Ep26 Be efficient. Be resourceful. Be ready! with Ryan Wiederstein

[00:00:00] I got golden rules. I'm always the manager and I'm always the majority owner. And so

[00:00:04] I was controlled my deals. So I'd never mind anything. I know what's going on in this market

[00:00:08] very well, and you don't have to spend a lot of brain damage to figure out what the

[00:00:13] market is from cornfields to high rises office to industrial houses to hotels and every

[00:00:19] other asset class in real estate. We cover the people, the projects and the profit.

[00:00:24] Welcome to The Investing in Iowa Show. This show is for go doers, action takers and business owners.

[00:00:31] It's for people like you who are sick of Uncle Sam taking a huge bite of your apple.

[00:00:36] If you're looking to get ahead of what's taking place in Iowa, learn who is doing what and how

[00:00:41] you can get in on the action. You're in the right place. Hosted by Neil Timmins, an Iowa

[00:00:47] native who has been involved in over 300 million dollars in real estate right here in Iowa.

[00:00:53] Recording in studio from West Des Moines. Here's your host Neil Timmins.

[00:00:59] I've got Ryan Wiedersdien here on the show. Ryan, welcome.

[00:01:02] Hey, thanks for having me.

[00:01:03] I'm excited you're here.

[00:01:04] Save for the audience's sake. Who are you? Where are you from? What do you do?

[00:01:07] Yeah, Ryan Wiedersdien with WB Realty. I'm the broker owner of WB Iowa native.

[00:01:13] I grew up in Audubon. I went to Drake. I ended in a state in Des Moines after graduating

[00:01:19] and been in real estate for 23 years. How'd you get into real estate?

[00:01:24] I actually started working at R&R in 2001. I was an IT guy and I stayed there through 2014

[00:01:32] and then left the day before my 40th birthday and went out on my own. So eight years ago.

[00:01:39] Would most people in the IT world identify themselves as real estate people if they

[00:01:44] happened to work in a real estate firm? Yeah, probably not. Yeah.

[00:01:46] Yeah, but I mean, I had my license and I did a lot of data center work for them.

[00:01:51] And then I was in management there. So I was one of the directors on

[00:01:54] and Ryan won other subsidiaries. So I mean, I was involved in

[00:01:58] day-to-day real estate, non real estate activities, I mean,

[00:02:02] county, anything. So it was pretty wide base of knowledge coming out of there.

[00:02:07] Yeah. Yeah. You got a tremendous amount of exposure.

[00:02:09] Yeah. Great place to get educated.

[00:02:11] Yeah. Yeah. We went off on our own and did what?

[00:02:13] So yeah, went off on my own. I had started my own brokerage and I mean, obviously,

[00:02:18] as you know, we started with residential properties back in the day.

[00:02:21] Right. And you know what I mean? Residential properties are fine and I bought a lot of

[00:02:25] houses through the recession and that was great. Had the stomach to buy things when

[00:02:29] nobody else was. And that was probably the biggest key to what kind of propelled us

[00:02:34] to where we are today. Ultimately, we got into commercial and needed to diversify.

[00:02:39] We got into ag and so now we're in ag commercially and residential. Residential

[00:02:44] being basically the least of the portfolio, majority of it's commercial and then ag.

[00:02:50] So I'm going to skip residential for today about that.

[00:02:52] Yeah. Well, let's talk about ag and talk about commercial. Pick one. Just tell me

[00:02:56] what it is that you do inside those asset classes.

[00:02:58] Right. So ag, we basically in 2015-16, I mean, I'm always looking for

[00:03:05] the soft spot in any market. I don't care what it is. It's an industrial, ag, housing,

[00:03:11] whatever it is. I mean, that's as you know, as an investor, I mean, I'm not buying things

[00:03:15] when they're at the top. Ag, I felt was at the bottom at that point, at least on the

[00:03:19] cycle. Ag was in a downward trend at that time. So we bought, well, ended up accumulating

[00:03:25] almost 3000 acres of ground in southern Iowa, ran a cattle operation.

[00:03:30] Part of this was for tax purposes too. So that was the benefit on the side was a lot of these

[00:03:36] operations were nice offsets. So we picked that up and pretty much hit that right on the money.

[00:03:42] We acquired almost all of it with options in October of 2018, which if you look

[00:03:47] at the last cycle, that month literally was the low. So that was good timing.

[00:03:52] And now like a lot of that ground weight purchase has tripled, at least tripled.

[00:03:57] And now we're starting to unload that. So we've got closings about every other week on portions

[00:04:02] of that Ag portfolio. So that's what we went after there and we're not married to anything. So

[00:04:08] whatever is there can go. I mean, we like the buy low sell high. Yeah. So yeah.

[00:04:14] Before we get into commercial, I mean, it sounds to me like you're a contrarian of some danger.

[00:04:17] Where did that start? Where did that begin? What's the genesis of that? Because a lot of

[00:04:21] people, they say we want to buy low sell high, but when the days are darkest,

[00:04:25] nobody takes the action. Yeah. I mean, I always tell people, and I mean,

[00:04:28] I have a lot of people that ask me about it, obviously, especially with the purchase of that

[00:04:31] Wells Fargo building. It's all about if you can sleep at night. I mean, that's really what it

[00:04:36] comes down to. Not everybody has a stomach for risk. And guys like you and I were

[00:04:40] entrepreneurs, regardless of what it is of its real estate or anything else,

[00:04:43] you're always thinking about doing whatever. But if you can't sleep at night,

[00:04:47] none of it's worth it, right? And everybody's got a risk tolerance. And entrepreneurs typically

[00:04:53] have a higher risk tolerance. And what are you willing to lose? This is the other question.

[00:04:58] And how do you get there? I don't really set goals for myself either. I'm just like,

[00:05:02] hey, look, I'm just looking for deals. I've got a really high risk tolerance.

[00:05:07] But it's thought out and it's not like I'm making bad decisions. It's like,

[00:05:10] I don't want risk just to have a risk. That's just where I feel like the deals are.

[00:05:14] And it's hard to make big moves without having a risk tolerance too.

[00:05:18] It's hard to get further ahead quicker without that risk tolerance. So we did foreclosures back in

[00:05:25] the day and those came with a lot of risk. And I mean, I was buying properties in the

[00:05:29] middle of the recession when there wasn't a sole buying. Correct. And I couldn't buy enough.

[00:05:34] But that was an easier time because we entered about that time into the residential market.

[00:05:40] So it's not like I had 300 homes that I had paid market value for.

[00:05:44] And then I'm coming in and then buying more at low prices. I didn't really have any.

[00:05:50] And then I was buying it low. So my entry point into that segment was at the bottom.

[00:05:54] And that's basically where I'm at on office right now is I'm buying in at the bottom,

[00:05:58] not at the top. There's a lot of developers out there that got millions of square feet of

[00:06:02] office. They're never going to be a buyer on a vacant office building.

[00:06:05] So they have enough vacancy. They don't need more.

[00:06:08] They have enough vacancy and they have other headwinds coming against them

[00:06:11] where I'm basically buying at the low. If I wanted to, I could just basically win every deal in the

[00:06:17] market because I have so much room in it. So it's just an easier way to get there,

[00:06:23] in my opinion. But again, it's all back to risk tolerance.

[00:06:26] Talking about some of your commercial side and about some of the things you have done,

[00:06:30] including some of the actual land development, which you've done,

[00:06:33] and then on the back side of it, the end of that will go to the most frequent, recent

[00:06:37] and highly published acquisition to Wells Fargo Billard.

[00:06:40] Yeah, close on.

[00:06:41] Sure. So we did some residential developments. That's kind of what we started into kind of

[00:06:45] figuring out where the money's at and how to do it wasn't very difficult for us. I mean,

[00:06:50] you don't have a lot of background in development working for a developer. So

[00:06:53] it wasn't terribly challenging. Again, development is all about timing,

[00:06:59] especially residential. You don't know about the time you're done developing a residential

[00:07:02] neighborhood. What's the market going to be like? You're sitting on a bunch of non-income

[00:07:05] producing assets or land that's just costing them, bleeding you. And that's probably where

[00:07:10] some people feel themselves today in some residential developments. Then we bought

[00:07:15] some commercial ground down on the Highway 5, South Branch business.

[00:07:19] Yeah, I'm still upset about that. We talked about that a few years ago when it was a piece

[00:07:22] that I wanted. You wisely got it done. Yeah, a terrific piece and then gone vertical on that

[00:07:29] too. Yep. Got a warehouse on that for marketing and seeing out space in that as we speak.

[00:07:34] I've got some additional ground down there. Looked at doing some storage actually, got through a

[00:07:39] whole process on that. Interest rates killed it though. Like a lot of deals, the interest rate's

[00:07:44] just really hammer on deals and it makes it really hard to do something. But we got the

[00:07:50] warehouse up and it should be... I think they're doing concrete out there today on the drives.

[00:07:55] And we're maybe a couple of three weeks away from completion on that warehouse.

[00:07:58] That should be good. And then we bought some buildings up in Johnston that were actually

[00:08:04] foreclosed on years ago. Local bank took them back and then sold them. They were vacant.

[00:08:11] Yeah, I guess I wasn't super hot on Johnston, but I mean, Johnston's a nice community. It's not

[00:08:16] known for its office market, but the price was right. I don't know, kind of verdicts still

[00:08:21] out on that one if that works out or not. I mean, I'll be fine on it. It's just taken

[00:08:26] longer than I thought. Trying to attract users, I mean, this is kind of part of that learning

[00:08:32] easy to take some people from some municipalities into others like West Des Moines. You can take

[00:08:36] somebody from any other municipality into West Des Moines. Some other cities are a little harder

[00:08:40] to attract people to. Again, nothing wrong with Johnston. It's just proximity to workers

[00:08:46] and some of these other things. Maybe it makes it a little bit challenging at the moment. But

[00:08:50] Johnston has been super supportive and has been helpful on everything on that project.

[00:08:54] But then we've got string of assets along the university. We had other buildings on the university

[00:09:00] in Clive that got pretty much the... Yeah, just they're already occupied type buildings. Our office

[00:09:07] building, 100% occupied. Went in, bought it. Rates were low. Same deal. Just rework leases,

[00:09:13] get the rates up and valuations come with that. It's funny when so many people want to shy

[00:09:19] away from office. You walked into my office. We bought this two years ago at 60% fake

[00:09:24] agency. Tremendous need of some level of physical repair. Then took a small percent of the square

[00:09:29] feet and today we're at 10% vacancy. That's great. Another thing looks a lot better.

[00:09:33] Yeah, it looks great. So there's opportunity when people want to shy away from it.

[00:09:37] Yeah. And you saw that when Wells Fargo decided to vacate their mortgage building on university

[00:09:42] and put it up for sale, 400-ish. 425,000 since change probably. Yeah, a lot of square feet.

[00:09:50] Tremendous amount of square feet. And you put a deal together and took this down just before

[00:09:55] the New Year rolled in. Yep, December 28th. Tell us about that. And I'm curious about the time frame

[00:10:01] too because the auditor, I think would find that interesting. The whole story is how quickly it

[00:10:05] had to come together. Yeah, we've been looking at that. Well, we were looking for opportunities

[00:10:09] all the way in earlier in the year in 23. And yeah, just that building kind of popped up.

[00:10:16] I'm like, all right, let me just take a look at it. We went and looked at the building.

[00:10:19] Wells Fargo took another. We didn't actually offer at that point. Somebody else came in,

[00:10:24] had it under contract, fell apart very quickly. We took another look, put an offer in.

[00:10:29] Our offer is actually probably weren't even being really taken serious because Wells Fargo

[00:10:32] wanted, I think their perception was, we want to ensure that those closes,

[00:10:38] they took another offer. Our offer wasn't accepted. I think we were actually,

[00:10:41] maybe I don't even know higher. I'm not really sure. That deal went all the way through due diligence

[00:10:47] and fell apart at the very end right before Thanksgiving. So I got the call, hey, this deal

[00:10:53] fell apart. This is back in play. And but one of the stipulations was they wanted to close

[00:11:00] by the end of the year. So at that point, I'm going into Thanksgiving and it's like,

[00:11:05] all right, we got a month to do this deal. Yep. Number one, I don't want to start this

[00:11:10] if I don't think I can finish it. And there was a number of moves that we had to make on the back

[00:11:15] and to make cash available and stack the capital to get it done because it was going to be an all

[00:11:18] cash deal. And so obviously had to make a few phone calls. We had a lot of cash sitting on the

[00:11:25] sidelines at the moment anyway. So that made it a lot easier. It's not like we're going out

[00:11:29] and borrowing the whole thing. We brought a minor part of it, but we still need to chase down

[00:11:33] some cash. We didn't want to bring in equity partners on it. So we didn't, we didn't

[00:11:38] have to go out and sell off, sell our souls on equity to get the deal done. And on top of that,

[00:11:44] we had to be a little careful who we talked to because if anybody found out what that price was

[00:11:47] going to be, it was going to go away real fast. And that was really the hardest part was trying

[00:11:52] to get it there without actually telling anybody because it's not like I could go to any bank.

[00:11:57] I wasn't going to get financing from a bank in that period. So we definitely had to go

[00:12:01] and find somebody that could step in for the small amount of cash we needed on it. It was

[00:12:06] small when I said, I mean, we're still like looking at millions of dollars in a short period of time.

[00:12:11] Found that money. Found a guy who was like, hey, I'll step up. I'll give you the cash.

[00:12:15] We actually just financed him out here two weeks ago. So that hard money guy was gone.

[00:12:19] And now we're back to bank financing, which is obviously with the preference.

[00:12:24] So going into that last 20 days from the time we signed the purchase agreement to the time of

[00:12:29] close was exactly 20 days. So Wells Fargo had just impeccable records,

[00:12:38] never deferred maintenance, had a record for every single thing, every warranty, any vendor,

[00:12:43] everything was well documented. So it made the due diligence release.

[00:12:46] He's credible.

[00:12:47] If it wasn't for that, that deal doesn't get done. So we went through, did that,

[00:12:52] did whatever due diligence we could. We knew we were going to miss some things.

[00:12:55] There's just some things we just weren't going to catch, but we had that factored in

[00:12:58] and got the deal done and closed. And I mean, to be honest with you, it was like

[00:13:03] that Friday before Christmas, we were still working through stuff.

[00:13:07] And it was like, man, I was like really hoping I was done that Friday before the holiday weekend.

[00:13:13] It was like five o'clock and all the lawyers and everybody were like basically leaving for

[00:13:17] the weekend. And I'm like, all right, I'm going to have to sit through the holiday

[00:13:20] weekend thinking about this. That was probably like three days in my life.

[00:13:24] I did not really sleep that well. Again, I was just worried about not getting the

[00:13:28] building. It wasn't getting the building and having 425,000 square feet of make-and-see.

[00:13:32] Right. It was just not getting the deal. Right? And then once the deal closed,

[00:13:35] I was like relieved. Yeah. So it was good. Yeah. Yeah, it was fun.

[00:13:40] Hey, Iowa investors, this is Ava Bowcamp, Chief of Staff at Legacy Impact Investors.

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[00:14:04] opening a tenant email or responding to a maintenance call. They just share in the

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[00:14:20] All right. So how does one go about filling 425,000 square feet of make-and-see?

[00:14:24] So we're smaller brokerage, which we're super resourceful in what we do, but I mean,

[00:14:29] this is a bigger project obviously. So we partner with Jones Lang LaCelle on marketing the space.

[00:14:34] So we have seasoned commercial professionals in our office too, but we needed more bodies

[00:14:39] after the horse power. We need more horsepower. So Justin Lossner and his team at JLL

[00:14:45] market that building with us. So that's been productive and generating a lot of activity

[00:14:50] and proposals and space planning. We're going through all those things and got a lot of prospects.

[00:14:56] Yeah. I mean, if people think there's nobody in the office market looking right now,

[00:14:59] they are delusional. I mean, there's a lot of office prospects out there. Now,

[00:15:03] great. A lot of them are probably making moves because they think there's maybe

[00:15:05] some soft spot here where they can get a better deal. And that's true.

[00:15:09] Yeah. I mean, and it is you're going to get a better deal on this building on lease rates

[00:15:12] than you would have. If I mean, that building built today, you wouldn't even be a double the

[00:15:17] current lease. Correct. I mean, it'd be way more. You'd be like in that 35 to $40 per foot range.

[00:15:22] So there are deals there where you can be in a class A office building with a restaurant and

[00:15:27] event space and catering and everything built into it with a ton of parking for a rate that

[00:15:32] you would have never seen otherwise. Dude, it's a beautiful building. Thanks.

[00:15:37] It's a standout building in the parking place. Yeah, thank you.

[00:15:39] So it will not shock me given when somebody goes out and shops in the West side.

[00:15:43] Yeah, this is the cream to crop. Yeah. I mean, my opinion is the best

[00:15:47] class A office building in the Western suburbs. I would agree with that.

[00:15:50] Yeah. What are you most excited about this year?

[00:15:53] That building's taken a lot of my time obviously. You know, that's the focus is we're going

[00:15:58] through a lot of design. We're working with the restaurant user right now going

[00:16:01] through all their architectural design elements, what we're doing at the outside.

[00:16:06] We're going to have some retail in that building too, like on the lower level.

[00:16:09] Oh, yeah. Some of these things, it's a domino effect. You got to have one deal

[00:16:13] that goes before we can kind of decide what to do with the rest of the space.

[00:16:16] I mean, that's the fun part of it, right? It's a strategy.

[00:16:20] You're solving a puzzle.

[00:16:20] Yeah, you're solving a puzzle and I mean, if you don't solve them puzzles like that,

[00:16:24] you're not a real estate guy. You got to figure out how to get there and what's the

[00:16:27] right way. Ultimately, you can look back and be like, oh, we should have done this.

[00:16:30] You do that every time, but it's like you're trying to make the best decision you can

[00:16:34] at the time. Right now, we're really dialed in on getting this restaurant user in established,

[00:16:41] get their stuff figured out and then we're going to kind of populate out the rest of what we have.

[00:16:47] Then I think that building will be that user and the building and the amenities in that building

[00:16:52] will be really good. Looking forward to that. That's the big, yeah. Looking forward to seeing

[00:16:56] interest rates lower too, I guess. What's your prediction there?

[00:17:01] I don't know. Obviously, you got rates election year. I mean, I wouldn't think

[00:17:08] rates will even drop once this year. Maybe next year, it doesn't matter who's elected after

[00:17:13] November, those rates are going to probably move one way or another. They might go up.

[00:17:18] The question is, can you get rid of inflation without a recession?

[00:17:22] I would say most people will say that's probably unlikely. You can end inflation

[00:17:26] without a recession. In order to put the country into a recession, you'd have to raise interest rates.

[00:17:32] I guess if I was betting one way or another, I would actually bet more on there'd be a rate

[00:17:37] increase than there would be a decrease, but more than likely stays flat through 25.

[00:17:42] However, you do have a lot of banks that are going to be pretty liquid in the middle of 25

[00:17:48] because all that PPP money that they took back in 01 starts coming back. They had all

[00:17:53] that windfall money dumped into treasuries. All those treasuries are getting cashed out next year.

[00:17:59] Banks should be in a much better position where they're not begging for deposits, but they're like,

[00:18:03] hey, we got money for loans now. There might be some softening just on that because they may end up

[00:18:07] with enough cash that they're like, hey, now's the time to attract some customers. Some of the

[00:18:12] banks are already seeing that. They'll step up and they'll do a deal where other banks

[00:18:16] are like, hey, we're just pumping the brakes. We're not doing anything. They're going to lose

[00:18:20] customers. They're going to lose customers. Banks with liquidity right now have the long-term

[00:18:23] advantage of acquiring customers and probably acquiring banks at the same time. They're in

[00:18:29] tremendous opportunity for them to strike. Yes, I mean, what a great time. If you're a bank that

[00:18:34] was well-structured and you didn't have that heavy treasury exposure, then yeah, you're probably

[00:18:39] in a really good spot. We talked about soft spots. You mentioned more than once.

[00:18:44] You look for soft spots in the market. Clearly, office is a soft spot. I'm wondering in your

[00:18:48] mind today, are there other soft spots that exist out there? Are there other places, avenues,

[00:18:53] asset classes you're looking at? You know what? I think office will hold that

[00:18:59] position of being the soft spot for probably a good time. Yeah. The opportunity is big enough

[00:19:04] and it's long enough. It's big enough and it's long enough. It's going to be like

[00:19:07] housing in the recession. That wasn't a one-year deal. No.

[00:19:11] Now, the risk there was way less because with housing, it's small purchase price.

[00:19:16] You got multiple exits. You can rent it. You can sell it. You've got people have to have a place

[00:19:20] to live. There's other factors in office. Value is not just determined in housing by

[00:19:25] which you can rent a force. That's all it is in office. Yep. So, it's a little different.

[00:19:29] I think this runs out quite a ways. Now, does that necessarily mean that it's here?

[00:19:34] Probably not as much. I mean, downtown has got a different deal, but those city leaders

[00:19:38] down there have always seemed to find a way to rectify office issues in downtown and they

[00:19:44] probably will again. Yeah. It'll get figured out and space will be consumed and things come and move

[00:19:50] from downtown to the west and to the suburbs that's happened several times even since I've been in

[00:19:56] rural estate. So, you just watch it happen and just know that it's happening. I mean,

[00:20:02] I'm still probably big on office, to be honest with you. Yep. Yeah.

[00:20:06] And I will be for a while. Now, I'm not saying I'm going to buy anymore office.

[00:20:10] I've obviously bought all the office I think I really want to take,

[00:20:12] but if I'm an investor out there, I don't know that you're going to find a good office building

[00:20:16] to buy because number one, this market is controlled by very few developers.

[00:20:22] Correct. And those developers are well capitalized, which is great because that actually makes the

[00:20:28] market super stable. Yep. You're not going to see R&R going under. Correct. I mean,

[00:20:33] if there's somebody I would not bet against it would be them. Yep.

[00:20:36] And you have those guys who will they aren't going anywhere. So, you're not going to see

[00:20:41] that portfolio just vanishing into lender land and foreclosure. It's not going to happen.

[00:20:46] And then you look at the rest of the market in the Western suburbs, it's almost all owner occupied.

[00:20:50] Correct. So, I don't think there's a ton of risk in the Western suburbs. If there is risk

[00:20:56] in the Western suburbs, it's outside pressures. It's a company that is located in Des Moines

[00:21:02] that may have five or six other cities around the US that they have businesses in

[00:21:07] where maybe it's Boston where rents are 25% of what they were and they can relocate their companies

[00:21:13] to Boston. Yeah, labor might be more but their office space just got a lot cheaper.

[00:21:18] Correct. Or that building in St. Louis that sold for $3 a foot. Right.

[00:21:21] It's like, are you going to be in St. Louis? Well, the right company might be and does that

[00:21:26] pressure all of a sudden it's like, well, we're not talking about Western suburbs versus

[00:21:30] downtown or it might be, hey, we're actually just talking about the market versus this market

[00:21:34] because all of a sudden rates moved enough in those other markets that now that's impacted.

[00:21:39] That's actually probably the bigger thing. It's interesting. Yeah. I mean, I can see that actually

[00:21:44] having some impact. There's enough Midwestern cities, Midwestern values in other cities where

[00:21:50] Des Moines is probably fortunate that it's in the position it's in. Yes. The Des Moines metro

[00:21:54] where you have other cities St. Louis for instance. It's not the case. Not the case.

[00:21:59] So somebody might be like, hey, look, we can track somebody down here real easy

[00:22:02] because this space is super cheap. Right. But you got to have companies want to make that move too.

[00:22:06] For you, why Iowa? What keeps you here? What has you invest here?

[00:22:11] Yeah, you're someplace long enough and I don't buy anywhere else because

[00:22:15] number one, I got golden rules. I'm always the manager and I'm always the majority owner.

[00:22:19] And so I always control my deals and I'm always the manager and it's hard to manage

[00:22:24] things if you're not there. So I'd never buy anything. I just wouldn't do it.

[00:22:30] It's too hard. I mean, I know what's going on in this market very well as you do.

[00:22:36] And you don't have to spend a lot of brain damage to figure out what the market is.

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[00:23:10] Check out www.littleguylones.com. Right. You don't have to learn the

[00:23:15] market anymore. You've been there for so long. Did they call on you to have

[00:23:18] an opportunity put in front of you to go, yes, no, maybe? I know. I don't have to go.

[00:23:23] Yeah. I'm sure you're the same way. You can look at a deal and be like,

[00:23:25] this isn't it. Yeah. That's efficiency, right? Yeah. I probably wouldn't be interested in going

[00:23:31] into any other markets. This market's got enough. I feel like I can find enough value in this market

[00:23:36] that I can stay here for a while. Brian, ready for the final three questions?

[00:23:40] Yeah, what do you got? If you had one piece of advice for your 20-year-old self,

[00:23:43] what would it be? I probably would have started buying real estate sooner.

[00:23:50] I ran out my working career until I was 40, basically. Don't get me wrong. I liked working

[00:23:57] at R&R. It was a great job. Loved all the people over there. Owner was really good to me.

[00:24:03] But at the end of the day, I probably shorted myself by staying there probably five to seven

[00:24:07] years longer than I probably needed to. That last five to seven years, there was no value

[00:24:12] for me in it. And so I just kind of hit a pinnacle where it was like,

[00:24:17] there's no reason to be here anymore. And I think people get into jobs and they feel secure.

[00:24:22] It's like, hey, great. I'll just show up here. Unless you just hate the job.

[00:24:26] But I think that's the thing too is it's hard to be like, I'm just going to go out

[00:24:31] and do this on my own. And it's eat what you kill all the way, which I didn't really have a

[00:24:36] problem with. I think it's kind of timing looking back on. That's the one thing I probably

[00:24:41] would have done sooner was just bailed sooner. Yep. So I don't know, 20 year old self. I don't

[00:24:47] know, maybe get out of college a few years earlier than I did. I had no idea. I don't know what I

[00:24:53] was doing when I was 20, but I'm sure I wasn't ready for anything else. Two bucks that changed

[00:25:00] your life. Two bucks. I don't know. I don't read books. So I don't know what do you do?

[00:25:04] How do you consume anything other than your standard real estate stuff and all the journals and

[00:25:10] nothing? Business record. Don't read anything. What helped form you shape you create that mental

[00:25:18] stronghold that you possess today? The intestinal fortitude to forge forward?

[00:25:22] Yeah. Maybe not a book, but maybe life lessons growing up. So I mean, I grew up on a farm.

[00:25:26] I watched my dad, he worked really hard. Had no issue. Never complained about working ever.

[00:25:32] I mean, farmers, I just feel like they don't. And I mean, there were some things I learned

[00:25:36] from him. It's like, never when you don't need to be the smartest guy in the room to

[00:25:39] be successful. And I'm not the smartest guy in the room ever. I have a probably unique risk

[00:25:43] tolerance. That's probably the only thing that makes me what I am. And I also have very high moral

[00:25:50] and ethical standards that I'm just not varying from those things. I'm going to always do the

[00:25:55] right thing regardless of what it is. It may not be comfortable. It may have a different

[00:25:59] outcome, but we're always going to do the right thing. And I do that for my employees.

[00:26:03] I don't treat my employees like they're disposable. My dad taught me that too. It's

[00:26:07] like, I mean, he had his employees and I mean, he cared for them like they were family. And so

[00:26:12] I do the same thing. I don't put non-competes in front of them. I don't do anything like that if

[00:26:16] they want to work for me. They're almost like partners to me. And we all work together and I

[00:26:22] have their loyalty and they have mine. I mean, those are some things that I've looked at.

[00:26:26] And I also think a lot of problems can be overcome by hard work. So when you get all

[00:26:31] short on a deal, you do tax. As long as you have a really good work ethic, that can overcome a lot of

[00:26:37] things too. So I feel like that's probably, I think, I mean, heck, when I was working at R&R,

[00:26:42] I mean, I'd go out at night and work till one o'clock in the morning at the house. I get off

[00:26:45] work and go work on the house, work on a property and I do that every night. It's who wants

[00:26:51] them more. Correct. And so that's what it was. It was like, that was my only option.

[00:26:55] If you were cast away on an island for a year, you can only get three pieces of data each

[00:26:59] month about your business. What three things must you know every month to know how your business is

[00:27:04] running? Three things to know about my business, to know how it's running. Well, I don't know. I mean,

[00:27:08] I look at financials every day. I mean, that's probably the biggest thing is I reconciled,

[00:27:13] I went well up until probably four years ago. Like I would reconcile daily. Like I knew to the

[00:27:19] penny, how much capital I had available, where my debt was, what payments were going,

[00:27:23] everything all the way out. I mean, so I look at financials a lot, probably more than

[00:27:28] most real estate people do. It's fair. I mean, it's really easy to get caught up in the marketing

[00:27:33] and the deals, the sexy stuff, the sexy stuff and you're not dialed in like I have an accountant

[00:27:38] in my office. I mean, I'm met with her for 30 minutes on the phone this morning talking through

[00:27:43] things like I'm very much involved in that. Who pays the bills today? Well, I still pay the bills.

[00:27:49] I mean, who actually writes the check? Who signs the check? Yeah, I still sign my

[00:27:53] I'm the same way. I'm that in tune to it. You have to. Correct. Here's the thing is,

[00:27:57] there's nothing in my company that anybody does that I can do. So I don't have like three things

[00:28:04] I would like to know, but nobody in that office can do something that I can. And if they do,

[00:28:09] maybe the marketing gal, she's probably pretty good at social media. That's probably the one

[00:28:13] exception. She can do that. I can do that. But I still get involved. It's like, Hey, look,

[00:28:16] I'm just not like cutting it loose doing this. Like I want to know, want to be involved.

[00:28:20] And it's not like a micromanaging and I share with them what I'm doing too. So everybody has

[00:28:25] this global perspective of what's happening in the organization. And we have really good people

[00:28:30] that understand that they all kind of know everything. I mean, like I said earlier,

[00:28:34] like everybody in my office is licensed. They may not sell real estate, but they're licensed.

[00:28:38] I want them to understand what our business is and that the opportunities are there for them

[00:28:42] if they ever migrate to it. And it's hard when you're a 23 year old gal doing marketing

[00:28:47] to sell real estate too. But there's always a path. Yeah, financials, I think is the big one.

[00:28:54] Understanding loans, understanding financing options. Loans is not just as easy.

[00:28:59] Yes. Barrel X pay Y. Right. It sounds like that. But as soon as you move forward to the

[00:29:04] commercial side and that loan package is 50, 60, 80 pages. Yeah, it's a lot. And

[00:29:08] It's another story. Yeah. And you have to know what your covenants are. You don't want to

[00:29:11] get snagged. I mean, you look back at there was guys during the recession back in the late

[00:29:16] 2000s. I mean, they're getting their buildings called on there making their payments.

[00:29:19] Making their payments to get into their building call. Yeah. Yes. I mean, that was

[00:29:22] when you tell people that they're like, I just can't believe it. If I'm making my payment,

[00:29:25] why does it matter? Right. Well, you have loan covenants in debt service coverage ratios and all

[00:29:29] these other things that you got to pay attention to. And if your financials aren't just spot on,

[00:29:35] it's hard to be like, Oh, I mean, when they're calls me today, they want my balance routes

[00:29:39] and my PNLs, they're good. I can send them to them this afternoon. And there's no,

[00:29:43] Hey, give me a month. I got to put this together. Like we don't do that.

[00:29:47] Yeah. Like we kicking that stuff out right away.

[00:29:49] And I think anybody that's in real estate should do that because you never know when

[00:29:53] an opportunity is going to come up. Correct. Might walk it might trip over tomorrow and you're like,

[00:29:58] Hey, I got to go get a loan. But what are you going to do with spend a month putting your

[00:30:02] financials together to give to a lender for a deal that you might lose because you don't have

[00:30:06] a ready to go? So when dollars are tied at a bank, meaning they can only lend so much money

[00:30:10] to so many people. And when they have a choice, yeah, of an operator who runs this tight

[00:30:15] and an operator who doesn't, it's not even a choice. Right. Sure. Exactly. And we do get

[00:30:19] a lot of props from lenders for that. The other thing I did learn too is don't just have one lender.

[00:30:24] And it's hard when you're starting off because you don't have a lot of deals to

[00:30:28] spread around. But I mean, we learned that. It's challenging because you'd rather have

[00:30:32] one because you'd rather have the greatest relationship in history. Yeah. Right. But

[00:30:35] unfortunately, things change in their world that you just can't touch. Well,

[00:30:40] things change, lenders move. Yep. They go from one bank to another,

[00:30:43] which is fine, everybody's. But you don't know who you're going to be left behind with at that

[00:30:47] bank or if the new bank or if they just leave the business altogether. We look at lending

[00:30:52] relationships very much personal. Like, who's that lender? The individual. The individual.

[00:30:58] Not the bank. I mean, we care about the health of the bank. Yes. But we also care about the

[00:31:02] relationship with the winner and like how good are they? Can they get deals done?

[00:31:06] Are they seasoned enough that they understand what we're doing and how we're structured

[00:31:09] to get the thing through and having multiple ones that do it? And I make it very clear to all of

[00:31:14] our lenders, like, hey, look, I'm just not, I'm not doing all my deposits with you. I'm not doing

[00:31:18] all my lending with you. I can't because there was a moment back in their recession,

[00:31:21] when we had financing with a particular lender and they called us on alone. And it was like,

[00:31:27] they were only doing it because they were getting just hammered by builders

[00:31:31] and they went to cross-collateralizing all this crazy stuff. And I'm like,

[00:31:34] nope, I just went ahead and paid it off. And I never used them again. And whenever I have

[00:31:38] a partner that wants to use them, I'm like, nope. We're just not doing it.

[00:31:42] Sure. I mean, those are some of the things. That's the biggest one. I never even really

[00:31:46] thought about that back in the day. It's like, look, you got to have a lot of different lenders

[00:31:50] and relationships. So you never know who's going to be there and who's not.

[00:31:54] So I've asked a lot of questions, Ryan. We get there for hours on end, but we will

[00:31:58] not today. What's one question that I did not ask that I should have asked?

[00:32:03] I mean, what do I do in my spare time? You don't have spare time.

[00:32:06] I do. I do that. That's why I golf with lenders.

[00:32:15] So yeah, that's the other way. That is the thing. Lenders do love the golf.

[00:32:18] They love the golf. All of my lenders just love golf. It's a lot of fun.

[00:32:22] No, it's so fun. Yeah.

[00:32:24] See, one time I get to take money from them.

[00:32:29] That's about it. No, it's good. I appreciate you having me on.

[00:32:32] It's a pleasure that your year. I thank you for people. They want to find you.

[00:32:35] They want to follow you. They want to connect with you. Where can they go?

[00:32:37] Just WBrealt.com, easiest way. Contact information is out there.

[00:32:42] Our whole team site's out there. Listings, services, things like that.

[00:32:46] So, like, blow on the show notes for everybody. Ryan, appreciate your time.

[00:32:48] Hey, thanks, Neil. Thanks, man.

[00:32:50] All right. Thanks for listening.

[00:32:51] If you're enjoying the show, may I ask a favor of you?

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