Jonah Bamberger is the Founder and Executive Chairman of Aulder Capital, where he has led over 60 acquisitions and 20 realizations valued at $1 billion since 2012. Serving as Aulder’s CFO from 2012 to 2018, he has been a managing partner and Investment Committee member for over a decade. Jonah is also the CEO of Viagem Inc., a short-term rental venture. Before Aulder, he was an investment manager at the Israel Infrastructure Fund, overseeing $1 billion in assets, and held leadership roles at Siemens Solar Thermal and TASC Strategic Consulting. He holds a B.S. from Cornell University and an MBA from Tel Aviv University.
Here’s some of the topics we covered:
- Jonah’s Game-Changing Leadership Background
- Real Estate Investing in NYC
- The 2024 Election Shockwaves and Jonah’s Bold Predictions
- How Inflation Could Turbocharge or Tank Rents in 2024
- The US Economy’s Next Move and What It Means for You
- Businesses Lost During the Pandemic
- The Lost Art New Generations Need to Revive to Succeed
- America’s Housing Crisis
- Spotting the Biggest Risks in Multifamily Real Estate
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
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Full Transcript Below
00;00;00;07 – 00;00;19;12
Rod
Welcome back to lifetime cash flow to real estate investing. I’m Rod Khleif and I am thrilled that you’re here and you are going to love this fascinating conversation I’m going to have with Joan Bamberger. And Joan is a freaking rock star in this space. Got about $1 billion in assets under management. Was probably forgotten more about it than many people know.
00;00;19;12 – 00;00;27;29
Rod
And, we’ve already had a wonderful pre frame conversation to this interview. So I’m very excited to, to get into it. Welcome, brother.
00;00;28;01 – 00;00;30;16
Jonah
Thank you. Thank you for having me. It’s, it’s a pleasure.
00;00;30;18 – 00;00;54;12
Rod
Thanks I appreciate that. Yeah. It’s, it’s fun to talk shop, and we’ve already had some stimulating conversation, which I’m sure we’ll put some clips out on. But, why don’t you give us a little background on on you. It’s Alder Capital. And, you’re the founder and CEO or executive chairman, so, maybe tell us a little bit about you, your history.
00;00;54;14 – 00;00;58;02
Rod
And, sure. Yeah. Bring us up. Yeah.
00;00;58;05 – 00;01;23;28
Jonah
So I grew up in Israel, and then we moved to the DC area. So kind of my foundational years were in the DC area in Northern Virginia and Rockville, Maryland, went to, college at Cornell and then moved back to Israel, got my master’s and kind of worked in the infrastructure space for, for the first couple of years of my career, both in the consulting side and then in, energy company, Siemens, the big German conglomerate, and then in, in a fund.
00;01;24;01 – 00;01;26;12
Jonah
And from that point, I kind of, you know.
00;01;26;15 – 00;01;29;14
Rod
When you said infrastructure, what what specifically did you mean by that?
00;01;29;16 – 00;01;30;16
Jonah
Roads, energy.
00;01;30;17 – 00;01;31;02
Rod
Oh, gotcha.
00;01;31;02 – 00;01;32;26
Jonah
Okay. So solar energy.
00;01;32;29 – 00;01;33;21
Rod
Infrastructure.
00;01;33;24 – 00;01;58;11
Jonah
Okay. All right. And it’s interesting how similar that is in some ways to real estate, because at the end of the day, it’s you’re not providing housing for people. You’re providing energy for people or so on and so forth. I mean, especially when it comes to solar, you know, PV solar panels and so on. It’s it’s not that different from, you know, self storage or some of those kind of operationally, like real estate.
00;01;58;14 – 00;02;17;15
Jonah
But, I’ve always wanted to be an entrepreneur. I wouldn’t necessarily call it a drive. It’s more like a sickness or a disease. And I think you could probably agree on that one, but it’s, you know, I wanted to, to do my own thing, and, and it kind of started out in Brooklyn, New York with the six, you know, unit multifamily that I did with a couple of friends.
00;02;17;18 – 00;02;25;18
Jonah
And that’s where Aldar kind of started as, you know, it was it was this was 12 years ago. Yes. It’s 2012. Wow. You know.
00;02;25;19 – 00;02;26;16
Rod
Timing actually.
00;02;26;23 – 00;02;27;24
Jonah
Still was amazing.
00;02;27;24 – 00;02;28;11
Rod
Right?
00;02;28;13 – 00;02;45;13
Jonah
Yeah. You could you anything you were doing is, you know, was doing great. And, and Brooklyn was going through a real renaissance, and it it felt good. And, you know, we’re value add player. So will, you know, what we like to do is pick up a slump, something that was really poorly managed and really make it nice.
00;02;45;13 – 00;02;55;05
Jonah
You know, it’s, we were working within some pretty strict regulations for rent stabilization that then dramatically changed in 2019. It’s a whole different story.
00;02;55;08 – 00;02;56;25
Rod
For the better or worse.
00;02;56;27 – 00;03;18;00
Jonah
Oh, for the worse, right. It was incredibly destructive in terms of capital. It essentially meant that investors were, you know, replacing the state in terms of it was essentially nationalizing projects. Yeah, we were simply expected to be public housing, and it hasn’t changed much for the better in New York since then. If you’re talking about two years for eviction or whatever it is you want, two years.
00;03;18;00 – 00;03;18;21
Rod
Being to evict.
00;03;18;28 – 00;03;22;08
Jonah
In a in a good situation. We’ve had ones that have taken longer.
00;03;22;08 – 00;03;37;03
Rod
You’ve heard me, you guys have heard me say avoid blue states. I mean, here’s a prime example of that debacle. And in the end, they have to keep taxing. I mean, they’re they’re broke and they have to keep tax. And you pay the highest taxes when you’re based in New York, don’t you? That or California.
00;03;37;03 – 00;04;01;24
Jonah
You know, New York’s an interesting one because the the fundamentals of real estate are so strong. And that’s what we always liked about it is, you know, you can the supply is extremely limited. The demand is very strong because living in New York is very different than investing in New York. So you’ve got really strong drivers, but, you know, you’ve got an incredibly unfriendly environment.
00;04;01;26 – 00;04;17;14
Jonah
You know, we we always consider myself, housing provider, not a landlord in New York. You know, if you if you watch enough TV, you know, landlords are always the bad guys. But at the end of the day, you know, we’re we’re coming in, we’re improving buildings, but we’re also improving entire neighborhoods at the end of the day.
00;04;17;15 – 00;04;19;12
Jonah
Sure. And I think that that’s, you know.
00;04;19;12 – 00;04;26;12
Rod
That that’s an I know you’ve got assets, you’ve got assets in New York, you’ve got assets in Philly, which, you know, like new Jersey or actually in Philadelphia.
00;04;26;17 – 00;04;42;26
Jonah
So we always avoided, Philadelphia. We had about 1000 units in suburban Philadelphia. Gotcha. You know, at that point we were kind of a bit more shy on the, on the deep blue cities. Just in terms of regulatory exposure, even though Philadelphia is not so bad. No, but in the suburbs, it felt a lot better.
00;04;42;26 – 00;05;03;00
Jonah
You know, you had fairly flat growth in terms of population, but very high GDP growth, which always felt good for us in terms of just basic fundamentals. Most of that portfolio got sold in 2000 and, and 22, we did really well off of it. In Maryland, we’ve got about a thousand units a bit more, multifamily, of course.
00;05;03;00 – 00;05;25;28
Jonah
And, and then we kept on going down south. We went, today we have in Myrtle Beach, previously we also went out to the Midwest a bit, to Louisville, Kentucky. All right. Again, a lot of that same kind of core fundamentals, you know, where we thought there was good growth. You know, of course it didn’t perform, I think, as well as the Carolinas or Texas, but, but we did well off of it.
00;05;25;28 – 00;05;28;00
Jonah
And I think we we were comfortable with what we did.
00;05;28;07 – 00;05;36;22
Rod
Nice. Nice. So I know you’re not just in multifamily, you’re also in some other, some other asset classes. Do you want to talk about that? Just just a little bit. Yeah.
00;05;36;26 – 00;05;59;22
Jonah
You know, we chase yield and you know I’d love to have part of that conversation with you as well. I know that you work in different states and different sectors as well. We we kind of fell in love to some extent with, the hospitality sector. We won a couple of concessions from New York City parks and one from the National Park Service to kind of create, like a Miami style beach club in New York City, which is just a amazing passion project.
00;05;59;22 – 00;06;01;29
Jonah
It’s also been very difficult.
00;06;02;02 – 00;06;07;21
Rod
So so you built a, like, a, like a restaurant concession inside of a park in New York.
00;06;07;21 – 00;06;29;19
Jonah
Or we have two of them. We have one in, it’s called McCarren Park House. It’s in McCarren Park. Okay. And it’s, 20 year concession. It’s, great little spot. Well, really fun to, to run, you know. And it does. Well, but that’s a bit different than, the National Mall, of course. And we also have the concession for the Rockaways boardwalk, which is, also really cool.
00;06;29;22 – 00;06;34;25
Jonah
Just a really cool project, very weather dependent. So in terms of that, it’s,
00;06;34;27 – 00;06;50;07
Rod
That’s no fun. The weather, the weather thing, it is you. If you’re at the mercy of the weather. I used to one of my 29 businesses I’ve started. Was there a cold air balloon business where you put balloons on top of roofs and you ended up hating the wind because you couldn’t make any money? But yeah. Weather dependance, no fun.
00;06;50;09 – 00;07;01;13
Jonah
Well, you know, it’s interesting that you mention that because now one of the our pain points in Myrtle Beach and we have a couple of assets, smaller ones in Florida. But the insurance that comes with and anything that’s weather dependent.
00;07;01;15 – 00;07;19;05
Rod
Yeah, I mean, we were talking about that before you got here. I told you you got to go look at my doc. It looks like something out of a doctor Seuss book from the from hurricane. Milton and Helen through my boat three doors down the road. Jet skis ended up in the backyard, but, yeah, I, I settled for a million, almost $1 million on Hurricane Ian here, you know?
00;07;19;05 – 00;07;26;03
Rod
And then that was. And now this happened. So, yeah, insurance is going to continue to be a real problem.
00;07;26;10 – 00;07;32;20
Jonah
Right. But on the multifamily side, it’s you know, it really affects your bottom line, right? Every dollar goes to the insurance company.
00;07;32;20 – 00;07;40;06
Rod
Just had just had an update call with limited partners are an asset in San Antonio. We showed them our insurance is literally doubled on that asset.
00;07;40;13 – 00;07;40;29
Jonah
Has it really.
00;07;40;29 – 00;07;49;27
Rod
Oh yeah. So we had to suspend distributions for a few months just to rebuild reserves, just to play it safe, you know, and explain why. That’s why. That’s the main reason why.
00;07;49;28 – 00;08;05;25
Jonah
One of the big questions that I query is, you know, as a lot of these places, the values went up so high. So in theory cash flow okay. But then you get the tax assessment. But now the insurance has gone up. So what’s going to happen with the taxes I don’t see them coming back down. So it’s just destruction.
00;08;05;25 – 00;08;27;07
Rod
Of of course you fight that. You fight the taxes every year. But no, I mean both. Luckily that didn’t hit us. And I was just thinking back through our PowerPoint last night, the taxes weren’t as big a deal, but but also, you know, contract labor went way up. It was paying a lot more there. You know, we’ve had to and just just on site labor went went way up.
00;08;27;07 – 00;08;32;06
Rod
I mean, to to get decent people, you have to pay a lot more because they’re paying a lot more at the grocery store. So.
00;08;32;06 – 00;08;32;27
Jonah
Right.
00;08;32;29 – 00;08;49;06
Rod
But, you know, and then I want to talk about the election in the economy and inflation, some of this stuff. But let’s talk about chasing yield first, okay? Because, you brought that up a couple of times. And so you say you chase yield. So I mean, the concession thing was that more passion than yield chasing. I’m assuming it was.
00;08;49;06 – 00;08;50;18
Rod
But you know, we.
00;08;50;21 – 00;09;08;13
Jonah
Because of what happened to us in 2020, which is kind of right. When Covid hit. Right. We we saw that there was, you know, kind of we hit the brakes on multifamily. And during 2020, we didn’t get a single deal done. So we said, okay, well, what else can we do? I see and we saw real opportunity where there’s just less, competition.
00;09;08;16 – 00;09;15;01
Jonah
So you’ve got this incredible foot traffic. You know, you’re working with the city, which is both a pleasure and a nightmare at the scene.
00;09;15;03 – 00;09;16;07
Rod
Was a yield play okay.
00;09;16;07 – 00;09;37;05
Jonah
Yeah. And, you know, because you got really good people who really want to get stuff done, but you’re also working within this very challenging democracy, you know, like bureaucracy, you know, hall type environment. So, so it’s got pluses and minuses just like everything else you do. And I think it’s been exciting. We have a good partner who’s kind of doing the operations for us.
00;09;37;05 – 00;09;39;05
Jonah
I, you know, I don’t want to operate right now.
00;09;39;05 – 00;09;39;15
Rod
Well, that’s.
00;09;39;15 – 00;09;44;14
Jonah
My sales sphere. That’s, Yeah. Or cleaning hotel rooms or so on. Right.
00;09;44;16 – 00;09;46;04
Rod
You buy some hotels as well?
00;09;46;06 – 00;09;53;23
Jonah
We have. We also need to have, a short term, rental operator, which we’ve, you know, that’s was a tough, challenging where business. We ended up shutting it down.
00;09;54;00 – 00;09;57;02
Rod
It’s hurting right now, actually. That business, that business that sort of, you know.
00;09;57;02 – 00;10;16;20
Jonah
You went so many, you lose some and it’s, you know, that one’s particularly painful because we worked so hard. It, it it was just it was constantly changing. Covid actually did great for it. Because so many people were avoiding hotels. Right. And you know, really, you know, kind of went great. And then it kind of ramped back down in the regulations all over, you know, kind of came out of the multifamily spacing.
00;10;16;20 – 00;10;22;26
Jonah
Well, how can we get a best utilization out of the space? How can we take some of our vacant units and kind of do something a bit more?
00;10;23;00 – 00;10;25;18
Rod
Oh, you did do you do it in some of your complexes as well?
00;10;25;20 – 00;10;29;01
Jonah
Some of the ones that were relevant? Yeah. Not all of our you know, some are relevant right.
00;10;29;01 – 00;10;29;12
Rod
Yeah. Got it.
00;10;29;18 – 00;10;33;27
Jonah
But you know, so maybe 20% of in Myrtle Beach, for example, some.
00;10;33;27 – 00;10;35;15
Rod
Of them we could spot. Yeah. Okay.
00;10;35;15 – 00;10;44;11
Jonah
Well you would think so, but it’s very seasonal and it’s, true, you know, but but but for multifamily, it’s been a very, you know, it’s been a very strong market.
00;10;44;11 – 00;10;59;20
Rod
It has. Yeah. I’ve got students that are doing midterm rentals, which are doing really well, you know, like nurses, things like that, traveling nurses and so on. And that’s they’ve been very successful with that. But, you know, my brother’s got some cabins up in the Blue Ridge Mountains, and he, he’s sold two of them already.
00;10;59;21 – 00;11;01;00
Rod
Just they’re just they’re just.
00;11;01;00 – 00;11;01;18
Jonah
Too much work.
00;11;01;18 – 00;11;23;13
Rod
And they’re just not they’re not occupied like they used to be. You know, it’s just really it’s really come down. So I don’t know what the what’s causing that if it’s an economic thing or what it is. But they’ve definitely had a pullback. So besides the hospitality, and you know, hotels and, or the concessions, is there any other way, any other area that you chase yield in?
00;11;23;16 – 00;11;39;10
Jonah
Yeah, we actually, a couple of years ago, we, we hopped across the pond and did, we do residential development, condo development in, Portugal. And it’s that’s been a really interesting one. You know, we kind of it’s the first time that we left the US.
00;11;39;10 – 00;11;41;11
Rod
And did you find a local partner there as well?
00;11;41;11 – 00;11;52;17
Jonah
We did. We do have a local partner. And he’s fantastic. And it’s, you know, it’s, the entire market in Portugal is so based on Americans looking for.
00;11;52;19 – 00;11;53;17
Rod
Like, expats.
00;11;53;17 – 00;11;59;26
Jonah
Yeah, well, specifically for their pension, you know, for their retirement. Oh, Florida’s not as cheap as it used.
00;11;59;28 – 00;12;05;05
Rod
Oh, you mean you mean utilizing the pension to go move there and live there. Yeah. Yeah, yeah. Got it. So yeah. Yeah yeah. Okay.
00;12;05;08 – 00;12;09;22
Jonah
Yeah. So the, you know, it’s a five hour flight. You get European level health care.
00;12;09;25 – 00;12;11;26
Rod
It’s five hours from, from the East coast from New York.
00;12;11;26 – 00;12;12;23
Jonah
Yeah. Oh, I didn’t know.
00;12;12;23 – 00;12;17;17
Rod
Is that clear? Yeah, I guess it is, because it’s kind of lean and off to the left there on a map. Yeah, yeah. Makes sense. Okay.
00;12;17;24 – 00;12;32;23
Jonah
Great weather. You know, you’re still Europe and you’ve got really strong drivers. And, you know, at some point I assume that the locals might get annoyed, but the, but for now, they’re appreciative and they’re supportive and, you know, they struggle to create more housing. And this really drives their economy.
00;12;32;23 – 00;12;35;08
Rod
And have you have you broken ground or done with you? Yeah, we’re.
00;12;35;08 – 00;12;36;02
Jonah
In construction on.
00;12;36;03 – 00;12;37;21
Rod
Construction right now. How many units.
00;12;37;24 – 00;12;39;20
Jonah
Altogether we’ve got about 400 units under.
00;12;39;20 – 00;12;43;29
Rod
Just kidding. And this is, this is, this is multifamily.
00;12;44;02 – 00;12;46;19
Jonah
Or so. It’s mostly it’s mostly condo, condo and development.
00;12;46;19 – 00;12;47;18
Rod
So you’re going to be selling them.
00;12;47;18 – 00;13;05;28
Jonah
Yeah. And to some of them, we explored the the build to rent space. But, you know, the yield was much lower. Yeah. In terms of chasing yield of course. And the and the regulations in, in Europe in general, Portugal specifically as well, you know, for renters.
00;13;05;28 – 00;13;11;13
Rod
Yeah. Same, same. Yeah. Same exactly what you mentioned. It’s got a socialist component to it as well there I suppose.
00;13;11;13 – 00;13;16;14
Jonah
Yeah it does, it does. But on the flip side it’s been very friendly in terms of the development process.
00;13;16;16 – 00;13;21;06
Rod
What’s the main city just just from my own edification that you fly into for, for
00;13;21;08 – 00;13;31;25
Jonah
There’s really two big cities, Lisbon as the capital. That’s about 2.5 million people, 3 million. And we work in Porto, which is the city. Okay. And that’s and it’s lovely. And I highly recommend it. Yeah. No.
00;13;31;26 – 00;13;36;29
Rod
It’s on the bucket list. I’ve been to Barcelona a few times, but I have not been to Portugal, so definitely going to have to go check.
00;13;36;29 – 00;13;41;01
Jonah
Lovely people, delicious food. Right. Wonderful weather. It’s just,
00;13;41;04 – 00;13;42;13
Rod
Can’t complain about any of that.
00;13;42;13 – 00;13;57;24
Jonah
None of it. None of it. So, you know, but our bread and butter is multifamily. Yeah. You know, East Coast. I love it up and down. Love it. And I think that that’s, you know, at the end of the day, it’s, there’s a cycle and we’re at a certain point in the cycle that’s, you know, challenging, very.
00;13;57;24 – 00;14;03;07
Rod
Challenging right now. It used to be survive to 25. You know, I don’t know what it’s going to be now.
00;14;03;07 – 00;14;05;09
Jonah
But they never promised the switch month, right?
00;14;05;09 – 00;14;36;08
Rod
Yeah. Right. Exactly, exactly. There’s that piece as well. Well, let’s, let’s shift gears and let’s talk about a taboo subject, which is the election. You know, I’m I’m I’m as red as red can be. But, you know, be interested to know what your thoughts are as far as, you know, depending upon if Harris wins versus Trump wins, if you have any thoughts about the impact of either either scenario, because, I mean, you know, some of the stuff Harris is thrown out there, it’s kind of sobering to me.
00;14;36;08 – 00;14;42;22
Rod
I mean, taxing unrealized gains. And, you know, the $25,000 credit for new homebuyers.
00;14;42;22 – 00;14;44;07
Jonah
That have you come across who.
00;14;44;07 – 00;14;45;22
Rod
Pays for it, you know, we.
00;14;45;22 – 00;14;52;11
Jonah
Have you come across national, rent, stabilization near the limit. That’s been talked about, but they’re.
00;14;52;11 – 00;14;56;23
Rod
Talking about if you own more than 50 homes, you’re going to you’re not going to have the tax benefits any longer.
00;14;56;27 – 00;15;16;29
Jonah
Right now. And I know the one that really and we’ve seen it come across in a couple of places, is a limitation on how much you can raise rents on existing, tenants. No. How would they would do that on a national level, I assume is with, you know, HUD dollars essentially federal funding. Yeah. That’s kind of or or maybe some kind of benefit in terms of mortgage program.
00;15;17;00 – 00;15;18;28
Rod
It’s another one. It’s another blue initiative.
00;15;19;05 – 00;15;40;05
Jonah
It is. And it’s, well, you know, what we find about regulations is that they can be supportive or destructive because of, you know, just because of market failure in different markets and in New York, there’s such a strong you know, the supply and demand is so out of whack, and the cost of building and the bureaucracy and everything is just so challenging.
00;15;40;07 – 00;15;51;11
Jonah
And yet it’s such an interesting city to work in. Regulation can be incredibly destructive, as you’re well aware. Sure. But it can also really create opportunity. And I think that that’s where, you know, that’s.
00;15;51;11 – 00;16;06;19
Rod
A great way to look at it, and it’s a great way to look at it. Seriously, I want to commend you for that comment, because, you know, with any with anything there’s opportunity. And when you look at things with that angle, that’s that’s the way to do it. So.
00;16;06;20 – 00;16;28;00
Jonah
So one of the things that we’ve tried to do is, you know, anything that the regulation is too unpredictable. And then that’s what we’ve really been trying to avoid. Right. A city that really doesn’t want you to succeed, right, is probably a tough city to work in. And I think that that’s where in New York, you know, you’ve got a strong mayor with with Eric Adams, who is promoting, the real estate industry.
00;16;28;00 – 00;16;31;05
Jonah
But, you know, whoever is next in line, you know, he’s under indictment.
00;16;31;05 – 00;16;32;16
Rod
We know what’s going on there, right?
00;16;32;16 – 00;16;41;22
Jonah
Right. You know, may not share the same view. The previous administration was very anti, and it destroyed an amount of capital that can only be.
00;16;41;22 – 00;16;45;06
Rod
A really big amount. Yeah, yeah. Well, so, you.
00;16;45;06 – 00;16;52;18
Jonah
Know, so, so we try to avoid those things. And that’s where the southeast is really just a more a friendlier place to do business, I think it’s not.
00;16;52;20 – 00;17;12;04
Rod
I like it like I told you, when we started recording, you asked me how long I’ve lived here. I said I could be a poster child for the Florida Chamber. You can’t keep people out now. Yeah, we’re going to have to deal with this insurance debacle because it’s good. It’s not going down. But, man, I buy everything I could get my hands on down here if it if it penciled, because ultimately, you know, rents are going to keep going.
00;17;12;04 – 00;17;16;13
Rod
I think at some point this could end up looking like California from a population standpoint.
00;17;16;13 – 00;17;28;23
Jonah
With what? Right. How do you feel about prison? Because I really went through and I’m not talking about rent. I mean also, you know, valuations and everything around it. I mean, it really popped in the last five years. Do you think it’s just a question of growth and kind of supply and demand.
00;17;28;23 – 00;17;41;04
Rod
Well I mean we saw 30 plus percent rent growth in one year in the Tampa MSA. Okay. By the way MSA is metropolitan statistical area like a big geographic area. So that’s what MSA means guys.
00;17;41;04 – 00;17;43;17
Jonah
But but that’s like three hours up and down, right?
00;17;43;17 – 00;18;09;04
Rod
Yeah. Yeah. Well pretty much you know, I think I think here in Sarasota, we’re even in the Tampa MSA, but but bottom line is, is, you know, 30, I think 31, 32% rent for about a one freaking year. I mean, it’s it’s crazy, you know, and in my view, obviously unsustainable and whatnot. So, you know, as, as we all know, you know, the, the values of these of this real estate is based on a multiple the net income.
00;18;09;04 – 00;18;25;11
Rod
And you know, obviously we saw huge increases there. So you know I want to get your opinion okay I have my opinion. And so I think the proverbial, you know what’s going to hit the fan here regardless of the election results. But I’d love to get your opinion as to what you think is going to happen valuation wise.
00;18;25;11 – 00;18;40;10
Rod
And some of these and maybe in your market that you’re specifically in, if you think it’s going to just stabilize and can keep going up. If you think inflation is going to keep driving the rents up, I actually think that, yeah. Because, you know, inflation is it is bad, but it does also affect rents. So.
00;18;40;14 – 00;18;54;13
Jonah
Well, I’ve seen some of your you know, I’ve heard you talk, and I agree completely in terms of the national housing shortage, I think in specific markets at specific times, it works at opposite Myrtle Beach right now is is overbuilt. I think that that supply. Okay. Yeah.
00;18;54;18 – 00;19;15;00
Rod
So yeah. So you know we’re seeing a lot of new absorption in some of these other markets that we’re in as well. In fact, that was part of the conversation on our San Antonio call last night as we’ve seen a lot. But it’s but it’s it’s died starting next year. So it’ll stabilize. It’ll come back fairly quickly. But it’s been crazy the last couple of years in the Texas market and I guess in Myrtle Beach as well.
00;19;15;00 – 00;19;15;29
Rod
And some of these well.
00;19;15;29 – 00;19;31;21
Jonah
I’ll tell you a quick story. And I think that that, you know, and then we’ll come back to the politics around it. But in, in Covid in New York, which has a lot of universities and a lot of students and is just because of its size, it’s such an interesting story and case study. You know, the city itself is let’s call it 10 million people.
00;19;31;21 – 00;19;57;01
Jonah
Right? So Brooklyn, if it was its own city, which close to 3 million would be the fourth largest city, well, in New York would still be the largest. Okay. So you had 600,000 students leave or move back in with their parents. That’s bigger than Boston, essentially. Right. So when you talk about supply and demand and kind of how that drives and what the fundamentals behind that are, you know, you look at a place like Florida that looks like you can just keep on building forever.
00;19;57;01 – 00;20;09;24
Jonah
But at the end of the day, you’ve got real cities like Miami, which said incredible growth, and Tampa, which is really filled in. And then the question is, at what point does it start? Is it worthwhile to start going up Sarasota or seeing a.
00;20;09;24 – 00;20;18;14
Rod
Spreading east from Tampa to, you know, connecting Orlando and Tampa? You know, that’s that’s becoming more and more of a reality. Come south to Sarasota, all of that.
00;20;18;14 – 00;20;35;13
Jonah
And then that’s the question, right, is how does the how does the supply versus demand, what’s the ability to build and how do you do it cheaply enough? You know, you’ve got places kind of in the Midwest where there’s been fairly stagnant growth, you know, in terms of population, but there’s still a lot of people and some of the product is old.
00;20;35;13 – 00;20;42;07
Jonah
I mean, you know, we used to buy 1970s product, right? That’s old. Oh, that’s 55. Yeah. No no offense to anybody in the mid 80s.
00;20;42;07 – 00;20;45;22
Rod
Minimal at this point. Yeah. Yeah. And not in prefer 90s but.
00;20;45;22 – 00;21;03;13
Jonah
Right. And that stuff you know you can look at it and it looks cheap but at the end of the day the amount of work that has to go into it, it’s you know, you have to be very, very careful. And I think we’ve made, you know, we’ve gotten lucky on some deals in terms of that. And sometimes we’ve made some mistakes, you know, in terms of just what the status and how much what the state of this property is.
00;21;03;13 – 00;21;03;28
Jonah
Right.
00;21;04;00 – 00;21;24;26
Rod
On that note, because I love to ask this question. I’ve got a boot camp coming up. You know, should have, somewhere between 700 and 1000 people in Orlando in a couple of weeks. And I put panels on, stays there, all my students. And one of the questions I ask that I love to because it get crazy answers, talk about what I call a seminar, which is a failure or a setback, a reckoning.
00;21;24;29 – 00;21;44;01
Rod
And I’d love to ask you that question, because you’re dealing in bigger numbers and you’ve seen and you’ve probably forgotten more of that stuff than. And we all have all these war stories and things that have happened to us. I’d love it. You share one, share one of yours, and maybe the lesson in it, a real doozy, a mistake you made, you know, because we all have made mistakes, you know?
00;21;44;05 – 00;21;46;12
Jonah
I mean, so you know that.
00;21;46;14 – 00;21;54;03
Rod
There’s so many I could tell you, right? I know, I know, that’s the that’s always the answer when I ask the question on the on stage, do you know, where do I start?
00;21;54;03 – 00;22;02;25
Jonah
Where do I start exactly? I think that one of the things that we, And it might sound like an obvious one, but people.
00;22;02;27 – 00;22;06;22
Rod
Yeah. Oh, yeah. Of course, making a bad selection with people. Well.
00;22;06;24 – 00;22;19;06
Jonah
You know, interestingly enough, some of the people that are that we’ve had that were the best started off the worst. And I think you know them well.
00;22;19;08 – 00;22;22;09
Rod
Well, they, you know, they were in the wrong seat.
00;22;22;12 – 00;22;44;12
Jonah
I think that they were in the wrong seat. And I think that it was kind of the attention that they were given. So when they didn’t have somebody really kind of, you know, and this is where you as a business owner, you kind of have to be a psychologist, right? Sure. Some people really need to, to have their hand held, and you really got to work with them and support them and take them through processes.
00;22;44;12 – 00;22;50;15
Jonah
And then they can be, you know, in a player and some people, you kind of have to leave them alone.
00;22;50;16 – 00;22;51;18
Rod
Let them just do their thing.
00;22;51;18 – 00;22;55;22
Jonah
Yeah. That’s right. And I think, you know, today we’ve got a fairly stabilized, team.
00;22;55;25 – 00;22;57;11
Rod
How big is your team? Just curious.
00;22;57;14 – 00;22;58;25
Jonah
About 80 people, 80.
00;22;58;27 – 00;23;18;22
Rod
Yeah. Yeah. I’m sorry to digress, but, do you, you know, I’m, I’m a big proponent for iOS, from the book traction, that operating system. Do you do you have any sort of a of a mechanism you use in your organization to help, you know, keep keep your eye on the ball, the familiar with the iOS system entrepreneurs.
00;23;18;22 – 00;23;40;29
Rod
I read a book called traction and and basically what you do. I’ve used it in all my businesses now and really love it. And you do basically 90 day quarterly meetings and you come up with your next 90 day goals and they call them rocks, but they’re goals, okay. And and, and instead of a organizational chart, you actually have an accountability chart, which is kind of fascinating where you just focused on what’s accountable.
00;23;41;01 – 00;23;47;11
Rod
But so I don’t know if you’ve ever brought business consultants in to help with, you know, things that you’re we.
00;23;47;11 – 00;23;55;04
Jonah
Have we also, interestingly enough, we’ve got a, a friend of the firm who’s an organizational behaviorist.
00;23;55;04 – 00;23;56;03
Rod
Oh, well, there you go.
00;23;56;04 – 00;24;25;22
Jonah
Professor Sam Bacharach. Okay. And he’s come in and done some seminars for us and given us some great advice just in terms of, you know, some of his books are, you know, called the, you know, the clunky organization, which unfortunately, my organization has certainly at certain times fallen into that category. We just can’t seem to, to push things forwards or, or one which really focuses on kind of how to convince a team to perform and I think as a, as entrepreneur and owner, you know, this isn’t a I’m not a general in an army.
00;24;25;22 – 00;24;43;01
Jonah
I can’t tell everybody do this now and that I’ll do it now, you know, I know. Oh, sure, you got to get people’s Buy-In. They have to feel like they’re part of a team. They have to. If you want good people, they have to have the right level of independence and empowerment. And you know, and in some people, the click doesn’t work.
00;24;43;01 – 00;24;45;03
Jonah
And then you have to know how to part ways as well.
00;24;45;08 – 00;25;03;03
Rod
Elegantly. Yeah. You know, every business guys is nothing but people in systems. You know, you define the systems carefully, you categorize them, you know, you emit them for lack of a better term. And then and then, by the way, the book E-Myth by a guy named Michael Gerber talks about McDonald’s raising a business. And that’s what I meant by that.
00;25;03;03 – 00;25;30;13
Rod
But you get the you get the procedures and the checklists and the systems down. Then it’s about putting the right butts in the right seats and coaching them. But like you said, you know, as part of like in this iOS process, we brought in everybody to play a role in that decision making process. And coming up with our code of values, coming up with our mission statement, coming up with some of these things, you know, that they feel enrolled in and need to be a part of, and that really makes a difference.
00;25;30;15 – 00;25;31;02
Rod
Would you agree?
00;25;31;07 – 00;25;48;17
Jonah
Yeah, absolutely. I mean, and I think that that’s, you know, there’s different systems out there. And I think some of them you study in business school, you don’t you know, I think the important part is picking one that suits your organization and really kind of committing to it. And it’s a lot harder than it sounds. And it sounds the one that you’ve pointed out I haven’t.
00;25;48;20 – 00;26;03;13
Rod
Heard of, you might check it out. A guy named Gino Wickman. The book is called traction, and I’ll try. And they, they, you know, they, it’s fascinating actually. And it’s been it’s been a game changer for us. But, you know, you’re obviously super successful, so you’re doing something right.
00;26;03;13 – 00;26;13;27
Jonah
I actually saw your library downstairs, and it’s, below the studio, and it’s it’s, you know, it’s amazing. It’s just an and it just shows like, you can never stop learning. You got to keep on going.
00;26;13;27 – 00;26;34;08
Rod
And I didn’t go to Cornell. I didn’t go to college, but. But I’m pretty well read, you know, so, you know, there you go. But, and I show this picture, of hundreds of lanyards on my. I have my arms out like this, and I’ve got hundreds of them around my neck and on my arms of, you know, I’m a I’ve learned from thought leaders, boot camps, masterminds, you know, things of that nature.
00;26;34;08 – 00;26;36;27
Rod
And and that’s, that’s basically my college.
00;26;36;27 – 00;26;39;14
Jonah
So that’s, that’s definitely a way to do whatever.
00;26;39;14 – 00;26;54;16
Rod
Works, whatever works. So so back to the election, do you think, I mean, are you bullish on the economy? Do you believe that that we’re going to just have a short stint here and then and then pull out.
00;26;54;18 – 00;27;12;02
Jonah
First of all, I’m bullish on the economy. I think inflation is never going to come back to where it was before. No way. I think in the you know, we’ve heard different people talk about, you know, a world with two poles in terms of kind of a us, you know, led one versus Chinese lead, you know, north and south, whatever you want to call it.
00;27;12;02 – 00;27;13;13
Rod
And they’re making moves.
00;27;13;16 – 00;27;17;14
Jonah
They are. And it’s, there’s a lot of uncertainty, political, what they’re doing.
00;27;17;14 – 00;27;18;02
Rod
Yeah, it.
00;27;18;02 – 00;27;39;09
Jonah
Is, but I think that there’s something about the United States, you know, and, and capitalism and the way to drive things forward. And I’m, generally bullish. I think that there’s a lot of really smart people and a lot of opportunity, in the multifamily space, I think we, you know, we did talk about survived 25. I think there’s going to be opportunities because I think things are going to shake out.
00;27;39;09 – 00;27;39;18
Jonah
Yeah.
00;27;39;24 – 00;27;42;12
Rod
Oh, they’re shaking out. The water’s coming out. We’re going to see who’s naked.
00;27;42;17 – 00;28;02;01
Jonah
Yeah absolutely. You know, and some people are going to take a hit and some people will keep on going and, and opportunities will be created in certain markets. And I think that that’s, you know, interestingly enough, that some that happened was a mere two years ago and Covid was just some places got destroyed in some markets. If you were in office, you weren’t going to do well.
00;28;02;01 – 00;28;08;06
Rod
And if you’re in logistical as well, retail as well, you know, absolutely. Restaurants got killed, health clubs got killed, all, you know.
00;28;08;07 – 00;28;12;22
Jonah
And yet logistics and warehouses, you could never have imagined that it would hit those pricing points.
00;28;12;27 – 00;28;15;28
Rod
Oh, they’re killing it. Absolutely killing it right now. Absolutely.
00;28;15;29 – 00;28;17;17
Jonah
You know, kind of makes me wish I was in that.
00;28;17;17 – 00;28;35;21
Rod
Same, same I was thinking that this morning I did a I did a Facebook live out in the back patio here, and I talked about that Creed Daly report that came out today, from oh, got, now. Forgot, forgotten. I forgot the name of the economic outfit that put it out. But anyway, you know, it talked about how industrials killing it.
00;28;35;21 – 00;28;39;25
Rod
I’m like, you know, I’m thinking to myself, yeah, dummy. You should have gotten some office warehouse or something.
00;28;39;25 – 00;28;40;11
Jonah
Exact.
00;28;40;12 – 00;28;41;17
Rod
On flex space or something.
00;28;41;19 – 00;29;00;23
Jonah
Exactly. But you know, that’s how it works, right? I mean, it goes up, it goes down. And you have to be agile and flexible. I think in terms of, the election itself, I think that, the Trump administration will be more business friendly. Yeah. Unfortunately, in the past, what we’ve seen is that that can happen is that, you know, can create, blowback on the local level.
00;29;00;23 – 00;29;05;09
Jonah
And I think in New York, 2019, rent regulations were partially again. And I’m.
00;29;05;09 – 00;29;08;25
Rod
Not. You mean, you mean to to fight the to fight the National?
00;29;08;27 – 00;29;21;27
Jonah
Yeah. It was it was kind of counter productive. And instead of, you know, it’s kind of whatever that guy’s doing is I’m going to do the opposite. So what we saw was local regulations that were real challenged to deal with, whereas the on the federal level, it was very.
00;29;22;00 – 00;29;22;22
Rod
It was loose.
00;29;22;25 – 00;29;23;20
Jonah
It was very friendly.
00;29;23;20 – 00;29;29;24
Rod
Yeah. Yeah. I mean, I think half the country is going to be pissed here in a few weeks. And so we’ll see at all that,
00;29;29;26 – 00;29;31;22
Jonah
That I know for a fact country is.
00;29;31;23 – 00;29;45;16
Rod
Going to be pissed because there’s a lot of emotion around this. And and so it’ll be really interesting. I, I’m, you know, I’m getting to a point where it’s stressing me out where I’m, I’m trying to stay off social media as much as I can, but it’s a it’s a fail for the most part, but.
00;29;45;18 – 00;29;51;08
Jonah
Well, read what I can tell you is because I because I do live abroad and, you know, I get to view it, although I’m an American.
00;29;51;08 – 00;29;53;04
Rod
How does the how how did other countries view all.
00;29;53;04 – 00;30;11;00
Jonah
This? Right. So, you know, at the end of the day, it’s and that’s what’s always interesting about the US is it’s kind of like, you know, an aircraft carrier and it’s going in a certain direction. So you might have a different pilot, but, you know, there’s only so much you can change a direction so quickly. I mean, these stories don’t turn on a dime.
00;30;11;00 – 00;30;31;29
Jonah
And just the amount of energy behind the US and, you know, is significant. So, you know, it might feel very personal and very close here. But from, you know, when you’re sitting, you know, far away regarding regardless whether you’re a more Democrat or a Republican. At the end of the day, I think that there’s certain energy that that’s, you know, there’s a certain energy that’s behind it.
00;30;31;29 – 00;30;36;19
Jonah
And that’s why I’m bullish. At the end of the day, I think that, you know, there’s not my brother’s exact revolution here.
00;30;36;19 – 00;30;54;24
Rod
It’s yeah, I had lunch with my brother yesterday and he’s like, you know what? Who cares? You know it’s all going to shake out and and you know, there’s a limit to how much anybody’s going to be able to get through. You know, let’s pray that that we’ve got, you know, stability in the House, in the Senate, that they’re not one way or the other.
00;30;54;27 – 00;31;13;20
Rod
Because that, you know, and so hopefully. I think it’ll all work out. But I do think there’s going to be some reckoning definitely in the multifamily space. I just just in talking to this attorney last night, just some of the big operators, like I said, before we start recording that, that are in trouble right now, that just blew my mind.
00;31;13;22 – 00;31;20;10
Rod
Who they were that, you know, I we’re going to see some some fallout and some opportunity.
00;31;20;10 – 00;31;47;15
Jonah
I mean, we were we have a good lender relationships with the lenders that we get along with, with the lenders that are we don’t get along with, obviously, just like everybody else. It’s a lot tougher. And some of the stuff that we’ve been presented or, you know, they’re asking us to come in sometimes the lender so far underwater that they’re really, you know, do they write off of their loan or do they write or do they try to work out some kind of deal, but they’re all in cost might be something that, you know, under the best case circumstances, I can’t pencil it to.
00;31;47;15 – 00;31;59;09
Jonah
Now, I don’t know if they’re including default interest rate. I don’t know which kind of penalties or fees are including in that. But, you know, if the deals worth eight and they’re like our basis is 22. Yeah, that’s going to be hard to it’s impossible.
00;31;59;09 – 00;32;17;11
Rod
And so, you know, and and we’re hearing that too. In fact, we just looked at a deal wasn’t quite that bad, but pretty bad. It was an $8 million debt. And there’s just no way to to make it work unless there’s a concession from the lender. And, you know, right now, the lenders are kicking the can down the curb because if they don’t, it hits their balance sheet.
00;32;17;11 – 00;32;35;03
Rod
And as you know, and so they’re forestalling in any way they can, hoping that, you know, there’s a light at the end of that tunnel with rates dropping and whatnot, I think is is the mindset. So they’re doing forbearance and mods and things like that. And they’ve been instructed by the fed to do that as well if they have a credit worthy borrower.
00;32;35;03 – 00;32;40;09
Rod
But I think at some point the piper’s going to get paid. So.
00;32;40;11 – 00;32;54;13
Jonah
You know, it’s kind of like soft landing, that mythical soft landing in the economy. Right? And if you can kick it down the curb long enough, sometimes you can be avoided. And I think in retail space, which took, what did they used to call it. Remind me. Retail apocalypse.
00;32;54;13 – 00;32;57;20
Rod
Yeah. Yeah. Yeah. You know, they did with the Covid things. Right.
00;32;57;20 – 00;33;04;20
Jonah
And they managed to you know, I think retail today it’s a totally different price point. But I think it performs well.
00;33;04;22 – 00;33;08;07
Rod
Okay. Well what’s your what’s your what about office?
00;33;08;09 – 00;33;09;07
Jonah
You know, office.
00;33;09;07 – 00;33;27;01
Rod
I never I think office is, is is doomed. And, you know, you can’t convert. You really can’t convert office to multifamily. It’s too expensive. I mean, maybe self-storage, maybe, you know, it centers, you know, but nobody wants to work in an office anymore.
00;33;27;03 – 00;33;35;07
Jonah
You know, we we when we started, we started out in, in kind of Brooklyn, in 2012. So it’s just after the crash, the whole thing, you know.
00;33;35;07 – 00;33;35;21
Rod
More than me.
00;33;35;21 – 00;33;52;05
Jonah
Then Williamsburg was, you know, was known for lofts. You would take this old industrial industrial space, you would throw it in a a ridiculous apartment. And it was fun. It was cool. You had, you know, 50ft ceilings and, you know, okay. And a bathroom in the middle of your kitchen, you.
00;33;52;09 – 00;33;54;20
Rod
Know, that that that could work. That could work. But, but.
00;33;54;20 – 00;33;58;23
Jonah
But then at some point it gets redeveloped because that’s not the right.
00;33;58;23 – 00;34;00;20
Rod
Highest and best use. It’s not the highest must use.
00;34;00;25 – 00;34;09;17
Jonah
So you know you can do it. Maybe we can do some kind of self storage, or maybe you can carve out the middle part, but b c class office.
00;34;09;20 – 00;34;14;20
Rod
And what’s the occupancy nationwide? I mean it’s like in the 60s I think. I mean it’s bad.
00;34;14;20 – 00;34;31;02
Jonah
Well in but it’s actually I think it’s actually worse than that because if you look at a class office, which is what people want today, just like they want a class, everything else it over performs right. And so maybe that’s okay. If you got 1,000,000 square foot and you got Google in there, right? You know, that’s you’re you’re in good shape, right?
00;34;31;05 – 00;34;36;29
Jonah
But if you’ve got B class office, with no parking in a C location.
00;34;37;02 – 00;34;51;27
Rod
And you know, and and C I think there could be a reckoning there. I think they’re kicking the can down the curb there as well. So I mean, I don’t know what your thoughts on that are, but, you know, a third of that debt is held by small and regional banks. You know what what’s going to happen there.
00;34;51;27 – 00;35;09;07
Rod
Is it kind of I mean, we are we don’t, you know, they’re not too big to fail. And, you know, we’re already our national debts going up about a trillion every hundred days right now. At some point, I mean, do the math at some point, you know, I don’t know I don’t know.
00;35;09;09 – 00;35;18;28
Jonah
Well, I mean, I think I think the fun part of inflation is that, you know, those numbers can be you know, I remember back in the day when us, I think it was a movie called Pulp Fiction where she’s talking about a $5 shake.
00;35;18;28 – 00;35;28;15
Rod
Oh yeah. Yeah, yeah, $5 shake. That’s right. I just watch that. We do what? Thurman just very recently. Oh, let me taste let me John Travolta I don’t know what a 5 to 5 shake it tastes like. Yeah.
00;35;28;15 – 00;35;30;23
Jonah
That was I’d like to see where you can buy a $5 shake today.
00;35;30;23 – 00;35;34;21
Rod
I can’t even find one today. Right. Oh that’s funny. And with crisis comes opportunity.
00;35;34;21 – 00;35;56;28
Jonah
Yes, absolutely. And I think that that’s, you know, patience, certainly in today’s day and age, TikTok generation, whatever you want to call it, it’s, you know, it’s a lost art, but I think that in the next, you know, I’ve seen different people talk about 12 months or so on. You know, I think it’s going to be a window that opens.
00;35;56;28 – 00;36;11;15
Jonah
It might shut relatively quickly just because there’s so much capital on the sidelines, actually. And for the people that are, you know, aware and wary and looking for those opportunities and kind of out there ready to go, I think there it’ll be something really interesting going on.
00;36;11;18 – 00;36;12;19
Rod
Could be some good stuff.
00;36;12;24 – 00;36;26;28
Jonah
Yeah. And I don’t think it’s just a case of interest rates. I think interest rates are certainly impactful, but I think it’s, you know, a lot of it just has to do with trends. At the end of the day, it’s, you know, suddenly something to loosen up or, you know.
00;36;27;03 – 00;36;42;12
Rod
Oh, we saw we have a housing shortage regardless. Yeah. That’s right. There’s there’s going to be a need. Regardless. We when we talk about whatever it is, 10 to 20 million people that have come over the border, they all need to have a place to live. And so, you know, we’re we were 5 million units short before all that happened.
00;36;42;12 – 00;36;48;12
Rod
So, you know, we’re we’re the the fundamentals are there.
00;36;48;15 – 00;37;09;13
Jonah
And I think that that’s the, the big thing is if people who are focused on fundamentals, on patience, on strong markets and, friendly regulations and again, that’s I think one of the things kind of I look at is I don’t mind regulations, as long as they’re clear and relative friendly. You can limit, you know, rent growth on existing tenants.
00;37;09;13 – 00;37;13;14
Jonah
And it’s something that we can probably all live with to a certain extent.
00;37;13;14 – 00;37;14;09
Rod
Sold for it. Yeah.
00;37;14;11 – 00;37;23;15
Jonah
That’s right. Right. As long as you don’t change it, as long as you make it and and as long as people pay, if you tell people listen, you don’t have to pay rent. That’s a really challenging environment for the multifamily.
00;37;23;15 – 00;37;41;24
Rod
We went through that in Covid. You know, we we saw that and that whole rental assistance and everything that happened back then as well. But, you know, I had someone sitting in where you’re sitting, you know, an economist tell me that that 80% of the currency that’s in circulation has been created in the last four years in this country.
00;37;41;26 – 00;37;46;10
Jonah
The question is, is, is how bad is that really? I mean, it’s at the end of the day, you know, it’s.
00;37;46;10 – 00;37;47;21
Rod
Inflationary for sure.
00;37;47;23 – 00;37;49;14
Jonah
It’s inflationary.
00;37;49;16 – 00;38;04;27
Rod
You know, are the inflation numbers that are thrown out there accurate? I mean, I’m, I’m blown away. I’m single now and I go buy my own groceries and I’m just blown away by what things cost. And I’m wondering how people can afford it, honestly. And I’m seeing the impact and, you know, on some of our assets that they’re struggling.
00;38;04;27 – 00;38;07;09
Rod
We’re seeing our delinquencies go up and for sure.
00;38;07;09 – 00;38;25;25
Jonah
And I think Florida and specifically this area, for example, is, you know, enjoyed or suffered that inflation more than most places, you know, really. It’s not universal. I mean, it’s Myrtle Beach. Part of the thing that really drove us there was that it became a tweener state because it wasn’t as appealing as Florida. Florida used to be cheap.
00;38;26;00 – 00;38;28;08
Jonah
Florida is no longer cheap. I mean, Miami’s.
00;38;28;10 – 00;38;48;13
Rod
Oh, it Miami is crazy. I mean, I was going to get a second. I was get you know, I make fun. You know, I’m single now and I make fun because, you know, I’m an hour south of Tampa and old people live in Tampa and their parents live here in Sarasota. Right, right. And so I make the joke and, and and so, you know, last time I was single at a second place in Miami and I went and looked at the building I was in before it was five grand a month, 15 years ago.
00;38;48;13 – 00;38;58;15
Rod
It’s 15 to 20 grand a month now. So it’s like F.U. Money, you know, do I really want to do that to be back in Miami? I’m still thinking about it, but it’s like, good lord. But the Miami’s exactly.
00;38;58;15 – 00;39;01;17
Jonah
The point is, you know, it’s but there’s a reason because Miami.
00;39;01;23 – 00;39;21;18
Rod
It’s desirable I mean traffic don’t get me started on the freaking traffic. So good lord. Especially in Brickell. It’s crazy. But but I love the energy of it. And the. You know, I have a beautiful Zen. You mean you saw my place here? It’s. It’s spectacularly peaceful and zen and beautiful, but but it’s slow, so, you know. Right.
00;39;21;21 – 00;39;36;21
Jonah
Well, that’s that’s a, you know, New York, the city that never sleeps. Right. It did go to sleep for about three years. There did. It certainly did. And now it’s kind of back and it feels good and and that’s you know when you talk about fundamentals in, in demand, I mean, if you’re young and you want to be somewhere that.
00;39;36;24 – 00;39;37;07
Rod
Yeah, it’s.
00;39;37;13 – 00;39;38;19
Jonah
Kick in.
00;39;38;22 – 00;39;39;22
Rod
New York, New York, New.
00;39;39;22 – 00;39;42;10
Jonah
York, Miami. Yeah I mean I just don’t yeah.
00;39;42;13 – 00;39;43;21
Rod
In this country, those are the two.
00;39;43;22 – 00;39;44;26
Jonah
Certainly on this coast I think.
00;39;44;26 – 00;39;57;09
Rod
That and then LA on the other side. Right. So you know I have a lot of listeners that have, you know, that want to be where you’re at. I want to be where I’m at. They want it. They want to own assets. They want to get out there and make things happen. But they haven’t they haven’t taken action yet.
00;39;57;09 – 00;40;15;25
Rod
For whatever reason. You know, what suggestions might you have for someone that’s listening or watching that knows they want to do something for themselves and their family? Create, you know, do a side hustle. And they like the idea of multifamily real estate in general. Any any words of wisdom for them.
00;40;15;29 – 00;40;38;27
Jonah
Real estate is always a little bit trickier than it seems. Learning, reading, listening to podcasts, whatever it is, you can never gain enough information. And I don’t think you need to necessarily have a PhD in real estate, to, to play in this game or to to work. I think you need patience. I think you need to be open minded.
00;40;38;27 – 00;41;01;29
Jonah
I think you need to be aggressive when it’s time to be aggressive. There’s risk involved and it can’t be avoided. So don’t take it too personally when it happens. I think I saw a show where somebody was talking about hard money loans. I’m not for or against those types of tools. You just have to be aware of, you know, the risk that comes with it and then go with something that will make your life better.
00;41;01;29 – 00;41;19;28
Jonah
If you’re not going to sleep at night, don’t do it. And if this is something you’re comfortable with, then, you know, then that’s then that’s the way to go. So, for example, if you struggle working with tenants and you don’t like people or dealing with them and their challenges, go with self storage. Yeah. Or go with logistics.
00;41;19;28 – 00;41;41;05
Jonah
And if you like people and you want to make their lives better, since I’m not going to recommend being a slumlord right then I think multifamily is, it’s a fundamentally strong, place to start. I think people always need a place to live, and if you give them a good product, I think they’ll be grateful. Yeah. And that’s, that’s a good way to, to live your life and to, to create wealth and value.
00;41;41;07 – 00;42;07;04
Rod
Now, that’s that’s well said, you know, and I will tell you this, you know, in my world, you can outsource the, the property management. And so, you know, you’re not dealing with the toilets and tenants now, you know, you’re still asset managing. Of course you’ve got to manage the asset. But you know, the bottom line is, is decide how are you going to pull yourself out, decide what you know, how you’re going to create that, that life that you want.
00;42;07;04 – 00;42;25;14
Rod
And, you know, I think there’s going to be I think there’s going to be incredible operating, buying businesses. Frankly, there’s 80 million baby boomers. A lot of them have businesses. They’re going to want us ultimately. So I think it’s going to be incredible opportunity to buy businesses as well as, you know, other real estate asset, you know, real estate asset classes in general.
00;42;25;14 – 00;42;41;25
Jonah
But one of the things that I’ve always found fascinating in terms of the psychology, it doesn’t matter if it’s a business or if it’s real estate, a building, whatever it is, if you want to buy that, by and large, you have to be willing to pay more than the next person, otherwise they’re going to sell to the next person.
00;42;41;25 – 00;43;01;27
Jonah
So it’s true that you can get a better deal by by certain tricks of the trade or being more aggressive cash buying, so on and so forth. But the, but the psychology behind getting to a place where you’re willing to buy and pay more than the next, because you see more potential value. That’s always been an interesting one for me as well.
00;43;01;27 – 00;43;19;03
Jonah
And it goes also when you’re selling is, you know, you know, you always want to get the best price. So is it is this the best offer you’re going to get? Are you ready to sign in it. And I think that there’s a certain level of confidence that has to come with it. Knowledge is probably the key to that one.
00;43;19;06 – 00;43;31;14
Jonah
And, that’s maybe the, the, the most challenging one is saying, you know, okay, I’m willing to pay this price. And then getting used to the fact that somebody is going to come to you and say, oh, man, you overpaid for that.
00;43;31;16 – 00;43;50;11
Rod
Right? Well, and you like you said, that only comes from knowledge. And, and, you know, we’ve we we kiss a lot of frogs to find the deals we want. Right. Yeah we do. So we do, you know, and but we stick to our guns and, and and that serves us and so you know that. But but that is a factor.
00;43;50;11 – 00;44;09;26
Rod
And that’s why, you know, the bottom line is what, you know, if you’re listening, whatever it is, I don’t care how you go create that side hustle to to create the life you want. Decide what it is. Go educate yourself and then just take massive freaking action and and and and it’ll come together. My most successful warriors, my most successful coaching students aren’t the smartest.
00;44;10;03 – 00;44;20;21
Rod
They’re not the ones that started with the most money. They’re not the most, you know, knowledgeable in the business that are just the ones that take the most action. You know, they just go do it, you know, they’re not going to make some mistakes.
00;44;20;21 – 00;44;22;12
Jonah
Absolutely. But but can’t be avoided.
00;44;22;17 – 00;44;23;23
Rod
Yeah, that’s part of the business.
00;44;23;23 – 00;44;26;10
Jonah
And you can’t ski without falling down. That’s work.
00;44;26;13 – 00;44;43;16
Rod
That’s it. And you know you’re going to it’s it’s not a straight line. But if you if you clear on what you want and why you want it, if one approach doesn’t work, you, you change your approach, keep your focus on the goal. And and that’s a, that’s a recipe for success. You just keep focused on that goal and change your approach as needed.
00;44;43;16 – 00;44;44;07
Rod
You agree?
00;44;44;09 – 00;44;44;24
Jonah
Absolutely.
00;44;44;26 – 00;44;45;05
Rod
Yeah.
00;44;45;05 – 00;44;46;21
Jonah
And I think you said it really well.
00;44;46;24 – 00;45;10;14
Rod
So your biggest hurdles in the in in business has been has been. Well the one you mentioned was, was people. And I would have to say the same thing. Yeah I’d have to say the same thing and, and you know, you I’ve interviewed hundreds of people I know you have as well. And you know and it and any tricks of the trade with that that you want to bring up any any thoughts on, on when I do use personality profiles, by the way.
00;45;10;16 – 00;45;19;28
Jonah
Let’s, let’s really, a very smart person once told me, if you’re going to interest, if your gut kind of tells you this is the wrong person.
00;45;19;28 – 00;45;20;25
Rod
Oh, it’s the wrong person.
00;45;21;00 – 00;45;37;26
Jonah
Yeah, it’s probably the wrong person. Well, you can you can try to play around with it and and I’ll tell you where it gets to be really challenging mediocrity. You know, you want really great people and somebody sometimes has that spark and you feel like you can get it out of them. But the end of the day, they’re they’re just not performing as well.
00;45;37;26 – 00;45;58;07
Jonah
And maybe it’s them or maybe it’s you, or maybe it’s a click. You know, because some of them, I’ve seen them go onwards and really perform somewhere else. Really. But that’s the hardest one, you know, if somebody is really terrible or they’re dishonest, that’s a no brainer. Brainer, right. But sometimes when you think you can get a little bit more and you just don’t know how to do it, and you still have to make that difficult decision and cut.
00;45;58;07 – 00;46;05;14
Jonah
And, you know, by and large, people fall on their feet. There’s a I think you can be fair with people. You can be honest with them. Oh yeah. You’re not doing them any favors by.
00;46;05;17 – 00;46;09;03
Rod
If they’re in the wrong place, they’re in the wrong place. They’re not going to thrive.
00;46;09;05 – 00;46;10;00
Jonah
And they’re not going to throw.
00;46;10;04 – 00;46;24;17
Rod
No, no. Right. But they’ll do better in another place for themselves. You don’t have to feel bad about making that move. That’s right. But, you know, I look for work ethic and passion and the rest of the stuff is, you know, the training you can do yourself. But those are the two things I like the.
00;46;24;20 – 00;46;26;02
Jonah
Passion, loyalty.
00;46;26;02 – 00;46;27;07
Rod
Loyalty as well, because.
00;46;27;07 – 00;46;38;21
Jonah
Stuff does not always go as smoothly as you want it to be. And I think that that’s where I try to show loyalty to, to, you know, to my colleagues and, same. Yeah. And I expect to have it back when times are tough.
00;46;38;21 – 00;46;39;17
Rod
Because that’s right.
00;46;39;21 – 00;46;43;15
Jonah
Because I still haven’t figured out how to avoid, you know, the tougher times.
00;46;43;17 – 00;47;01;26
Rod
You know what? We’re in it right now. I mean, you know, and on some of my portfolio as well. And we’re just going to deal with it, you know, you just deal with it. But yeah. No. But about your gut comment, you know, our brain I use it I talk about this in my bootcamp because it’s so important because I, you know, there’s a lot of partnerships that come out of our business.
00;47;01;26 – 00;47;19;28
Rod
You know, people together. It’s a team sport. So you can have partnerships. I’ve got a book actually, a list of questions you should ask before you get in a partnership. And if you’re listening and you haven’t seen that, go to Rod’s links.com. Rod’s links.com. That’s my Linktree. And there’s a bunch of free books there. And one of them is a book of questions you should ask before you get in a partnership.
00;47;19;28 – 00;47;36;24
Rod
Because a partnership, like a marriage is easy to get into and hard to get out of. And yeah, so you want to ask the hard questions upfront. But but I always say as a caveat to that, you know, our brains are super powerful and we can pick up on micro nuance subconsciously that we’re not even consciously aware of.
00;47;37;00 – 00;47;53;28
Rod
And a great book about this is Steven presents a book called blink where, where an art expert can look at a painting and they know it’s a fake, but they don’t know why. They know it’s a fake and same way with a person. So, you know, if your brain is picking up on something’s off, trust it. I can tell you, every time I’ve ignored it, I’ve regretted it every time.
00;47;53;28 – 00;47;56;09
Rod
So, you know, that’s my $0.02 on that.
00;47;56;11 – 00;48;06;25
Jonah
And so also when it comes to partnerships, because this is a this is an industry with partnerships. Right. You can’t do it alone. It’s it. This isn’t an island. Right. You know, I prefer to date before I get married.
00;48;07;01 – 00;48;07;14
Rod
Yes.
00;48;07;14 – 00;48;10;23
Jonah
And, and even then, sometimes it doesn’t work out, right.
00;48;10;26 – 00;48;30;25
Rod
Yeah. And what and what he means by that is, you know, when you when you meet somebody, you’re like. Like at my boot camp, if you’re coming, if you came to my boot camp or if you’re, you know, getting even in my warrior coaching program, I tell people, don’t decide you’re going to do everything together moving forward, decide to do one deal together and see how everybody works together, see how well you handle disputes or conflict.
00;48;30;25 – 00;48;37;15
Rod
If they come up, see how well, see what the work ethic is. Yeah. And and then decide if you’re going to go forward and do more deals and.
00;48;37;15 – 00;48;40;27
Jonah
Talk about what’s going to happen if you do need a divorce because those documents.
00;48;40;27 – 00;48;46;05
Rod
In advance, in advance. So that’s what that’s just what’s on that list of questions. That’s one of the top of it.
00;48;46;06 – 00;48;53;12
Jonah
Sure. You know, it’s kind of like a prenup before a marriage, I guess, but it’s unpleasant. But you have to talk about what happens if, you know.
00;48;53;12 – 00;49;10;21
Rod
You have to leave the emotion out and talk about, you know, what happens if if somebody is not working out? What happens if we get in an argument? You know, what happens? You know, every eventuality you can think of. And and those are important questions. And so yeah. Well listen, Jonah, this has been a blast. I really have enjoyed talking to you.
00;49;10;21 – 00;49;14;06
Rod
And it’s such a pleasure to meet you. And I really appreciate you coming down to chat with me. Right.
00;49;14;06 – 00;49;23;10
Jonah
Do you have a, you know, you do great work. I love, you know, your podcast. Super educational, always something to learn, always something new. And thank you so much for hosting me. It’s been a pleasure.
00;49;23;12 – 00;49;25;14
Rod
Kind of you there. So thank you brother. Thank you.
