Ep. #791 - Commercial Real Estate Entrepreneurship

Matt DeCoursey 0:01
And we’re back for another episode of Startup Hustle, Matt DeCoursey here to have another conversation I’m hoping helps your business grow. So commercial real estate’s everywhere you shop in it, you have an office in it. There’s a lot of different forms of it and the entrepreneurship that goes around commercial real estate. It comes in many shapes and forms and there’s a whole lot of different things and opportunities, literally opportunity zones that people work and operate in. And we’re gonna get into all of that today. I’m really excited for today’s episode. Now, before we get too far, I want to let everyone know that today’s episode of Startup Hustle is brought to you by Lending Standard. The only secure online origination underwriting platform solution for HUD, Fannie, Freddie, and bank multifamily lenders. Visit lendingstandard.com to learn more or click the link in the show notes with me today. I’ve got Logan Freeman and Logan is the founder and principal at FTW Investments. Go to ftwinvestmentsllc.com. There’s a link for that in the show notes too. So you can go down there Lending Standard, and you go to FTW and learn all about these great companies now straight out of Kansas City, my hometown. Logan, Welcome to Startup Hustle.

Logan Freeman 1:16
Man, thanks for having me here. I’ve been following this this show for quite some time, and excited to be here and hopefully lend some some good advice and some stories that people can relate to.

Matt DeCoursey 1:27
I like that a lot. Well, let’s start with the story of your backstory. So why don’t you give us a little background about who you are and what brought you to what you’re doing and what you guys do. You got it.

Logan Freeman 1:38
My whole story starts back in little old Jefferson City, Missouri, so many folks might not know, but it’s the capital of our beautiful state here in Missouri. And, you know, I grew up as an athlete, man, I mean, I grew up playing sports, basketball, baseball, football, you name it really identified with that. But one thing that I want you guys to hear and take to fruition here is my mom had two jobs growing up to kind of really, you know, keep our family stable. And I’ll touch on that here in a second. But when I was 14 years old, and then I was itching, I was itching to get out in the workforce and make some money. And the only way I knew how to do it in mid-Missouri was to go throw hay on the back of a trailer, and to really start on the farm. And so I did that. But there was a little catering business that was close to my house. And somebody had told me that if you can get a letter from your high school to say, you know, you can keep your grades up and work, you can also get a job here. And so they were hiring like 14 or 15 year old at the time. And so I started at this catering business I worked with, you know, workout after school, doing dishes, cleaning the floors doing all this stuff. And I remember my personal finance class in high school. I’m an alias boy. So any Jeff City natives might know hilarious, but we had a personal finance course. And I started a Roth IRA when I was when I was 15 years old, because I thought that was what I needed to do to be successful. And thankfully, I had the opportunity to play collegiate football at the University of Central Missouri and Warrensburg not too far from Kansas City, and had a great career there was picked up as an undrafted, free agent with the Oakland Raiders after college. And I was out there for at camp, you know, for a few weeks, my claim to fame was I beat up, you know, beat out a couple guys they drafted, which was awesome. But ultimately I was cut from the NFL and I just decided to go back and and finish my master’s degree. And so when I did, that was a real big decision point and changing point in my life and, and I lost 100 pounds at the NFL Combine I was 335 pounds, lost all this way. I got a job driving the Sweet Springs, Missouri, making 265 cold calls a day, I drive back and go to school and spend all Saturday in the library. But one thing that happened that changed my life. My whole trajectory. Why I ended up here in Kansas City is my father battled drugs and alcohol his whole life. And in that same six months, I lost my dad with his battle of drugs and alcohol. And so he passed away. And so I was no longer an athlete. I lost all of this weight. I’m moving to Kansas City to start my first job and then my dad passes away. And so thankfully, I had some mentors in my life that really pulled me up and put me on the right, the right path. But during that period of time, I started reading and this was when podcasts and John Lee Dumas and and you know, Lewis House were out there, the only ones that you could really listen to and so I started really listening to this stuff. And, you know, putting the good things in my mind, which landed me in Kansas City as a franchise consultant with Jimmy John’s, and, you know, I was the youngest franchise consultant ever hired. So I basically had 25 stores here in Northwest Arkansas in Des Moines. I hit a glass ceiling early in that career, I left there and went to the startup world here in Kansas City. And that’s where everything really started to change for me again, I met my wife from the Kauffman Foundation, she was running 1 Million Cups the best man and my, my wedding and I joined a company with two people, you know, and was in the startup world for three years. Over in the Startup Village, Matt, you might, you might know that right next to RFP 365. And in random in DOS, and we were all over there in the startup world, which was pretty cool. And I left there and went to a bigger company was fired 15 months later started my entrepreneurship journey in, in real estate as the Head of Acquisitions for a $50 million fund. I took that information and knowledge and experience to create my own company. Now we own about $130 million worth of real estate over four states, mostly in the multifamily space. But we also have offices and shopping centers as well. So I know that was a long, you know, backstory, but I wanted to try to pull all those things out, man.

Matt DeCoursey 5:52
The story is the story. I was say. So I mean, sometimes it’s fast. Sometimes it’s slow. I run into people all the time that come to our suite and greet events or different servers sometimes here on the podcast, and they’re like, Matt, what’s your story? I’m like, do you want small, medium or large? Right?

Logan Freeman 6:11
Yeah, I love I love you want.

Matt DeCoursey 6:13
And sometimes I just force you into one of those depending on what kind of mood I’m in. So that’s a whole different subject. So CRE, commercial real estate, meaning property that is used exclusively for business related purposes, or to provide a workspace rather than as a living space, which would instead constitute residential real estate. So there’s a big difference there now, with CRE, we’ve got four different classes, office space, industrial use, multifamily rentals, and retail. Now, you know, before the show starts, I always talk to our guests for a few minutes. And I have some understanding on this. Not a master’s level, like you do. But for me, you know, way back in the day, a long time ago, I actually manage the chain of retail stores. And, and so I got very familiar as we expanded in getting into retail space, and how tricky that is, there’s a lot, there’s a lot that goes into it. And, you know, overall, like, I mean, there’s, there’s, you know, build outs and leases. And, you know, if you’re going to be in a mall, they want a portion of your revenue, and there’s a whole lot of complexity. And then over the last 20 years as well, you know, seeing this big shift, you know, like, who goes to the mall now. And you know, and then obviously, the pandemic has thrown a lot of office space use including my own, you know, up in the air. So, you know, as of the current climate and I don’t like to timestamp episodes, but we’re recording this on January 25, 2022. So I say that because only only reason I’m going to timestamp it as as of like this moment out of those four, that’s what’s hot and what’s not.

Logan Freeman 7:51
Yeah, and I’m happy to speak about this. I just got back from Los Angeles at a real estate conference and I can tell you what’s hot and what’s not and where my focus is, but multifamily is the hot button multifamily and industrial are absolutely the shining stars and where money in capital is pouring into for good reason. But not even from gateway markets like San Francisco or New York City, even Chicago is really started trickle into the Midwest here Kansas City, Des Moines, you know, Oklahoma City, Tulsa, all these tertiary markets are starting to really attract these people so multifamily and industrial, by far the shining stars through the pandemic. And it’s really changed the way that we’ve looked at kind of investing in these properties. Because, you know, no longer are the days where we can go buy a 70s Ventures, you know, multifamily property 150 units, for $55,000, a door here in Kansas City, that’s up to about $90,000 a door where I’m thinking about selling the properties, you know, when I was buying back two or three years ago, and so it makes it really hard for this, this word that you hear in this space, a lot value add, you’re gonna hear a lot of people talk about what’s the value add, for the real estate, well, there’s usually two components to that you’ve got some sort of cosmetic upgrade that you can do to the property, right, making it look nicer, adding amenities, things like that. And then you have an operational efficiency that you can bring to the property through management and skill. What I will tell you and your listeners is the second component of that inflation, which was another hot topic, obviously, at the real estate conference, has really got our eyes looking at our expense line and saying, Hey, there’s not really a way that we’re going to be able to cut expenses from this property. There are specific opportunities to do that. But when we think about the labor shortages and trying to get people to come to those types of jobs and and the increases in the wages, that’s not going down that’s going up on the on the revenue line, thankfully, up to this point in the multifamily space, and in the industrial space rents have been trending positively that direction as well. So a little bit of an offset there. But the question becomes, and you know, how long is that going to, to continue? And so, you know, things that we’re thinking about that propose opportunities. Right is you know, Sam Zell is a guy that’s been in this business for 45-50 years, kind of the, the modern REIT guy created this, this whole system and bought mobile home parks office multifamily back when nobody was touching these types of assets is, you know, will office go away completely? That’s the question in my mind, and I think the answer is no, I think it’s changing. And I think there’s hybrid workspaces that need to be adapted to that. Now, downtown high rises, I’m looking at my window here, because I’m pretty close to downtown Kansas City. You know, we’re not really bullish on doing those types of opportunities. But just like in the multifamily space, we saw a lot of people kind of flocked to the suburbs during COVID-19, looking for more space, more green space, you know, walkability, same things happening in the office, you have a flight to quality. And so people that want to be able to park now, they don’t want to commute, you know, 30 minutes downtown, they maybe want to go to a suburban office. So there’s specific opportunities, and what we always say is real estate’s hyperlocal. And you have to evaluate each type of those opportunities. The other shining stars, Matt, cell storage has done very good, very recession resistant, in that space. And retail shopping centers are now starting to really attract a lot of capital, because it’s chasing yield that you can’t find in the multifamily or industrial space. And so we’re seeing a lot more competition in the retail space as well. And so that’s kind of the pulse of the market. And I would say that was pretty in line with what I heard out in Los Angeles last week.

Matt Decoursey 11:40
I find it pretty interesting, that multifamily makes it into care, because that seems like a form of residential, I get that apartments and you know, duplexes, and anything that contains multifamily is in there, I get that self storage thing, honestly, I hadn’t even considered that. You know, I’ve been having people telling me for 25 years, like I want to get into the space, these are little miniature cash cows. So why is multifamily? And once again, thanks to Lending Standard, because that’s pretty much what they do as multifamily lending. So if you need a loan for a multifamily unit, that’s like, I know Andy Callen back the founder of Lending Standard pretty well, and, you know, like there’s efficiency for commercial lending, there’s sufficiency for regular home lending, there wasn’t for multifamily. So that was, you know, a big, you know, big problem that they’re solving there. But what why exactly is multifamily and a commercial space and not just a variant of residential?

Logan Freeman 12:41
Well, I think that inside of multifamily, you can kind of think about this in different ways, you know, and I think about this from a Lending Standard, not to play on word there. But when you think about the loans, or the debt, which is the biggest component of the capital stack, when you’re doing these types of investments, the debt is going to be the largest portion of that. And when you’re looking at residential, so one to four units, I still consider that to be residential units, anything above that, typically, you have to go get a commercial loan, either from a local regional bank, or Freddie and Fannie or a life insurance company, that type of institution that’s going to lend on that. And so in regards to the multifamily space, it’s really started to shift and I mean, mean by shift is, you’re seeing these huge complexes that not only just have apartment units now, but they have dog parks, they have dog washing stations, they’ve got gyms, they have business centers that you can go work out of if you need to. And so the size and the scale of these multifamily properties really have started to kind of increase. And so you know, I don’t see a lot of developments that are under 50 units, if you’re gonna go by ground, you’re going to develop that ground, you’re trying to get as many units as you possibly can for scale for construction, all of those different pieces of the puzzle, I think multifamily has come into the commercial real estate world, for two reasons. One, obviously from the debt standpoint, but two private institutions really weren’t investing in commercial, real estate, multifamily real estate. The last you know, since the last 40 years, is when they really started to pick up So previous to that was, was mostly the office buildings, the shopping centers, the the retail, you know, shopping centers, the malls and those types of things. So I think if you tie it back to the capital that’s coming into the project, as well as the capital, it’s available for the debt. And that’s been a big driver to get multifamily kind of in the commercial real estate space. And then obviously, we could talk about supply and demand as well.

Matt DeCoursey 14:37
You know, we were talking about lendingstandard.com And you know, they’re here in Kansas City and venture backed company. And, you know, it’s no secret that the multifamily loan process can be difficult to manage and Lending Standard actually has a product they also own multifamilydebt.com. And that’s an intuitive online platform that can help take the pain out of the process of lending and borrowing by matching buyers. borrowers with lenders vying for their business, streamlining the application process and providing guidance from industry experts to help borrowers find the best option. So, if you want to be a commercial real estate entrepreneur, how important is it to lean on tools like multifamilydebt.com, or wherever to get in? Because like, I don’t think most people are just sitting on are usually like $3 million flush and like, hey, you know, let’s put this all into a commercial real estate venture. So I mean, are those are those kind of modern tools shaping the future of the marketplace when it comes to lending and just getting into these places as an entrepreneur?

Logan Freeman 15:43
Absolutely. And I’ll speak to this because I was having lunch yesterday with somebody that’s very involved with Lending Standard, may have even built their tech platform and is an investor in that company. And we were talking about this this point, specifically, you know, as technology continues to become more robust, you know, industries are adapting it at different times. And in different ways, right, a commercial real estate has been, you know, one of those kind of handshake businesses has been done one way for a long time. That’s changing, and that’s changing rapidly. And that’s changing in regards to what Zillow is doing on the residential side, what other companies are doing in regards to the commercial real estate side like lending standard, and prop tech firms are popping up left and right to try to make this business a little easier and more streamlined using technology? What I would say, in regards to the companies and the streamlining of the process is, is this, I mean, we have access now to more data in regards to making decisions about investments than we ever have before in the commercial real estate space. Think about costar yardie, real page, all of these companies that have data that try to make informed decisions, and that we have these these technology companies that are helping us manage these assets better. So you have, you know, smart technology that you can now put on your apartment units, you’ve got security software’s that are, are lightyears ahead of where they were previously, and now you’re seeing in the lending world as well, which has been an antiquated process to get a agency loan or a commercial real estate loan, at some point, you’ve had to know somebody, or you’d have to have done it before, or somebody making an intro for you, right. And so now you can literally go online, and you can make your profile, and you can talk with a company like lending standard that can really help that process, you know, streamline, which has been great, you know, I think that we’ve we’ve worked with a few of those different companies in the space. And and we really appreciate all of the streamlining of of the debt side of things, which, you know, has been, and I’ll tell you one pain point on that front is, you know, I haven’t been through a loan we’ve done I don’t know how many loans now. But we haven’t been through a loan or I haven’t sent the same document 12 to 15 times throughout the process, or like, why is just not on a portal where it’s uploaded. And you can revisit that and it’s just and I know Linux Standard is helping to fix those types of problems and streamlining that. But it is such a big component of the debt side of things in our business that you have to know how to place the right debt, and then have the relationships to actually do that. commercializing that making that available along with the other prop Tech’s is making our business a lot easier, more intuitive. And now we’re seeing blockchain into the interior into this game as well, which is a whole nother conversation.

Matt DeCoursey 18:29
Yeah, I’ve been, you know, I at this point, I’m never shocked when I hear about market inefficiency, because it’s everywhere. But you know, in conversations with Andy from lending standards, he really brought to light how inefficient the loan process was, and like, you know, talking about, like lenders being 40 to 60k and labor into a loan, I’m like, Okay, so maybe I’ll need to figure out how to use some technology, because it sounds a little excessive. Because in the end, like you mentioned, like, those forms and documents, all that is, is data man, like, right, those are just fields that need that need characters in them. So it’s so it just always surprises me and that, you know, certain industries that I mean, are mega, don’t like why are we still on handshake deals? And bullshit, right, like arrangements, you know, it’s like, wow, and his agent firm, the same thing he was saying that, you know, so much of the loan process, and that’s where it makes it difficult for new entrepreneurs to enter the space because in some cases, some dude knows another dude at the bank and they’re like, Hey, cool, here’s a loan. You know, and then in some cases, it’s this just massive dog and pony show, right sound like you’re talking about like, Why have I sent this 15 times and honestly, nothing will make me feel a little crazier than that. Yeah, I guess the depth. The definition of insanity is doing this same thing over and over and expecting a different result. But exactly. And another thing too, for all you lenders out there, stop calling me 10 seconds after I fill out the form, like I’m afraid to hit submit on your platform, because I know I’m gonna get spammed with phone calls for three days, like I’ll answer but come on. Yeah, like at dinnertime too. That drives me nuts man, like, seriously, like, I mean, Now on the flip side, I do have to respect the hustle. Because anything that has like a 10 cent like, I think I could actually get a faster response from a lending platform after hitting submit that I might be able to get from 911 during an emergency. I believe it I believe it and don’t put you on hold, don’t literally put you on hold 911 It’s an emergency head. Can you hold? You’re like, no. But yeah, so

Logan Freeman 20:52
we I mean, one of the things that we’ve we’ve watched and seen happen is, is some groups are open to adopting new technology, obviously, we’re a little bit younger in the space. So we’re kind of grew up with some of this. But I mean, I can speak to this man, we grow our business online, I mean, this, this business now has been grown through LinkedIn, through podcasts through connecting, you know, virtually via zoom. And I think the folks that do adopt this, this new technology in the way that we’re doing business is going to be the ones that shine through. And as owners become younger and younger, that I think that’s going to shape the industry, but you really do have a lot of institutions and older generations that hold on to the real estate, but it’s starting to trade hands. And I think that’s gonna have a big impact on the commercial real estate space. And, and while I’m really bullish on trying to adopt this technology, and utilize it on a regular basis, Matt, because it’s so important to keep on the pulse of things. And if you don’t, I mean, I really do believe that, that, you know, you’re going to be able to go online, not too long, and say, you know, I’ve got some money, I want to invest and be able to just, you know, invest that through cryptocurrency or anything like that everything’s going to be tied to the blockchain, which is going to allow for fractional ownership that you’ve never seen before. And secondary liquidity that really helps investors out. And, you know, there’s going to be people that are on the beginning of that early adopters. And then there’s going to be folks that are saying, No, I’m not going to do that. But it’s really opening up to cost of capital that’s much lower and, and really has to be kind of taken in consideration with your business. So it’s fun to be a part of it, and to try to adopt what makes sense.

Matt DeCoursey 22:40
So I have a note here that says, tell us a bit about your buyers representation Success System. That’s all I got. So I’m hoping you got something on the other side of that. Absolutely.

Logan Freeman 22:51
So I mentioned to you pre recording that, you know, we’re real estate brokers as well, and we own real estate. But, you know, when I got into this space, I had always been on the acquisition side. So always looking at how can I find good properties for either a fund I was working for or for myself, never really representing sellers in that space. And what I saw was kind of a fragmented space in regards to 1031 exchanges. So I’ll break that down really quickly. So if you have a piece of property that you go and sell, and you’re looking to defer your capital gains tax, you can utilize a section of the IRS Code called 1031 exchange to roll those proceeds into a new project. But there’s a timeline attached to that. And the timeline is only 45 days to identify three properties. And so what happened was, I was getting calls from all of these people that have heard us on a podcast or something that said, Look, I need help identifying properties. And I need buyer representation because I’ve never done this before. And Marcus and Millichap, one of the biggest brokerages in the country, don’t even allow their brokers to represent buyers, you can only have listing. So it’s just another one of those pieces of the industry that’s been antiquated and most buyers are not represented, which is not good for a lot of first time buyers say I inherited a property or I bought a property for my business. Now I sold it now I need to go find an investment opportunity. So what we put together was kind of a buyers representation Success System, which simply just is a service based kind of commercial real estate. You know, brokerage advisory that helps people understand what they’re trying to accomplish, what knowledge experience do they have, and then pairing them up with the right properties. And I’ve been able to do this in a couple of different ways. One is just finding an active property for them to purchase, and they own and manage themselves. The second is being able to put together what I call not what I call but what is called Tin tenancy in common projects. So this allows people to put multiple 1031 exchanges together and have one partner usually manage the whole process so folks can be more passive through that and lean on real quick mercial real estate operators. And the last is putting those, you know, those tenancy in common projects alongside our regular syndication projects, which is just a really powerful medium. And so when a client comes in and says I got a 1031 exchange, I don’t just I don’t have the limitations to just say, Here’s five properties that you can identify, I can say, Here’s five different options for you, you can pick which one fits your, your goals, and then we can go, you know, solidify that. And we’ve been able to do that for over 100 people and close to $400 million in transactions here in Kansas City. And I think there’s a big need for a marketplace that connects buyers and sellers, especially of 1031 exchanges, and helping them transact online. And so that’s what we’re building.

Matt DeCoursey 25:44
Yeah, and, you know, once again, not pretending to be an expert on the subject, but knowing enough to maybe be dangerous. And I say dangerous, like dangerous to yourself, because there’s a lot more complexity when it comes to a commercial real estate transaction. You know, a lot of people will say, kind of the hobbyist entrepreneur own a rental home, or maybe a few of you know, and here’s the thing, in most cases, those are a lot easier to populate. And I’ve known quite a few people over the years that have kind of gotten themselves upside down. In commercial real estate, because it’s a different kind of transaction. It’s a different kind of buyer, there’s a whole lot of factors, about you know, when there’s a lot of there’s a lot of advantages and disadvantages, but some of the advantages with commercial real estate is you can run into attractive leasing rates, it can be a hedge against the stock market, it can be a high yield source of income, if you get it right, it can also be a boat anchor, if you get it wrong, you get longer leasing contracts. So you know, in the world, I’m primarily at this point in the world of tech, F tech, and we use the term sticky. So when you have a sticky product, that’s something that wants to get a user it sticks with them for God knows how long a long time. So with commercial real estate, you typically, you know, a residential lease might be a year, maybe two, you know, you don’t really see homes leased and rented for that much longer. But most of the time with commercial it’s five or 10 years. And that’s not only for the the building owner, but you know, you don’t want to go in and build out a space build a clientele do a whole lot of other stuff, and and you’re gone in two years. So longer lease contracts with tenants, and you know, it offers, in many cases, a greater opportunity for capital appreciation of the buildings while maintaining the area’s come up. So, you know, so I think it’s important what you’re doing with the light, sometimes you just need a guide and being able to show people hey, you know, like, because what you think might be a good deal on commercial, if you’re not experienced might be the boat anchor that I mentioned. And now, one of the stated advantages of commercial real estate that I just mentioned, is it is a hedge against the stock market. So when you think about that, like, what does that mean? And why?

Logan Freeman 28:09
Yeah, that’s a great question. And there are a few different things here in regards to hedging against inflation with commercial real estate, the first being the debt that you’re able to put on these projects. So obviously, if I can go lock in debt right now, and inflation is running hot, and I can lock in debt at three and a quarter to 3.5%, in fixed for 10 years, then I’m paying back today’s dollars, you know, I’m hedging against inflation, because the money, you know, isn’t going to be worth as much in theory in 10 years. So that’s the first one. The second one is being able to pass inflation off and through to your customer. Right. And so a lot of these commercial leases will allow they’re there. Some of them are tied to the CPI, some of them are not, but typically they have increases baked into those leases. On a multifamily standpoint, you have 12 month leases and so you’re able to turn those every single 12 months. And the inflation that you see in the, in the obviously the economy passes through to the rental rate increases, we’ve seen that on the multifamily side as well. So those are the main pieces of of, you know, inflation hedge with with investing in this commercial real estate is making sure to lock in your debt for a long time and being able to make sure you’re in real estate that you can pass any increases that you’re incurring over to your tenants. So for triple net lease opportunity, obviously, you know, the the tenants are required to pay increases to a certain extent on property taxes, insurance and, and other things on the building, just depending on the lease. And so, if you can pass that through to your customer, you’re actually not incurring that, but you have to you know, you have to think through okay, my customer continue to pay, you know, eight 9% increases. That’s that’s something you have to evaluate for each opportunity. But those are the ways that you can really hedge against kind of inflation. with commercial real estate and I mean, one of the things that I have an acronym Matt, and I’ll just share it, the five benefits of investing in real estate, it’s the ideal investment. So you can create income if done, right? Depreciation is a big reason a lot of folks get into this space, you have equity build up, you have appreciation, obviously natural if you’re in the right market, but you have forced appreciation opportunities, and then the power of leverage, you know, buying a million dollar property, I have to put 250 down whatever it is, your buying power is obviously increased with through leverage, if done right, as well. So all of those things come into consideration when you’re thinking about investing in these types of opportunities,

Matt DeCoursey 30:39
is a slightly different subject here, I was having a conversation with someone recently, and we were, you know, at one point you the phrase, buy, buy, buy real estate or land, they’re not making more of it. And I find that to be interesting, because then the Internet came out, which was kind of making more land in some ways you had these digital digital real estate and now reverse is, you know, I’m just I’m fascinated with all the stuff that’s going on with that, um, and some of it. I mean, it’s it’s my, beyond my level of comprehension as to what what drives that I was bored the other day. So I had our creative department make me some designs, and I literally went through the whole process of creating an NFT like a truly like a tokenized asset. And I did all of it. It’s my Twitter profile. Now, if you want to check it out, which was, which was kind of interesting. Twitter has a beta program, they’ll let you put that in. But I’m, I’m curious about how people in traditional real estate, look at some of these trends, because you mentioned like, antiquated methods and whatever. I mean, I’ve talked to some really, really sophisticated and honestly wealthy people that are asking me questions, they’re like, what’s this Metaverse stuff or like, they don’t get it? And I’m curious what what, what the general comments, if any, are about that? Because in some ways, that is a very interesting space could implode or it could just be completely insane.

Logan Freeman 32:11
I don’t know. Yeah. And this is something I’m very interested in as well, especially when I saw Snoop Dogg, you know, a lot next to Snoop Dogg’s. You know, digital real estate sell for what was it man? 350 grand or something like that? I

Matt DeCoursey 32:24
can’t remember more, man. Yeah, more. I mean, in some cases, like I’m watching like that. And this is a little different than Metaverse, but like the board, I’m fascinated with the board, ape, and FTS, which are like, selling for like 2 million bucks. I’m like, Dude, that’s a JPEG Right? Exactly. I can make a screenshot of that, upload it to my Twitter and prove that I don’t own it. Um, yeah, so I was, but but things are worth whatever people will pay for it. I mean, that’s just that simple,

Logan Freeman 32:49
until they’re not willing to pay for him. Right. And, and I imagine Doer ship, kind of like a beanie baby. Exactly. And I think that’s my stance on it, I would take kind of the Buffett and Munger stance on this is, you know, stay inside your circle of competency, I need to understand how these technologies are going to impact the way that we do business in regards to that, and I’m interested in operating businesses that, you know, serve these types of markets. But in regards to like NF T’s, I’ve got a couple of buddies who have, you know, actually created their own NFT. And, and sold it and been really successful with that I was at this real estate conference. And this guy, you know, was talking to me about how, you know, he was a janitor, and he got early in with one of these guys that was a tech guy and created this NFT. Now he has $30 million worth of NF T’s. And he’s looking to invest in commercial real estate. I asked, I had to ask him five times, you did what? And you have what? And he said, I mean, and so I don’t, it’s not in my circle of competency, necessarily understanding that, you know, I’ve tried to read about these things and try to understand them. But what we always talk about is I’m going to stay with things that have intrinsic value, meaning they have value, regardless of what somebody is willing to pay for them. They have an income stream that’s tied to them. So that’s operating businesses, that’s real estate, if done, right, you know, different types of things like that, that don’t, you know, maybe go up and down with with, you know, a tweet from Elon Musk all of the time. And so, that’s kind of my stance in regards to this. We have not other than just making our own internal memes and NF T’s here at the office and having some fun with it. Haven’t really adopted that. I don’t know how that would actually impact it. What I do know is that fractionalized real estate ownership through the blockchain is coming in is already happening. Real estate deals are being tokenized. I was out with a guy that did this on a huge shopping center recently and tokenize, his real estate offering so those types of things I’m very into precedent understanding. I’m also interested in understanding people who are making this, this money in this space are now looking to more tangible assets so they can kind of offset some of those gains in those realized gains and create some other opportunities for him. So that’d be my stance, man.

Matt DeCoursey 35:19
Well, on some level, you probably have to sit back and you’re like, like you mentioned the janitor you’re like, I was a janitor. And now I own $30 million. This like there’s there’s always a sense I’ve been I’ve been a you know, done stuff. I’m very well attuned. With supply and demand and scarcity. I was a ticket broker for eight years. Yeah. Like I’m very well, I’m and I’ve also done a lot of work with urban necessities, which is our sneaker resale shop out in Vegas. You know, you get your in sports suit. So you gotta, you know, the whole sneaker culture is what it is. And yep, you know, what makes someone want to pay 12 grand for a pair of Yeezys. Right? The fact that they know that there were only 20 of those made, and it was in a color style that only that nobody else has. That’s right. And another thing too is people think they’re like, well, you’re crazy. Why would you buy that? Well, 20 grand to someone with 20 million bucks is like a way different transaction. Absolutely. As someone that makes 40 grand a year. So you know, it’s all it’s all kind of relative and yeah, and you know, I don’t know me, I’m like, I mean, I think you get to a certain point with money where you have enough of it and you’re kind of like, what else am I gonna do with it? Yes, whatever. Yeah, it’s a free market economy. Man. That’s that’s how it goes. Yeah, exactly. Right. Now speaking of the free market economy and buying selling things and making investments, you can get matched with commercial multifamily loan options in minutes when you go to multifamily debt.com That is a subsidiary of lending. standard.com who sponsors this episode? Thank you so much for lending standard. Thank you to Andy has been a guest on the show been great stewards of not only entrepreneurship in Kansas City, but finding solutions for annoying problems that exist in the multifamily space. They’ll streamline your loan, that’s all you need to know. So go check it out. There’s a link in the show notes for lending standard and for multifamily debt. And they just simplify that commercial real estate mortgage process and once again, multi family debt.com Now I like to end my episodes of the show and I say my episodes because I’m you know Logan, I’m not the only host of this anymore. What wants started with me and Matt Watson is still myself and Matt Watson, make sure you check out the 52 part series that we did slash are doing about how to start a tech company which is as realistic as it can get because we’re three months behind on that deliverable. And that’s kind of the way it goes as an entrepreneur things always cost more and, and take longer now. Tune in weekly with Lauren Conaway Lawrence, the founder of innovate her and just a pioneer with what she’s doing so proud of Lauren, and she’s got a weekly show, as does Andrew Morgans, who is our specialist when it comes to Amazon and E-commerce, a lot of shows five days a week, check them out. So I mentioned the founders freestyle, like to get all the founders that I talked to an opportunity to, to say anything that they may have left out, or highlight anything that was important, any of it. What do you got for me, Logan?

Logan Freeman 38:26
Here’s what I’ve got. And I’ve been studying this, I think that we are in the cycle of cycles, right? Business cycles, debt cycles, there’s all these different cycles. Ray Dalio is one of my idols when it comes to investing not just his principles book, but the big debt crisis, his new book, the changing world order, nobody knows China, probably better than then ray does. And just because something has not happened in our lifetimes, does it mean that it won’t happen in our lifetimes. And I think that if you look back for the past 500 years and study dynasties, Ray did this study. And it’s very interesting to see kind of all of the money printing that we’ve had all of kind of the internal and external disorder, in regards to the United States and other countries, is kind of coming to a culmination in regards to kind of this big cycle that he outlines in his book, and you have to go deeper than the headlines. I get articles sent to me daily from our investors from other people logon What did you see? Did you see this? What did you think about this? And you really have to understand as a marketer myself, those those headlines are getting you to open something up. I have started to study real true data and try to form my own opinions. And so my best advice my way there I like to leave this as with all of these new and different investing opportunities, the best investment you can make is in yourself. have an understanding what your circle of competency is, and spin time operating in that space and understand history and where we’re at currently, we don’t know, nobody knows where we’re going. But we better understand kind of where we’re at. And that’s Howard Marks another one of my idols on the investing space. And I’ll just, I’m not going to rap or anything today, I don’t have that kind of ability. But come on, it’s kind of just a call to action in regards to investing in yourself and really focus on being a productive individual, whatever that means for for you.

Matt DeCoursey 40:34
Yeah, you know, these topics are interesting for me. I’ve, you know, I look back at my history as an entrepreneur, I was fortunate enough to own some rental homes on the good side of what we now call the housing bubble 2008. And the profits I made off of those really kind of launched a lot of the stuff that I went forward and did as far as you know, real estate goes, it hasn’t really been my cup of tea, because, you know, honestly, I’m kind of, I’m more of the riverboat gambler type. And it doesn’t always move as quickly, right for me, but that said, you know, I turned 47 This year, so I’m getting old, and I’m really looking at it. And I’m and, and really like, more so than trying to create my own expertise, talking to people like you and other people about, you know, I find a lot of these deals, you get a lot of people that kind of go in on the trade rather than just one sole owner. So, you know, I realized that I don’t necessarily possess the expertise, but I do possess the capital and the connections to do some other things. And then, you know, another thing I found interesting is, you know, our new office, which is in Kansas City, Kansas. We actually got incentives to move Startup Hustle here. That’s right. We’re in a, we’re in a building that was vacant for seven years. And then Startup Hustle moved here, and now it’s full. Yeah. Why? Because you talk about value add. That’s right. There was some value add just like all the content, we create all the people that come in and out of the studio, all these different things that go on, and I didn’t even know you were in Kansas City until I was about to hit record, we should have had you come by here. I know. Yeah, I know. I know, missed an opportunity there. But, you know, when it comes to commercial real estate, I don’t see it going away. I think that there’s a you mentioned like the little retail almost like the strip, there’s, you know, some businesses just can’t operate only on Amazon or are in a mall or whatever. But, you know, there’s little those those buildings aren’t expensive to build, there’s not a whole lot to them. And, you know, I can see how that comes back in vogue. You know, when it comes to a whole lot. Now, it’s interesting, because here, for the most part of the shopping mall seems dead. Now, when I’m in the Philippines, where my company has most of its employees. That’s where everyone wants to go, like, and I’m in Cebu City in the Philippines, and they have two of the 15 largest malls in the world. Yep. So you know, it’s always different. And there’s a lot of there’s a lot to be considered without, I think that, you know, you look at inflation and all this other stuff. And, I mean, there’s a lot of people that bought residential real estate, eight to 10 years ago, that are banking on that now, you know, I mean, I personally, I live in a, in a pretty in-demand part of town, and, you know, you know, eight years ago bought a house for 400 grand that’s worth 700 grand now, right? A lot of, you know, and it’s not you know, sometimes I see people talking to my house went, Oh, my house went down. Well, who gives a shit until you’re ready to sell it? That’s exactly right. Our thing, too is when your house goes up by a bunch, so does the next house you’re gonna buy. That’s right. So you know, it’s all kind of relative. I do think that if you’re smart about it, there are a lot of really great ways to lever yourself into things. I’ve been on the good side and the bad side of leverage in my life. So be careful with that is all I want to say. Just be smart about it. That’s really what caused a lot of the problems in 2008 was a lever on top of a lever on top of a whole lot of stuff. I love the movie. Was it The Big Short? Yep. You know, I just love that because it’s a real introspective look on at stupidity and greed. That’s right of a lot of markets. And you know, you talk about things changing demand, that was a lot, potentially a hell of a lot worse than I mean, that letter almost folded in the economy.

Matt DeCoursey 44:26
Which is what happened in the Great Depression, essentially. So there’s a lot out there, and you know, I agree with you, I think that blockchain is an important part of future real estate, if anything, just from the ledger standpoint, it just makes things a lot easier rather than, you know, at one point there were literally like deeds at a county office. Absolutely. What happened at that burned down, you know, and a lot of other stuff, and it’s like just these records, and I hadn’t really considered the fractional ownership through blockchain. You got a really good point there. You know, like, can you own one percent of the building? And then the thing is one of the things I haven’t liked about real estate entrepreneurship for myself is the lack of liquidity. Right? You know, so with fracture, with tokenized, and fractional ownership of things, you’re seeing that with startups on a, on a level two, and that’s one of the things so, you know, it’s so I own have invested $1.5 million in, in non-public companies or startups try to take that to a bank and get them to give a shit right now, because it’s not liquid, it’s not liquid, and there’s no real street value. There are no standards around it. So I think I think the next decade is really going to be a revolutionary time for assets in general, right? Like we were talking about things like NFT’s and whatever and like, I still don’t get that I still don’t get it, but it is what it is like, you know, things are worth what someone’s willing to pay for it. That’s always going to ebb and flow. You know, if you’re a little more on the conservative long play kind of person, then I think commercial or even residential is a good place to start for entrepreneurship. And I was a little long when I normally don’t go that deep with the, with the free stuff. Well, I think there’s a lot to be said because I think that real estate offers on like, quote, entrepreneurship for a lot of people that aren’t ful-time entrepreneurs. I think this is going to be a really popular episode just based, you know, like, I mean, the title alone you talk about commercial real estate entrepreneurship we were supposed to do this last fall we had cats a chancel in the cancel Yep, was sick, had some issues, you know, and that so this is actually part of this is a delayed part of a 10 part series we did on real estate entrepreneurship, so make sure you go back and check out those other episodes. Logan, thanks for joining me, man. I’m gonna catch up with you down the road.

Logan Freeman 46:52
Yeah, thanks for having me. This was great.