Ep30 Lessons Learned as a Real Estate Professional with Rick Krause

[00:00:00] Fear of fire at the day's market. You've got a sea opportunity. If you don't see

[00:00:04] opportunity, some way somehow to improve upon an asset that you might consider purchasing.

[00:00:09] You're probably not going to like the fire. From cornfields to high-risis, office to industrial,

[00:00:14] houses, do hotels, and every other asset class in real estate, we cover the people, the projects,

[00:00:21] and the profit. Welcome to the Investing in Iowa Show. This show is for go-doers, action takers,

[00:00:27] and business owners. It's for people like you who are sick of Uncle Sam taking a huge bite in your app.

[00:00:34] But if you're looking to get ahead of what's taking place in Iowa, learn who is doing what,

[00:00:38] and how you can get in on the action. You're in the right place. Posted by Neil Timmins,

[00:00:44] an Iowa native who has been involved in over $300 million in real estate, right here in Iowa,

[00:00:51] recording in studio from West of Illinois. Here's your host, Neil Timmins.

[00:00:56] I got Rick Krause here on the show. Rick, welcome. Thank you Neil. It's good to see you again.

[00:01:01] It was you know, say, for the audience, say, who are you from? Well, I grew up in Skokil,

[00:01:06] Illinois. I in the son of two refugees from Germany, they came over. I father came over,

[00:01:11] she ate at 13 with a sister on a boat, five themselves. My mother came over with you as nine.

[00:01:17] I had it. I was about to university in Chicago, Captain Eurydon, set up a life in Skokie, basically

[00:01:23] went to school in Skokie, graduated 1978, headed to Drake University and had been into

[00:01:31] my ever since. What journey did you drink? There was a lot of students in Chicago's uppers

[00:01:36] that were attractive straight. Quite a presence there at 40% of student enrollment that Drake

[00:01:41] came from the state of Illinois. Most of that was from Chicago. I knew some people that had come

[00:01:45] to Drake, don't worry. When the study business made that decision wasn't we didn't go through

[00:01:51] a lot of due diligence back in those days to figure out where to go to college, basically had

[00:01:55] two or three choices. You decided. So after graduating in 82, I was contemplating whether to create

[00:02:04] a professional life in Skokie or a state of Illinois and I just realized that living in Illinois was

[00:02:09] a lot easier. This is back in the 80s in Chicago at that time. You waited in line for everything

[00:02:15] and it's only gotten worse. So I think Duane was a great place to start a family and create some

[00:02:22] net worse for us. So I just stuck around, it worked for several employers. 1988, I purchased

[00:02:31] state flex in Milwaukee. Back when Milwaukee was a little handled of 2,500 residents, it had to be a

[00:02:37] stretch from college, the edge up the buoyant, the burps at the point too much. You back in the day.

[00:02:43] Come out of remember, I mean to come down. I think it was heatment road at the time, I didn't sure

[00:02:48] not to get off the heatment road went through but if you didn't take heatment there was no other way

[00:02:52] to get to walk heat, right? University didn't exist, at least not that far west. Sure. So anyhow,

[00:03:00] at that time, it went people there were interested in real estate, the one where Bill and App

[00:03:05] and Martin Pongrassum, who exaggerated a little bit, but nobody was interested. And I saw an advertisement

[00:03:12] in the joint register classified sections under income property for this 8x for $220,000 with

[00:03:21] $20,000 down like it purchased at our contract. From a guy who lived in California. So I made

[00:03:28] that decision purchased it, right when I had to take the time I had to year old at a new one.

[00:03:35] So we had it to year old and new one. But anyhow, I remember cleaning the apartments when there

[00:03:41] is 10-it-turned over and having my wife help me. And the kids they had to climb on grant

[00:03:46] bus, and my wife told me after about two places that I'm not sure if it's more. So anyhow,

[00:03:53] we caught another way but three years later our purchase and other eclics in Ancony,

[00:03:58] part against my own 401k to do that. And then realized that Ancony was too far away to all

[00:04:05] eclics and sold the two years later and exchanged into office building and climbed. Back then,

[00:04:11] hardly anybody knew what 10-30 walks to each other was included myself. But I counted out

[00:04:16] and made that transaction. So beyond that I really did purchase any property until 1999

[00:04:22] in which at that time I purchased three properties and I just was looking for value. I didn't

[00:04:28] have in my mind that I wanted to purchase a property a year. I just purchased property so I

[00:04:33] really wanted to. And it turns out that the times that I purchased property when real estate was

[00:04:39] waning and value of the properties were there was a little recession and commercial property.

[00:04:46] So about three properties in 1999, I was really starting to do more and those been contact

[00:04:52] by a lot of commercial brokers at the time still working full-time. So we're going to jump selling

[00:04:57] industrial packaging systems at the time. I got a little frustrated with a lot of the commercial brokers

[00:05:02] in mind that didn't seem to know much about investment properties. I knew a lot about leasing

[00:05:08] office industrial and retail, but not much about investments. So I decided that it was probably

[00:05:14] good opportunity for me to get to the business and focus on the capital of the year. So in 2001,

[00:05:19] September 1st, 2001, I made the plunge in 11 days later was nightly. I wish turned out to be a

[00:05:27] terrible time to get into the commercial brokerage business. So I struggled for the first year

[00:05:33] like everyone else that made the $19,000 in commissions which was quite a shock but turned out to be

[00:05:41] really a good time to get into the business. Why? Well because it's not easy there was activity out there

[00:05:47] really, what is that hardest thing about getting in the commercial real estate business? Just to figure

[00:05:51] out which opportunities to pursue there's always opportunity. Some will learn dead ends and some

[00:05:58] will learn real opportunity. So you know the next year I tripled my earnings and the next year

[00:06:05] considered more. So it only really lasted about a year for me to enter and then it seemed like

[00:06:11] it accelerated through the early 2000s and I and Miami for I pretty dead time. I was busy selling

[00:06:18] real estate brokerage business. They thought, right, but then 2008 and at that time I was actually

[00:06:25] working for I'm a real declercial and I switched, I went over to CBRE Hubble because I felt like

[00:06:31] I had better opportunity to enter. I was like to over 2008 but we know what happened right just before

[00:06:37] then. So anytime I made a move, beware. But anyhow I came over and fact I was running the

[00:06:44] Chicago Mariton in October 2008 and I'm looking around at all these in the condo developments that are

[00:06:51] 50, 60, 80 stories high that are the construction activity just stopped halted halt and I'm looking

[00:07:00] around as I'm running and this is going to be really interesting. So it was, I remember back in

[00:07:08] that day you could probably buy, I know you could buy a one bedroom condo in downtown Chicago with

[00:07:14] a primal case for $130,000 and those were probably selling through $700,000 that were yesterday.

[00:07:21] And developers were concerned about him. Who was going to pay those condos association? Yeah,

[00:07:30] but I wish I bought some, I didn't. I bought some other commercial property to find that it was the

[00:07:36] greatest line opportunity in my life. What did you buy? Maybe of course, because we were going to

[00:07:41] ask a class this morning by the time I bought some couple retail properties about a flex space

[00:07:49] property bought a new house. So there is just plenty of opportunity if you saw this on the

[00:07:57] most people weren't interested in participating. The question to you is when the days are darkest,

[00:08:04] the opportunity is to put a brightest but most people don't see it that way. It's in on the

[00:08:07] sideline there isn't action because it's a scary moment. How did you get through that? I mean,

[00:08:13] I have that intestinal fortitude to forge forward and risk and try that. Well, I felt like I knew

[00:08:21] what good opportunities were. I felt like this was a period of time that wasn't going to last.

[00:08:26] Some of the assets that I acquired were maybe 70% least and maybe somewhat this man

[00:08:32] to you before the great recession. So I just had confidence in myself and knowing what was

[00:08:38] good quality property, real estate goes typically in 10 years like those 1999 was a part of

[00:08:45] a downturn right when I first saw the property. The late 2000s was a downturn. We didn't really

[00:08:51] have a downturn until the next 10 year gap turned was caused by COVID, which was something we'd

[00:08:57] never seen before either. So before then we had the SNL crisis back in the late 70s, early 80s.

[00:09:05] So there's always something that impacted the real estate market and it always came back. Now today

[00:09:12] is a little different. You hear what a doom and gloom about commercial real estate today? Well,

[00:09:21] there's some difficult sector or the office market is your tough sector, particularly in the

[00:09:27] central business of this year. But the rest of the market is doing quite well. Yes, interest rates

[00:09:33] are having an impact but we as a group, as our brokerage group, our marketing which includes

[00:09:40] sidefox, Ray Hamilton and Clark Matthews who started with us people first is growing and the

[00:09:48] reason we're growing is we're working hard to find opportunities and the market there's a

[00:09:54] scarcity of listings on the market right because of that people are still willing to pay a premium.

[00:10:01] Chore these properties. We're expanding our market. We are doing more business and we're

[00:10:07] all parts of Iowa in the lot Eastern Iowa. We have guys on our team that are licensed and

[00:10:13] out to code it. We're doing business and suit fall instead. So I think the theme of any one

[00:10:20] of the real estate businesses conditions will change. Those that succeed will adapt to the conditions.

[00:10:28] You know, I was buying property in 2009 through 2012 because I wasn't doing a lot of

[00:10:41] property was as a buyer not a supporter at the time. When I was trying to sell real estate,

[00:10:47] her broker real estate in that period of time nobody wanted to sell. The only people that

[00:10:52] would sell were those that were in trouble or if you were dealing with a lender and I always said

[00:10:57] I was working twice as hard to start with making half as much money because it just wasn't

[00:11:01] opportunity for a broker so you're correct. So I adapted partly because of that, but partly because

[00:11:08] we're at the police. It's an investor. I'm curious what you've seen in today's environment

[00:11:13] that you're sustain with that theme, but what urgency is that actually is not a lot of

[00:11:18] let's say it's not a lot of inventory for sale and those stuff that does come out people will pay

[00:11:23] it premium for that so I'm curious if you have a personal level. But we all have different buying

[00:11:27] criteria as different parameters. You guys, you know, somebody buys, somebody passes, and that's

[00:11:32] it only make it a good or bad, he also has an opportunity for that. Look at the other buyer.

[00:11:36] I've curious about what you're doing in your buying environment today. Well, I'm more focused

[00:11:43] today on demographics, more than ever. I think if you're a buyer at the days market you've got

[00:11:48] to see opportunities. If you don't see opportunity some way somehow to improve upon an asset that

[00:11:55] he might consider purchasing you probably not even like an buyer and there's a shortage of policy

[00:12:01] for a buyer. And because of that, I think in particular saying the DeWont Metro area,

[00:12:08] DeWont Metro area is the fastest growing sitting in the Midwest. Right. It almost doubles next

[00:12:14] in gross, I think, my dear Louisville or Omaha that's the second fastest growing community.

[00:12:22] Because of that we have a lot of demand for multi-finaly housing. I'm probably looking more at

[00:12:28] the C properties today than A properties because there's a lot of development going on at the

[00:12:33] point as well. So, in 2013 I put together a partnership that developed 198 goods and cloud.

[00:12:44] And at that time there was a lack of housing on the property to DeWont. There was a lack of

[00:12:51] development at DeWont. I was into that because I was selling multi-finaly property and I saw

[00:12:58] an opportunity that very few other for acting upon. We built the property with Hubble at the time

[00:13:06] have since owned it as a group and done quite well. Since then there has been quite a bit of

[00:13:12] multi-finaly development. I've already done quite a lot of degree in the Western suburbs and

[00:13:15] downtown, and so that market has changed. So I haven't been a fan of development for several years.

[00:13:23] There's a lot of risk with development that a lot of people book relies on in you get a

[00:13:28] construction loan that interest rate that you know, it is fixed for maybe 18 to 24 months and then

[00:13:35] you've got to arrange permanent finance. Well what happens when interest rates have changed like

[00:13:40] they have right now, and two years ago we were at 4%, 5%, and now we're at 67%. And the other thing

[00:13:47] is you don't know what the demand is going to be in 20 years. When it takes two years to deliver

[00:13:51] the product correct, correct. So there's a lot of risk in your development which I don't mind taking

[00:13:58] the risk but sometimes when you're risky other people's mind there's a lot more pressure

[00:14:02] to collect and I wasn't always comfortable with taking that chance. Hey Iowa investors this is Avabau

[00:14:09] Camp chief of staff at Legacy Impact Investors have you thought about adding real estate to your

[00:14:15] portfolio but don't have the time or desire to play landlord at Legacy Impact Investors we do

[00:14:20] heavy lifting. Our team finds the deals, manages the properties, and handles all the day-to-day

[00:14:25] operations. Our select group of qualified investors co-invest with us gaining ownership equity

[00:14:31] without opening a tenant email or responding to a maintenance call. They just share an income

[00:14:36] appreciation and tax benefits. These opportunities aren't for everyone there for qualified

[00:14:41] accredited investors only. If you want to learn more please visit Legacy Impact Investors.com

[00:14:47] to apply. How did an investor first help you when it came to serving as a roles broker?

[00:14:58] Well that's a great question. I got into the business because I didn't feel the other

[00:15:02] brokers at the time knew much about investment property. They never seemed to give me the

[00:15:08] information that I was really looking for income statements, rent roles, basic information that

[00:15:14] investor who's going to buy an investment product, actually go at basic and share it. So I would ask

[00:15:19] them certain questions and all they did was they put property for me that happened together. They

[00:15:24] didn't know why someone might be interested in purchasing that money. So I saw an opportunity

[00:15:28] to reach those people and my goal was to focus on investment property overall. It turned out

[00:15:34] that it was easier for me to get involved with the multi-family sector and I just started to try and

[00:15:43] teach out to other owners. The reason why I was easier from his very few of the multi-family

[00:15:50] property owners, you've been new any commercial brokers at the time. So I created newsletters that

[00:15:59] I physically mailed the 4,000 apartment property owners and started out with Polk County, expanded

[00:16:07] several counties in the area and did all kinds of seminars. Anywhere I could speak, that was a

[00:16:14] multi-family warranty group. I was there and did that. And so all of a sudden I had people contact

[00:16:21] and I provide them with information about the market and they responded with calling me and I

[00:16:27] was able to receive calls rather than make calls. Business in any real estate field or more business

[00:16:33] you do and a sector is more exposure. It's right. So it was actually pretty easy to reach the

[00:16:39] multi-family ones. I started doing these newsletters, the seminars, etc. I value them. I

[00:16:44] value to them and I remember 10 years later I had brokers come up to me and say when you started

[00:16:50] to focus on the family wealth like you were crazy because there wasn't enough of a market

[00:16:55] for a unit of state or so. Now the market has evolved into a incredibly, I mean in 2015

[00:17:05] in Polk County there was $15 million worth of multi-family sales to place. In 2021 it was

[00:17:13] 500 million. Wow! So the reason being, I mean there's more money out there pursuing assets

[00:17:20] they ever has. DeMoline became market that others from outside the state were interested in.

[00:17:27] Most of the sale we sell a lot of 50 plus unit properties. We probably could show 60 plus

[00:17:33] percent of that market. It does happen but more often 80% of the time it's somebody in

[00:17:39] obviously and Iowa is viewed as safe. There are rent control laws that are being implemented

[00:17:47] across the country that are not friendly to investors. Every time you see more and more of that

[00:17:54] it helps Iowa become more and more so on and then with the growth that we've had there's just

[00:18:00] a lot of interest in more of that. I agree with you between what the state has done to create a

[00:18:05] friendly, economic, friendly, land-order-biron rich. Many other things that allows

[00:18:11] population as local cities, state, etc. There's a lot of things I like here. There is

[00:18:17] a lot of things you can probably see a lot of you see out of state dollars being attracted here.

[00:18:21] We still aren't quite sure even though maybe not as much as cash flow or yield to some

[00:18:26] of us been like to see but if your parents in their cross-acutary, still in environment that is

[00:18:31] outshines all much of other places. It's certainly on the coast and because of that we've had

[00:18:36] appreciation as far as we can. We haven't seen 15 years ago you bought property for the cash

[00:18:43] you hope for appreciation. Obviously we're reducing that as you went, correct but you couldn't

[00:18:50] account on appreciation. Today you can account on significant appreciation. You got to

[00:18:55] appreciate it back in the day if your rents were to increase over time, correct. But then

[00:19:01] the omitants and an incredible run I think it will continue. There's talk about rent control

[00:19:07] nationally. I don't know that will happen but just to give you an example of one of the worst

[00:19:12] rent control laws passed in the countries in St. Paul, Minnesota. They enacted a law about

[00:19:18] two years ago that makes it so you cannot increase rents more than 3% annually. Now the past

[00:19:25] when rent control laws were enacted when that tenant moves out you can raise the rent to the market.

[00:19:32] Well the same poll law does not lie yet you can only raise your rent 3% annually. Whether it's a new

[00:19:40] tenant or a existing tenant what happens is there's no incentive for these landlords to prove

[00:19:46] the proper toilet. And so you're housing stock and so we're deling away. You're not this spend

[00:19:54] $5,000 should approve an apartment so you can raise the rent 3% so you're going to do that so you

[00:20:01] can raise the rent 7-8% that formula will work it more correct. So I think they're realizing that

[00:20:09] they're starting to relax some of the features of that law so that's probably the worst

[00:20:14] rent control laws. But when that happens in a Twin Cities those investors are going to shy away

[00:20:22] from that market and look to other places like that. Yeah they look their dollars and you know I think

[00:20:26] it that has to impact the tax decision that city as well. Yeah that's so pretty good right? You're

[00:20:32] putting a restriction right? Therefore you're putting a restriction ultimately a cap what that value

[00:20:36] could be worth is right. You need time frame up and therefore you're reducing what that taxable

[00:20:43] property is what that assessment's going to be. Sure I'm just going to say it's always back in

[00:20:46] City all. There are some things in Iowa that we've done, multi-failory proper heat supply taxes

[00:20:52] in the first product. Right a home house in Iowa typically gets a rollback of about 45%. So

[00:21:00] they're only paying 55% of the taxes that say a commercial property would pay. In 2013

[00:21:08] they changed the law in the state of Iowa where multifially property received the same rollback

[00:21:14] that a house did and then they faced it in our 10 years with it's not fully faced it as of 2023.

[00:21:22] So that's been a big benefit to values for mobile and property. Then it's put them on an heating

[00:21:27] really true. So I'm curious just one way back here. Being the son of first generation

[00:21:35] immigrants out of that imp what was that life like what was growing up like how did it

[00:21:39] back to work ethic? What was distilled from that experience that gave you an ultimate advantage

[00:21:44] problem in the market? Well my father after he was an engineer, pretty smart guy. My parents both

[00:21:52] are very hard working. But they were Europeans and the sister maybe now to live like

[00:21:57] practices with that Europeans or back then they weren't child focused in America. We're very

[00:22:03] useful just. Right and so I was very my parents let me do whatever I wanted to. They didn't believe

[00:22:11] in youth sports at the time or organized youth sports but had a lot of time on my own and

[00:22:18] first I was part of the culture back then too. But my father got into the multi-handling property

[00:22:24] industry that's probably about 12 years old. I did some odds and ends work from sanded floors

[00:22:32] wood floors, did some painting so I gave me a good foundation when I bought my first property.

[00:22:38] Obviously, he's off my father. My father was tough guy. I mean he was not easy to convince

[00:22:44] anything. He didn't give me any good reasons why not to do it. I took that as a okay that must be

[00:22:50] that must be it's a good opportunity so I got this full-thirty endorsement as I could to go ahead

[00:22:55] and purchase that property but it helped a lot. So part where I worked basically from 20 years old

[00:23:04] to my whole bike for really I've worked multiple jobs. I've kind of been the gigatomic before

[00:23:09] the risk of you having. So I've worked hard and you take risk but not the ton of risk. The environment

[00:23:16] ever changed in colloquial labor everywhere but certainly inside the real estate environment and

[00:23:21] you have to evolve this industry has evolved and continues to do so. Yeah, I mean those that

[00:23:27] evolved six-year-old. My career is an example when the brokerage business wasn't there

[00:23:33] and I was buying property even though the economy was recovery there were a need for multi-family

[00:23:39] housing I was developing 198 units. Today there's opportunity out there if you're willing to take

[00:23:47] risk. I think the problem today is there is tremendous opportunity in office market but I don't

[00:23:54] know that we're going to see that market where it covers for quite some time with since COVID.

[00:24:01] You know working from home was something that was trending even before COVID. COVID accelerated

[00:24:08] everything that was good Amazon Facebook working from home and anything that was waiting got

[00:24:17] kicked hard to the curb like home. So the office we've always had the technology to work from home

[00:24:24] or we say always before COVID yes it just made that so it's a reality now companies you know they

[00:24:33] want people to come back to work or probably to do that. I think the economy will

[00:24:37] prove and we will absorb the office space but it's going to take a while and what's going on

[00:24:43] at the time time to point is very interesting. You've got two significant properties that are

[00:24:49] you know planning to convert to multi-family. Whether that will actually happen the other day

[00:24:54] don't know. You've got doctors, we're going to talk about that. So whether office buildings to

[00:25:00] an American and use moving out of the room on center because of that room on center is now

[00:25:05] burning some to multi-family. You've got the city of Des Moines, purchasing half of nationwide

[00:25:11] property downtown which I think is a great opportunity for the city of Des Moines they can fill it

[00:25:16] correct. There are 6000 of foot correct for office property that probably cost $250 a foot to build

[00:25:24] right 15 20 years ago right and I've got American equity relocating to downtown Des Moines but

[00:25:30] because there's tremendous opportunity probably you know, rencer coming down and things will

[00:25:37] happen and it'll fall and I'm somewhat optimistic that downtown Des Moines will do well but

[00:25:44] I don't know that I want to be purchasing an office for a new year this time. If you're a house

[00:25:49] clipper execute the birth strategy or do double closings and are in need of money. Little guy

[00:25:54] loans is your go-to lender here in the Des Moines area. Time is money. Loan approvals in

[00:26:00] 24 hours, closings in five days. Little guy loans was founded by Neil Timmins an investor just like you

[00:26:08] since he has been in over 10,000 homes in Des Moines there's never an appraisal.

[00:26:13] Houses, multi-family and commercial property loans up to 1 million. Check out www.littleguilones.com

[00:26:21] There's always been a close and downtown on the internet environment right? There's some sort of

[00:26:30] you've got this one right at the door stuff it. It's gonna be interesting to see how it comes together

[00:26:35] that converting multi-family that sounds fantastic but is that cheap to execute?

[00:26:42] You'd almost get served over from the ground, I wonder yeah, the swing of it goes around

[00:26:47] up and is it last actually? No, I don't know. I either have some incentives to get build

[00:26:52] that repurposed stuff race and without those incentives I'm not sure if it's done.

[00:26:57] Another interesting transaction in the toy market is the Wells Fargo building up. I'm going to

[00:27:02] start virtual age, that just turns out to be in the last year. Wells Fargo is taking it that

[00:27:07] property that consolidate down to their Jordan Creek facility and that 400,000 square feet

[00:27:13] sold for about $30 foot. Ryan, we're seeing with just a few weeks back and we talked about that

[00:27:19] detail. It's gonna be interesting one to see how it comes along because $30 square foot is a

[00:27:25] permanent steel. It's a steel, yeah. Overall that's I think it's a 16 million dollar price

[00:27:30] type for that property. It's an absolute steel. The problem with it is and I don't know what Ryan's

[00:27:35] got in the one you might have at all figured out already is just putting the pieces together but

[00:27:41] it's probably costing them over a half a million dollars a month just to keep going. So if you go

[00:27:47] over your period of time with minimal activity, well that's another 12 million dollars you've got

[00:27:52] and the cost of that gap for as well. So you've got to float it. That one is one I'm

[00:27:58] watching very closely. Yeah, how did anybody in Dilling so far? You took the bulls move

[00:28:04] shirt on and they're crudally property. So I'm excited to see how. I mean absolutely could be a home

[00:28:09] run. Yep, it absolutely could but there's a lot of risk clearance. Does it feel

[00:28:15] in a Disney office sector specifically feel a little like the global environment of 2008?

[00:28:21] Dilling it with every asset today feels like there's one sector that is plighted. And so

[00:28:28] you want to be able to step in and put their tone on that water, it takes a rest kid. How does that

[00:28:32] plant? 3, 4, 5, 10 years. I mean the problem with the finance crisis was that there were so much

[00:28:39] easy money back in those states that impacted every asset class. Yeah. And you had to have a

[00:28:46] head need to go as a heart to get a little better. Right? Yeah, a liar alone. There was no income

[00:28:53] verification that were in those days. Right? So a lot of us never in my wildest dreams that I think

[00:28:59] we'd endure the financial crisis that we did but a lot of people in the industry knew that

[00:29:05] this wouldn't last. So just can't these loans you just can't continue with these loans that

[00:29:11] have we pushed? Right. And so that was a pumped up market. Yeah. The government encouraged

[00:29:18] today things make more economic sense. Yes, we have issues with COVID as a black swan.

[00:29:26] Right? Nobody saw that. Right? We were wondering, time we know because we typically try every 10 years.

[00:29:34] There's a recession in real estate industry. We're wondering what's going on this? The last

[00:29:41] time we did know what it was going to look like. Never in our wildest dreams that we ever

[00:29:47] think COVID would be, what changed things. But COVID, I think then the office industry,

[00:29:54] everybody was probably right at the end of the year. Yes, the government spent so much money

[00:29:58] to float the economy for a period of time. We had no idea how to impact things. We didn't know

[00:30:03] you know, multiply family properties whether candidates would be able to pay rent. We

[00:30:08] government took $34,000 in every person's pocket shortly thereafter and all of a sudden people

[00:30:16] wanted their own home or they didn't want to live with a roommate, or because they were at home

[00:30:22] 90 percent of the time they didn't want to live in the basement of their parents house and it turned

[00:30:29] out to be a big boom for the housing industry, both the rental and home ownership.

[00:30:37] So yes there were still issues, yes there were still people that were losing their jobs

[00:30:42] but for a majority of people that COVID probably didn't more for companies and people's

[00:30:50] personal development unless you on the restaurant or bowling alley or bar were held

[00:30:57] by COVID.

[00:30:58] So a lot of money went out and ultimately like any ever change environment, they created

[00:31:03] up for two of these.

[00:31:05] Then several people have actually queued on.

[00:31:07] Sure, some of those opportunities.

[00:31:09] Sure, we'll see if they have to turn into an office opportunity or not.

[00:31:13] Right.

[00:31:14] I have owned office property as an asset.

[00:31:17] I don't currently glad I don't but I always felt like when the economy was doing well

[00:31:22] office market went up with it.

[00:31:24] Sure, when businesses were opening the office market, they'd well.

[00:31:27] So I think it will recover and I think this will take maybe up to a decade and properties

[00:31:33] will get repurposed and things will evolve as they always do.

[00:31:38] So some office property owners have probably sit on their inventory for a couple of years

[00:31:43] and let other office investors offer rent that 40% off where we were and wait for inventory

[00:31:53] to thin out.

[00:31:54] And so we'll see what are you mostly excited about 20 to 24?

[00:31:58] Well, when I'm most excited about it's more on a personal level, I have six grandchildren.

[00:32:03] Three of them live two miles from our house and another three living household in Norway.

[00:32:08] And they are in the process of relocating to Seattle Washington, which is set up

[00:32:14] being seven times on the way will be two times the way I spend it.

[00:32:23] So we're actually in the process of moving right now, they are going to be at our house

[00:32:28] and to moind later this month and spend the most of our this year while they relocate.

[00:32:34] So that's what I'm mostly excited about this tour.

[00:32:36] So as far as business wise, I think there's opportunities out there.

[00:32:42] I'm more excited.

[00:32:43] I've partnered with some younger people to invest and I'm kind of excited about helping them

[00:32:49] have success be taking a step back a little bit and be involved with not having to be the go-to person.

[00:32:56] Sure. So if there aren't a lot of properties out there, but we're still looking.

[00:33:01] So ready for final three questions?

[00:33:03] Sure.

[00:33:04] If you had one piece of advice for your 20 year old self-worth of being, I would say,

[00:33:08] fail more often.

[00:33:10] And my philosophy is you never get an 100% ready.

[00:33:13] If you get 80% right, you'll do well.

[00:33:16] So I wish I had taken more risks earlier in my life.

[00:33:20] But I also say, I have this philosophy that if I tell people that if I knew now what I knew then,

[00:33:26] I wouldn't be half the success.

[00:33:28] And being naive can help you.

[00:33:32] I'm not saying naive is there's a benefit to be naive but knowing too much gives your

[00:33:38] reasons to pause and I think you need to take some risks in life and the bowls typically

[00:33:44] do well in American economy.

[00:33:47] Two books that change their life.

[00:33:48] Two books that change my life,

[00:33:50] factfulness which is written by a Swedish professor Hans Roslyn,

[00:33:56] can basically work being fed all kinds of information on the databases I hope horrible things are.

[00:34:04] They're not horrible but we definitely need information to receive as negative.

[00:34:08] Yes, there is so much good going on this world.

[00:34:10] I mean, the poverty levels can serve a less than people think it is.

[00:34:15] Life, opportunity, Africa is so much better today than it ever has been because of communications that we have today.

[00:34:23] Nobody puts in a landline flow and system anymore.

[00:34:27] With the internet with satellites, cellular coverage, we can transfer all kinds of information across the world.

[00:34:34] Very inexpensive.

[00:34:35] People are getting educated but women are far fewer women today are being kept down than in the past.

[00:34:44] So there's a wide range stuff going on in the world.

[00:34:46] Other books, leadership, self-deception, a book written by the Arvin's group,

[00:34:51] changed the way I receive information.

[00:34:54] We all have our biases.

[00:34:56] One of the problems we have today is people have too many biases.

[00:35:00] It taught me to keep an open mind into it.

[00:35:02] They're there's good and bad news.

[00:35:04] If you want to focus on why some people, or you don't want something, you'll find that.

[00:35:08] Correct? If you want to focus on why think this is a good opportunity, you'll find it.

[00:35:13] But to see it on a balanced basis is really helpful and I think most good business people

[00:35:19] are open-minded.

[00:35:21] I try to do the best I can.

[00:35:22] Again, we all have our biases but he'll be a better listener.

[00:35:26] If you were cast away on an island for a year, you're going to go in three pieces a day out of your business each and every month.

[00:35:33] And you have multiple businesses meeting the brokerage it and also the investment side of things.

[00:35:37] So I'll let you answer however you choose.

[00:35:39] What three things do you mean? They're no every month to no. I hear this.

[00:35:43] Well, I don't know that there's any, I could pinpoint it in one of three.

[00:35:48] I mean from a brokerage standpoint, I guess I'd like to have access to all the assessors.

[00:35:53] Web sites to see what's transacting, what's going on.

[00:35:57] Maybe look at the pipeline of what might be an areas of focus upon

[00:36:03] as far as my properties go.

[00:36:05] One of the things I've always looked at, or tried to, as I've gotten older, is the demographic

[00:36:10] image that earlier on.

[00:36:11] And so to know where the city of the more I'm fits in with the rest of living west or to know

[00:36:18] the growth in this area would be helpful in making investment decisions.

[00:36:22] Obviously, it becomes statements, wraples.

[00:36:24] That's helpful information but that's a picture in time.

[00:36:27] To know bigger picture things, to know whether it's a good time to invest in whatever

[00:36:32] asset class looking at really dumb and basic information.

[00:36:37] So it's fantastic conversation.

[00:36:39] Who was going to be great when you really come out with the money to the four years

[00:36:42] and you've been in this business for lots and you've got to achieve lots of things.

[00:36:45] This is going to be a lot of my appreciate your time.

[00:36:47] But people they want to find you, they want to follow you, they want to connect with you,

[00:36:50] where can I go? I just looked at a C-Verry research for Rick Krause, C-Verry, you'll find me

[00:36:56] with my email and my phone numbers.

[00:36:59] So this is a great thing you're doing me all.

[00:37:01] I look forward to this interview, your brain, the real estate community together.

[00:37:05] I appreciate that. I appreciate that. You're promoting it.

[00:37:09] Absolutely. There's a lot to like here in this state.

[00:37:11] There is. There absolutely is.

[00:37:13] I appreciate it. Thank you.

[00:37:15] Thanks for listening.

[00:37:16] If you're enjoying the show, may I ask a favor of you?

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[00:37:58] Until next time, keep investing in Iowa.