 Guys, today I interviewed Ryan Setco. This is Grant Cardone's very first private jet pilot. He tells a story of how he met Grant, what he was doing before, what led him to that moment to be his pilot, and then transitioning from that into helping Grant run Cardone Capital. They have today 12,000 apartment complex units across the U.S. So we dove into so many things, his story, their deals, how they evaluate deals, different tax benefits, what he thinks about the current state of the apartment complex market with interest rates doubling overnight, what they're doing in this market. I really kind of dug in to try to get as much meat as I could here so that it could help you. There's so much to unpack. This was a really incredible interview, so I'm not gonna waste any more time. I wanna dive right into it, so go ahead and click subscribe, smash the like button, leave me a comment. When you hear something in the video that really resonates, and here we go. It's really fascinating too, because as you're saying that the transition, we all have to transition from the work hard to the working smarter, but the end result is actually you're working harder because you're using this up here. I started really researching and really understanding the game of syndication. Talked to a bunch of different lawyers that are in the game, a lot of syndicators, so on and so forth. I looked at tons of deals. We've looked at hundreds and hundreds of deals to this point, and looking at deals all the time. First and foremost, I always say the deal's the most important piece of any syndication, whereas we lean more towards, okay, we're buying this property. It doesn't need a lot of work to it, and we're gonna get the rent growth because we have a great market, great location, the runner by choice. We have properties that have a $2 million swimming pool, and these properties are incredible. Like my fault is, if it's a great property, I'm not gonna sell it, ever. That's right, because you're getting all the benefits, and the exit, no exit is actually the best benefit because you can refinance, take money out, not pay any tax, and then keep it for another five or 10 years. Hey, what's up everybody? Welcome to the show today. I've got, man, a really special guest, honestly. This is Ryan Seco. Bro, what's up? Ricky, good to see ya. Glad to be here. Absolutely, man. So, man, we got a lot to talk about, and first off, if you don't know Ryan, Ryan was, right? You're not any long, you don't fly a grand around anymore, right? That's right, yeah, I started out as a pilot, now I run Cardinal Capital with him, but I don't fly anymore. Yeah, you don't fly, you still like fly. I'm working, yeah, I'm working actually to start flying these fighter jets. So, I have moved to the passion piece of it, but I don't fly the Gulf Stream G550 or the G650 anymore now. Yeah, yeah. No, it's cool. Number one, I want to hear this story, right? I want to hear this story about how you came to be Grant Cardone's pilot, number one. Number two, I know that you've kind of moved over towards helping him run Cardinal Capital, acquiring these massive apartment complexes all over the country. So, I want to kind of dig into, because I know a lot of people listening are really interested in what you guys look for in investments, how you guys evaluate these and underwrite these deals. And just hear more about that side of the business, what you guys are looking at as far as the future, what the goal is with this thing, and just kind of dig into some really good details. But, man, I can't wait to hear the story. Like, how did you come about to be Grant's pilot and then transition into one of his, like, biggest business partners? Well, so, I was always in real estate because my uncle was a builder when I was growing up. And I grew up in Scottsdale. So, I grew up in Scottsdale, which is Fountain Hills, Arizona, which they border each other. But when I was growing up, my uncle was a builder and that was his form of art. And so, it actually became my form of art because we could take a piece of dirt and build a house. The model, though, just wasn't built for cash flow. It was more built for build a home, sell it, make your money, and then move on to the next one or two projects. So, it was really hard to scale. And he was always really beating himself up because it's a tough job. When I was 17 years old, I looked at him. I said, hey, I want to own my first house. And he looked back at me and he says, well, son, you don't have any money. And subsequently, like literally at the same time, he was buying an airplane because he had always wanted to be a commercial airline pilot. And he didn't do it because he took off one day from the airport and he couldn't find the airport anymore. And so, he had a family and he scared the hell out of himself so bad that he's like, I can't fly. And proper training would have solved that. But he's like, he put it on the back burner. So, when he was like 45 years old and I was 17, he bought a Cessna and we started flying. And I was, you know, your typical, you know, dropping in and out of high school and you know, trying to figure myself out, definitely wasn't the guy picked to be the most successful. But I was an entrepreneur and I really wanted to be successful. I just, I wanted to go out there and make money and figure it out. And I've always loved real estate. So, I looked at him one day and I said, look, I can get paid to do this because my other options were pretty like, okay, build homes, fly airplanes. I started thinking about, you know, airplanes and flight attendants and traveling the world and doing all this stuff. And I lit up, I was like, oh my God, I can get paid to do this. He says, yeah. And I literally got hooked into, you know, this flying bug. And once it hits you, man, this thing is a bug and it never, it never leaves your blood. So, from the age of like 18 to 21, all I did was fly. And at the age of 21 years old, I actually got hired on at United Express flying a $40 million, 70 passenger Bombardier jet, which is any kid's dream. I literally felt like I was going into a candy store, right? I talked to the chief pilot and they let me fly. I was based out of St. Louis, Missouri and it started getting me traveling and around people who were really doing some cool stuff. And along the way, I've had really good mentors, right? But, you know, the fast track and the fast forward, you know, I've always wanted to come back into real estate. So, from the age of 21 to 30, all I did was fly. But at the age of 25, 2008 happened and I started buying my, I bought my first home in Scottsdale, Arizona. And I turned that into a crash pad. And then I realized I didn't want to live with people. So, I bought a fourplex and then I bought a threeplex. And I did, I ended up with 21 units and I'm flying full time. I'm trying to work with the real estate full time because the real estate has, for me, has always been, this is what I'm going to do. This is my bucket. This is my retirement. This is my financial freedom. This is my legacy. This is, because I've been hooked. Like, you know, you could read any of these books, whether it's Rich Dad, Poor Dad, or, you know, Grant's Books or whatever it is. Like, all of these people tell you about the benefits of real estate. It's just how many people are willing to actually learn and invest and do these things. So, I had 21 units. I had the age of 30 years old. And I said, the management is driving me crazy. I don't really want to manage 21 units because it's not big enough to have a manager. And I looked at my girlfriend and my family and the people around me. I said, man, what is next? There's got to be something out there that's next. And I started looking at 10 units and 15 units and 30 units. And I just felt myself struggling because I was running out of money. I didn't have the credibility. I didn't know who to manage it. I didn't, you know, am I going to go out of state? Am I going to stay in Arizona? So, I had all these questions. And I actually, on Bigger Pockets and on YouTube, I started searching and a Grant Cardone popped up. And this is how I became Grant Cardone's pilot. I literally found him on YouTube in Bigger Pockets. I called his office and I said, what would it look like for me to come work for Grant? And they're like, well, we don't have an airplane yet. And they're, you know, he's supposed to get one in a few weeks, but we have a sales position. And I'm like, a sales role? Okay, what is it? So I went down and interviewed and literally, Ricky, two weeks later, I was here in Miami. I've now been here for 10 years. I was hired on as a sales guy. And then two weeks later, after I met Elena and Grant, I got hired on as the captain of the airplane, the G200. And then we were flying together everywhere. We started flying all over the, you know, the U.S. and the world. And we started looking at a lot of real estate. So literally, that's how I became Grant's pilot as I showed up and I just got hired for any position. And I said, I could fly airplanes. I love real estate and I'm okay at it, but I want to learn that next level. What can I do for this organization to put me in this position where I can grow with Grant and really help him grow that real estate vertical, which we have done at Cardone Capital, but that's just the start story. What a vision, bro. What a vision to kind of see that. So before you, so how many, you had 20-something units at the time? I had 21 units and they were four plexes and I was doing creative financing. You know, like I bought one four plexes. It was, you know, four clothes on and I went and did everything, painted it, did the floorings and, you know, rents at the time where I bought it for 50 grand a unit and it was, you know, $600 rent. So it met the 1% roll, right? These were all the little key indicators that I always, those were my guides back then. And I just, I found that. What's that? Back then, where did you learn that 1% roll and all that stuff? Like where did you? You know, I was listening to podcasts. You were listening to podcasts. It's fascinating, you know, Ricky, I'm probably, we're probably a lot of like, you know, I've actually not only had the vision, but I start studying before I actually do something, you know, like, like I start studying, like I'm flying airplanes right now and I'm trying to learn about Reg D, you know, I'm trying to figure out how to crowdfund because the issue was I was running out of money. You know, I'd take my 30 grand or my 40 grand or 50 grand and put it as a deposit, but then I'd realize I had to go back to work to go get the money to get the next deal. And when I started learning about crowdfunding, even back when I was 26, 27, you know, like the real estate guys, they have a podcast and they have these little seminars that you go to. I was literally learning about Reg D, 506B. And we needed to have 506C at the time where you can go out on Instagram and social media and raise money. We didn't have that back then. And so I was learning all these different things. And so when I joined Grant's team, I was able to add some value because I didn't know it all, but I knew enough to say, hey, look, you know, you've got great deals, Grant. What if we did this? Hey, you've got great deals, man. Your business partners are reaching out saying they want to do a million. And that's how we built this, you know, and I know we're going to talk about that, but that's really how we built this crowdfunding platform is that, you know, the rules changed when I joined Grant's team in 2015. That's when all the rules were really starting to change. What, why do you think that they did that? Why do you think that they changed the rules the way that they did? Well, I think they were trying to help the smaller business owners scale. When you look at these big institutions, they've already been raising the money from the little guy. I call it the little guy, right? The non-accredited investor. That means you don't make 200 grand a year or you're net worth not a million. But they've already had that on lock, meaning, you know, when you, when I work for United, the only option I really had was the 401k. I didn't believe in it, but I didn't have any other option and I did want to retire one day because you know, you go to work at 21 and they're like, oh, you're going to retire at 65. That's a long runway. That is, it's ridiculous. It's ridiculous. And that's, I mean, this is your whole life. You literally throw your whole life away just to be able to try to enjoy the last, you know, the last little bit of your life. And hopefully you retire on a few million bucks depending on the market. When you retire. And that doesn't get you too far at that point. It doesn't get you far at all. So those are my options. And, you know, I just, I just, I just, I just realized that's not what I wanted. Were you always like a hard worker? Like, did you have just like incredible work ethic from, you know, an early age? My uncle, my uncle was pretty tough. He was, he was really a tough, which was good. I'm not saying tough in a bad way. I'm saying tough in a great way. You know, if I wasn't feeling good, he'd be like, okay, well, I'm not feeling good either. So, you know, here's the option. Either you come with me or you come with me. And I think, I think hard work is, is, you know, based on stats, you know, when I work for the airlines, I never called in sick one day. I called the schedule. I said, anybody you need to count on, you can just call me. I'll be there in 30 minutes. You know, I'm your guy. So yeah, I think I, I think I have a great work ethic, probably a 10 out of a 10. And that, that's actually how I've become, you know, again, you know, I didn't graduate from Harvard. I didn't graduate from these top schools, but I will outwork and it's not hard in today's society. It's not hard to outwork my age group and my age bracket and people who are coming up. It's just not hard to outwork them. I'm willing to answer my phone on, you know, seven days a week on short notice. And you know, that's really how I've been able to build up with Grant and, and, and help him run and run Cardone Capital with him. I mean, it's been phenomenal, but I've always wanted the responsibility. I've always been okay taking on more. So the answer is hell yeah. And I, I'm ready for more responsibility now. I'm actually bored right now. I'm like, okay, what's next? What's the next portfolio we're going to go on by? How are we going to scale this? Yeah, there's, I mean, I kind of learned this. Did you watch Alex Hermozzi's like big thing his little book drop last week? No, no, but it was a good. It was, it was very, it was very interesting. I'll, I'll, I'll spoiler alert here. I'll tell you kind of what he, what he did. And then I'll tell you kind of why I'm bringing it up, but he, he, he advertised this thing for months, right? I'm dropping my book on this day at this time. I'm going to be live. I'm going to, I'm going to drop the book and you're going to want to be there. Promise you it's going to be something special, right? And you know, he came out and he was like, number one, he had hundreds of thousands of people watching and he was like, you know, I guess you're wondering if I'm going to sell you something, you'll find out in a minute. And number two, what I'm going to share with you today, I told you to be here live. I want to share something with you live for the people watching. And I want to, I want to hold up to that promise because I want you to know next time I say to be somewhere, you better be there because I'm going to do something. Right? It was just masterful what he did, right? And then guess what he did? He went down this long road of, and I'm talking long road of like a pitch. And he was like doing his value stack where he's like, I'm going to teach you how to negotiate. And this is a $12,000 value. I'm going to teach you how to do this as a $5,000 value. You know, I'm talking for like 20 minutes and you're just like, I just want to know what this thing is going to cost me, right? Right. And at the end, he's like, this is all going to be, you know, bought for everyone here and whatever for one single price of zero, right? And he like literally created these amazing courses and they're just free on his website, right? Like serious stuff. But one thing that he brought up, and I don't know if he brought it up during the, it was, it was just like a climatic moment. And then it was just like zero. I love you guys. And all I want you to do is buy three of my books. I have like batches of three. It's going to come with my hat that I do not give away. I don't sell them. You're going to have my hat acquisition.com and three books that are collector editions, not what you're going to be able to buy. Three collector editions, boom. Nah, tellin' how many. That was the biggest book launch probably in history for like business type books. But I don't know if he said it then or during another video I saw, but he talked about hard work, okay? And he, it was so interesting to me with the way he put it because he was like, the definition of hard, what is the definition of hard work? Everybody says work hard. It was like, let's break down the definition. And basically just to fast forward, the definition ended up being what your results are, okay? Divided by the time spent to get the results. And so he's like Warren Buffett made 500 million on Coca-Cola dividends last year. Okay, 500 million. And the CEO made 50 million last year, working his ass off at Coca-Cola all day long the whole year while Warren Buffett made 10 times as much, you know, not working, okay? And he's like, who worked harder there? Well, the definition results per time invested Warren Buffett worked harder. Yeah. So there's the hard work of like the physical, mental, like in it grinding. And then there's the definition of, well, what's the results? What are the results that you get out of the time spent to try to, you know, accumulate those results, right? And it sounds like you are a lot like me because my dad was a roofer, he owned a roofing business. And I grew up roofing houses with him and he was very tough. Right. And like that work ethic just instilled in me early and it carried into everything I did, football, art, music, real estate, everything. Up until now, I mean, it's just like ingrained in me just grind, grind, grind. So there's that part of it, but I feel like we're kind of on the same level here. We're like, we want to combine both definitions, right? We want to outwork everyone in the physical, mental sense of grinding our time, but then also applying that towards leveraging out as much as we can to make them, you know, to have the largest amount of results and the least amount of time. I just found that incredibly enlightening to hear somebody say it like that. You know what I mean? And it's really, it's really fascinating too, because as you're saying that, you know, the transition, we all have to transition from the work hard to the working smarter, but the end result is actually you're working harder because you're using this up here. And it's not, it's not, you know, from an early age, I realized, okay, I don't want to work. I don't want to work in that my body is sore every day and I have to count on my back and my legs and my, like, I want to use my brain and continue to work this out because I just knew that the ROI, as well as, you know, the hard work in versioning into the ROI is, you know, the Warren Buffett versus the CEO effect where, but we all get stuck on that because we're all taught to go and go get a good job and work hard and that's the only way to produce income. I've really struggled with that because, you know, as we continue to grow card on capital, you have to take yourself out of doing everything and now delegate to really smart people to actually do something a lot bigger than what, you know, Grant and Ryan and the Cardinal Capital team, we can't do anything really massive until we actually start to really scale with partners and partnerships, you know, hard work is a lot like partnerships, you know, people always say like, you know, don't do partnerships, you know, everybody's going to screw you over. It's like the only way that people have really gotten successful and built really good brands is they partnered with people. Yeah, yeah. I mean, if you want to go big, big, you know, absolutely. I mean, even if you want to go small, you still, you're going to run out of money. Well, yeah, I mean, yeah, I mean, like even in the non, you know, even when we're not talking about people throwing in money, you've still got to build teams around you that are all invested in the end result, you know, to do things even on a small scale. That's why I love what you guys are doing at Cardinal Capital because I've been watching the whole thing for a while and listening to all the, as many of the calls as I can and stuff like that. And I mean, it's literally kind of like the warm bucket of real estate kind of scenario, you know, where I don't know what the dividends are off of everything you guys have, but it's up there and it's impressive. And it literally comes in while you're sleeping. That's what, that's what's so cool about it. And maybe we can get into like depreciation and all the different things that just like, wow. So when you, I mean, I just find it so fascinating, man, that you literally just listen to Grant on a podcast and called his office and said, hey, I want to come work and they just went down there and just started selling. So what were you selling? Well, at the time they're selling, yeah, at the time we were selling his training platforms to car dealerships and he walked in one day and he's like, man, you're terrible, man. He's like, you're, you're awful at selling, you know, the, the, I'm like, look, I'll get better. I mean, I'm like, I'm not going to beat myself up. I'll get better. I've been training on your material. And, and I think it's, it's awesome. You know, and, and I sit here and, you know, say to you in the audience, it's like, you know, you don't always start at the top, right? I was literally giving away my four bars. I was a captain. I was a captain sitting in the left seat. I had a crew. I was communicating. I was in the training department. Like I had some, you know, I wasn't on the bottom of the airline. And I was willing to give that all up because I knew that if I could start at the bottom with something really, really massive with Grant, then I'll just work through the, I'll just work through the steps. And so I was selling on my days off, like we'd go and fly the airplane. I'd go, we'd go and land in these different cities and go look at deals and, you know, look at real estate. And he started to realize he's like, man, Ryan, you really like real estate. I'm like, yes, I really like real estate. And if I could just get past a couple of these hurdles that I've been dealing with in my head, like, you know, underwriting a deal faster, understanding the proper debt in the proper equity and all these different things that come apart of a deal. And also the relationship with the broker. I was like, I know that we can continue to rocket ship and I want to help you do that. But yeah, no, I mean, it was selling, flying. And then, you know, it was a few months later where he realized he's like, okay, you're a real estate guy where I was on the Cardone capital team. It was just him and I. And we just started, I started managing. He had about 3000 units at the time. It was like $400 million worth of assets. And, you know, today those assets are probably worth, you know, 800 or, you know, plus or minus, because, you know, they were great deals. They're awesome assets. But I started really getting into the managing side and managing the managers and the third party managers and, you know, all the regionals would roll up and I was, you know, handling capital projects and, you know, the projections and, you know, all of the different things that go along with the asset management. And then when, you know, 2016, 2017 happened, we got our first deal that was 20 million bucks. It was a reserve at Port St. Lucie. This deal right now is doing, you know, 10, 11, 12% year over year over year, right? 12% a year cash flow and it's appreciated. It's a great deal. And we bought it in like 2015 or 2016. And we bought that first deal for 20 million and we got debt at 14 and we went and raised via crowdfunding the $6 million. Well, it came in in like nine days. It was like, it was like a week. We had commits, they sent their money in, we backfilled grant, grant looked at me and he's like, you think we could do this again? And I said, I know we can do it again. And it was crazy, Ricky. The people who invested in the first deal, they wanted to invest in the second deal. And they were all sandbagging me, right? They were sending in $250,000, $300,000, $500,000. Because what happened was they're like, oh, this is your first deal, let me try it out. And then once they realized that, oh, okay, well, they're buying this deal, it's already stabilized. Like it was like 96% occupied. The cash flow started 30 days after we bought it. So like, not only am I getting the cash flow, but the way you guys set this up was just a simple LLC where we're all partners. And so you get your schedule, right? You get your schedule of all the investors. So if you're raising $6 million and six people did a million, well, you own 10% of, yeah, so no, if you were raising $10 million and each person did a million bucks, you don't 10% of the deal. So it was very simple how we set it up. And then once they realized that they're like, okay, well, there's my equity. Now I'm gonna also get the appreciation. There's a split, right? 65, 35, now it's 80, 20. But at that time, it was a 65, 35 split. They would get 65 the line share. We would get 35 per foot putting the deal together. Then you'd run down. They're like, oh, we got leverage. We got a great bank. It's called Fannie Mae that gave us the leverage. It was like 75% of the time. Oh, and by the way, we also get this depreciation, all these write-offs from the real estate come on these bigger deals. What you were alluding to is you get this cost segregation study where you go and hire a third party. They write off all that schedule that's in your five and seven year schedule into year one. You get bonus depreciation. Literally, based on your percentage of the deal, you get that depreciation that rolls right through to you. And so they're getting the cash flow. They're getting the tax benefits. They're getting the leverage and they're getting the appreciation. They're like, well, why would I go and do this myself? Second deal, sign me up. And that's the model. In a simplistic form and fashion, that is the model. We'll just go and find a deal, put it all together and these investors come in as partners and we run the deal and we send out distributions monthly. On the non-accredited, it's quarterly. But it's just a simple model that people could understand because they could actually touch and fill the asset. We give people addresses. Here's the deal, 192 units. So if it's a 10-mil raise and you put a mill up, you get 10% of the equity. You have 10 investors put up 10 mil. Do they own 100% of this building? Or like, I mean, so they own 100% but then you're saying off of the appreciation, you guys were taking 35% at the time, now it's 20. You guys were taking 25% back then, 20 now of the appreciation. So the investors own the building and you're just there as you get a percentage of any appreciation from that point. That's right and that was just an example, right? Like Grant and myself and the whole team, we actually invest in these deals because we believe in them but the only way you get equity in deals, you put money in. Grant gets equity, Grant gets equity. And it's a great question. A lot of people, they ask this question because it's confusing. The equity is based, the equity is based on, if you're raising 10 million and each person puts in a million bucks, you get percent. Now, that's the equity. Now, there's a thing called the promote, which is a piece that you get as the sponsor, as the person putting the deal together that has nothing to do with the equity. Like when we sell the deal, the first 10 million goes back to the investors to pay off their, the money that they invested, right? And let's just use this as an example. Say we made 10 million on top, right? On top because we got a double on the equity, which means the property went up 25%, we got a double. We ended up 10 million bucks. If we were taking the 35%, we'd get 3.5 and the investors would split the 6.5. Now, current models were 80-20, so we would get 2 million and the investors would split 8 million based on the percentage of the equity that they own. Right, right. So it's very simple, but it's stolen separate. Like the only way you get out of these deals is if you invest money. Yeah, and so like even Grant's throwing his own money into these deals. Oh yeah, Grant is, I am, the team members are. We believe in these deals. But it goes back to me as a commercial airline. I didn't have any pilot. I didn't have any of these options. And that was really, Ricky, that was my leading, that was my beacon, man. I was like, I wanted to solve for Ryan. I wanted to solve for myself. I was in Chicago with Grant one day as his pilot. And I said, Grant, look at my 21 units. I was like, look at these things. I'm like the four plex and the three plex. He's like, Ryan, that's garbage. And at first I was a little bit taken back. I was like, what do you mean this is garbage? I work my ass off to get these deals. He's like, Ryan, it's 21 units in their B and C in their OK locations. I was like, well, what would you do? Because see, I was always open minded. Like, OK, well, what would you do? He's like, I'd sell them all and I'd invest with me. And this was before Cardinal Capital. And I said, OK, well, if I do that, I'm going to end up with 500 grand. I'm going to have to pay tax because you already bought a deal. Would you let me invest with you? And he's like, yeah, I'll let you invest with me. I took 400 grand, invested in 826 units in Nashville, Tennessee, was one of the biggest release of my life because I no longer had people calling me. I had property managers and regional managers. And I had the whole system right because it was a portfolio. And I took the 400 grand. I paid the tax of 100. I took my 400 grand. And I was getting four and five and 6% yearly, paid out monthly. And within like four years, that 400 grand turned into 1.1 million bucks. And so I was solving for Ryan. I was solving for how does Ryan build wealth in real estate? And then I realized all these people around us, because we have a big training business, right? All these people around us wanted to invest in these buildings and these deals because number one, they didn't have the real estate. Number two, they don't know how to find the deal. And then number three, their only option is the 401Ks, the IRAs, and they're trying to play that game. But they don't really have a hard asset that they go invest in. Typically, we're all investing in the stock market and we're hoping that we picked the right trades. So this was needed, man. This was so needed, like 2014, the Jobs Act. This was so needed because sponsors like us and syndicators like us, we can go out and find a deal. And then it was the perfect combination because Grant has now like 15 million. At the time, he probably had two or three million. But even so, if people are out there trying to put together a fund and they want to use crowdfunding, that's the two components you need. You need really good deals. You need to be trusted online. You need to continue to be trusted online. And you can grow and scale your company as long as you're doing the right thing. Yeah. Yeah. Now, absolutely, man. Well, it kind of comes full circle for me then because I saw the videos from back in the day of him doing a reel with you in there as his pilot. And I'm like, man, that would be cool to be like Grant Cardone's pilot. And the whole time I was thinking, that's just a pilot guy. You know what I mean? And then later on, what's that? I said, that's right. It's crazy, right? Yeah. And then later on, I started to see the transition where you were talking about real estate stuff with him and doing real estatey things. And I was like, oh, man, he took his pilot and turned him into a real estate, like turned him into, you know, some real big guy. Run the real estate side of things. And but I never realized that you actually, it was kind of reversed. Like you were in real estate and then you wanted to grow bigger. And then you read like, it comes like, now that I hear the whole story, it all makes sense. Like the way that I saw it, that's really cool. So these people thought I was crazy. People were crazy. People thought I was crazy. Like in the aviation world, in the aviation space, one of the reasons why I left flying at the airline is because people, when I was talking about real estate, they were like, oh, be careful. That's the reason. Like I had a, I worked in a corporation. I was just a number. And when I started talking about my dreams and my ideas and what I wanted to invest in, people were like, oh my God, that's so risky. Like, why would you ever do that? And it forced me to move. It forced me to jump ship and come over to an entrepreneur who had an airplane who didn't have a flight department where I can go and add value on so many different levels. The key, the key to adding value, we hear this so much in books, the key to adding value is actually adding value to teams. Like, I was the pilot. I was the real estate guy. I was whatever else he wanted me to be. And the goal was to get close to Grant so that way I can get the data that he knew about putting these deals together so that way, not only Grant but Ryan and now the team. I got a team of 30 people here at Cardone Capital. We can now be a force in the real estate market and we can go and do more. One person can't do this alone. It is one thing that Grant knew very well and he still knows very well to this day. Like he partners up with people who are great at certain things and he's able to scale. Like people are like, well, how do you do all that stuff? Brandon Dawson runs Cardone Ventures. Jared Glant runs Cardone training technologies. Ryan runs Cardone Capital. Gary and the doctors run 10x Health. Like he starts stacking on all these other companies and he's such a great leader because damn it, Ricky, you and me both know the only opportunity of life is how do you put me in coach? You play football, right? Put me in coach. The only way you're going to learn how to run that play, the only way you're really going to learn how to run that play is if they put you in a damn game because you're not going to learn it from the sidelines. You're not going to learn it from a book. And that is what happened. What me is when I said, I'm no longer going to play this game of this retire when I'm 65 and I'm going to go and actually force and push my way in life, that's when I actually got put in the real game, which was with Grant. Yeah, now it's a really cool story. So that was 2013? 2015. So yeah, so like 2014, 2015 is in. So it's been eight, almost nine years. So back in 2010, let's see, now it was more like 2011. I read the 10X rule. It was my first introduction to Grant. I was like, you know, at that time I was like, I just came out of like sleeping in my car, got back in real estate. I lost everything in the crash. Like I was working on oil rig, roofing houses. And like when I came back and got back in real estate, kind of switched to, I got to learn skills. So I started like reading all these self-development books. Brian Tracy was the first one I read and I was addicted. I was just reading book after book of anything I could get my hands on that had to do with personal development, business, stuff like that. And I ran across grants and 10X rule and I was like, oh, I'll listen to the little, listen to it on audible, listen to the preview. And I was like, okay, this sounds good. Listen to it. And it's to this day, one of my top three books that I recommend, I mean, it changed my entire perception, my entire just like thought process of everything and really kind of made me think, you know, bigger. So, you know, it was really cool. And then ever since then, 2011, ever since then I've followed him and like watched, you know, and I've seen, like, so this is like 12 years ago or whatever that I've been following Grant. And I've like watched him progress, you know, on YouTube, on Instagram, on Facebook. And I've watched this whole transformation, you know, to what he is today and everything that's been really cool to watch. So going back to real estate, right now we're in that book, not to cut you off, but that book gave that book gave guys like you and me permission. And actually feel normal about thinking bigger. And it's okay to think bigger. And it's okay to like, it's okay to say, hey, no, you know, friends, I'm not going to drink. I'm not going to smoke. I'm not going to party. I'm going to focus on this because I want to be something the multiplier, the 10x multiplier, the 10x roll. I just love that you bring it up because it's one of the books that changed my trajectory that changed the course of my life. I listened to that book probably four or five times. And that was one of the leading up to, hey, I'm all in with this guy. Like I was sold. I've always been sold on grant because it's almost when you hear the truth, you could hear it from miles away. It was just so, like you say, it was like a weight was lifted off my shoulders. It was like, I was able to breathe a little bit. Like, okay, I'm not crazy, right? I'm not insane for thinking these thoughts because, you know, I grew up poor and then, you know, roofed and lost it in real estate and then worked on an oil rig and stuff and like barely getting by, you know, living in a little shack and stuff and sleeping on people's couches and eating out of people's refrigerators. And it's just like, am I ever going to be a millionaire? And yeah, it was like very enlightening. So I was hooked the whole time. And then, you know, there was a period of time, honestly, if we're like just being real honest, there was a period of time where I was like, he's just trying to sell stuff to me. You know, everything was just by this, by that. I was kind of turned off for a second. And then I came back, you know, it was like a kind of loss of interest in grant for a second. And, you know, then I would listen, then I wouldn't listen to him for a while. Then I would come back and listen to a few things. I was like, damn, he's so good. Like he really gets a lot of stuff that in a way that a lot of people just don't. And that's why he's who he is, where he is, and what he's doing. He's a special human. Well, you can't get people. You can't get people to pay attention until they pay. It's true. It's true. There's a lot of, you know, people that look at my business monitor like, man, that's just the wrong way, you know, not charging people for stuff. And that's true. And I think in today's world, Alex Ramosy just did it. We just talked about it. He did this whole thing, had hundreds of thousands of people. Well, at this point, like he did the numbers, and there's probably been like over 20 million people that have seen that thing by now. And he could have sold tens of thousands of courses, but he didn't, right? So there's two ways to look at it. And I've been in the room with both schools of thought. And I just, I find it incredibly fascinating. And I totally agree with what you're saying. And what I meant by that too is, you know, Grant gives so much for free that when he's asking people, hey, are you ready to take the next level? Because there's different levels to the game, right? I mean, people, we give out so much free content. I mean, Grant is probably one of the, I mean, he's got so much content on YouTube and the real estate podcast and all that stuff. Like he gives so much for free, but really for people to really take that next level and so we can, you know, dedicate our time for Wednesday calls or Friday calls, like whether it's the real estate club or the training or the corporations, it does take some form of transaction, you know? And it's like, it's a new event. When you get to that level and you're paying all this money for all these teams and all these coaches and you, I mean, like you've invested yourself into the people, you know? I mean, you can't, you've got, if that's your business model, you have to charge because otherwise you'll lose money because you've actually invested dollars into what you're selling. Yep. And so there's got to be a return and you're right. When people pay, it's a whole different level of attention, you know? I mean, they are really locked in. Because they're so afraid, they're so, they're so afraid of losing what they paid you, the money that they're going to, they're going to multiply the output by multiples because they're just like, Hey man, I just, I worked my butt off for that money. I'm going to get better because of it. Yep. Yep. And then those are the exact type of people who end up investing into real estate deals. So that's right. Yeah. It's a genius model. So, but back to the real estate. So right now, okay, with interest rates, mortgage rates, okay, it's completely flipped the entire game upside down and more so on the commercial side and more so on like large offices and stuff than single family homes. Single family homes are still, you know, near all-time highs, apartment complexes, haven't really been hit that much yet and rents, I mean, are different than, you know, commercial office space. So two different niches there. Um, rents are continuing to go up, not as fast as they were, but they're not going down per se, maybe in a few markets, a tad, but holding really, really firm, which I think is going to be monumental when we do get to the place where some of this debt matures that, you know, some of these apartment complexes have and the, the rate doubles. I still think they're going to be sitting okay because of rent and how well, you know, the rent rental market has done. But you know, I, I got into wanting to go syndicate, you know, about a year and a half ago, which is coincidentally when rates started to go up. And I was actually maybe three or four months before that, I started really researching and really understanding the game of syndication, talked to a bunch of different lawyers that are in the game, a lot of syndicators, so on and so forth, looked at tons of deals. We've looked at hundreds and hundreds and hundreds of deals to this point and looking at deals all the time. We've made a couple offers. We haven't gotten anything up to this point. We're just being super patient. We don't want to, we don't, you know, be, be a new, you know, in the syndication game. I definitely want to make sure that when we do a deal, it's going to be a home run, no matter what. And for me, it's kind of like, well, what is going to happen when a lot of this debt is, you know, matures, right, on some of this stuff. What are your thoughts on just the general, you know, vibe of the market when it comes to apartment complexes concerning these mortgage rates and how some of these complexes are sitting on, you know, half the rate that they're going to have to move up to over the next 6 to 12 to 18 months? What are your thoughts on that and how is Cardone Capital adjusting to this new market? Well, I think, you know, first and foremost, I always say the deal is the most important piece of any syndication. When you look at a deal, you want to be sure that you're going to want to hold this thing in any cycle. And that's why the quality was so important for us at Cardone Capital, right? Like, when you look at CardoneCapital.com, you're going to see a lot of really, really great deals. You know, you had already mentioned, you know, some of these guys, you know, they've got interest rates that are coming up. There's some maturities. I personally believe the Fed waited too long to raise rates if he truly wanted to slow down the economy. But I believe it's also his only key, his only instrument, his only tool that he has to control the marketplace. Where people were is, you know, and this is what we always looked at, too. Grant, I had this conversation probably three or four years ago, is we were looking at value add deals where they were trading for a forecast. Let me just use easy numbers, right? And you were looking at a core deal, great, awesome property trading at a forecast. Well, which one do you want to buy? Well, some people were actually leaning more towards like the execution risk, the value add, you know, hey, we can get huge rent increases and, you know, put a bunch of work into the deal, hoping that they would get the rents. Whereas we lean more towards, okay, we're buying this property. It doesn't need a lot of work to it. And we're going to get the rent growth because we have a great market, great location, the runner by choice. Like, we have properties that have that too much swimming pool. I mean, these properties are incredible. I think the Class A properties will be less affected than the B and C. The B and C, you have a lot of these syndicators, they weren't well-capitalized. The people who own the A properties, they're all big institutions, for the most part. They're all well-capitalized. Multi-family is much different because multi-family has been the sweetheart over the last three, four, five years where you've had a lot of retail, office, in other types of real estate getting hammered because office is number one, the probably the biggest headliner right now saying, well, are people going to come back to the office, right? And so some of these marketplaces, Class A office is actually not getting hit as hard as the B and C and some of these second tertiary markets. Those are the ones that the banks are worried about. But I do think that we will have, it just may take a little bit longer, well, there will be people who have to either walk away from the deals or the lenders are going to have to help them out in their deals. I just think that when you buy an asset with a fixed income, I mean, rents will help you. But when rates go from three and 4% to six, seven and eight, Rick gets double. And so your rents can't keep up with that interest rate. And if you over-leveraged or you don't have any money to keep that deal, there will be some issues. So we're watching it. We're tracking it. We have the majority of our deals are fixed. Some of our deals that we had that were float. Number one, it's over the last two years, you've had to manage these deals more intense. You have to look for refinancing options. You know, we just refinanced the deal in Boca Raton. It was a value-add deal, Primo location. We just did a refinance on that one. We're converting it to fixed rate. But yeah, no, look, you have to be a great manager. You have to want to own the deal forever because, you know, even when you syndicate your first deal, Ricky, you're going to have these issues, right? If it's a 10-year deal, and I always recommend to people too, don't do these deals for two and three years. That's the traditional model. Our, like my fault is, if it's a great property, I'm not going to sell it ever. That's right because you're getting all the benefits. And the exit, no exit is actually the best benefit because you could refinance, take money out, not pay any tax, and then keep it for another five or 10 years. So there will be issues. There's always issues. We're raising a fund right now where, you know, we raise capital for upcoming deals. We will be oversubscribed on our $150 million fund. If I can help you in any way setting stuff up, or if you need to bounce things off me, call me. I'm always here. Like, I've been a part of all the crowdfunding because I really enjoy that piece of it. And, you know, we have a lot of investors right now who are like, we're ready. We've been waiting for this moment because, you know, we're well-capitalized. We have a fund. We have these different tools that we can go out there and do. And also, you know, we've been in all cycles, right? People who think that they're just going to go, oh, it's going to, this is going to happen. We're going to go buy a bunch of deals. You have to know the brokers. You have to know the institutions. You have to know the people who are actually selling. And right now, we're seeing people, even some institutions who had some redemptions, they're selling right now. And it's not a great time to sell. The Boca Raton deal that you refinanced, what was the interest rate before and what is it now? On that deal, it was right around 5.5%. We did it with the local bank here that we have a relationship with. All in, it was like a little over 5%. That's incredible. And that's fixed. Yeah, yeah. Grant has great relationships. It was a fixed deal, five years. We have a little bit more value add we need to do. We were spending about 25 grand per unit and we were getting a $1,000 rent increase. So it's in Boca Raton. I mean, it's right in the heart. We picked this deal up. Actually, we picked this deal up. It was like right around 70. We put so far about 4 million. So we're all in for right around 75. It's just a praise. Two weeks go for 100 million. It's amazing. So these are the types of deals where it's like, value add. Just make sure if you're buying the value add deal, just make sure it's in a phenomenal location where you can bring the B up to an A. Unless you're buying a B for a cap rate that is well above this core asset that you don't have to do any with, because the execution risk is worth a lot. You know what I mean? If you're going to go out and do all this work and you're going to go and flip and turn every single unit, you should get paid to do that. You should be paying a fair price and you should be reaping the upside. Not paying a lower or at the same price and they're already getting paid for all this work that's been done. Right. Because right now the biggest thing, Ricky, right now the biggest thing why a lot of deals aren't trading is because you actually have a negative leverage situation where interest rates are six and cap rates are still at five, five and a half, even on multiple families. Right, right. So what do you think is going to happen? Well, we just did a deal in Florida where we assume the loan. So deals that have assumable loan, those are still trading, but it's going to continue to be a stalemate. Until people aren't willing, moving into these headwinds, people aren't willing to go negative leverage and then rents may flatten and now they have to reduce their cash on cash. Because there's different levels to the real estate game, right? I mean, you go in at a cap rate, then you put your debt and it's cash on cash and then you're looking for a total return. These are just the benchmarks. These are the key fundamentals that investors need to look at and this is what we're looking at. So two things need to happen. Either interest rates need to come down and cap rates need to equal out or cap rates need to come up to match the interest rates and so deals and transactions can start happening. Which means prices cap to come down for cap rates to increase. That's right. That's right. When cap rates increase, prices and values come down because it's all on yield. It's everything. And that's why I like the multi-family game. The multi-family game is because it's very efficient but it's very just numbers driven. It's not a lot of emotion. Right, right. It's a long term over 10 years. I still love multi-family. You know, when we were going through COVID, we're like, hey, look, this is going to turn the boys into the men. Where we're at right now, this can turn the men and like the boys into the men. Like, these are the types of things that anybody out there who wants to raise the fund, you and anybody else, just be prepared. You know, just be well-capitalized. Just be prepared for anything that could possibly happen, you know, whether it's insurance or interest rates or COVID or whatever it is. Just make sure that you feel good about it. Number one, being the asset that you want to hold it for a long time. How are you guys dealing with, because I know we've underwritten a lot of deals in Florida and I know insurances went like crazy per unit there and it's really messed up the numbers on a lot of the stuff we were looking at. We were kind of looking at stuff before insurance went crazy and then, you know, we look at stuff after it's like, oh my god, the numbers don't even, it's not even in the stratosphere. And I know you guys learned a lot of stuff in Florida. So how have you guys dealt with these massive increases in in insurance? Well, everybody in Florida, if you have a portfolio, you got an increase, actually for the last three years. One of the ways that I focused on, you know, managing the insurance is, we have a master policy and so the more units you have, like we have 12,200 plus, we have over 12,000 units. And so some of them are in Texas, some of them are in Georgia, some of them are in Maryland, some of them are in Florida. And so if you have a big master portfolio, some of that stuff helps offset the cost, but you have to have a master portfolio and you have to negotiate and you have to have a good, you know, you have to have a good stack, you have to have a good broker, you have to have good insurers and you have to have a good reputation. So, you know, everybody's reaching capacity, everybody's having the same issues in Florida, but, you know, we've been able to build a portfolio where it helps offset, I mean, we were seeing, you know, 40 and 50 and 60 percent, some of them are seeing 80 to 90 percent increases on the renewals. I mean, like there were a couple that it seemed like it was like 400 bucks a unit for insurance and it went to like 1200 and stuff like that. Oh, yeah. Yeah, if you're down here in Florida, you're playing, you're paying 1200, 1500, 2000. If it's a great quality asset, like by the water, you're paying two grand, 2500. I've seen, I've seen it as high as four grand per unit. Wow, that's incredible, man. Which is actually a good opportunity, Rick. If you can make the numbers make sense, if you can make the numbers work with the insurance being so high, we do believe that the insurance will actually stabilize and come down. We've seen this before. Think about the value, think about the value creation, which is the insurance premiums going down. It may not be in 12 months, it may not be in two years, but in three years or four years or five years, when that starts to settle out, when your insurance premium goes down, your NOI goes up and what happens is your value. Yeah, and then if interest rates go down, you refinance it at a lower rate. You know, a lot of different ways to add to the cash flow. So how many deals have you guys bought this year? This year, we have bought one deal. One deal. It's incredible. We closed one deal in Scottsdale in December. We bought it from a big group. It's called the Cardone Corporate Center. It's right there on Scottsdale Road in Frank Lloyd Wright. But we bought that from a big group. It was an office building, because we have our second HQ out there, but we closed that in December and we've just been patient. You know, you had said it earlier, patience is key right now. I mean, I'm not, we're not following a level of deals and just going out and about. We're actually making a lot of cash offers right now. Yeah. I went to Scottsdale and did a speech. I forget when that was. It was, it was a while back, maybe like eight, 10 months ago, something like that. We were blown away. I mean, it was, we never really been there. Like we stayed in Scottsdale and it was just like, just completely different. We stayed at the Omni. Yeah. Um, it was just, it was just like, it was just, we were just like blown away. It was just so nice. Everything was so manicured. It was like, you know, um, it was, it was really cool. The streets are nice. You know, the streets are clean. You know, the buildings are, you know, the buildings are newer. I always get, you know what, you know what it felt like? Money. Right. Like it just felt like money. Right. Um, it's still, it's still a baby city and it was all planned out. You know, that's what I like going about to, you know, when I go back to Scottsdale and Phoenix, it's a baby city, right? It still hasn't really had, it's not like, it's not like Chicago. It's not like LA. It's not like these big cities like New York. It's, it's, it's really in the last 30 years become something and really in the last 10 and 15. But it's all been mapped out. So everywhere you go, it's like North, South, East, West. It's very easy to navigate. The buildings are relatively new. All the people paint their stuff. They take care of it. It's a bunch of rock. It just feels like you said, it feels manicured. But it does. There's a lot of money going in there from Southern California, from Chicago, from the Midwest, from all directions. That has been the retirement mecca. And then also people feel good when they're coming from California and they're, you know, paying, used to paying a million bucks for home. And they're like, oh, 300, 400, 500 now press are going up, but it feels like a bargain still. Yeah. Yeah. There was a new restaurant that had just opened there called Doe Bird. Okay. You familiar? No, no. Doe, Doe Bird? Yeah. Doe Bird. It's like, it's like, it's like rotisserie and pizza, like rotisserie chicken and pizza. Okay. Dude. Absolute fire. Was it good? Absolute fire. Absolute fire. It's like my, I was like, I'm hungry or something. And my wife was like, oh, Doe Bird. And I looked over and I was like, oh my God, I belt got in a wreck because I'd never seen like those four words together. Doe Bird, rotisserie pizza. I was like, this is my dream come true. But it was, it was fire. You need to go try that. They just opened up one. And they, that was the first one. They franchised it to Nashville. I've been following along their little, their little story. And so I'm trying to make it. You liked it so much, you started investing. Yeah. I was like, yeah, exactly. I follow them Instagram. Like, how can I get a piece of this action? But I remember Grant said on a call that he backed out like a billion dollars worth of deals or two billion dollars worth of deals or something like that. I don't know if it was earlier last year, I guess. Like when rate started to change and stuff, like did he have like a billion dollars worth of deals on the table that he kind of backed, he walked away from at one point? Well, what happened was interest rates started moving quick. And all those deals, all of those deals were based on and baked on current interest rates. And so when you started model, you know, when you, when you started changing your model for a point or a point and a half or two points, it just wrecked the deals, the cash flow. So, so we had, we had some deals that we had to call the owners. And look, you know, we, we, we did it the correct way. We did it the right way. I don't recommend anybody just saying, hey, you know, I'm walking away. And you know, you reach out to the owners and say, hey, look, Houston, we got an issue and the investors want this and we need this and the banks want this. And you know, it's not, it wasn't really an issue that we had. It was an issue that the whole market had. And so we were just upfront and honest with the sellers and said, hey, look, you know, we're, we're, we're, we're going to take a fire. We're going to take a pass. And as you probably know, over the last 12 months, it's been hard to get any deals done. Yeah. Any deals, any deals, you know. And that's just from the point of negotiating the deal with the seller? Well, you try or the lender or what, what part is hard about the deal? Well, you try, but, but, but, but Ricky, the issue is when something like that is happening so quick, the sellers, that's where that standoff comes in from. The sellers are like, no, no, no, no, this thing is worth more. And the buyer is like, no, no, no, no, no, this thing's worth this. And the lender's like, well, hey, if you guys can come to a agreement, we'll do a deal, but we're back proceeds because of the interest rates because it's all a debt service coverage ratio. I mean, this is all just based off coverage. So the numbers never lie. And we just got to the point where, you know, the sellers didn't need to, the sellers weren't willing to go. And they're now inching to where things need to happen, right? But the sellers at that time were unwilling to go because they thought that it was going to be a quick fix or a quick change or a quick spike. And it wasn't. It turned out to not be that. And so hindsight's 2020. You know, yeah, I mean, people even get pissed off at the time. It's like, hey, guys, look, we got to do the right thing. We got to do this for the investor. We got to do this for us. We got to do this for X, Y, and Z. And now looking back, people are like, it was a good move. You get to the right thing. You know, you guys did the right thing. So. The sellers? Well, all the above, you know, the brokers and the sellers. Yeah, yeah, yeah. Oh, right, right. Well, of course. I mean, how can you blame? How can they blame you? It's like, here's the numbers. This real estate, this real estate game, you know it, whether it's, you know, single family. Everybody's got a poker face. Yeah, middle markets, you know, the top market. Everybody, everybody's got an opinion. And everybody's like, oh, well, you know, you should do this and you should do this. Hey, look, I get it, but this is where we're at. So, you know, number one is reputation. But if you communicate, I think that's the right thing to do. And, you know, at the end of the day, we did the right thing. Yeah. And I'm sure those deals are probably worth less than what you offered them now. They are. I mean, rates are higher now. That's right. You know, it's going to be interesting to see, man, what mortgage rates do through the rest of the year. But I feel pretty good that we're going to start, we're going to see some cuts next year, election year. You know, they, I mean, they don't quite have inflation under control. But, you know, they're getting close. Yeah. Hey, look, that's what the financial market and it's been moving. I don't know if you follow like Chatham or, you know, these groups, you know, where you can go on and track the five-year and the seven-year and the ten-year treasury. But these groups do have, you know, because LIBOR changed the SOFR and, you know, now you're tracking that SOFR curve, which a lot of the variable rates based off of. But then if you look at the ten-year treasury, you know, it starts to, you know, Q2 and Q3 and Q4, that's what they're predicting. That's what the market is saying. But it's actually been sliding, you know, the Fed keeps coming out and, you know, you're still being bullish on, you know, hey, we're keeping here for higher, for longer. Yeah. You know, do they go back to zero percent, you know, next year or the year after? I don't think they do. No. But I do think there's some relief. Yeah. In 12 months. That's how we need a little relief. That's right. Yeah. You know. I mean, because everybody wants, everybody wants the single family market to free up, too, because people are unwilling. I mean, you know better than I do, but it seems to me like people are unwilling to walk away from a 3 to go into a 5 or a 6% rate, you know, buying a new property, because all they're looking at is the payment, right? Well, the single family market is, I mean, it's in, it's, what's going to happen is that active listings are going to go from bad to worse, because when rates do ease a little, we're going to have the trade-up seller list their house. They're ready to move. They've been ready to move. That demand is building. There's so many people sitting in their house that can't, you know, double their rate, who want to move badly. And that number is growing every day. And so when rates come down, they're going to put their house on the market. That's going to add to inventory. But then they're doing that to buy a house. So they're also taking a house off the market. So it's, so it's a net, it's a net even for active listings. And then we're going to have this rush of first-time home buyers. You know, we got more 33-year-olds than we've seen in like two decades right now. And they want to be homeowners. You know, more than 90% want to become homeowners. And they're just sitting on the sidelines waiting on rates to come down. And so all this is going to happen at the same time. You're going to have trade-up sellers sell and buy, taking, you know, one-for-one on the market. And then first-time home buyers come in that aren't adding a home to the market, that take a bunch more homes off the market. And we're going to see active listings drop even more than they are now, which is going to be insane. We're going to see transactions increase, because all the activity of buying and selling. But we're going to see active listings drop during that time. And nobody, there's not a genius, there's not an economical genius on earth that has said how inventory is going to increase, right? At least in the next three to five years. You know, it's like, where is the inventory going to come from that's going to create that balance between buyers and sellers? So that's really kind of what we're looking at is we're going to jump transactions, but it's going to hurt active listings. And it's going to put prices, it's going to put upward pressure on prices even more than they are now, you know? So it's going to be an interesting 24, 36 months. It's going to be super interesting. This is like, for me, it's like watching a movie. Like, I'm just, I'm in it. I'm just like, this thing is getting really cinematic for me. I'm just like zoned in because it's so interesting the way this thing rolls. Well, and so do you think that prices will continue to go up? Or do you think there's going to be some downward pressure because of a soft landing or a medium landing or a hard potential landing? You think there's some weakness in some markets? I mean, obviously, I'm not asking you the question as a blanket statement. I'm just saying kind of overarching. Do you think there's going to be some pressure on a downward where people, if they're looking to buy a house, they should wait versus go and buy one now. I don't see how there could be. There's nothing that supports prices coming down. Now, every market's local and you can have some ebbs and flows in different little local markets, right? But overall, we're going to see growth, big growth, because of this inventory issue. See, right now, we've got only the people buying and selling right now are people that have to. Job transfers, divorces, mom died, whatever, right? It's only people that have to. And a third of the sales are new home builds. That's like the highest ever, right? Because existing homes just aren't coming on the market. Well, not at the level that people want, right? We're actually at 70%, 80% of the same amount of people that were listing last year or listing this year. We're actually like 70%, not horrible. It's down because last year was already way down. But right now, it's only people that have to buy and sell. Okay? So think about that for a second. There's never going to be a moment where people that have to buy and sell aren't going to buy and sell. Why? Because they have to buy and sell. Right. So we're literally at that baseline foundation of buyers and sellers where we're literally at rock bottom. Like even if interest rates went up even more, we're still going to be right about where we are transaction-wise because we're down to the people that just have to, right? Regardless of price, regardless of interest rates, whatever the case may be. And because we're at that level and that'll always be there, those people that have to buy and sell are always going to be fighting over the few homes that are on the market. Yeah. Until inventory increases, okay, until inventory increases, we're not going to see any serious downward pressure on home prices. Now, how is inventory going to increase? That's the magic question that not a genius on earth has been able to answer. You know, I hear, I see, I watch CNBC and all these different financial channels and I watch, you know, YouTube and all this stuff and like there's not nobody, like the analysts at BlackRock and everybody, they're like, where's inventory going to come from? They're like, oh, like they don't know how this problem of inventory is going to get solved. And that's why he's more involved in making this huge bet on builders because he knows. Yeah. Yeah. That's what I was going to say. Builders are actually getting stopped right now because it's hard to get credit. It's hard to get debt. It's hard to get financing for the new projects, which just adds one more piece to the 2035 housing shortage. And to your point, you know, a lot of these multifamily owners and operators and syndicators, you know, we're seeing people renew. We're seeing rents increase, especially in these great markets. You know, in 2000s and 90s, you saw all these cities, you know, where people wanted to live out in the suburbs. It's almost now you're starting to see these people, you know, the new generation, they want to live where there's activity, where there's entertainment, and where there's, you know, excitement. And so we're starting to see this thing coming back to these CBDs where people are renters by choice. So I think we're going to see a combination, which again, to your point, people will always want to buy a home. You know, that's been the marketing. That's been the American dream. That has been the thing where it's like, for most people, they want to grow up, have a house, have a family, and they're good with that. What I'm seeing a lot of is people are like, I don't want that. I want to grow up. I want to rent by choice. I want to have all of the amenities. I don't really even want to have a gym membership. I want to have lifetime fitness inside the same complex. I want to have my barber. I want to have my food. I want to have all that stuff within a mile. And also my friends. And it's fascinating for me and it's really cool because that's actually what I prefer as well. I prefer to have everything within a mile or two. And I actually wasn't, I didn't grow up in a city, but I like that environment because I get bored. I don't want to be bored. I'm OK with renting. And so, you know, I always say this is the model. I think you've got different demographics that, you know. Well, it's shifting. It's shifting. It's shifting. People are saying, OK, I'm OK. Not because before people are like, I don't own a home. I'm just throwing my money away because I'm renting. Not really. I mean, if you really look at the breakdown, I mean, if you own a home, all the expenses and all that, and I'm not saying home ownership is terrible. I've owned many homes. I've owned three homes before I was 26 years old. I'm just telling, you know, you and people, I rent right now. I rent where I live and I invest where the numbers actually make sense to get cash flow to pay for my rent. So it's a little bit of a paradigm shift for me is it's like own multifamily, multiple doors, diversify, get the cash flow, rent where I want to, because actually where I rent right now is cheaper rent than actually owning and the mortgage and the HOA and the interest rates. So it's a little bit of a different approach. Yeah. Yeah. And it's an interesting approach. And a lot of people are, like you say, shifting towards that. You're always going to have both demographics and you're going to have people who, you know, say, well, rent increases every year. I want to fix payment. And you're going to have people that say, well, I don't care about that. I'm making more off my investments that I could have bought a house with that more than pays for the appreciation of rent growth. I see both sides of it. And I love both sides. I've seen grants breakdown of several of his breakdowns. So the house. Because I'm owning a home. Yeah. The home ownership in 10 years. And I saw him break down Beyonce and Jay-Z's house. They bought it for, like, what, $300 million? It was like $200 million or $300 million in Malibu. Yeah. And at the end of the day, he's like, they're going to have to sell that for $1 billion, just whatever. And the numbers didn't, I mean, the numbers weren't, like, didn't not make sense. The numbers didn't make sense. But the hack that people are forgetting, right? So Beyonce and Jay-Z, they've got these companies. They've got these businesses. They've got these empires. And what they do is they go and take debt on their empires, their companies, tax-free. And then they go and buy the home cash. They actually go and buy the home cash. Yeah. And then guess what they do? They ride it off through the company? They ride it off. But then six months, 12 months, $36 million. They re-buy and get tax-free money? Well, they go and refinance the home. And guess what happens? They refinance the home. It's debt. They pull the money out. And it's not taxed because it's debt on NASA that they already own. These are the tweaks. These are the, you call them the hacks or the tweaks or whatever, like, there's a game. There's a game that all these high-end, wealthy folks are playing that you and me were never taught. But if you really look at it, right? Like, hey, why is a guy from another country buying a condo in New York? Why is he buying a condo in Miami? Oh, okay, great. Well, here's why. He's taking his cash. He's putting it in a condo for cash. And then he's going to wait 12 months and refinance that cash. And guess what he just got? He got a loan in the U.S. in cash. And so he just brought in his money. And then he refinanced, didn't pay tax, and then now that money's there for his spending. So you rent now and say the lease goes up, the owner sells the property, the owner says, I'm going to live in the property. What other case may be? Does that ever, is that ever a stress level for you? Worrying, like, oh, what if he kicks me out? What if he doesn't renew? What if he moves in? You just rent the next door? You just move to the next door? Yeah, I'm not worried about all that stuff. I've got a career and I've got passive income. I mean, I could always find a rental that's even better. You don't mind moving around. I don't mind moving around. I actually prefer it. I feel like I get stuck in places sometimes. Like, when I bought a home, I felt like I was getting stuck and I wasn't able to move and I wasn't able to meet new people. I actually prefer moving every two and three years. Even when I, I'm going to start a family here really soon. I don't have any kids yet, but I'm going to start. And, you know, even with, not yet, so that's number one. And then number two is, Are you dating? Are you dating someone? Oh, yeah, yeah, yeah. I've been dating my girlfriend for over four years now. She's amazing. She's wonderful. She's, you know, she's 10x. But it's like, you know, the model for me is staying mobile, even with the family. Like, hey guys, kids, this is how it's going to be. We're going to live here. Let's find a better place. But, you know, the place that I rent right now, it's fascinating, Ricky. Some of my best relationships and my best friendships actually come through doing what I'm saying right now. It's like, I rented a condo from a guy who was Yale and very high to do and like very, just very successful. Had a condo down here in Florida. Doesn't even come back to. He's got a couple of homes in New York and, you know, he's, he's, he's very successful. This is just a condo that he doesn't even want to come back to and he rents it to me. It was fully furnished. I moved in and I just brought my clothes and I've enjoyed it for years and he is going to continue to rent it because he's got a family up there in New York. If you ever want to come down here, he stays with friends. And so it's like, I've built these relationships and now he's become a friend. And, and, and so it's like, no, I don't worry about the renting and kicking out. I'm more worried about who am I going to meet on the next unit that I rent? Who's the next person that I could connect with that we become friends because these are, these are lifelong friends. These are lifelong relationships. Like, it's just, I've learned a lot over the last 10 years working for Grant. And it's really opened my mind to say, you know what, I'm going to shatter all the things that were input before and I'm going to actually go out there and have this abundance mindset where I'm going to think different. Hey, I'm going to rent, but who, who owns that rental property? Let's connect with them. Yeah. So you've been there for how many years? I've been there in that building for almost five years. I've rented, I've rented, I've rented this unit for over two. Has, has, has the rent increased since you started in that building? Yeah, every, every year, every year it increases. I hope, look, I hope it keeps increasing too, because that means my rental properties that I invested, those are going up too. Right, right. Any increase there means you're making more money to pay the increase because your rents are increasing as well. That's great. That's right. That's the game you're in. That's right. It's just the end of that. Now, that's interesting, right? Like, you're in the real game buying rentals, renting a home, knowing that it doesn't matter, because if your rent goes up, that means you're making 10X on the money you've got invested. That's right. But it just, it gives me the flexibility. It gives me the flexibility to go and move if I want, because the units that I'm renting out, you know, I'm invested in the majority of these deals, like my own hard-earned money. Like investing $100, $250, $250, $500, $250. Like, I just keep stacking. I'm not just watching what Grant's doing. I'm taking all the money that I earn. 99% of my net worth is in these deals. It's in this real estate. It's in multifamily. So, if the landlord calls me up and says, hey, I'm going to increase your rent by $1,000 or $500, I said, do I keep sending the checks to the same place? Because what happened was on all the units that I'm invested in, the same thing has happened, so my returns are going up. Do you think you ever get to the point, like do you foresee yourself getting to the point where you're like, you know what? I want to, you know, you're married, you have kids, you think you'll ever get to the point where you're like, I want to stay in, I want to make sure, I want to be in the same place for a while. Think you'll ever be there? I mean, if you're asking if I'll ever buy a home, the answer is yes, I'm sure I'll buy a home. Look, I like real estate. And I actually really like creating my art. You know, when we started this conversation, real estate has always been my art. I've got a lot of projects going on right now. I've got 600 units that are going to be renovated in the next 15 months. I've got projects that are going, and so when I buy a home or when I buy real estate, it's like, hey, how do I buy something and keep it? And whether it's a good deal or it's a great location, but my mindset will change. The next home that our next condo that I buy, it will be in a great location. That's one thing I won't waver on. I won't say, hey, I'm getting a good deal, so I'm going to go into the second and third market. I'm going to make sure that if I do, and when I do buy a home, it's where I want to be. Yeah, that's the first mistake I made in real estate. I bought in a secondary market because I thought I was getting a good deal. I made money on the deal, but I didn't make as much as I could have. We're in our dream home. We bought it, we're here. Our daughter's three, we're like, we love where we are. We're good with being here until she turns 18 or whatever, raising her here and everything. I think people are just in different places in their life with different, like you said, maybe one day you'll buy a home. What's the typical return? What's the typical monthly, so non-accredited investors get a quarterly check, and accredited investors get a monthly check, right? What's the typical return for a card on capital investment? I invest $100,000 into one of these deals. What's the typical, on average, return that I'm going to see? Going into these big multifamily core assets, great deals, right? I mean, they trade for, you know, call it a four or five or a six cap rate going in. You don't really see sixes on the core stuff. But typically, when you have, like, let me give you an example, right? So the deal we just bought in Florida, year one, that's going to do between 5% and 6%, yearly. So for every $100,000, you could expect between $400 and $600 per month. And that's a simple math. That's a simple breakdown. And then, so there's two components to these investments. Actually, there's three, but there's two money cash wise. So for every $100,000, we say it's, okay, four, five, six percent starting out year one. But as the rents go up, that number's not fixed. It actually goes up as well. Now, in real estate, there's the total return, which is the cash flow plus the appreciation. And what we do is we solve for anywhere between call it 11, 12 to 15%. Now, that's per year. That includes, you know, call it an average cash on cash yearly is, you know, 6, 7, 8%. And then the remaining of that is the appreciation. Those are the monetary, those are the cash, those are the, those are how you get your money cash flowing. And then also the appreciation. The return that most people don't talk about is when you buy a property, you're getting 5% and 6% year one. You also get the tax benefit, which is the depreciation. What you can do is you can use that to where you're not paying tax. So like for me personally, when I invest 100 grand in this deal, I'll get 400 bucks, 500 bucks per month, you know, four or five grand per year. I use the depreciation. So I'm actually not paying tax on that five grand. So I keep it all. I don't pay. And so really it's like, it's like 7 and 8% paying tax at your rate of, you know, 20, 30%. But you're able to use the property depreciation to keep that money and keep it in play. So that's really the simple breakdown of it. And I always tell people, I always tell people, you know, for me, I'm a pretty conservative investor. If I can get 5 and 6 and 7% of my money for the rest of my life, I'm willing to take that deal over you giving me a million bucks and using the principle to pay for my life. You know what I mean? Like, like, like if I can get a consistent 5 and 6 and 7% and know that it's backed by a real asset, know the asset, know that there's, you know, some appreciation coming one day. If you believe in the market, if you believe in rents going up, appreciation will come one day. But then I also like the tax benefits too, because I don't like to pay the IRS through my personal. I, we do pay them through the taxes. I do pay, you know, whether it's, you know, the state and the local, because, you know, you pay all that stuff through the property. But when it comes to the IRS, I personally believe that I can manage my money better and invest in things better than what they do. So I'm always trying to use all of the above. And this goes back to the wealthiest individuals in the world. They've all used real estate to say, Hey, look, I'm going to invest in this piece of real estate. I'm going to get the cash on my weight. And I'm also going to use that to help offset some of these taxes that I'm paying the IRS. So do you, so the hundred thousand that you invested, are you writing off any of that? The hundred grand. So, so here's an, here's an example, right? So say I gave, say I invested a hundred grand. When I'm seeing year one on a typical deal, is anywhere between 30 and 50% of my investment, the capital that I put in, I'm seeing a loss, even though I've, even though I've seen a return. And, and Ricky, by the way, I'm not a CPA. I'm not a tax consultant. I'm not telling people, Hey, absolutely, like read the docs, read all this up. But if I invest a hundred grand. And I'm only asking this, I'm only asking this for just the viewers, you know, understanding, right? Yeah. Yeah. And it's, and it's, it's, it's really the information that they should have taught us in school. Because if I invest a hundred grand in this next deal, on my K one, I could expect to see anywhere between 30 and 50%. So if I invested a hundred, I could expect to see a 20, 30, 40, $50,000 loss. So when I send you back at K one, Ricky saying, Hey, here's your loss. You're like, Well, hey, you pay me six grand, or you pay me five grand this year. Why is it showing a loss? Well, we did the bonus depreciation. You got the tax benefits. And then based on your percentage of the deal, you're actually showing a loss. Now you can either use this to offset the cash flow of your passive income, or I don't know about you, but I'm a real estate professional. And this is a whole different conversation. But if you're a real estate professional, what happens is I could actually use that loss, and I could use it to offset other income that I've received to even further help me. So if you're not a real estate professional, you'll just, you'll just use whatever you need to that year, say it was five grand or six grand, and then you'll just book it and you'll just carry it forward. You know, some of our investors, they just carry it forward to year two, year three, year four, year five, year six, or seven, year eight. And they may not even pay taxes on that passive income as they go through the life of the investment. And then when we sell it, you pay long-term cap gains, instead of ordinary. Right, but if you are a real estate professional, and you do take that depreciation, that loss of 30, 40 grand, and you apply it towards your income taxes that year, from that point, you will be taxed on the dividends, the five, six percent, or whatever the case may be, because you've used up those losses, right? When the LLC starts to show a gain, the answer is yes. If you've already used that up in year one, but if you use that all up in year one, if you're a real estate professional, that's a win, that's a net win for you, because you're able to keep more money in play for longer. Yeah, exactly. What I see a lot of these wealthy people doing, Ricky, is they call me in November and December, say, how many deals do you have coming up? I want to push in a million, two million, three million, four million dollars, because I want the depreciation. I want the cash flow, but I want the write-offs as well, because they know how to play the game. Yeah, well, they have good CPAs. They've done this before. They understand. They're real estate professionals. They've been investing for long periods of time. They want a real asset. They got great team members. They got great CPAs, like you had mentioned. But a lot of people look at these wealthy folks and are like, well, man, do you work hard going back to what we talked about? No, it's they work smart. Yes, they work hard, but they also work smart. And just for people listening, we're keep saying real estate professional. That's where the IRS classifies you as a real estate professional based on, there's a couple of different ways. Like, it can be how many hours you're putting in towards managing properties or as a real estate agent, or there's several different ways. So when we say real estate professional, we're talking about a classification with the IRS that you can achieve that classification a couple of different ways. So definitely talk to your CPA about any of this stuff. This is just two guys just chatting it up and comparing notes about different ways to get rich. But if you want to create wealth, if you want to create wealth, you got to go and dig in. You got to figure out, okay, how am I working more than 50% on my real estate company? How am I investing more in real estate? How am I working more than 15 hours a week on real estate? Whatever your CPA recommends for you, you just got to figure out how you can do it because that is the ultimate wealth creation formula, which is, hey, use the code, use the tax code to benefit you and your family. Now, here's a question. When investors come in, earlier we talked about a $10 million raise. I'd say it's a $40 million deal and do a $10 million raise. The investors have 100% of this deal. You invested a mill, Grant invested a mill, so there's two mills of the 10. You guys both have 10% apiece on the front end. And on the back end, let's say Grant is the house, right? I don't know how you guys have it set up. Let's say the house gets 20% of any upside from the point that you guys buy it. When you guys go and depreciate that, are you depreciating more than the million that you put in because you've got an extra 20% on the back end? Is there any kind of free depreciation that you've gotten without having to put money in because you were the syndication company, you put the deal together, whatever the case may be? Or is it literally dollar-for-dollar where you put the million in and you're seeing like a $300,000 loss, but you put a million bucks in? My question is, is you put a million bucks in, are you able to depreciate more than the $300,000 that you would have if you weren't one of the GPs? You were an LP? Well, so, and just to keep it simple, right? So all of the depreciation, so you're not just writing off the million bucks, you're writing off the different schedule of depreciation on the real estate deal. The way it just works, I'm just trying to simplify it for everybody who's listening, but what happens is the GP, because they're putting the deal together, they actually don't get extra depreciation. What happens is the way it works is like, say you have a $100 million deal and say you're writing off, you get 30% or 40% or 50% year one. Now that just gets, that flows through back just to only the equity partners. And so when Grant or Ryan and other people come in and whether you're the GP or the LP, all of that is split up evenly based on the percent of the ownership on the equity. But you're not just writing off the equity, you're actually writing off the property. It just solves for, because I've done enough of these deals, where it just ranges between 20, 30, 40, 50, 60% of the amount you put in. That's just the way it works. But you're actually writing off the property, some of the schedule, instead of writing real estate off in 27 and a half, you can take some of that five and seven, whether it's the floors and the appliances or carpets or whatever, and you're able to shove that into year one, that bonus depreciation carve out. And that's how we come up with that. Yeah, yeah. I've always wondered that, like, is Grant getting free appreciation, where it puts them, because I know like, he'll brag about not paying any taxes. You know, like I bought a $50 million jet and then I look and raise in this money and stuff like that. Like, technically, there's nothing to hide there, right? Like when he comes out and says, I'm not paying any taxes, the education company did 150 mil. Like how is he writing it off? Like just for the novice people here, how does he get to that legitimately? Well, he invests, yeah, he invests his money into the deal. So he writes it off based on how much he puts in. And that's how he's actually able to write it off, because he's investing in these deals. So he'll put in his own money, and then he'll get his depreciation based off of that. He doesn't get extra depreciation because he's controlling the deal. Right, right, right. And I think the way that some of these people do it, they do get some depreciation just for handling the deal, right? Like other, I don't know, I'm not sure. I'm not sure how they do that. I just know we keep it simple. It gets too complicated. We just say, hey, if you invest, you get the depreciation. Some people may have a way to kind of move it around. We don't do that. Yeah. Bro, it's been good spending some time with you. Same, man. I appreciate you, man. I told you from the beginning, I love what you're doing. I love your energy. Anything I can do to help you out? Let's do more stuff together. No, I'm totally down. We are going to do some stuff together, man. Everybody go follow Ryan. He's going to be on the speaking circuit. Doing some speeches and stuff. He's doing big things. And he's just a good guy as a hard worker and cares about people. So I hope you guys go follow him, follow his journey. Until next time, we'll see you guys on the next video.