บทถอดความฉบับเต็มของ Navigating Distress in Investment Real Estate EP 004

for rent, an SFR portfolio that we acquired individually in 2020, 2021. 00:02:04.400 --> 00:02:09.840 So not multifamily assets, literally single family homes across seven of the 10 states we're in. 00:02:09.840 --> 00:02:20.319 So in today, with the Rhodes Act that happened a few months ago, uh, what this means is owning a single family portfolio, honestly, is kind of like having a Monet. 00:02:20.319 --> 00:02:22.960 Uh, and it's one of the things that that I said at Blueprint. 00:02:22.960 --> 00:02:27.599 So, you know, we have a lot to talk about about scaling, about growing, about opening different markets. 00:02:27.599 --> 00:02:30.879 Uh, so it's something that we've done and been there personally. 00:02:30.879 --> 00:02:32.960 Uh, my wife and I have four children. 00:02:32.960 --> 00:02:36.479 So I am mostly a chauffeur in the evenings. 00:02:36.479 --> 00:02:38.400 Actually, real quick, funny story. 00:02:38.400 --> 00:02:41.520 I met a guy a couple years ago and ran into him. 00:02:41.520 --> 00:02:43.759 Uh, he came to a class that I spoke at. 00:02:43.759 --> 00:02:46.000 And I ran in him like a year, year and a half later. 00:02:46.000 --> 00:02:48.400 And this is now going back maybe 12, 18 months. 00:02:48.400 --> 00:02:49.680 And he asked how things are going. 00:02:49.680 --> 00:02:52.479 And and I looked and I was like, Well, I'm just an Uber driver these days. 00:02:52.479 --> 00:02:55.680 And he got a very conf concerned look on his face. 00:02:55.680 --> 00:02:57.360 And I realized what he heard. 00:02:57.360 --> 00:02:58.719 And I said, No, sorry, sorry, sorry. 00:02:58.719 --> 00:03:00.479 I'm just a chauffeur for my kids. 00:03:00.479 --> 00:03:02.479 I'm not driving Uber to make a living. 00:03:02.479 --> 00:03:07.199 And he and he looks at me and says, Man, I thought things had gone really bad for you. 00:03:07.199 --> 00:03:10.080 Um, so, you know, I'm an investor individually. 00:03:10.080 --> 00:03:13.360 My wife and I own 40 some units of rental real estate. 00:03:13.360 --> 00:03:19.599 So I, you know, my job is to uh to help, to coach, to teach, to invest. 00:03:19.599 --> 00:03:23.840 And we'll get to this, but we as Atlas are no longer pencils down. 00:03:23.840 --> 00:03:26.560 We've been pencils down for three years, but we are buying again. 00:03:26.560 --> 00:03:28.560 So and we can talk about that a little bit too. 00:03:28.879 --> 00:03:29.120 Yeah. 00:03:29.120 --> 00:03:38.000 Well, you've just said a whole bunch that I want to dig into that I, you know, I think it will be very interesting to the people that are listening in, um, especially about the pencil down part. 00:03:38.000 --> 00:03:41.280 Why don't we talk about that and just jump right into a hot topic? 00:03:41.280 --> 00:03:44.159 Because I think there's been a lot of people that can relate to that. 00:03:44.159 --> 00:03:47.120 You know, there really hasn't been a lot of movement for various reasons. 00:03:47.120 --> 00:03:50.159 Tell me a little bit about that and and where you're seeing the light now. 00:03:50.479 --> 00:03:50.639 Sure. 00:03:50.719 --> 00:03:58.080 And at Blueprint, we talked a lot about BTR, the built-to-rent space, for those that don't know the acronym, but is, you know, what is BTR? 00:03:58.080 --> 00:03:58.960 Are we seeing it? 00:03:58.960 --> 00:03:59.840 Are we buying again? 00:03:59.840 --> 00:04:01.520 But here's the 30,000-foot view. 00:04:01.520 --> 00:04:12.240 So when interest road rates rose at the rapid that they did in 2022, most investors, us included, just stopped buying because it didn't make sense. 00:04:12.240 --> 00:04:14.080 We couldn't make sense of the world anymore. 00:04:14.080 --> 00:04:16.000 But that's not just interest rates. 00:04:16.000 --> 00:04:26.079 It's interest rates, it's tariffs, it's taxes, it's insurance, it's wars, it's all of these things that we just didn't know what to do. 00:04:26.079 --> 00:04:28.639 So what do good investors do when you don't know? 00:04:28.639 --> 00:04:30.639 You just pause and say, like, take a breath. 00:04:30.639 --> 00:04:32.079 I'm not gonna force a deal. 00:04:32.079 --> 00:04:34.399 I'm just gonna wait for the deals to come to us. 00:04:34.399 --> 00:04:39.759 Well, over the last roughly nine, 12 months, we've actually seen deals again. 00:04:39.759 --> 00:04:49.120 But the deals that we are pursuing in what we call distressed real estate, but it's a niche or a niche, depending on how you like to say the word, inside that distressed real estate. 00:04:49.120 --> 00:04:50.079 Because everybody knows what that is. 00:04:50.079 --> 00:04:50.879 Distressed real estate. 00:04:50.879 --> 00:04:57.360 You buy a 70s vintage, 80s vintage, 90s vintage, buy it, own it, update it, raise the rent, sell the property. 00:04:57.360 --> 00:04:58.800 Well, we're not buying that. 00:04:58.800 --> 00:05:01.839 What we're looking at doing is buying financial distress. 00:05:01.839 --> 00:05:08.000 And what I mean by that, the acquisition that we did in January was a building that was built in May of 25. 00:05:08.000 --> 00:05:10.959 We bought it in uh January of 26. 00:05:10.959 --> 00:05:16.720 We're under contract right now on a building in Denver MSA that was built in 2023. 00:05:16.720 --> 00:05:20.560 And so we're buying things where there is financial distress. 00:05:20.560 --> 00:05:30.160 And generally, what that looks like is a, without getting too technical about it, but bad debt or bad financing on a very, very good asset. 00:05:30.160 --> 00:05:33.519 So not operational distress, financial distress. 00:05:33.519 --> 00:05:36.879 And we come in and do what's known as a basis reset. 00:05:36.879 --> 00:05:39.680 So we get a big discount, reset the basis. 00:05:39.680 --> 00:05:56.079 The generally the current owner goes away, the bank takes a small haircut, and we're able to acquire something at below replacement cost, which is one of our pillars to do this, at financial distress with good

financing on it, and then own it for the near term. 00:05:56.079 --> 00:05:59.360 And when I say near term, I'm talking three to five, maybe six years. 00:05:59.360 --> 00:06:09.759 Uh, let the world do its thing, operate it positively and operate it well today, and then let the price take care of itself on the back end. 00:06:09.759 --> 00:06:17.680 So buy strongly positioned assets, operate them the right way, and then have good financing on it, and then be patient. 00:06:17.680 --> 00:06:19.519 So a basis reset with patience. 00:06:19.519 --> 00:06:21.439 And frankly, we're property managers. 00:06:21.439 --> 00:06:24.399 By definition, that makes us among the most patient people out there. 00:06:24.399 --> 00:06:29.920 Because for all your listeners, most of them are like, I want to be an investor, but I do not want to be a property manager. 00:06:29.920 --> 00:06:30.399 Why? 00:06:30.399 --> 00:06:32.079 Because it's hard and it's annoying. 00:06:32.480 --> 00:06:32.879 My gosh. 00:06:32.879 --> 00:06:33.279 Yes. 00:06:33.279 --> 00:06:36.319 And how many times have I had this conversation with owners? 00:06:36.319 --> 00:06:41.439 Well, we want to sit back, we like this as an investment opportunity, but manage it, uh, let's leave those. 00:06:41.439 --> 00:06:43.600 Let's leave it to the big guys, right? 00:06:43.600 --> 00:06:44.240 Yep. 00:06:44.240 --> 00:06:45.199 Right. 00:06:45.199 --> 00:06:47.680 But yes, and and operating well. 00:06:47.680 --> 00:06:54.160 I think I think you you identified a really key ingredient, you know, obviously having good financing. 00:06:54.160 --> 00:06:56.800 And we've seen some things unravel, right? 00:06:56.800 --> 00:07:01.759 Um, I can think of a lot of deals that have were not written well in the short term. 00:07:01.759 --> 00:07:04.160 And those are coming back on the market. 00:07:04.160 --> 00:07:11.279 And I I love the approach with um, you know, looking at this as financial distress versus operational distress. 00:07:11.279 --> 00:07:20.399 But tell me how you're positioning the company with the operations and how you're solving for that because there's also really great opportunity there. 00:07:20.399 --> 00:07:27.600 I mean, face it, you know, the the all of the the years that we could ride on on great results versus great operations. 00:07:27.600 --> 00:07:29.279 And now you got to have it all. 00:07:29.279 --> 00:07:31.839 So how how are you, how are you doing that? 00:07:32.160 --> 00:07:34.319 So, so we take a unique approach to this. 00:07:34.319 --> 00:07:36.079 I sit in my office in in Denver. 00:07:36.079 --> 00:07:38.240 Uh, we are operational in 10 states. 00:07:38.240 --> 00:07:44.319 And one of the things that we do is we're very picky and choosy as to, first of all, the assets that we will buy. 00:07:44.319 --> 00:07:48.240 Um, and then more importantly, we're also picky and choosy on the assets. 00:07:48.240 --> 00:07:52.720 You know, if you come to me and say I own X, I may

look at you and be like, yeah, we don't want to operate that. 00:07:52.720 --> 00:07:53.279 Why? 00:07:53.279 --> 00:07:54.959 Because it doesn't make sense. 00:07:54.959 --> 00:08:00.720 The, the, the amount of money that I would need to charge you in order to make it profitable for both of us just isn't there. 00:08:00.720 --> 00:08:16.639 So one of the things that we we talk a lot about a culture of discipline is the ability to say yes, but also the ability to say, no, I like you, I love you, I love your company, but but I don't want to get in bed in terms of that kind of asset, whatever that asset is. 00:08:16.639 --> 00:08:18.800 So, and and and that just depends. 00:08:18.800 --> 00:08:22.480 Uh, and that is in our DNA, just the ability to say no and be patient. 00:08:22.480 --> 00:08:25.920 Because I think patience is a thing that most people lack. 00:08:25.920 --> 00:08:35.279 But in terms of operational, I think what's interesting, in order to scale across markets, and I know your listeners are interested in scale, you really have to have technology. 00:08:35.279 --> 00:08:40.399 And we have a certain particular way of doing things, and we like to do them our way. 00:08:40.399 --> 00:08:48.559 So when we open a market, as two examples, we opened Athens, Georgia, and we opened Cheyenne, Wyoming in 2026. 00:08:48.559 --> 00:08:54.399 And the way we do this is we have a team that goes into those markets that does it our way. 00:08:54.399 --> 00:09:02.159 They hire local boots on the ground and train them our way with this is how we expand, this is how we operate. 00:09:02.159 --> 00:09:08.960 These are the expectations that we expect you to follow in order to make this a viable asset. 00:09:08.960 --> 00:09:17.759 And we've learned that over years and years and years of how do we functionally and how do we expand markets well? 00:09:17.759 --> 00:09:20.480 Uh, and that's the way, that's generally the way we do it. 00:09:20.480 --> 00:09:24.799 And both of those markets, both Wyoming and Athens, we didn't actually buy those assets. 00:09:24.799 --> 00:09:28.000 We were asked by partner companies to come to us. 00:09:28.000 --> 00:09:30.240 They came to us and said, Hey, we open this market. 00:09:30.240 --> 00:09:34.879 We like the way you do things in other markets, go open this market for us on our behalf. 00:09:34.879 --> 00:09:37.039 So that that is one of the ways that we do it. 00:09:37.039 --> 00:09:39.759 Then we get to do it our way with our technology. 00:09:39.759 --> 00:09:42.240 And that's what AI has allowed us to do. 00:09:42.240 --> 00:09:44.159 You know, we talk a lot about a blueprint. 00:09:44.159 --> 00:09:45.600 What is the AI? 00:09:45.600 --> 00:09:46.559 How do we do this? 00:09:46.559 --> 00:09:47.919 What's the best use? 00:09:47.919 --> 00:09:53.759 And I think technology has, you know, versus 10 years ago, it is very, very human-centric. 00:09:53.759 --> 00:09:56.080 And the property management business still is.

00:09:56.080 --> 00:10:02.320 But with technology, you just have a quicker view into what's going on. 00:10:02.320 --> 00:10:05.279 And we can talk more about how we're using AI if you'd like. 00:10:05.279 --> 00:10:14.240 But I would say uh uh AI and technology has really allowed us to expand better and more efficiently for our customers and our clients. 00:10:14.559 --> 00:10:16.559 And that is no easy feat, by the way. 00:10:16.559 --> 00:10:32.559 Um, you know, in in expansion and in growth, some of the biggest mistakes we've seen has been in doing that poorly and where you don't have a large footprint in a market that can be very difficult if you don't have the technology to leverage there. 00:10:32.559 --> 00:10:41.600 And so, yes, I definitely want to dive in to blueprint what happened there and some of the technology that you're willing to share that you're leveraging because that's really where it's at. 00:10:41.600 --> 00:10:43.919 I think you said something too about speed. 00:10:43.919 --> 00:10:51.200 And we talk a lot about that um with our listeners, as you know, technology relates to acceleration. 00:10:51.200 --> 00:10:57.919 It doesn't necessarily replace people, but it definitely accelerates their ability to be able to have an impact. 00:10:57.919 --> 00:11:00.639 So yeah, the floor is open, Mike. 00:11:00.639 --> 00:11:03.679 Tell me, tell me what Blueprint was like, tell me what you got out of it. 00:11:03.679 --> 00:11:06.080 Tell me, yeah, tell me about what you're using. 00:11:06.480 --> 00:11:07.519 So a couple thoughts. 00:11:07.519 --> 00:11:11.600 And uh don't get mad at me if I don't agree with everything everybody said there. 00:11:11.600 --> 00:11:13.120 That's you know, you get to know me well enough. 00:11:13.120 --> 00:11:16.399 I disagree generally with a lot just for fun because it makes things interesting. 00:11:16.399 --> 00:11:21.519 Um the the one thing that I can say is that I spend a lot of times at conferences. 00:11:21.519 --> 00:11:27.039 A lot of times I do this on the operators' conferences or the financial side of conferences. 00:11:27.039 --> 00:11:33.200 Blueprint, it was unique in that everybody was so positive, everybody was so happy. 00:11:33.200 --> 00:11:45.840 It was like a feeling of excitement for this new technology and the new things and the problems that are going to get solved, which to be honest, for the last two years, I just don't feel that very often at conferences. 00:11:45.840 --> 00:11:55.919 It's more like I've heard survive till 25 and and then thrive, you know, and we just make it to 27 or whatever rhymes that way. 00:11:55.919 --> 00:11:57.519 You know, and that doesn't rhyme. 00:11:57.519 --> 00:12:03.600 So I I am I have never said that I am a uh a poet, but that's what we've heard for years and years and years. 00:12:03.600 --> 00:12:09.200 And man, Blueprint, it was just a feeling of excitement and be like, yes, this is the problem that we're gonna solve. 00:12:09.200 --> 00:12:29.440 What I find interesting so much so often is that at Atlas, because we are owners first and we spend so much time talking to investors and owners, one of the things that I think is missed at uh at a place like Blueprint, everybody, I I probably heard the phrase resident experience no less than 100, 150 times. 00:12:29.440 --> 00:12:35.919 What I find is that one of the things we focus on is PM or property manager health. 00:12:35.919 --> 00:12:40.159 It, you know, you have you have a couple different stakeholders as a property management company. 00:12:40.159 --> 00:12:43.039 You have the resident, which is exceedingly important. 00:12:43.039 --> 00:12:54.639 But if the property manager isn't healthy, and and I don't mean healthy like they have a cold, I mean healthy like the ability and the way to effectively do their job, they need to be healthy. 00:12:54.639 --> 00:12:57.279 But then there's a third piece, which is the owner. 00:12:57.279 --> 00:13:02.960 If the owner's not healthy or the owner is upset, then things are out of balance. 00:13:02.960 --> 00:13:17.360 So we spend a lot of time as an executive team talking about all three layers and three levels of our business, the the resident, which is exceedingly important, but also the property management and manager health, along with the owner health. 00:13:17.360 --> 00:13:26.080 And if you can solve all three of those, and it doesn't always work, but if you're if you're constantly trying to make things better for all three, that's how you win the game. 00:13:26.080 --> 00:13:29.840 And it's one of the reasons that we've been able to effectively scale so much. 00:13:29.840 --> 00:13:32.799 You know, we have a say around here bad news uh faster and first. 00:13:32.799 --> 00:13:41.919 And it's one of those things like if you have bad news, get it to the party that needs to hear it so you can solve it fast and effectively. 00:13:41.919 --> 00:13:45.440 Uh, and it is one of the reasons that as a property management company, we're profitable. 00:13:45.440 --> 00:13:47.120 It's been, it's been fantastic. 00:13:47.120 --> 00:13:58.080 I mean, this is the last three years, last four years, anybody that argues that it's been anything less than a fist fight, you're just not trying hard enough because it is a fist fight. 00:13:58.080 --> 00:14:02.000 But we've been able to navigate this uh and come out profitable on the other side. 00:14:02.000 --> 00:14:09.519 And I'm really proud of that from our executive team all the way down to the brand new employees that are just learning, you know, who we are and what we do. 00:14:10.000 --> 00:14:21.360 Well, and I know we had a chance to talk a little bit about this, which I think is so valuable because you're talking about, you know, the DNA of your company and how that really can make a huge difference, the culture, et cetera. 00:14:21.360 --> 00:14:26.639 And we talk about culture and we kind of throw it around the core values being

slapped on the wall, all the stuff. 00:14:26.639 --> 00:14:29.200 But you talked about a culture of discipline. 00:14:29.200 --> 00:14:33.759 And when I hear that, I hear accountability and I hear execution. 00:14:33.759 --> 00:14:36.080 And those are some of the things that are missing. 00:14:36.080 --> 00:14:44.720 Tell me more about what it is to be in your culture at Atlas, this culture of discipline and how you think that's making an impact. 00:14:45.039 --> 00:14:46.879 So we have a few pillars that we live by. 00:14:46.879 --> 00:14:50.320 One of them is empowered, accountable. 00:14:50.320 --> 00:14:52.879 Uh, it's simple, empowered, and accountable. 00:14:52.879 --> 00:14:55.440 Now, property management isn't all not always simple. 00:14:55.440 --> 00:14:57.840 We try, but it's not a simple business. 00:14:57.840 --> 00:15:01.759 But we we lean into that to try to make it more simple. 00:15:01.759 --> 00:15:17.279 And then at empowered, we try to give the team, and when we do our property management, we set it up like teams, a manager at the top with a couple employees that report to that manager, because our average portfolio is give or take, roughly 400 dollars per what we call pod. 00:15:17.279 --> 00:15:19.279 So property manager pod. 00:15:19.279 --> 00:15:22.159 And and then it's the accountable. 00:15:22.159 --> 00:15:23.919 We've we've tried to make it simple. 00:15:23.919 --> 00:15:30.799 We've empowered you to make the decisions that benefit you, your owner, your residents, and your team members. 00:15:30.799 --> 00:15:32.879 And then we're gonna hold you accountable to that. 00:15:32.879 --> 00:15:36.159 But as a leader for me, I want to get out of your backswing. 00:15:36.159 --> 00:15:39.919 I I want to know that you're gonna do what's in your best interest. 00:15:39.919 --> 00:15:55.919 And one of the things that I say frequently, and it's probably easier for me coming from a background in sales, is I'll ask our brand newest employees and say, hey, if you had to pick, what are the two most important things that you do in your daily job? 00:15:55.919 --> 00:16:01.360 And it's fascinating how many times as leaders, we don't actually need communicate that effectively. 00:16:01.360 --> 00:16:08.000 And the people that we ask, so for your listeners, I would challenge you, don't ask the question you, because you'll scare people. 00:16:08.000 --> 00:16:10.000 You'll scare like, why are you asking me? 00:16:10.000 --> 00:16:14.000 Have your have your management layer ask their direct reports. 00:16:14.000 --> 00:16:21.200 What is your number one most important thing that if you do this job job, you keep your job. 00:16:21.200 --> 00:16:24.159 If you do this not, you do not keep your job. 00:16:24.159 --> 00:16:27.679 And you know, it that's that's nuance and it's not the same. 00:16:27.679 --> 00:16:41.039 But I think that's the discipline of when you have mistakes being made, or when you have somebody that's not pulling their weight, is having the discipline and the intestinal fortitude to go to them and say, hey, what's going on? 00:16:41.039 --> 00:16:42.080 What is going on? 00:16:42.080 --> 00:16:49.919 And what's interesting is going back to Blueprint for a second, AI has allowed us the technology to that semantic layer. 00:16:49.919 --> 00:16:54.080 Now, I don't know what those words mean, but um, you know, like I said, I'm a simple sales guy. 00:16:54.080 --> 00:17:00.960 So AI and semantic layers and data and porting and outfolio integration, you know, we say all these things and I I make light of it. 00:17:00.960 --> 00:17:12.480 But the fact is that when you can pull real-time reports and AI has allowed us to integrate with outfolio, which is a system of record we use, we can pull company reports, we can pull individual reports. 00:17:12.480 --> 00:17:15.279 I think I mentioned earlier my wife and I own 40-sun rental units. 00:17:15.279 --> 00:17:30.799 If I wanted to just look at my portfolio and see what my leasing renewal rate is to see what vacancy is, what turn times cost, I can drill down using AI, can get it a very accurate look for zip codes, for streets, for buildings, for portfolios. 00:17:30.799 --> 00:17:43.839 And that has made us more effective because then we can go in and coach or teach or ask questions that we wouldn't have known to ask uh, you know, six, maybe not six months ago, but 16 months ago. 00:17:44.160 --> 00:17:44.799 Yeah, yeah. 00:17:44.799 --> 00:17:47.119 And I'm very familiar with that folio. 00:17:47.119 --> 00:17:51.200 Um, a couple of my clients utilize that as their operating system. 00:17:51.200 --> 00:17:53.359 And yeah, they they are on the cutting edge. 00:17:53.359 --> 00:17:54.960 And I think you have to be, right? 00:17:54.960 --> 00:17:58.960 Um, it's really necessary for us to be nimble with technology today. 00:17:58.960 --> 00:18:01.200 It's changing every single day. 00:18:01.200 --> 00:18:07.039 And utilizing the AI component, I'm I've, you know, everyone's doing it a little bit differently. 00:18:07.039 --> 00:18:15.200 Uh, and the companies that are embracing it and making sure that it's integrated into their operations are the ones that are going to be ahead and are ahead already. 00:18:15.200 --> 00:18:21.200 I know that the environment at Blueprint, obviously, the people that are going there are, you know, forward thinking, they're innovative. 00:18:21.200 --> 00:18:28.319 Um, for but for people who are having some trouble with this, like governance and uh maybe getting some, you know, stuck in some of the weeds here. 00:18:28.319 --> 00:18:35.359 What are what's a piece of advice that you would give them on where to start with loosening it up a little bit and doing some experimenting? 00:18:35.359 --> 00:18:38.160 Because that's where I see some companies falling behind. 00:18:38.480 --> 00:18:39.039 Fear. 00:18:39.039 --> 00:18:40.880 I think most people don't do it. 00:18:40.880 --> 00:18:44.720 That

was the the way you phrased the question, I would say it's fear. 00:18:44.720 --> 00:18:45.759 Because guess what? 00:18:45.759 --> 00:18:51.279 You're the 24-year-old, the 28-year-old, even the 32-year-old is not afraid of AI. 00:18:51.279 --> 00:18:54.319 Your 50-year-old is afraid of AI. 00:18:54.319 --> 00:18:55.440 And they have this thought. 00:18:55.440 --> 00:19:06.880 I talked to somebody very specifically, I won't say who we're where, uh, blueprint, and I asked that question, and he said, Well, I manage 1600 doors, which is a good property management company. 00:19:06.880 --> 00:19:08.319 And I said, How much AI? 00:19:08.319 --> 00:19:11.759 And he's like, Well, it's not, he essentially said it's not broke, so we don't fix it. 00:19:11.759 --> 00:19:13.920 I was like, Cool. 00:19:13.920 --> 00:19:16.000 Give it six months and it will be. 00:19:16.000 --> 00:19:21.920 Now, maybe it's again, maybe it's not six months, maybe it's six days or six weeks or six months or sixteen months. 00:19:21.920 --> 00:19:22.480 I don't know. 00:19:22.480 --> 00:19:30.240 But the idea is I think most people think that it's not broken, but your lower level employees think that it is. 00:19:30.240 --> 00:19:31.519 We think it's not. 00:19:31.519 --> 00:19:32.799 Oh, we're profitable. 00:19:32.799 --> 00:19:35.039 So therefore, we're not going to fix anything. 00:19:35.039 --> 00:19:42.240 And you're not investing the time, the effort, and the energy to make positive changes that are going to positively affect you in the future. 00:19:42.240 --> 00:19:45.519 You just go, hey, I don't understand how to use Claude. 00:19:45.519 --> 00:19:46.240 And guess what? 00:19:46.240 --> 00:19:47.279 You know how I can say this? 00:19:47.279 --> 00:19:55.119 Because when it first came out, I'm on the older side of the spectrum and I've never been overly techie, but it's actually really helpful. 00:19:55.119 --> 00:19:59.279 I just spend time asking Claude, hey, I want to have you help me do XYZ. 00:19:59.279 --> 00:20:00.480 And it tells me how to do it. 00:20:00.480 --> 00:20:01.279 It's awesome. 00:20:01.279 --> 00:20:05.920 But it's embracing that fear and not letting the world pass you by. 00:20:05.920 --> 00:20:20.319 Uh, whether you're evaluating deals or running property management or investing or whatever it may be, it's it's getting over that first step to say, man, I'm afraid, and admitting it, saying, This scares me. 00:20:20.319 --> 00:20:23.759 And it scares me because I don't know what I don't know. 00:20:23.759 --> 00:20:25.039 Embrace it. 00:20:25.359 --> 00:20:25.599 Yeah. 00:20:25.599 --> 00:20:34.640 And there's a lot of people, many, many people that will help, you know, and have, you know, a lot of great programs and and education out there for people who are just getting started with it. 00:20:34.640 --> 00:20:37.440 There's obviously a lot of people that are advanced, right? 00:20:37.440 --> 00:20:43.599 And they're using many of these AI uh as partners in crime, you know, the the thought partner. 00:20:43.599 --> 00:20:46.079 Uh, it's not just rewriting an email. 00:20:46.079 --> 00:20:48.559 It's really, you know, how do how do we make this business better? 00:20:48.559 --> 00:20:51.039 And let's really look at where we're off. 00:20:51.039 --> 00:20:54.240 Let's really identify and dig into what we can be doing better. 00:20:54.240 --> 00:20:58.799 And um, there's just so many, so many ways to be able to utilize it. 00:20:58.799 --> 00:21:11.839 I was talking to a client the other day and they were talking about, you know, the need to have the leverage of speed to really keep up with scale, which I thought was really interesting. 00:21:11.839 --> 00:21:15.200 In reverse, you're thinking that the speed will make you scale. 00:21:15.200 --> 00:21:22.799 But when when you're scaling, you also need the resources to be able to lean back on and have so that you can continue the pace. 00:21:22.799 --> 00:21:39.119 And so uh sort of in reverse, the chicken before the egg or the egg before the chicken, you know, I I love the way people are utilizing uh AI to and and in that thinking, but they are going to be that top, you know, top percent of uh the people that are leaping ahead. 00:21:39.119 --> 00:21:46.400 And did you hear anything regarding that, like pace and and who's ahead and and you know, what's happening with the people that are falling behind? 00:21:46.400 --> 00:21:48.000 Because it's gonna happen, right? 00:21:49.039 --> 00:21:50.720 Well, and what you're talking about is efficiency. 00:21:50.720 --> 00:21:59.759 And and we we talk a lot about we talk at these conversations with Blueprint, and we have the these conversations with our internal team that this concept that AI does. 00:21:59.759 --> 00:22:01.599 Make you more effective. 00:22:01.599 --> 00:22:08.880 AI does make things faster, but what are the things that you haven't thought of yet? 00:22:08.880 --> 00:22:14.559 What are the things that AI now makes possible that were never possible before? 00:22:14.559 --> 00:22:16.720 You know, and it goes to this wish list. 00:22:16.720 --> 00:22:21.200 If you could change two things, one thing, four things, what would it be? 00:22:21.200 --> 00:22:24.640 And in a lot of ways, AI does make that possible. 00:22:24.640 --> 00:22:30.079 And it goes back to my fear comment on your last question is what is holding us back from this? 00:22:30.079 --> 00:22:34.000 It's just the it was never possible, so we never thought about it. 00:22:34.000 --> 00:22:38.480 And I think that's the stagnant uh nature of just comfortability. 00:22:38.480 --> 00:22:46.480 We we go, well, I'm not gonna challenge a status quo because that's too hard, or I'm afraid to do that. 00:22:46.480 --> 00:22:48.000 But AI makes it possible. 00:22:48.000 --> 00:22:52.480 So it's it's both efficiency and innovation. 00:22:52.480 --> 00:22:58.640 And sometimes I go to some of these conferences like Blueprint, and I'm

like, oh, that's a really good idea. 00:22:58.640 --> 00:23:01.519 But unfortunately, I don't need to hire you to do it for me. 00:23:01.519 --> 00:23:02.799 I can do it myself. 00:23:02.799 --> 00:23:07.279 And I again I don't mean me personally, and frankly, I probably can't do it myself. 00:23:07.279 --> 00:23:10.240 But one of our tech team can. 00:23:10.240 --> 00:23:14.640 You know, so and I I think that is one of the things that we have done, and it it speaks to who we are. 00:23:14.640 --> 00:23:17.119 We invested in our data centers. 00:23:17.119 --> 00:23:21.920 Um, and I don't mean data centers in the in the the current term of building big data centers. 00:23:21.920 --> 00:23:25.039 That's not what I mean, but our data team is probably more accurate. 00:23:25.039 --> 00:23:34.319 We have people on that team that we invested in, been doing this for two years, three years now, that have spent a lot of money on this uh from a salary perspective. 00:23:34.319 --> 00:23:36.319 So we are on the front side of that. 00:23:36.319 --> 00:23:41.519 And it's actually, to your point, allowed us to scale because we have visibility. 00:23:41.519 --> 00:23:46.400 We actually know what's going on in our business rather than, again, we're in Denver, Colorado. 00:23:46.400 --> 00:23:48.240 We just opened Athens, Georgia. 00:23:48.240 --> 00:23:50.000 What's going on in the portfolio? 00:23:50.000 --> 00:23:53.519 I could pull it up and say, this is what is exactly what's going on. 00:23:53.519 --> 00:23:58.319 This is where vacancy sits, this is where leasing sits, this is where maintenance sits, et cetera, et cetera, et cetera. 00:23:58.319 --> 00:24:11.599 So it's it allows us to scale and operate better and faster and more effective for the client who is both the owner and the client who's the resident, and then the team member who's running the whole show. 00:24:11.920 --> 00:24:12.160 Yeah. 00:24:12.160 --> 00:24:13.200 I love it. 00:24:13.200 --> 00:24:13.759 I love it. 00:24:13.759 --> 00:24:15.839 I know we talked about um pre-show too. 00:24:15.839 --> 00:24:21.440 And you're speaking very much like the entrepreneurs that I get the privilege of surrounding myself with. 00:24:21.440 --> 00:24:31.039 And one of the things that they talk about is that no matter how large you get, that entrepreneurial spirit is different than um anything else. 00:24:31.039 --> 00:24:39.599 And it has to do with some ownership of what you do and also that forward thinking, that agility, the discipline, all of it. 00:24:39.599 --> 00:24:41.359 I'm thinking of Jocko right now. 00:24:41.359 --> 00:24:43.839 I'm sure you're familiar with uh extreme ownership. 00:24:43.839 --> 00:24:49.200 But tell me a little bit about your entrepreneurial uh experience because you own your own deals. 00:24:49.200 --> 00:24:53.119 You've got that under your belt and really you've helped build a business, right? 00:24:53.119 --> 00:25:05.279 So tell me a little bit about entrepreneurship

in your in your mind and maybe some tips for our younger or just starting entrepreneurs out there that uh are looking to accelerate and scale. 00:25:05.599 --> 00:25:06.079 Awesome. 00:25:06.079 --> 00:25:09.359 And I would say, and I say this a lot, it's it's it's one of my favorite things to say. 00:25:09.359 --> 00:25:11.440 Most people think we're talking about money. 00:25:11.440 --> 00:25:13.920 And I would say we're not talking about money. 00:25:13.920 --> 00:25:18.960 It feels when you're 25 or 22 or even 30, you think you're talking about money. 00:25:18.960 --> 00:25:27.519 Today, in hindsight, what you're talking about is options, the ability to choose, the ability to say, nope, I don't want to do that, or yes, I do. 00:25:27.519 --> 00:25:37.039 And the question that I would ask all your listeners is think about what is your relationship with your future self. 00:25:37.039 --> 00:25:39.039 And that's something that I think we forget. 00:25:39.039 --> 00:25:42.640 Sometimes we make decisions today and we just make those decisions. 00:25:42.640 --> 00:25:54.559 But if you think about it and you frame it in the reference of if I, you know, not go without today, but if I make the harder decisions today, how does that benefit my future self? 00:25:54.559 --> 00:25:58.640 You know, and it's something that I, that I coach and teach and talk about with my children. 00:25:58.640 --> 00:26:04.319 You know, I just this idea that I do things today because it benefits the future me. 00:26:04.319 --> 00:26:07.680 I mean, you could boil that down to diet and exercise. 00:26:07.680 --> 00:26:16.799 I mean, how many people do we all know that that they're they're getting up there in age and they're like, man, I have not treated my body physically very well for the last 10 years. 00:26:16.799 --> 00:26:19.440 And now it's there's consequences to it. 00:26:19.440 --> 00:26:23.119 So it is that from an entrepreneurial side. 00:26:23.119 --> 00:26:27.119 And then the second thing is I would make the same fear comments. 00:26:27.119 --> 00:26:35.119 Uh, what's interesting about us as a company is our average employee owns 2.4 doors of rental real estate. 00:26:35.119 --> 00:26:48.319 So what we've done, and this is something that I'm very passionate about, and I built a program without getting into this, but teaching our, I don't know how many times I say this, but when I speak to the like the new hire orientation, I will say these words. 00:26:48.319 --> 00:26:52.480 You come to work for us, you will make a paycheck and you will make a decent paycheck. 00:26:52.480 --> 00:26:55.519 And the longer you're here, in theory, you will make more and more money. 00:26:55.519 --> 00:27:02.400 However, if that's the only reason you're here, you're letting the best that this company has to offer go away. 00:27:02.400 --> 00:27:03.839 And people are like, well, what does that mean? 00:27:03.839 --> 00:27:08.079 It's like, we and I will teach you how to own real estate. 00:27:08.079 --> 00:27:13.119 If you want to put two commas in your name, think about that, what that means from a net worth perspective. 00:27:13.119 --> 00:27:14.559 Buy real estate. 00:27:14.559 --> 00:27:15.759 Because guess what? 00:27:15.759 --> 00:27:18.880 Most of us are not smart enough to invent the next widget. 00:27:18.880 --> 00:27:24.319 All of those brilliant people that Blueprint last week, many of them invented a widget. 00:27:24.319 --> 00:27:25.200 And guess what? 00:27:25.200 --> 00:27:29.920 Even those 60%, 30%, I don't know what the number is, isn't gonna work. 00:27:29.920 --> 00:27:37.680 But owning real estate for the long term over the course of human history has worked really, really well. 00:27:37.680 --> 00:27:40.559 So we lean into that and we coach it to our employees. 00:27:40.559 --> 00:27:44.799 But one of the things I might be even more proud of is we do it for our residents. 00:27:44.799 --> 00:27:46.480 We call it the virtuous cycle. 00:27:46.480 --> 00:27:54.240 So we take our residents and teach them how to own real estate and then teach them how to invest in real estate. 00:27:54.240 --> 00:27:55.680 And it starts the cycle over. 00:27:55.680 --> 00:28:17.200 Because if you really get down to the nut nuts and bolts of this, if you own your home, not even rental real estate, just your home, all of the things that it benefits positively for the nuclear family, you know, you're talking education, lack of poverty, lack of divorce, uh financial freedom, et cetera, et cetera, et cetera, that starts with ownership in the home. 00:28:17.200 --> 00:28:26.559 And if we can give that to our employees and give it to our residents, it is something that we can live, which is our motto, which is uplifting humanity through real estate. 00:28:26.559 --> 00:28:31.839 And I know it sounds altruistic, but anybody out there, if you don't believe me, call me. 00:28:31.839 --> 00:28:34.880 Let's have a cup of coffee or a cocktail, your choice. 00:28:34.880 --> 00:28:41.119 And we can we can argue about it in a very, very real and positive way because it does work. 00:28:41.119 --> 00:28:46.000 Because I think so much of business in America is what's in it for me. 00:28:46.000 --> 00:28:49.599 And I would ask you as an executive, wrong, what's in it for them? 00:28:49.599 --> 00:28:50.799 What are you giving them? 00:28:50.799 --> 00:28:57.279 And them can be your customer and not just your resident in our in this situation, but your employee. 00:28:57.279 --> 00:29:00.880 Maybe you're not in rental real estate, maybe you're in basket weaving. 00:29:00.880 --> 00:29:02.160 I don't know, whatever it is. 00:29:02.160 --> 00:29:04.960 Why do your people come and work for you? 00:29:04.960 --> 00:29:08.160 And one of the things is that I want you to have financial freedom. 00:29:08.160 --> 00:29:08.799 Quick story. 00:29:08.799 --> 00:29:10.240 I know we're we're getting close on time. 00:29:10.240 --> 00:29:12.240 I have a

good buddy of mine that owns a company. 00:29:12.240 --> 00:29:13.519 This is years ago. 00:29:13.519 --> 00:29:14.880 And he said to me, He's like, hold on. 00:29:14.880 --> 00:29:18.480 So you're telling me you teach your people how to buy real estate. 00:29:18.480 --> 00:29:19.759 And I was like, absolutely. 00:29:19.759 --> 00:29:22.160 And he said, but then they don't need you. 00:29:22.160 --> 00:29:29.599 He was of the ilk then, this thought that you pay them enough, you want them to have a big mortgage payment, you want them to have a car payment. 00:29:29.599 --> 00:29:31.200 So they have to come to work. 00:29:31.200 --> 00:29:33.759 I would argue with every leader listening. 00:29:33.759 --> 00:29:36.319 If you do it that way, it works for the short term. 00:29:36.319 --> 00:29:40.880 But any time that that employee sees a bigger and better deal, they will leave. 00:29:40.880 --> 00:29:44.640 I want you to come to work not for me, but with me. 00:29:44.640 --> 00:29:45.519 Why? 00:29:45.519 --> 00:29:50.000 Because if done right over the long term, you choose to come to work. 00:29:50.000 --> 00:29:54.400 That's the key to building a sustainable business over the long term. 00:29:54.400 --> 00:29:57.440 And it's something we talk about, think about, and uh try to lead from. 00:29:57.440 --> 00:30:00.079 It's not always perfect, but that's how we do it. 00:30:00.559 --> 00:30:01.359 I love it. 00:30:01.359 --> 00:30:10.480 I'm so thrilled to meet another person that is investing back in this way about educating not only your employees on how to have choices, right? 00:30:10.480 --> 00:30:18.240 To to inevitably be able to make really good choices without feeling like they have to because of financial burden, but also the residents. 00:30:18.240 --> 00:30:19.519 How cool is that? 00:30:19.839 --> 00:30:20.400 It's awesome. 00:30:20.799 --> 00:30:23.839 Yeah, it is, especially we need it now because it's really hard. 00:30:23.839 --> 00:30:28.079 It's really hard to own real estate, more so than any other time probably in our history. 00:30:28.160 --> 00:30:33.279 So I thought owners call me and go, You're selling my residents' real estate? 00:30:33.279 --> 00:30:34.400 How dare you? 00:30:34.400 --> 00:30:38.400 And and and my my answer is, dude, I'm not selling them anything. 00:30:38.400 --> 00:30:41.519 They you think they don't know that you can buy a house? 00:30:41.519 --> 00:30:42.720 Like, come on. 00:30:42.720 --> 00:30:55.119 And here's the funny the data, again, AI is making this possible, shows that the residents that are engaged in our ownership program, for lack of a better description, actually pay rent on time. 00:30:55.119 --> 00:30:57.839 They stay a little bit longer, they treat the asset better. 00:30:57.839 --> 00:31:04.319 So there's some very, very meaningful and real benefits to the owner of that piece of real estate. 00:31:04.319 --> 00:31:12.559 And once they understand that, they're like, wow, because it what it does is it breaks down the barrier of the resident-landlord relationship. 00:31:12.559 --> 00:31:14.799 The word landlord has been around for more than a thousand years. 00:31:14.799 --> 00:31:17.519 It's from feudal Europe, because he who owned the land was the Lord. 00:31:17.519 --> 00:31:20.960 Well, the idea is it's a contentious relationship. 00:31:20.960 --> 00:31:22.480 So how do we get around that? 00:31:22.480 --> 00:31:26.880 And we get around that, making sure that we're aligned and moving in the same direction. 00:31:26.880 --> 00:31:33.119 And we don't just try to do that with our residents, we try to do with our employees as well, our team members, because we want you to come to work. 00:31:33.119 --> 00:31:35.759 We don't want you to be forced or feel like you have to. 00:31:36.079 --> 00:31:45.200 Yeah, gosh, Mike, I could talk all day with you and I hope they'll come back because I think there's so many like loose ends out there that we could dive deeper into. 00:31:45.200 --> 00:31:48.480 Uh, I really want to thank you for all of what you've shared today. 00:31:48.480 --> 00:31:57.440 And I don't know if you're still doing keynotes, but I think it would be great if uh people could have you come in and and and rev up their teams because you do a really, really great job of that. 00:31:57.440 --> 00:32:04.400 Set aside, people want to get a hold of you to find out more about how to work with you or just pick your brain. 00:32:04.400 --> 00:32:05.440 How do they find you? 00:32:05.440 --> 00:32:07.039 Like where where do we find Mike? 00:32:07.359 --> 00:32:13.920 Email Michael, M-I-C-H-A-E-L at realatlas.com, or I'm not afraid to do this, my cell phone. 00:32:13.920 --> 00:32:15.759 Because if you look it up, you're gonna find my cell phone. 00:32:15.759 --> 00:32:18.880 It's 720-220-8500. 00:32:18.880 --> 00:32:23.440 So Michael at RealAtlas or my cell is 720-220-8500. 00:32:23.440 --> 00:32:26.640 I'm happy to talk to anybody because this is one of those things. 00:32:26.640 --> 00:32:28.720 This is long-term relationship game. 00:32:28.720 --> 00:32:35.359 And it's one of the reasons I like going to Blueprint every year is I'm getting to know people and go out to dinners and people that I see the year before and get to ask how it's doing. 00:32:35.359 --> 00:32:40.640 I met a guy that it was a startup last year, now he's pivoting, same, same industry, different something. 00:32:40.640 --> 00:32:45.759 So it it's, you know, but it's about being positive, making connection, and hopefully adding value. 00:32:45.759 --> 00:32:47.200 So happy to talk to anybody. 00:32:47.519 --> 00:32:49.839 All those relationships, yeah, for sure. 00:32:49.839 --> 00:32:51.359 Well, thank you again, Mike. 00:32:51.359 --> 00:32:54.640 And I just really appreciate the time and and all of the shares. 00:32:54.640 --> 00:32:55.200 Thank you. 00:32:56.160 --> 00:32:57.039 Thank you for having me. 00:32:57.200 --> 00:32:57.839 Yeah.