that get pinched and it was just how many did you have on there? Well, now we've stabilized all of them and I think in two years I'll sell them for exactly what I thought I was going to sell them for. So what's the goal with selling them rather than keeping them and your philosophy around that? Yeah. So my goal is to get to a thousand doors. We can't get to $1,000 if you keep all your money in each deal. Mhm. Mhm. And I don't like taking money out of the deal once we do it. So, the idea was to stack up as much cash than we would take on that portion. But remember, I was that was back when you could do they were doing arv loans. Mhm. Mhm. And we're building at 140 a door and they're worth 250. Mhm. Mhm. So, I'm all in at 180. Yeah. Yeah. Like everything I built had 60,000 a door in margin. It was like I was flipping a 100 homes at one. What do you what would you be at today, do you think? Uh with how much expenses have gone up?
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No, that uh so I'm about that now. So I just had to tweak I tweaked the design. Yeah. So we tweaked the design to accommodate it. Yeah. What's your layout now? Um so we actually we got more square footage because you have to understand during that time that here's a good example. So it's the best story. If you ever build an apartment building, there's this main disconnect, right? Power company has to connect to your building, but it's through this one piece of equipment. Yeah. Can't get them. Made in mexico in an undisclosed location. Ship dates undisclosed. You have no idea when they're showing up, but you can't get certifi any kind of certificate of occupancy till it's installed. Installed. Yeah. Yeah. And so basically, we're sitting there on the 72 unit. I'm supposed to be closing with these guys. And I'm like, let's just close this. Like, I know I can't refi it. And we're sitting there and I'm like, I'm shopping every black market site you can for this thing. And I'm like, can I go make one? They're like, no, you can't make it. It's got to be signed off. And we get down, we end up, they cost 7,500 bucks a piece, right? I end up paying 87,000 for two of them to get them there on one project. The next project I'm like, I can't find more of these. Jesus, I can't sell my child. Like, this isn't going to work. And so, we redesigned the entire electrical layout to go from a three-phase to a one-phase just to not have that disconnect and then closed them all on time. It's like the greatest accomplishment I ever did in during that stretch. But the issue was that so that was inflated pricing up. It actually has come down because now like we have a rule we can't buy anything that's can sit in a port.
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So I know I can get cabinets in china cheaper but I but we had cabinets sitting in a shipping container. Yeah. Yeah. And so now our port actually I come out of uh portland but I could hop in a big box truck and get cabinets there. So we've literally switched our design to where nothing outside of those disconnects and maybe some small like oh even those we have. So yeah it's mostly those disconnects were the ones that you just can't control. You should just start stocking those up. We do. I have 10 of them. Yeah. And so then what we'll do is so then we broke ground on 300 more units. They are locked in my safe. Those aren't in a warehouse. A million bucks worth of disconnects in the right market. That is a good investment. Crazy. I didn't think about it. I'm like on the balance sheet on your I'm losing over here, but I'm winning on the disconnect. Disconnect. Your ps has the disconnect. It's like the guys selling jeans to the gold miners, right? That's the money.
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That worked out. So, you mentioned you didn't like the idea of taking money out of the projects to hold them. Why? Uh just cuz I think that where they got to perform and I think the issue is that we get strapped with the cash and no most of the loans we were getting at had 5 year sevenyear notes and I'm like I don't like where we're heading five seven years. The last thing I want to do is be forced to do something. And so we and we already had higher leverage. That was the other thing. So I remember vividly I sent a text we were using debt funds. It was like but when they re first came on the market so I could prove it up to 100 million for any project that worked right and they're taking arvs. So all I'm doing is penciling this thing down. Yep. Farmer joe sell me the land. My builder said we can do it. I can get permits in three months. Months. And are you having to bring money down on that or the debt fund is I'm rolling my commission in and that's it. And then they're taking our equity that we're creating between the two. Right. So they're doing an ltv loan instead of an ltc which they do now. Yeah. Yeah.
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And so it just it's stupid. You can't give somebody that much rain. And so basically yeah. Wait, break that down easier, right? Let's do they're giving them all the money to build it. It sounds like what? Yeah. It's let's call 100 unit building, right? So, I'm going to be all into that thing even with their expensive debt for 200 a door. So, 20 million bucks. It's worth 25 with an appraisal. Mhm. Mhm. Well, I'm over 10% of 25 already. Actually, I'm at 20% of arv. Yeah. Yeah. And so then what they're like, "hey, we need something." so, I remember putting like 200 grand down on a 72 apartment building. Building. Does this still exist? No. No. That was gone. Those are the anybody who's burned did that. Yeah, yeah, they did that when they expected a sale or they expected something. So that same project to keep it I had to bring another 4 million what I should have brought. What I should have brought that cover at that point and so bring it later instead of up front and I would prefer not to do it when you're accumulating 10% interest on 15 20 million. That's that's kind of where it hit. But at the other side is like also wouldn't have scaled this fast.
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There's no way to I just think there's a responsible way to do that. But it might just be do one project. Yeah. Yeah. Somebody told me that. My mom told me that the other day. I'm like what one? Who does one? I'm already out here working. Why don't I just throw five on the table? What am I going to do with the rest of my time? So what do you use as your debt structure today on the stuff you're building? Building? Yeah. So the two we just closed. So what we'll end up doing, we so we created a fund to help us raise. So rather than us put every dollar in, we brought a fund together to do it. And so um it's a single asset raise. And so what we'll end up doing is finding 65% ltc on the project on a three-year note, two-year fully funded ir, and then um usually we'll do is we'll bridge into a basically a bridge to hud. So we're designing all of them now. They took away green standard stuff. So we're we're designing them all for that takeout. So before we break ground, we have an estimated takeout with kind of a better sensitivity test to rate volatility and those will be to hold then they'll hold now. Yep. Yep. And again, I say that, but the right offer comes. I just it's just going to be an interesting market because what's happening is your supplies going down again just like it's supposed to. And so all of a sudden, I'll be sitting on 600 of these doors. So you give me 250 a door, I'm back to the same number I thought I would have.
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So is that fund for those two deals then specifically or each one of them had their own? Yeah. And so kind of over the course of those I'm trying to think it's probably 30 40 million raised uh into those assets. But then again, you had frustrated investors. They're like, why aren't we breaking ground? I'm like, "look, I have this project we can't lease." and you're asking me to build it. Build another one. Yeah. Yeah. And so it's just it there was a year and a half of I'm not a great communicator cuz like I'll be in a meeting like this most the day. Mhm. Mhm. Yeah. You're frustrated. Want to get a hold of me? I'm like, do I call you at 6 p. M. And so we've really had to this last two years has been like, "how are we communicating better?" because we didn't do a good job of that. And I think anybody trying to ever take someone's money, you need to figure out your communication plan. Yeah, I could have solved most. It would have just been a simple text of, "hey guys, this is not the market to put this building in the ground. We own the land. Just hold tight with me because it's a five year. We take it's five, seven years on the money anyway." if I would have just sent that email, no problem.
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Yeah. So, what do you do differently today to communicate better with your I send so, I send an update now every Friday on a project whether it did something or didn't do something. And then um now we've set a better portal so our tech stacks better. So you get very inside kind of transparent access to what we do now. And then um and then we started adding video, more video walkthroughs. You feel like your investors start to feel like they're part of the project. Yeah. Silence kills everything. And I wish somebody would have told me that. In my head, I'm like, "no, I'll fix it and then I'll update you." one of the things I've seen of people who have failed over the last few years is um they did a really great job communicating when there was good news, but then when there was bad news, they went silent. So that was I mean cuz it's really hard to share bad news. I mean it puts you in the hot seat and if you got lots and lots of people that you're bound to and you should be bound to them. You took their money, you need to make sure you're communicating that and I think it g and so what I learned through that. And so the cool part is now the debt's great. Um in the meantime learned the importance of like lobbying.
[00:27:30]
So we created a program. So I don't know how we did this. Take any unimproved site in Spokane. They called it a parking lot rule, but it really applied to anywhere you could park a car, which is land, right? And they gave us a sales tax waiver. Uh so on this last project we just built, it saved us 1.5 million. Wow. Wow. And then we had them increase the income limits for our MFTE. So then we'd saved no property tax for basically 12 years. So we're building this product now. It's about 12 grand a door less with 10% less opex. Opex. Wow. Wow. Like this is what we need to be doing. And so kind of it's allowed us to tweak our model there. There's still like a bunch of hair. Like I had a front page article jordan what is it? This is how small Spokane is too, right? That this is a front page article. It's like developer Jordan Tampien faces foreclosure at brick west. Front page article. Like the three projects I had that were like how do I fix these? All hit the front page of the paper.
[00:28:21]
That's not the communication you want with your investor. So, I started communicating from that day on. It was kind of the trigger one. I'm like, "oh my god." like, they all knew that, hey, there's two buildings that are restaurants that it's just they're going to be hard ones to save. Like, I these apartments will be worth it the next day. This one I had tough partnership that I was trying to navigate. And I'm like, and so, but that's kind of where I was like, "wait a second. You can't hear my news from the p. If you're in the circle, you should be in the circle." so, best thing we ever did, we changed that piece. And then um and then I'm going direct kind of the debt funds and figuring out kind of the so when you say lobbying, you're getting political. So were you championed this parking lot waiver? Yeah. So just with the City cuz it's it's expensive to build in Washington State. Um and I think our rents are pretty high for where they're at now. I mean you're that 22 that I was talking about. I mean we're getting 1725. That's not sustainable. Should be$,550,600 I think would be fair. And so if we can implement things like this, it encourages me to build and then it's there's no additional cost. Like that's a vacant piece of land that brings in a th000 a year in taxes. Yeah.
[00:29:20]
Yeah. My building will be now 130,000 in 10 years. Years. Yeah. Yeah. Pretty easy math if you're not shortsighted. So why are you doing funds on these projects rather than syndication? It is. Sorry. I was saying I was want to move to funds. So it's all single asset so you know what asset you're in. Uh I was saying that it's difficult to do every one of those raises. Yeah. Uh, and so unless we do what my mom said, scale back to one project every other year, the fund piece was what we were looking at next, cuz then you can kind of be in it a little longer term. Um, I'd want to work on some of the liquidity language and kind of redemption language, but um, I think that's probably our the next evolution of it. Yeah. And is that 30 to 40 million raised? Is that what's the typical investor look like? Like $100,000 chunk and you got a ton of them or you getting like million, $2 million chunk? It's it's a mix. So, we did one project that probably wrecked my brokerage the most because it was a project that stalled was we actually I think agents should invest. It's the weirdest thing to me that your only thing you're supposed to be good at, you don't even take advantage of. It's the craziest thing to me. So, me too.
[00:30:17]
We built an apartment one and again this is still based on a model of I had the buyer lined up for it. So, I'm like look guys of all the ones this is the one I would do. So, we let them go down to 25 grand. So, we had to do a special exemption de uh filing and so that's the only one. It was never that low but I had 25 agents in it. Wait, why did you have to do a special exam? Uh because they're not accredited. Oh. Oh. So you can only have so many unacredited investors. And so we built that's the only one I ever did. Otherwise, it's typically 250. And then now my new minimum will be 500. And then probably by next year it'll be 1 million. And then one day it will be 5 million and it'll be one check. Like I think it's just the hardest one of like how much time we spend communicating the piece to it. Um that I think we're we're pretty good at finding the deals and I pretty positive if I frame it or put together big enough packages that it'll appeal to the right buyers. So, are you personally raising all that capital or do you have a team of people? We don't have teams yet. So, like kind of it's it was just me, we had me and then my brother kind of runs the asset management back inside of it and so it's me right now. Yeah. Doing that.
[00:31:15]
Yeah. That's a lot of money to raise. Yeah. And it's fortunately when you do that many projects create that much wealth like it's not that it's text like here's a deal right so I was just driving over I'm looking at we're looking really big into covered land plays right now something that I can develop in 5 years I just think the market will know what we know in 5 years and so found this building has that same credit same mftte it's in an a pocket I can has no density limits it has an existing threetory brick building on it they want an eight cap to buy it now and the it's a aaa credit. They have four more years left on their lease and with an option to renew. If they renew it goes up 20%. On a property like that, you're going to go pretty tall though, right? So, are you starting to change your designs? Uh tallest we did is a 50 over2 podium. Yeah. Okay. So, seventory. I'll explain that. But like that's what we're buying now. So, then I would then that's a text to like some friends. Hey, we need 500 grand. I have this financing lined up. I don't collect any cash flow from it. So, whoever brings the 500 gets whatever the return is and then I'm just the developer when we build it and then I hold my equity piece.
[00:32:21]
Do you have a specific return you're trying to hit for investors? 22 to 24. I don't think you can actually offer anything if you're not over 20 like you should that you probably shouldn't do the deal after. Is it ir or ar? Yeah. Or irr? Sorry. Yeah. And I'm thinking about actually listening to your podcast. I might actually switch how we eval is that based yeah, I was going to say is the ir based on the sale and five. Five. Five. They're all based on sales and five up to seven depending on the asset. Um, some of our newer uh, podium style buildings just take longer to build and to kind of get in the market. When you hold for five, are you refing at two? Yep. Yep. Okay. So, do you pull cash out at the refi if we can? Yeah. So, ideally, so there's you I can send you sometime, but we send three basically performers out. Okay. So, you're calculating ir based on the cash out in two years as well. Exactly. So, when I say 22 though, that's just based off cash flow and a sale in five. So that probably be like half of your investments getting recaptured at the refi maybe. You think?
[00:33:16]
Uh so that's a version but then my irra would be 30ish. Okay. That's what I was going to ask. It' be way higher. So all I'm basing it on is one redemption, right? It's cash flow and oh, so then that is more like a ar it cuz ir would be calculated if you on the recapitalization in two years. Well, if you recap. So what I'll do is I'll send out three performance three options of what this could look like, right? But we're never going to exceed a dscr. So that's what we're capping it on. Then we have sale parameters that have to be below a five cap, which may or may not happen with before 5 years. So that's when we would look explore selling if it drops to a five cap or below. Below. And so then I'll send you three options, but we're basing the investment model off of you only get well, you get no cash flow for two years really cuz that put in stabilize and then the next three cash flow returns and then a sale. But then you'll see a model of hey actually rates went down year two here's a redemption and the ir just goes up from there. So how much do you target that you want to own as the gp of the deal and split lp?
[00:34:15]
It's a crazy one. I'm just a curious developer. I just like doing it. And so for me a typical deal we'll own 20%. Okay. Okay. And then we have a gp lp structure. So that will go anywhere from 10 to 20 and then we like to put cash in the deal. So it'll be a limited partner and a general partner in the same deal. Yeah. Typically that's what we'll do. Will take minimum 30 on it is what we target right now. But it's hard to do the deals cuz we're hitting like raising funds 40 to 50% return on the deal level itself to then go to a 20 to investors because you're taking 30 off the top and then we're buying lp shares too. Yeah. And I found they like I mean most investors like having some skin in the game. I mean there's a couple deals we'd put zero in. We got our 20%. I mean it's a lot of work. I mean especially the last year financing used to be a text. Now I'm spending six months. Yeah. Yeah. It's a way different operation. So even why we're so lean was I didn't need them. Mhm. Mhm. Like our broker handled everything. Yes. And we're guaranting everything.
[00:35:06]
So back in the heyday period where you could get that, you know, zero down kind of scenario. Are you bringing investors in at that like it was totally just you just getting reps, building that brand, people are like bugging you, can I get in? So when the time came where actually you needed to inject equity, you had either maybe the guys that bought all those houses when you were early on and now they're watching and they want to get in. Like what is that evolution of building that brand through reps and then needing capital and being, you know, a facilitator? Like did that have a clear milestone in your no, I think that was the issue. I didn't have anything clear. It was just you could. Could. Yeah. Yeah. And when your goal is $100 million, you go until someone tells you can't. Like that's such a terrible idea. God, my I just remember vividly thinking so I grew up in a pretty poor house. Um I think my dad made like 26 grand a year to feed seven kids. And so like 20s to 30s I remember vividly writing this down. 20s to 30s was like how does money even work?
[00:36:03]
I thought credit card credit cards were income and I'm at school here and being like dude keep giving me money. I'm like no they're acrewing a balance at 7% interest. And so in that time I'm like wait a second I really like this real estate game. I think I can make something here and I think you need to own businesses. Some type of affiliation because of the write-offs and the daily cash flow. And I was like, well, from 30 to 40, I'm going to risk every dollar every day. And so my I bought the soccer team when I was 39. And it's like I told you I was going to like this isn't a surprise. Like the same article that was bad there, there was 19 of them of jordan buys another I bought 52 buildings in four years. And so it's like there was that runup. But I was like if you knew what I was trying to do, but I wanted to learn them all. Like my goal is in 10 years that I actually fund like a company like this but from a strategic level and operational and so then I need my cash to do that and then I'm just coming in and helping you guys I've seen this one before or hey call this person or do this and target service related companies and then just use my own money to be your 250 seed fund to get it going and then just back operators. So I'm like well if that's your plan I had to do what I did because I wanted to learn all of these things.
[00:37:10]
But again I can tell you how to build a 5 over2 podium and why you don't build the eighth floor. I can tell you what elevators to use. I can tell you what how to orient them to the sun, right? And it's things like that. Then that's what I think drove me most of the time. And then the whole time I'm like, well, I don't want anybody in these deals. I don't have to call people. And we could do it. And then when that kind of we saw that tide shifting, wait a second, we should hold some of these. Like I don't want to have to keep recreating this wheel every day. I don't know if that was the right decision actually cuz that's that's it was mostly the market change. But that's really when we started shifting and bringing funds on. So, we'll have a we have a couple hundred investors and now I'm just we're paying them off and then limiting it down. Paying them off, closing the circle. Paying them off, closing the circle. And then my goal is to have five to 10 people who understand it and they think a little longer term because I can build a 2,000 unit portfolio if you give me the access. And it's like, okay, let's just find one group and do something like that. So, where'd you get your education? Is I mean, how I'm guessing your law background helps a little bit, but you've learned a lot more stuff since then. Is this just a was there any one main source that you went to figure this all out?
[00:38:12]
I'm just a doer like you throw up sheetrock the wrong way and put the wrong texture on have to rip it out. You don't do that again and it's a lot of that and then bigger pockets could write kind of came on the scene there. It's probably a traditional story that way of I think everybody should read rich dad poor dad. Just a mindset shift of what it does to how you think about it. And I also don't think everybody should do this. Actually, I'm a firm believer now. Everybody should if you can't stay awake at night and not sleep like this is not for you. Go work for somebody. Come learn from you. What if I could have switched I would have come and worked for you guys for 5 years and been like okay let's learn what are we doing here cuz a lot of it was just assumptions and I built terrible habits in a good market. Yeah. It's just the ability to see it and do it and so many other people are taking 5 years to go do it you know and you're just like opportunity. You just don't say no for a while. You uh you get pretty experienced. 2015 was a good time to figure it out. And then I had a big developer so I was developing his building. So the podium style wasn't any of my money, but I developed it for free. Yeah.
[00:39:09]
Yeah. And I learned all of it. And so then it's like, okay, what size of sewer pipe do you need for 50 units as seven stories? Stories? Well, you don't need a 6 in. You need an 8 in because the flow is different. And then it's like, well, wait a second. What about your trash shoots? Well, they make echo chambers if you don't put the right compactor at the bottom. Like, it's just the littlest things. And then we own a management company. If I was just a developer, I wouldn't have understood that. But now I get the complaints. Complaints. Yeah. Sounds like a thunder's rolling down when somebody's dropping a trash shoot and I'm like, "oh, jesus." all right, new trash shoot, guys. And so, it's allowed that. So, four degrees came from the idea of those companies should all work together. Management should be informing development. Development should be informing brokers and that side and then we have a foundation that gives away what we make. So, it's so, that's the name four degrees. Got it. It. So, yeah. No, it's been I've been feel fortunate and then Spokane kind of was the perfect time of any time you could have been in Spokane. Um, and it's it's fun to be a part of some of that growth actually. So, still learning a lot. I think actually now I'm realizing I'm need a lot more to learn. It's just what did you learn a lot about partnerships during that time? Cuz I imagine there's a lot of people pulling at you that are, you know, on the operations side or on the trade partner side that have a lot of value and maybe that allowed you to create that velocity and learning, but I imagine it created a lot more drama as well. Yeah, I think actually was from this podcast you say is like don't bring somebody in if they don't write a check. Like that's a new rule because I brought him on because I'm like I know I don't I'm terrible with employees because in my head I'm like why aren't you guys working? You're taking a break right now. We have so much to do and then I'm like nope. So my brother does all that. So the idea was hey I'm going to bring on somebody that does that. Well those partnerships failed. So guess what I'm doing? I'm
[00:40:46]
Down at my brewery counting the till to make sure nobody's taking money. And I'm like this is the worst possible use. And so for me now it's I've become so selective. I'd rather not do the deal at this point. And so as I've gone through it, it's just I'm too much of a salesman to be the money ra. So it's it's just setting up systems and structures so that you will hear from me of why I believe it's going to change the City of Spokane. And then you should have somebody come in right behind be like, "but you could lose your money." like you almost need that yin and yang. And it was just me out in front doing it. So of course I raised it and now it's like, "okay, but I told you bring back 10%. I need to make sure this brings back 10%. And so I think it was just a matter of let's slow down. Uh we realized we filled gaps with people really fast instead of understanding the system better. So we kind of cut back on staffing across the management company and across the brokerage and pieces. And so I think I'm really excited because it's just the most clarity I think I've had in the development world. And I think if you can build a system for the last year and still make things work, you I think you'll do really well in the game. So what's your why?
[00:41:50]
Um that was good. That's a good question actually. We uh we are entertained this option to basically like 10x our management company and I sat in the meeting for the first time like I don't know if we want this and I think for the first time I'm asking what the why. It was just fun. Mhm. Mhm. And it was because people said you couldn't and I'm like this is the worst michael jordan trying to push people out. I'm like I need what are you doing it for? And what I love is like I literally will sit in our patio have a thousand people. We got negotiated a deal with the City where we have our building. They had to put something underneath it under pund billions. We lease this entire park for a dollar that our brewery license extends to. And so like sometimes I'll just sit out there and watch 900 people that never would have been in that part of town if it wasn't there, let alone drinking our beer that was never there. And so there that was always been kind of the why. And now I think it's just I need to figure out a way to give back better. Like I said, I think it's going to be now three years of just learn me better so that I can do what I do better. So it's just it's been a lot of self-reflection on it. And again, when you go to zero or actually when you go severely negative and you're not sleeping, you do those you do a lot of self-reflection. I'll tell you that much. So, so you hit that point in 23, you're saying?
[00:42:56]
Saying? So, yeah, 23 to 25 probably. I mean, if I lost 10 million, I mean, I don't even know what I lost. And that was just mostly mine because it was like I have to sacrifice my project to keep this one alive. Alive. And so, you're selling, but I had 22 development projects going and so you're just like picking through them. And I remember I had this schedule once where wife luckily she stayed with me and I'm amazing daughter but like I would be I couldn't sleep well. So then it would be run all day and then as soon as I felt tired like I could go to sleep. It could be 6:00 p. M. 5:00 p. M. 9:00 p. M. Whatever it was. I'd go lay down cuz I knew I was waking up at 1:00 and then I'd work from 1 to 6 and then I'd go lay down cuz I was like I got I need an hour another hour or 1 to 5 and then I go lay down and I'd get up at 6:00 and go to work. And that's the stuff that nobody tells you and you're like, "yeah, sure. It's cool. You want to build it like it's fun till it's not." and then what do you do? What do you do when it gets really hard? And so it's been that side of it where for 10 years, I mean, it was really actually I would argue it was harder cuz it was moving so fast. I was working way more, but I was winning.
[00:43:57]
And so it was super easy. But it was the first time where I'm like, and so the second book I wrote was like I had nobody that could help me in that situation. Couldn't go to my dad's aid. Dad, I have a capital call of $4 million. What do you do here? You would give me a sweet john wooden quote, but it's like what I realiz like you hit this point where like I just what we were building was bigger than the circle I built it on. Mhm. Mhm. And so now it's been like intentionally like this one. Yeah, I probably could have phoned it in over which would been great, but like why not come learn? Why not come meet people and just really try to soak that part in, but it was yeah. And it's still getting out of it, right? You know, get out of something like that in a day, but it's been make the phone calls. They're going to be really hard. Make them, keep them going, keep building. And so it was super exciting. And we um two projects that have been delayed for almost 2 years now uh broke ground. So it was 88 unit, a 72 unit, and then we're securing our final financing on a $30 million loan uh for a downtown office rehab uh that should close in March. So it's like all of them are coming back and I'm like, "okay, but we're not out of it yet.
[00:44:56]
Had to keep showing up. Had to keep being that person." and yeah, it's it's a lot. So basically, I was like taking all these journals. We started a podcast about the same time. Um we're not as funny so we actually only have like a few listens but what's the name of your podcast? Podcast? I think it's my mom listening 10 times but that's how it all starts. Uh it was called it's called chess not checkers and so the idea was how who are people doing it at a different level and how what do you learn from them and what you find is everybody has the same story some point it got hard and the ones that won stuck with it even when it got harder and so it's uh it was kind of those so I'd be journaling so we are on our 60th episode so I'm just taking notes journaling I'm journaling every day and then finally I'm like I need like structure to this cuz I'm just facing the hottest flame. Mhm. Mhm. Yeah. So gabe's yelling at me the most, but if I could just look past you, I know if I get this building going, I'll solve all three of your problems. And so I literally was like, "hey, put in chad g. Put this in some format. Take everybody's advice. Put it in some format that I can use every day." and so it's a book called stacking bricks and it's based off bill arian's comment where he's like when he lost four billion and he's like, "you can't look back up at everest. How that was probably cool up there. It was a blast.
[00:46:03]
But if you're never going to get back up there if you look." so just take one step. Make one phone call. One thing and I started doing that and then it's like wait I closed that deal finally cuz I wasn't trying to fix things inch it along and it was best advice and so then that book is just full of everything I did to kind of get through those pieces and then kind of at the back part is like what my new wealth strategy looks like so how do you manage your stress that's the hardest one that's such a good question I'm terrible at it u big believer in god so like I feel like I'm I'm not in control of it anyway um but what really helped me was when I just started limiting down so every morning I pick three things they got to do that day. Day. So, that's funny. Break it up into small chunks. I got two pieces of dad advice that one you've already touched on, but my dad uh he says every morning for the last 25 years, he or every night, sorry, before he leaves the office, he writes down his three things. So, he's got a sticky note that's on his desk and he says, "cuz I used to be extremely stressed." yeah.
[00:47:00]
Yeah. He says, "when I started working, like I just could work all the time." he's like, "I'd work for 12 hours a day. It didn't matter. Like, I loved it. I was addicted." and then he said, "but what happens is then you get home and you can't fall asleep cuz you're thinking, "what do I got to do tomorrow?" and so he would write down his three things on a sticky note. Still does it to this day. He sets it on his keyboard. He says, "that means I can't touch my keyboard. I can't log in until I've looked at the three things that I have to do that day." he said, "man, if I do those three things today, I won. I did my day, right?" like, and as long as I do those three things, I moved the three things forward that I needed to move forward, I know I won. And so if I do it the night before because I've already I've done my whole day, then I'm thinking of all the top three things where it's like, man, I'm leaving the office. What do I need to make sure that I get done tomorrow? So on that note, he really he reduced a lot of stress. We try to implement that I would say between uh we trevor and I being we um within our own companies and now we've kind of moved that way where we you just have a task list and it's like what's the three things that like I can get done. Then two, on the note of communicating to investors, I feel like I got super lucky and not that this is this is all on jordan, but I got lucky that I had uh I had both parents, but frankly mostly my dad um in the in terms of who I was really afraid of. I just don't tell my mom when like bad stuff. But uh but he always said um if you tell me something that went wrong, I'm never going to get mad at you. I'm never going to blow it out of proportion. I'm never gonna but if I find out from somebody else what went wrong and that was from like a super young age and like to this day you know when something it's like okay I know that it's always going to be better
[00:48:39]
That I brought it to him or that I brought it to an investor or that I brought it to one of my business partners. It's like it's always better. It's always been better. And like if that person isn't going to react in a way that's better that they heard it from me than they heard it from somebody else then I shouldn't be interacting with them anyways. And like that's never going to be the case, right? Like they're always going to be a crazy person, right? They want to hear it from you. Um, and so I just got lucky that I was trained that way, I guess. And not to but you had to learn that a much harder way, it sounds like, but I don't know that everybody has that uh, you know, uh, what is it? What's the word for it? I don't know. Um, honesty. Honesty. Honesty. Yeah. Right. I mean, that's the thing is like the withholding information can also be dishonest. Dishonest. Correct. Correct. Yeah. Omitting. And so omitting yeah. And so to be an honest person, you have to be willing to have hard conversations. And that's it takes I mean it takes backbone. It takes there's a lot of pressure. You know, it's a hard phone call to make, but you got to make it. Yeah. And I think stress also comes from the vision we play in our head. And I was doing that a lot. I was like, okay, I know I gave a call. I know he owes 100. He's going to be so mad that I didn't do or did do or didn't do. And then you don't call for a day. Well, guess what happens the next day? Now that pressure gets worse. Yeah.
[00:49:54]
Yeah. And so what happened was I'd build up these narratives and how what's even harder. Like it wouldn't have been as big a hole, but I was paying back people what they put in plus what I told them they'd make. And I had one investor, he goes, "why don't you just tell me?" he goes, "I would have just taken back what you owed me. We would go try another one." and I was like, "damn it. I should have just made the phone call instead of trying to fix it and make it work. I should have just picked up the phone the day in 2023. Should have picked up the phone like, "all right, guys. This is going to be a ride, but I'm not going anywhere. Here's what I'm going to do for you every day, though, until we get there. Talk a little bit about the stress of losing your own money versus losing an investor's money. Yeah. So, I have a weird connection to money. It doesn't really mean anything to me in that sense. Like I'm a guy that like if you ask me what I want, I just want my credit card to swipe and not look at the right side of a menu. Like that's how simple I am. I don't need a nice car. I don't need to do a lot of things. My life wife loves traveling but like and so for me that part the detachment from it is just a sunk cost. I'm like I'm just learning like I'm working on a $90 million build now. So if I lost five to learn how to build 90 was it worth it? Yeah. Mhm.
[00:50:59]
Mhm. I'm going to build a billion dollars of real estate. I mean I'm at 300 million now in 5 years. I'm like I can build it. If I lost five to learn how to build a billion, was that worth it? Yep. Yep. Yeah. The people who lose sight of money think that was the last dollar they had. Had. And that's what I realized was not everybody looks at money like I look at. Like if I lost I did it. I invested in a buddy. He's a serial entrepreneur. He finally got one going. That's good. It's like taking old costco pallets and monetizing into a bid auction site. Should have invested in that one, not the other one. But and so I gave him 200 grand. And then he calls and goes, "jere, we lost it." oh, okay. I probably should have asked you a few more questions of where I thought it was going. I'm like, "okay, so next time, it's not that I'm not going to invest. It's just before I put money in. Maybe I do in tr is or maybe I ask what the kind of exit is. And I think in my world that's why for me losing mine was easier than telling you lost yours. And so that's been the bigger part of the journey was I realized it wasn't even the buildings. The buildings, none of them were wrong.
[00:51:56]
I just had a point I was paying 600 grand a month in carry costs. You're going to eat through a lot of reserves very quickly on a development project if you have 600 grand in carrying cost. So when you're waking up in the middle of the night, I'm guessing you're not doing that anymore or you still should. No, that's it. I just had no structure because everything like I said was a fire and I was like that's what the first thing I would do if you ever and it as soon as it gets hard just stop. But you weren't setting an alarm to get up and work at 1. I don't set alarm. You're waking up at 1:00 about ready to have a heart attack and said I got to go sit at my computer and get soon as I wake up it's like the first three things would go through my head and I'm like well I might as well just go get this done. Nobody's emailing me back at 1:00 a. M. And it worked. Like, so actually I have one new york. We most of our funds come from new york now. And they called and they go, "actually, we did the loan cuz you were up at 2 a. M. We know you're grinding." so, one weird one, if you ever want to schedule, send a couple at like 3:00 a. M. Just cuz they know you're thinking about it that much. And we closed all those loans and it was great. But I've never met more special assets people, more workouts with banks. And so I've been fortunate to have really good lending partners so far that have kind of been like, "okay, we still want it back, but here's what we can do to do versus we're taking it back." so, it's been that part of it is I feel more fortunate now having gone through it of understanding that and but the same thing they would say just call me.
[00:53:08]
Me. I'm like what am I going to call and tell you I can't pay you? Oh, that's that's not fun. They're like yes just call. Call. Just call. When you go silent then we just then we don't care anymore. Yeah. Yeah. Best advice I ever got. So 23 to 21. So the last 3 four years have been pretty tough in real estate. I would say Spokane from what you're telling me and what I've heard was really kind of one of these emerging markets. Like you hit the timing really good on that which benefited you on one hand cuz you could scale but it also got you in trouble because you could scale. Talk a little bit about the pain of the last few years, especially with just expenses going up, interest rates going up, you're having cash in refies, you're trying to manage, you're losing money, you're doing I mean, h how did you move all those parts around and how do you feel like that maybe leveled you up as a person and as a developer? And then where do you think we're at going forward?
[00:54:01]
Forward? Yes, it's really good. And I mean the say I don't know who saying it is, but if you owe somebody $10, it's your problem. You owe them 10 million, it's their problem. I fortunately benefited from that logic cuz we had so many assets in Spokane. And so what I was able to do was say, "all right, here's our good ones. Here's our decent ones and then here's our bad ones." and so I'd have to offset them and I'd just kind of laid them all out like a monopoly board and be like, "all right, unfortunately these were supposed to be my legacy assets. We're going to have to trade those three to get these ones done." and so just and anybody I owed I said, "hey, look, here's about 20 million of equity. I can trade you shares of this for that." and so basically spent about four months just saying, "hey, look, this still has the same thing because I do believe this market comes back. We just spokan can absorb about 700 units a year. It's what it's supposed to do. It's designed to do that. It adds 5,000 people a year. We put in 1,900 two years in a row. And then the issue is we have these builders that bu have their own construction company and they're billionaires that all already own the land. Mhm.
[00:54:57]
So if you build next to them, they could drop 400 bucks off the rent. Yeah. Yeah. Cuz they don't care. Can't compete. Can't compete. And so then you're learning the value of those. And so I think what happened was I took a very micro perspective and now it's only macro. Macro. And I think that was the best change for me because I went from a flipping background where I just had to know what the block looked like. Yeah. Yeah. And I tried to scale a flipping background to a 100 unit apartment building. It doesn't scale. It gets lost at five units basically at four units. And you need to level up yourself from that 5 to 20, the 20 to 100. And I think as we were looking at it further, I just got blinded by 22% appreciation. You're like, how do you go wrong when you're doing that? Can't lose. Can't lose. And I was like, I mean, idiot. I mean, I'm saying out loud. I'm like, what was I thinking? And I remember vividly in 2020, um, when co hit, I was like, all the money left the table. And I said, we are either going to double down and I will get us to 300 million or we stop now. And I retire. We scale way back. We shore up. We shore up retained earnings. And obviously, and I'm like, we're going, man. I got to get to a billion. And I'm like, again, driven by stupid logic. But I think the issue that we're running into is like, you're not going to be able to build these for less. Everybody keeps thinking something's going to come replace the cost to build them.
[00:56:09]
It's not. Even if a robot comes does it, that robot still costs money and maintenance. Maintenance. It just it's not. And so what I'm running into now is I'm becoming more bullish on long-term. And so, yeah, yeah, I think we're gonna become a rent Spokane spec specifically become a renter community. Yeah. Yeah. Um, I don't think apartments are the answer. Our code just doesn't have very many fixes otherwise, but it's not town home. So, we're working on kind of some exploratory like mixed concept buildings right now. Um, concept development. So, um, um, so working on one right now. It's 520 units, but it's going to be 520 with like a swimming pool aquatic center in the middle of it. So, we're going to have a retail component. You're going to have coffee shops. We're going to build a community within an apartment community. So, you see it a lot in subdivisions. Subdivisions. They'll have this kind of master plan subdivision. We want to do it in a tighter space. And so, what we'll do is basically we can absorb it across 500, 40 units, you can't, right? You need a number of units to do it. So, it'll be what kind of amenities can we do where you basically within your halo have everything you need.
[00:57:10]
Need. Where would parking go? Are you multi-level basement or something? I it's one of the arguments I believe. I think parking becomes a nonsequitary as we go forward. Like I think that'll be one that gets replaced with um self-driving cars, self-driving and just the need for it. And I think if you can create a community where you'd have to drive less, it makes a lot more sense. And so and offsite I guess too like valley. There's a lot of those complexes in dc too. And those are insane where it's 500,000 units. They took up multiple blocks and then they have their basketball gym, multiple swimming pools, the dog park in like office, everything just in this one thing with the grocery store at the base and they're insane when you go over there and start looking at them. Well, it's great. And then now what are you selling when you're getting there? Cuz the other thing we're running into is competition. Like I also think we're going to have a generation that just doesn't want 5,000 foot homes. Yeah. Yeah. And they're going to have people that can't actually afford said 5,000t home. And so for us it's like well then build a community that limits your cost to live. And so what obviously why to buy a gym? Because what's going to go in there? A gym. Why do I have a brewery?
[00:58:09]
What's going to go in there? A brewery. Like all the things we already operate on, we're going to put into those communities. And then just vertically scale that side of it. And so you'll have a mix of town homes, cottage, um, apartment, true traditional apartment, and then interior controlled corridor housing. So within this one community, you can have 55 plus, you could have families, you could have all those parts. But with that many units, cuz you're talking about 100 million build, you could actually af a afford to put these other amenities. And I think Spokane before you could just put up a building. Now you can't. Yeah. Yeah. And I think that's going to be most communities where people want to be. That's what I was going to ask. So what's the msa in Spokane? Um, so we do you know boise very well? Yeah. Yeah. Yeah. We think of it a lot like boise. So boise's treasure valley is just over a million. It's like a million two. Spokane valley, not the City, but the valley is about a million. Okay. Gotcha. And I see it getting about5 to two just with because we already have the natural resources. So you just got to give people a great place to live they can afford.
[00:59:02]
Have you thought about population decline? Not that's something that we want to talk about as developers, but that makes me nervous long term as a developed country is it's like we're not having nearly as many babies. Obviously we're people are immigrating from out of country as well as in country to the right places. And so is your take just that Spokane will be desirable enough or do you even think about I assume you have yeah. I mean so then what you look at is what do you have someone else can't offer? Offer? Mhm. Mhm. So we don't have any natural disasters for the most part outside of forest fires but they usually are obviously out in the periphery. We have cheap water. Cheap power. Abundant water. We have 42 lakes within an hour. We have seven ski hills within an hour. And then we have an international airport that they're put and then the City's putting money in the infrastructure. We also have a lagging inf. So then now you're looking for barriers to entry, right? We also have a lagging infrastructure problem which means we can't develop like a boise cuz that's my bigger fear. Where I got hurt the most was in boise because I bought a $9 million piece of dirt here went to develop well roundhouse went and bought the one next door and developed a better one. And you're like how do I compete with this? And so I'm starting to look for markets where it lacks that competition or where I have an advantage in that.
[01:00:18]
And so for me, uh, population decline, I think, is a big deal, but I think in areas like where we're at, and I think here is probably very similar. I think if we can get the politics piece of it figured out, but that politics will also attract dwellers. Right. It sucks sometimes for landlords, but it's also a place people will retreat to as well because that's what they want. And it restricts development, too. So there's less people. Exactly. So I think what we have to start really looking at is the type of unit we're putting out. And that's the bigger one. That's what I was going to say. So on that 500 unit development, I mean, what's the mix? They're not doing two twos and one on one's all over. No, no, that's what I was saying. So in that one, we'll have a massive commercial drop in the middle. So multi-mix twotory, but it'll be like a ymca you dropped just for these residents, plus retail, patios, the whole works. Then you're going to have a traditional, which would be built first because it's the easiest to get financed. Then we'll have a fourale town home cottage style. And then we'll have like a senior living which is controlled corridors. So then your elevator is kind of the little nicer. So you're going to give four different five different types and pricing units within that one housing development. Whoa.
[01:01:24]
Whoa. That's amazing. It's getting me fired up. Yeah. Super fun. But you just have to think of a little different. And then the hard part is it's like well it's 100 million. Well, it's almost harder to get 10 million right now than it is to get 100. 100. And so it's just like as you're looking at does that make sense? And can you build it for that amount? So, yeah. No, that makes total sense. So, I kind of want to we're we're we're close on time. Not that it really matters at all. Um cuz we run the thing, but I want to go back to your thought on how you view money really quick and why you don't care about it. Do you think part of that is because of your upbringing or do you think part of it's maybe because of religion too? It's not your money. It's just your job is to do as much as you possibly can. I'd say it's religion, but I also think uh some of my happier times was our very first three bed, one bath, 700 foot, and we're playing beer pong on the top of our hot tub cover. I would argue I was probably happier then. I just didn't know what h like what was out there. I think the more I keep seeing that's out there, I think that's what's causing me to be less happy. And it's like, wait, I don't want that. Mhm.
[01:02:22]
Mhm. I think I'm going back to portland, going to hop on first class at alaska and fly home in 45 minutes. Do I need a private jet to get here? No. And I think what I'm starting to really realize is I see more need in the world than I've ever seen. And I feel like we're in a position where we should be able to affect that. Not just drive profits, but affect change. And so it's just really put on my heart to go that route. And I just think we're put on earth to learn. You should be curious. It's just the hard part. Like I had people, it was the most mixed results ever when that article came out, too. Again, I have to call every lender, every investor. And then in a City where again, it's not huge, but a few people know who I am. It's like half hated me. And I'm like, you know, why did you hate me for? I did a startup brewer on a part of town and aluminum went up 30%. Of course, it was bad. And then I had half that were like, just keep going. This is what it looks like. And I think too many times we listen to the other half. Yeah. Yeah. And I think the more people that could be like, wait, you get one shot at this life.
[01:03:15]
Life. Do it. Yeah. Yeah. And you're going to have hard moments. That's all I'm that's all I know is I think anybody who builds a 100red units will have this problem. Yeah. Yeah. You will. The only way you wish what you wish for. I this is everything I wish for. I've built 800 units in two years. Everything I wish for, I'm getting. I'm also getting all the things I didn't know come with it. I think too often we avoid trying to shoot for something. And so, no, I just, like I said, big believer in god that has a path. And so, now it's just like one of those I'll have one where I don't have the answer. It's happening more and more. But it's like I'm like, "all right, just let me know. I'll make the phone call. If you give me an angle, I'll I'll find it and then I'll just keep going." I think it's really interesting that you talked about learning is fun. And I think that is um probably the most fun we can have as human beings is to learn. The problem for me is I only learn when my ass is on fire. And so then I start to wonder like, well, is that when I have I only have fun when my ass is on fire.
[01:04:14]
It's like there's this double-edged sword to it. It's like I want to learn. I'm having so much fun, but then it's like I want to have fun when I'm winning. Like to your point, you're like, "oh, I was going through this thing and I was working all the time, but I was winning." yeah. And then when you're working all the time and you're learning and then you're learning the most valuable lessons of your life, that's when you're up at 1 in the morning and you're stressed out, you know, and you're just like, how am I even going to survive through this? And that's when the biggest growth comes. But it's not necessar it doesn't feel fun in the moment. Oh, no. You if you feel every emotion, it is the worst feeling you'll ever feel. Feel. And like you said, not everybody should do this cuz not I mean this is not for the faint of heart. I mean because the easy answer I mean that's why they created bankruptcy. Yeah. The easy world, I would have just said, "sorry guys, this is in the ppm. Yeah, yeah, we're gonna I'm gonna sell these at a break even or a loss and then oh, I had a personal guarantee. Sorry, I'm just going to reset." and I think choosing not to do that was the best decision I ever did. It's cost me more. It's going to cost me 5 years of my plan. But at the end of it, I think I feel better and I feel like you get put in a situation you think you can't do anymore. I saw this awesome clip when I was coming down here. It shows who won the gold medal in 1946 doing the uh oh what's the bar where simone biles bounce off and does the flips and stuff.
[01:05:27]
Yeah. And all this it's a gymnastic ones but it's the bar and then bounce off it and uh this person does it handstand and then falls on her feet. Simone biles does a triple flip with a spin and they're like when you think that's the standard there is more. And I think that pursuit of better is what I enjoy. And then how do you distill it down so that a you 10 years ago would hear it. Yeah. So, my challenge in the next 3 years is how do I distill down all of this into something my daughter would understand? Cuz she's going to have the same stubborn as I have and I would not. You told me this and you would have said, "jordan, you're overlevered." overlevered." okay. Okay. Whatever. Sure. Sure. I'll figure it out. I'm doing it different. No, you're not. Nobody's doing it different. Now, your strategy could be different, but like it's it's your mindset of how you approach it and what you put in. And then I think everybody has different risk tolerance. And so what I have to do is adjust mine then if I'm bringing people's money on. So my goal will be to get to where I don't bring people's money on and I'm going to go tackle the most crazy stuff out there because I enjoy it. So I think that's been the biggest one is just getting to know yourself through it and put yourself in a hard spot. And the more you can simulate that, the better. And if it's a hard call, do it now because it's only going to get harder. And it's just like those things of like just pick up the phone and go. And so no, I think it's good. And I think vehicles like this, the issue is that there's like 5,000 podcasts. And it's be cool if some people can just distill down to where you're hearing that information cuz I think you could sim simulate a lot of this pain. Yeah.
[01:06:50]
Yeah. And build a model that actually has the fund without the pain. Yeah. Yeah. Like let's build with cash. There's no pain if we're building with cash. There we go. So I'm going to raise $100 million of cash and then that project would be fun. It'll still have hard pieces within it. And I think that's what as I'm getting to this point I'm like every day I have to put out fire somewhere somehow. It's like sitting out here waiting for you for 15 minutes I put out four and it's like and there's half of me that's going to be the most relieved i' ever been and then there's half me that's sad. Yeah. Yeah. It's the weirdest feeling. Like you asked me two years ago I'd be like take it all. Look it I don't need any of it. Just let me start over. And now I'm like man there is a there's an element to growth that only happens with fire. Yeah. Mark always tells us to be thankful for the problems because that's what we were put on earth for. Mark has a lot of problems though. Yeah. Mark is a lot more relevant. He has the harder side. He loves it. I love it. But the what I've learned about this entrepreneurial wiring that we have is like you move from chaos to chaos and that's when you actually feel like you've done your part of it.
[01:07:48]
Cuz every day I walk in the office, I have this tempt to be like, what's the biggest problem right now? Like what can I solve? I'm like so antsy to just then and you get a little bit of like stalled out and you start to feel it. You're like this is kind of weird. Like there's not anything going wrong like I need to go solve it. Um, but I remember telling gabe like about that theory I had a couple years ago and we had a lot of problems was uh I was like I feel like we've graduated to the next level and gab's like I'm I don't want another level. Level. I was like I like high level. He's like I don't want to get any better at this. Like I don't want these problems to get harder. But that's really what happens is we get so much better at dealing with it. It's almost laughable when you think of the old problems you had. Count it all joy when you encounter various trials. So true. Well, okay. Yeah. And like that we took on this historic rehab 96 unit redevelopment. I stayed in portland last night and it's like such a cool downtown. I don't see how you guys think it's coming back yet, but we'll explain that later.
[01:08:46]
You should have seen it a couple years ago. Ago. Oh man, that still looks rough. Super rough. But you just look at like when you look past that and see the other parts. Some of the coolest architecture rebuilds in this in the I mean in the nation. It's the coolest. Um, and so I think as we dive in, well, now all of a sudden I'm learning about moreest, right? You're real estate. You're always going to learn something. Even when you're good, you're going to learn something new. You just got to the difference is you don't panic. Yeah. Yeah. And you start to look ahead of all right. So my dd list, I remember the first one, I was probably written down in handwriting. It was like 10 things long. My new one is like 10 pages. Yeah. And now it's at least check it off. So it's not that you even get better. It's just like, all right, did we check for asbestous? All asbestous anywhere like it's did the surveyor actually do their job can we sue them if they didn't right and so it's just this whole thing and but I made the mistake therefore it became a check we had a guy come on uh a couple months ago who initially when I met him he was like I mean he's he does well he's in self storage though but he does it nationwide and uh he was telling me that he had like a pretty good dd checklist he felt like built out um and I was like I'd love to just like take a look at it right? Cuz I just get to kind of learn the lessons that you didn't learn. I still I'm going to have to learn them on my own nonetheless, but I can look at it. And I was like, "can you like send it over to me?" I was, "yeah, yeah, yeah, for sure." he sends it over to me. It's 750 checkpoints.
[01:10:10]
And he has it broken down by like the feasibility piece, physical, legal, financial, and it's like, "did we check for I mean, it's everything stuff that I was looking at. I was like, I don't even think that applies in oregon." and he was like, "no, no, no. That's just for georgia, but we're going to have it on there. Like, we can't forget. You got to do the hardest standard for all of them. Yeah. Yeah. Yeah. Like I had to do my first this last lender for the big loan required a rate cap. Uh no, a rate cap endorsement. And I remember on the call, yeah, we'll get that lined up. And I'm like I got off and I'm like got to find a rate. A rate cap. I'm like I understand a rate cap, but it was like even different. So it's this insurance against yeah, it's essentially insurance I get against the cap rate going up. That's awesome. Or the interest rate going up. And I was like, oh, okay. I learned that one. Checklist item. Should probably add that to our checklist. So, there's one point I want to drive home, too. We had um rob beardsley, you know him on lonear capital.
[01:11:02]
Oh, yeah. Yeah. Yeah. Really awesome. Really sharp guy. And uh when we were talking through his strategy because he had a really ramped up, you know, couple year compression there and a lot of his investors are big check guys. And it really drove home to me because the strategy that he put forth on day one was that long-term strategy despite the turmoil in the middle there. And I felt like so many times younger guys or you know that haven't quite figured out what you figured out with just sticking to the plan and training the investors on what the plan is despite the headwinds and things and he said it really well and I can't repeat it exactly but it was essentially he is leading you know the ship. He is driving it and despite some investors with some experience, some with, you know, he has to continue to keep that message and stick to the business plan despite all the headwinds. And when you mention the, you know, I'm just going to make a fund of cash and that's going to be the plan and all my investors know the plan and despite all the challenges like other people think is that's a terrible deal.
[01:12:07]
It's like that's not your deal. This is our deal. This is the plan. Stick with me. That message only really works when you exercise that communication along the way because they're going to probably feel the outside influence, see the newspaper, see whatever. And I think that as a fiduciary, we got in that position because we have the vision. We have to just stay strong in that and understand our principles in that. And I it's just changed the way I've looked at the these deals because there's just so much adversity at every corner. And the second you waver a little bit, you know, it's huge. I mean my brother joel gave me the example. Do you ever watch the big short? Short? Yeah. Yeah. So the scene where yeah. So he has character right he makes this big play believes in the fundamentals but is losing 200 million investors are banging on his door and then he walks out and writes what was it a 1500% return right and I think that the big one then if you take that approach is you need to be the best at what you do. Yeah.
[01:13:01]
Yeah. The confidence in yourself because you have that confidence can't lack but it's got to be based on what you do well. And I think that's where too many people skip over and they try to like I said I think that scale p piece is bigger than I gave it credit for anyway. But yeah I think it's just and then you got to communicate. Yeah. Yeah. So all right we're going to wrap this one up. We're going to come back. We didn't make you cry this time. So we're going to try to make you cry on the next episode. Episode. Don't make me cry though. I think we'll all cry with this one. Yeah. Yeah. All right guys. Jordan Tampien on deal junkies. Jordan, you are an amazing guy. Uh it's been really fun to get to know you. Thanks for being on the show today. We hope to have you back again and we will come back and do another episode and talk about deals. And if people want to reach out to you, what are you looking for and how do they get a hold of you? Please don't right now. If you have 100 million cash, your real name is not jordan taylor. Uh no, I mean it just I think on instagram, facebook, we have website just there. It's pretty easy to find my number. But yeah, I think we're still building that ship and I want to be, like I said, super confident on phase two of this thing.
[01:14:03]
All right, Jordan Tampien, four degrees real estate deal junkies, we love you.