LeadingIE Episode 5 - Turning Real Estate Challenges into Opportunities with Jared Jones 💼🏡

[Music] you [Music] crazy we were talking right right before we started this and you guys by the end of this year are on track for 500 adus built out is that right yeah so um I think as of today uh we have like 178 in process and we've done just over 300 I believe in the last so we're we're somewhere in that in that realm yep that's wild that's amazing and um I think you're also mentioned that they can be anywhere from 60k to 200k so so the viewers can kind of do the math on that it's quite impressive yeah I mean it it's something that we stumbled into we we happened on to it and it's been really good for our business and especially as Real Estate Investors that's really it's been a huge shot in the arm for us so how many of those let's say 500 that you're building I know you're working on a fund where you retain some of those properties right as cash flow things I mean cash flow California right flow um what percentage of those 500 are ones that you guys are kind of retaining uh and cash flowing or going to be in the fund or how does that kind of work versus like ones for you guys versus ones for you know other people yeah so um our business model has been that we attract and deal with investors that we've been working with for a while um and we help them go through the steps of the process now we're shifting from that model to a model where we're taking in funds on bulk and so we're doing this private Equity Fund and from that perspective the projects that we move forward with in that fund we have participation like we have ownership and all of those yeah and so um with that we have U probably 50 of those product projects in development we have some ownership and some of them we own all of it some of them are for the fund and then um we still have a lot of our investors that we've been working with that we're able to um that we're still working through the process on their projects so okay we're we're we're kind of now moving into the position in our business where we have realized that the amount of equity and E that we download when we go out and find and do a project like this for our investors um versus the amount of lift that's required for us by the time everything's said and done um even though it's painful for those investors it's very asymmetrical like it's a very good return relative to what they could do just walking out on the street and buying a threx or a fiveplex or whatever and so as we figured that out we are long game like that's our whole thought process yeah we've got to keep the doors open right now but we would much rather instead of going out and flipping a project like this and making2 or $300,000 on a deal we know that if we can participate in that deal and keep it that long term it's a much bigger benefit to us as individuals and also to our clients and so that's kind of as we're looking at the way that we're headed um that's that's what we've been looking at and we've also been able to say to ourselves and that the the people the investors that we've dealt with substantially that have done multiple projects 10 20 30 projects those investors get better returns than the investors that do one or two and so as we scale economy well there's and really like even though this is this is kind of like a done with you solution that we've created for our investors even though that's the the case um we're always making decisions based off of what the availability of their cash is what the timing is for any specific um City to deal with that property specifically what are the weird nuances of that thing and so like if you have a garage and the plumbing doesn't run right through it or like there's all sorts of weird stuff that does have an effect and is a factor and how quickly things can be done and what they cost and so what what we figured out is those people that we've already done a lot with those are people that we retain and we're going to continue to do business with they understand the process how you resolve issues and and just real quick plug if if cash flow California like on Instagram and your social media if you're following that and you're watching some those videos You'll see a lot of those like you just had a a foundation crack or something like you have these weird issues that just come up like it's not like you just come in and it's an automatic okay these five steps boom bang we're out like you think like that's the plan right but it seems like from watching some of your videos like you get there and you're like we're on step three and all of a sudden now we've got you know this road block or this hurle yeah and start over on that or whatever it might be so yeah yeah and so um you know the the people that have been successful with us these investors that we've brought in from um our our clientele that already existed and and some new newer ones um the ones that do this in multiple they're the ones that have the best success because for the most part they're like oh okay yeah that happens we move on and so like when a foundation cracks which by the way that's a that's a first for me I I I hope so I have flipped hundreds and hundreds of homes and that is the first time that that's happened but then we look at the project and we're like okay well this is a million dooll project and we're into it for $650,000 and so $20,000 isn't going to kick our butt um and so yeah like but those investors that can look at that take it in stride and move forward and not like have this major stress case about about it are the ones that we can work with however developing the fund gives us this position where we get to go out and find the projects and we get to decide what's best to do with the Project based off of best practice IES that we've learned off of our own projects and off of running projects for our investors and you don't have the the individual owner and the investor which obviously respect and appreciate but having them potentially out of the picture for the the day-to-day decision- making the planning the profitability yeah gives you more room to to just execute a profitable situation for your fund I imagine right correct correct and so one of the factors well two of the factors in that one is as we as we've been growing we've been onard boarding new investors every time and so there's this ex educational curve that you hit every time no matter what I can set expectations all I want yeah but until they feel for themselves if I give arranged I'm like look it's six to nine months to get permit they hear six and start panicking when it's eight and a half they're they're like hey what the hell and it's like look dude like and and sometimes that six to N is a year now one of the things that we have realized over the last little bit we were doing a lot of conversions um to garages lots of things like that and and still are in process on a lot of those but they don't necessarily return the best they're the just the quickest cheapest way to do it and so you're gutting it and adding to it versus like a ground up but with a ground up and you have your pre-approved plans yeah that's 69 months that's the sneaky trick that I was just going to you that yeah that is a real win in the fund it is more money to do a ground up but its value as a rental is higher its value as a like a resale value is also for the overall property I imagine the resale value is going to go up sign now on those properties are you buying the whole property and then doing something like maybe a two or three unit in the front and then a ground up in the back or a mix or is the front property going to be a normal rental or how how will it work because I imagine with the fun you're gonna buy the whole property right not just yeah yeah correct and so that I mean what we're our Target project is one of two profiles either it's a single family with a good siiz backyard so this is for the fund and and that's kind of like so we've we're shying away from garage conversions and so when we do that yes it costs more money up front but when I've got you know our fund is 20 million bucks that allows us to do 20 to 30 projects at a time and then refinance out of them so one of the the Beauties with that though is as we look at this we're like okay if it costs more but it appraises for higher and it rents for higher my numbers are better so even though it's more a cash up front since I have more pull out for the next project yeah that's it so I mean it's so when I look at it from a 30,000 F foot view and say what makes the returns better that makes the returns better and then to what you just said is with Adu laws there's a new one that just came out in the beginning of this year that says once you've had a set of plans approved in the city it's now considered preapproved in that City for your next project so from a timeline perspective when we were saying six to n months to get plans approved then now we're saying well actually no it's 30 days it's 30 days to get our plans approved because they're already Engineers here what we're gonna do and they're like okay it's already you've already done it and you know look the cities love that right because the cities get their fees still they have a lot less work to do and you know for the most part the cities that we work with they want housing they the middle housing which is what these adus are you know these are for um the people that don't qualify for se8 yeah they're affordable housing but not Section 8 like affordable housing right right so they're to serve the lower middle and so for us as a company we are we're absolutely capitalistic however we are also alteristic all of my partners um in these businesses we all care about the greater good we all care about housing and I know that especially at the position that we're in now like a lot of people are like a these are like just Rich guys that don't care we do we care we care about providing access to affordable housing in every neighborhood um in most neighborhoods right so um what in so as we're able to do that as we're able to go out and deliver this housing the cities are excited about that they want that and they want it big time the first time we met we were talking about they were it's 10 10,000 I think something units that they want in the next 10 years a thousand units well no it's more than that doesn't it I don't remember but there's a huge deficit for Supply on affordable housing we need in our little area over the next so in in the Inland Empire we need a million housing units over the next 20 years a million yes housing units for the next 20 years correct and so as that's the case you know as we're launching this fund and we're like look we're we're we're being very conservative five 5,000 a year um no no no that's 50,000 a year in the Inland Empire M affordable ones or just units in general 70% of the need in the market is affordable housing right now so yeah I mean a lot 35 of them 40 of them or whatever it might be yeah and so um in in our fun the way that we're doing this though is we're we're Del this is our first time you know even though we've done hundreds of these units and tons of these projects this is our first time doing it all in one fund so from that perspective um we're we're coming out and being super conservative in what we create and so we're saying hey we're going to be able to do like 400 doors or 500 doors whatever that number is when in reality by going out and building refinancing doing it again um and so reality is we think that we can do between 13 and 1,600 doors um with that $20 million Fund in the next 10 years and that is based off of our our actual performance like what we've actually been getting out of the money that we've been employing and refinancing yeah yeah and so as as we go through this process um we know that we're diving into this Market that's underserved because you've got really you've got two profiles for people that want to do adus 50% of the adus right now are being built by Mom and Pop for their dad for their kid yeah whatever that looks like I'm looking at maybe building house and putting an ad down there for the in-laws because it's their property like that kind of a that scenario right yeah 100% And and so you know people look at that and we're like oh well that's been available for a long time because like the in-law unit has been available um in Riverside at least the zoning ordinances have allowed that for a long time but that's not the same as an Adu and there's multiple reasons it's not the same one is that with a guest house the way that you're supposed to be using that is if you're going to rent the property out it's got to all be rented out to one person the whole property yeah the main house and the guest house or the whole Guest House correct correct right or there are depending on um it's either a primary residence or a rental property like no in between kind of or was right right or if one of the units is owner occupied then you can rent it out with certain restrictions it's age restricted or there's all sorts of different and that you know there's Riverside zoning code and then there's all the different City Zoning codes so that's one of the factors that makes it significantly different and I do know people who have been evicted from a guest house oh because the city found out that they were renting that Guest House individually and they had to move out and so they the city code enforcement got involved and they were done but has that changed or is that still an issue so here's the cool thing now if you've got a guest house one of the services that we offer through um one of the the verticals in our business our plan design company ad design right Adu Design Group yep and one of the services that we offer is hermitting unpermitted construction and or um like if you want to get that zoning or if you want to get that unit changed to an Adu even though it's a a guest house you can do that oh and then it allows you to rent it out individually so it has to be actually classified as an Adu that not a guest house now look in Riverside we I'm born and raised in Riverside and so um you can see on my arm that I just uh yeah boom okay perfect you see right there um I got my oranges you know I got my rain cross so I'm there um I love it but in reality with all the cities that we deal with with we've done like 24 25 cities over the last couple years that we've been getting permits in and dealing with from a code enforcement perspective on whatever those issues could be um permitting unpermitted structures and Riverside is actually the best what is so hold on what is you keep saying permitting unpermitted structures what does that mean okay so like say that you decided 10 years ago that you wanted to build an Adu in your backyard they didn't call it that then it was you know what a second unit whatever you want to call it but um you built it you didn't get permits to oh so literally unpermitted it never got permitted and I think like if you were under like 800 or 700 square feet you didn't have to get permits back in the day or is that um so for like well that's they just did it that's a good question I don't know what zoning ordinances were back in like the 50s or something like that but recently the only thing that was permissible is if you're 120 square ft or less for like a shed yeah that's literally but you're still not allowed to have power or Plumbing or any of that kind of stuff and I'm not saying um that as a flipper in my flipper days that I've never done anything like that without permits I mean okay whatever but in general um that's not the smartest way to go because the cost to do the permit and then get it all legalized from a marketability perspective on a resale from all the things it just doing it after the fact is more expensive than doing it it is and and we have people that were helping on that right now and sometimes that's a it's a 10 $20,000 difference especially if it wasn't built well um so but we can help people change the designation um so you still have to go through a full plan set and submitt and tell people what's built there like yeah but we we have a property over off of duffen that we we converted an office um into an Adu recently and that process was very simple so it already had a permitted kitchen separate separated office okay yeah yeah so it we we rented out to um a care facility but um it was it's attached to like this 3600 foot Barn oh and so um this office was permitted as an office um and it had a permitted bathroom so all we had to do is add a cooktop and hopefully not in the bathroom uh no no no plenty of space in this one it was good size but um but so all we had to do is add a cook top and then we had to add closets so we bought vanities or uh not vanities wardrobes off of Amazon uh for just the wall and it was lit literally the cheapest ones that we could buy but that was it that's all we had to do and we were able to get it permitted but you have to pay the fees you have to go through the process and I want to say that our conversion on that cost us a total of about N9 or 10,000 bucks wow to convert that into a space now how big was it SC feet 700 some odd so now they're renting that out for500 or 2,000 a month something I think we're getting 20 like 2200 so four months five months and you're all up oh for sure and but what so that one is what your use is that's available to you but the second one that is really important many people have seen news articles recently I'm I'm positive on condation of adus and so there's a law called a1033 that passed at the beginning of this or that came into effect at the beginning of this year where now you have an Adu in your backyard you're allowed to record a document um drop a an HOA plan or whatever and turn that into a unit that can be sold by itself on Fanny May Freddy Mack FHA VA will lend on it as a separate property now as a separate property and so like it's condo ising because like a condo you can pick they're like stuck together but it's one big building and each one can be individually sold so it's kind of one property that's okay yeah and so I mean it's so you can sell that separately separately somebody can own it separately and so that only works if it's an Adu it doesn't work if it's a guest house oh it doesn't work um garage conversion probably doesn't or can be it does but it it excludes what's called a junior Adu Junior Adu has to be attached to the house and it has to be 500 ft or less it doesn't have all of the requirements like you can have a shared kitchen in a junior Adu um and so there there's different things like that um so the junior 8s are exempt from that those can't be condis so right now the way the law works is that each city has the opportunity to adapt condation in their city now the state's given them permission they have to choose whether they're going to do it allow or not right right okay however uh first of all I like I look at this from a legal standpoint and you know I just one of my really close friends is our attorney we do a lot of business together we own property together and whatnot and so we chat um about this kind of stuff all the time and as we were talking like the city's always could adopt condom isation now the state is just saying like hey this is a great idea you can do it it's more an endorsement than a we allow it however they've also always been able to do adus by their own ordinance so what I have seen over the last five years as these laws have developed for Middle housing is that the state comes out with an idea slash an adaptation of somebody else's idea either in another state or in a city that's having success with that thing in California right and and then they say hey guys you can do this now like cities all around California you can do this and then they say two years down the road after three or four cities have adapted it and been successful with it they're like hey you have to do this like now so our perspective on this is if I'm a betting man I'm going to put big money on the fact that in the next two years that we are going to see condation as a mandate by the state and so you have to do that to an Adu they're gonna you're gonna have to you don't have to do it to the Adu the city has to allow it to do it okay okay okay and so Riverside's pretty housing forward they're working on some laws right now uh for for the city that are pretty aggressive homelessness and housing are the topic of every mixer every chamber function every meeting everything that anybody's talking about are those two topics you need to show up those are the two things that I you need to make the Economic Development Council meetings if you guys aren't chamber members you should join it then you should go to those meeting we haven't been rolling up so just that one once a month would be I think a good meeting for you guys yeah we we do need to some good committees to be involved in because there's a lot of advocacy and push for those things and the relationships with the city are helping progress those ideas yeah and so when we look at that that's where our money goes so we have a nonprofit that's attached to our business the bulk of our nonprofit um is to help with education and homelessness those are the things that we care about um and we're pushing for you know housing in general yeah um and so like we we care about those things and as um like as we're going through the process of working with the city of Riverside we see that they're very housing forward I wouldn't be surprised to see them adapt something before the state mandate set um I would love to see that but you it's needed the the I've drank the Kool-Aid with the chamber right just seeing how they interact so take it for what you will but that's that is the vehicle to help push those kind of things forward right if if yeah if Nick and the Chamber get behind that idea and start talking with the city and they have those conversations I mean we had Tano was there just recently and then and if they say this is an idea that we want to talk about they're like well we'll set a meeting we'll have that conversation so it's definitely something to consider you know putting a little time into if affording that is is good for the business right or for the community yeah well and so sometimes those things are tangential right like I um I care about what's good for the community like we're we've raised our family here we built our Dreamhouse here 5 years ago like we are not going anywhere yeah so we absolutely want to make sure that housing is provided now it's interesting to me um because we do get not a lot but we get some push back from Neighbors on this on the condation part of it or just AB in general yeah developing in people's backyard well I imagine it also depends on the demographics of the neighborhood let's say right like oh you're G to add affordable housing and I I imagine in their mind like you're going to bring down property values but flip side is it's bringing up potentially bring up property Val right and yeah and I mean the reality is the statement that gets made surrounding that like that it's going to bring down values it's it's not true right yeah and we can look at other markets where this has already been adapted for a long period of time and find that that's the case so we have actually had um a hate group formed For Us online um relative I think right well you know like and um they they put a lot of pressure on the city and went and talked to the city council and whatnot and the reality is when they got up and talked to the city council I was not at that meeting because obviously like like you know I'm not going there but I didn't even know that going to show up to that but I had a few friends that were there and the city's basically like yeah like adus are legal there's nothing we can do about it we have to permit it there's a housing problem like that's that's just what it is so next and so now that's what I was told about the meeting you may have some listeners that were actually at that meeting I don't know but what I do know is that there is a certain amount of privilege that exists Within our heads space in the United States where it's like those people or that demographic should not be allowed in my neighborhood yeah and what that is like for some people that's just a socioeconomic thing for some people that's racial right like whatever it is doesn't really matter to me we either have there there's two things to look at from my perspective we either have property ownership rights that allow us to do what we want to do on our property that we which I think we should yeah or we we are in a position where our neighbors should be able to determine exactly what we do because those things don't intersect very well well we're kind of I could be wrong this is more your space but we're kind of in the middle of both right because through advocating and changing laws neighbors can affect what you do with your property the the one of the things with like Title 20 Title 20 and like the like there was about to be potentially the law changed where it's not relev D used but if a historical property if they wanted to be deemed a historical property concurrently you have to get consent from the owner it's my property I don't want it to be you know I'll do what I want with it they were going to one of the Clauses that they want to put in there was that owner consent would be removed so like if we your house isn't brand new that wouldn't but somebody has an old house and they go we want this to be historic now they just go boom you're stamped historic now you can't take down your fence without approval you can't change the paint you basically live in the worst HooHa ever yeah so so so it's a my point though is is kind of a mix but I agree with what you're saying that should be one or the other yeah and so it's interesting because um you know the forces that work to create affordable housing often times also are the same forces that want to do that thing too right and so it and sometimes they want to do it on their own agenda as far as where and how and for in preservation I get it like we own a historical house here in Riverside um the Holden house um with with our attorney Ben and we get it like we it's a beautiful place and it should be preserved like where there there's government involvement and then there's neighborhood involvement and those are two different things and so yeah the the way that we that we look at this is yes the law is on our side that's fine but we also believe that the people are entitled to safe and affordable housing we believe that now people often will say like oh yeah cool you're a rich guy like whatever you've got a big property it doesn't affect you so you couldn't care and I'm going to recog recognize some of my privilege there and say okay at the same time um I have an Adu as my neighbor like I own the property and I have an Adu there I have a rental your neighborhood I have a rental direct now my driveway is super long so still like people can make whatever they AR argument they want but I want families that want to be in these little units like 7 00 to 1200 foot units I want them to have access to be in a neighborhood that they want to be in like if they want to go to a certain school but there's there's not affordable house like affordable housing in that area yeah well now we can create that well and you guys have uh I don't know how many of these are managed by but there is your investment First Property Management which I imagine tries to manage a lot of these adus yep and I assume and you can speak to it but I assume there are background checks based on sure background checks for yeah eligibility you know um legal issues credit whatever not not necessarily like whether you fit the demographic the area but whether you are going to be a reliable trustworthy tenant to the property and if that's the case then yeah and look here's my here's my argument to to that like because that's a thought process that yes obviously we're going to do that from an investment standpoint but somebody can come in um who is on Megan's Law and they can buy the house next door to you and you can't do anything about Megan's Law is a predator database oh yeah yeah yeah like okay and so you can have a felon that buys a house next door to you and guess what lots of felons have money right so just because you live in a you know a special neighborhood that means to you doesn't mean that you are safer if you have that can AFF a $2,000 rent or a $5,000 mortgage payment it it doesn't yeah bad people are in all walks of life all walks of life so like gosh gosh D it like what what's the guy that uh you know the had that private island Epstein right like top tier financially of life super super rich guy like scum of the earth though and yeah and that's and I so I don't subscribe to the fact that somebody's socioeconomic status determines whether they're going to be a good neighborhood now I will say that there is an actual issue that comes along with this and that is parking I was going to ask if okay so I was going to ask if especially with condo ising right does it have to have its own access does it have to have its own parking it has to have its own access it doesn't have to have its own parking okay so that could P spill out of the streets and I can see that being a concern for Neighbors yeah and I and get it I I really do I also two things first of all how many neighbors do you have in your community that have more than one generation living in that house a bunch of our very high percentage just in California in general it I I don't know the exact number but I know the amount of houses that I've drive by that have seven cars in the driveway or five cars and so is that different nine right right but is that different it's not different from a perspective of how many people are going to no the the difference is how many people are you're cramming into a structure versus multiple structures and ultimately it makes the housing all of the pieces of that housing more affordable right the main unit like the house that's existing I don't if it's a $3,100 a month rental as a house with a big backyard and a garage and then I go and take away the garage and give a portion of the backyard away well it's not $3,100 anymore it's probably 2,800 bucks so that makes that a little bit more affordable but then the affordable housing that I created from the garage maybe 16 to $1800 for a little one-bedroom but when you're staring down the barrel of 22 $2400 a month in rent for a bigger one-bedroom in an apartment complex 16 to 18 it's like studio apartments there's some that are yeah two three grand for studio apartment and Riverside of all places I mean it's wild yeah yeah and so and they're attached they hear their neighbor taking a leak or you know whatever versus the Adu if it's comparably priced but they they they get the um the value and the benefit of having their own space and that that sense of ownership or at least you know that freedom I would say yeah that's crazy yeah so we we like that um we think that that's um that's a benefit to the whole Market from affordable housing perspective um and so as we like and I I kind of touched on this before but the ability if you want your kid to go to King High School but there are no apartment complexes in that area and I'm not saying that there may be I think they're building one there maybe a couple up by uh the point being but the point is there's not affordable housing where you want to go put your into a safe and strong educational environment right right and not busting them or whatever like yeah and so the ability to be able to enter into that market with the housing I get that there are people that are upset about that and want to protect them fine like but those people I would imagine the people that are thinking about putting their kids into a good school probably have Ambitions to not being an Adu and will probably transition into home ownership in that area yeah if that's their goal right I'm sure they're like I mean maybe at least they're thoughtful of that right I used to think real estate investing was for everyone it's not I used to think that homeownership is for everyone it's not and so I'm not saying that homeownership is not a tool to hedge against housing inflation it absolutely is and I think that it's a very valuable thing to the average American family but we are shifting away from that model we one of the things that I think that is important for us to acknowledge about our identity in the Inland Empire is right now we're suburbanized but that's not where we're going we will be urbanized that's where we're going you give us 20 years that's what's going to happen there's some really good articles that came out that on that at the beginning of the year um Press Enterprise um did one based off of a study that was given to them uh through the state housing authority and that's just where we're going and so well this whole region is growing so fast it's just gonna get denser and denser and more urban it is the fastest growing region in California and it's one of the fastest growing region top 10 in the country or something yeah that's right and but it's not going to stop um you know we we sat down um with the city of Marino Valley they are a city that we do a lot of business with and their major Focus right now is has been industrial it's been um Logistics yeah Logistics mixed use kind of yeah stuff and they have done an amazing job over the last 15 years of bringing jobs to that City and there are some really big projects that were that they are working on to do that but who fills those jobs like people from out of the city well you're going to bring in World Logistics right that's going to be if is what it is it's going to be a ton of jobs but those are all going to be majority of those people if it's not robots is going to be affordable housing people yeah and so no the yeah that world UHS or something like that that program or that product is amazing um and what they're doing there is cool but one of the things that we've noticed and that we love with what we do about 70% of our tenants in Marino Valley live in Marino Valley work in Marino Val sorry obviously they live there they work in Marina Valley yeah and so they work there and live there and that's the Dream well and that now your affordable housing is also helping the economy the local economy they're not living in San burino or or H well not even like menife or something to commute in somewhere more affordable to commute in yeah it's staying there the tax dollars are St there the the spending at the stores I mean yeah and so I think that the switch from suburbanization to urbanization is a big thing to acknowledge and our goal when we started out doing this it was a flip hack right it's like oh cool we can just do this thing real quick and it adds value to our house and we get more rents go that's how we were looking at it now um as we've matured in our business and in our thought process and our resources um we're looking at this like what does this look like for us as a rental over the next 20 years and what does it look like for a community how can we be thoughtful one of the restrictions for parking you you don't have to provide parking for these units like not if you're close enough to a bus stop or public transportation for the units we do like almost 98% of the time it's not even an issue so understanding that usually what we would do is take a portion in the front yard and make more parking depending on what zoning says or allows that becomes a little bit tricky and so you can't some some cities require specific amounts of your front yard to be softscape or what not it's fine like I think I think all of those things are good um but it does we don't a whole neighborhood into a cement lot with parking lines and but I've seen where uh in some of your videos I've seen where you've taken areas that are not like even visible from the street are useless essentially and then pay them in a nice parking now you're tucking that away providing the access and yeah we try look we're trying to be thoughtful and create things that um are valuable not only as an asset but to the community and to the renter um who's going to to be there for the long period of time and use that space so we want to be conscientious housing providers that it and that's our aspiration I'm not saying that's exactly where we're at but as we go through this process like that's what we've been thinking about how do we provide something that gives a lot of value and sometimes that makes a shift and I you know I I posted a video last week um about um these about our fund but I I reference the fact that we have just adopted um a new design for one of our floor plans if you were 750 s feet or under in an Adu then for the most part most cities um do not charge school fees like I was gonna okay I'll ask about that question later because that's a question I had in my head yeah there there's just a lot of development fees and whatnot that you don't have to because now that's okay so this might distract you but but I was talking to somebody about I have a property my in-laws have a property that my my dream is to get to a point where I build my dream housee on this property up on Overlook with the subh house I talked about but one of the I was talking to m is like put another $100,000 into your planning for all of your it might not be that much but for your school planning your fees your process so one of the questions that was in my head earlier that I meant to ask was when especially with condo ising where now becomes a separate property do they then pay those school fees and stuff like that so I guess if it's over that square footage they do yeah and so I mean I do think from a fee perspective that the municipalities are going to have some discretion on how and what well I mean let me rephrase that I know that they have discretion so we'll see what they end up doing now when the condo isation hits on a Statewide law they can specify and say AC City here's all you can charge that's what they've done in the ad La um so you know we we'll see how that flows but I mean my wife and I built our own house as I said earlier and in that I want to say that our fees were like between development fees like just bringing my oh actually we don't have super on septic bringing on our um water line bringing on our electrical we had to um put um Transformers um I think I'm lucky there's one sitting on the edge of the lot so I'm hoping we can tie into that oh I'm sure you can yeah but for for our house like our panels I have two 200 amp panels on my house and and so like our system we needed 400 amps of power and so and I think each of those boxes gives like the ones that we have I think give like 800 amps or something like that but anyways so um I want to say that our development fees were somewhere in like that 70k range depending on how big a house you build it may or may not be well I think square footage way would be less than what I imagine you have but it will be septic because it's Overlook it's I think it's yeah yeah the the higher like I think you're in that other yeah yeah so similar it's um but if you stay at 750 or less then you avoid a lot of those fees in Riverside and so we have developed I posted this video and talked about the fact that we developed this 750 squ foot footprint where we had been doing two-bedroom two bath in them and one of the designers on my team which that's a decent two bed two bath size like it's good um it's not like huge it's not amazing but one of my designers came to me and he's like look if we were reduce the bedroom sizes to 10x 10 instead of 12x 10 which are not big bedrooms but they're bedrooms and you can fit a queen bed in one like um anyways he he showed me the floor plan and he's like look this is a tighter fit but you can get a three-bedroom two bath in this and so it's 750 now I'm picturing an RV shower like the shower the same regular tub kit showers like your normal um but is it one and a half bath or actually two bath it's two bath wow but your your living area is just not ginormous now now you've got a like a 21 by 13 living room area that includes a kitchen on one of the ends you know and so it's so it's it is it's a tighter thing right my wife and I our first property that we bought was a little condo is 912 ft and so as I was looking at the livable space in the condo that we had yeah with it was like 10% less just with the way that we laid out the floor plan and so I like that was totally fine for us until we had three kids and then it was a little too tight but we were also in a privileged position to upgrade at that right but we would have live and I know families that raised four kids in those cont I I don't know if I like your use of the word privilege so much for like you you worked for that right I mean yes but but I also at that point was financially capable to move up right but when you say privilege was that money just handed to you or did you no but it is still it's still look I've got I know a lot of friends that work very hard at what they do and they don't move up that way yeah they got in a career path and they did the thing and it's like they're on the hamster wheel that's right and I make you know it's like okay I'm making $25 now and I keep working hard and in four years from now I'm going to make 32 or five in but okay but man is that privilege or life choices not not to degrade on either side of it but yeah I mean look for me I there there's so many factors that go into that and one of the factors is who do you know that's huge and what is your mentality like because who do you know who do you know is actually huge you could that you could call that one potentially privilege right CU those connections can change your world 100% yeah no that that that's fair so there's that said is your choice yeah but however I I'm GNA I'm still going to push back on that and the reason and I there are absolutely that is a thing like you do we're all autonomous over ourselves but that doesn't mean that our conditioning was not given to us in a certain way nurture and nature both impact you very heavily they do they do and so I I don't want I grew up in a wealthy family relatively speaking my dad was an entrepreneur yeah um I've got ADHD I hyperfocus on stuff like it served me well in the career path that I'm on yeah and so I got the opposite ADHD the no Focus one yeah so but to me privilege doesn't mean that I don't have to work it means that if I work very hard and the person that grows up in a different situation in a different Circle works just as hard maybe even harder they don't end up in the same spot as I do okay my only counter to that is is I grew up more middle class but not me but I had a friend um my best friend that grew up in the worst yep you know situation but um and some of what who we know somebody pushed him in the right direction but but that guy came from uh a really poor life in a small apartment in Diamond Bar no real opportunity not a lot of connections Y and he makes way more money than I do now his mindset and his drive to learn you know to be a program he's a programmer to learn to be a programmer and to to to slave over going through the books and and that tedious like so that's that's where I struggle like I I 100% agree with you and and he did have a friend that pushed him down that path so who you know is still so important but yeah in mindset and look mindset is so important yes but and so rich dad and Poor Dad right like I mean I know entrepreneurs in general love that book and I had Rich Dad like that was my dad's mentality and so that it was an easy transition it did not feel like a big risk to do what I was doing and by the way as I was making these hard decisions and yes I work long hours and yes there have been many things that hit and landed and and some geni a huge safety net essentially yeah some genius like that that I latched on to and some smarts that I've got fine all of those things fine yeah but if I didn't have some of the pieces that already helped me line up mentally I would not be where I'm at today and so I can look at that and I can say that is privileged now I don't need to say I don't have to compare every scenario because the reality is everybody's exactly not the same nobody's the same I guess it's just the privilege has this this stigma now and it's used in a way but I I do want to say though that I mean that resonates with me I my dad was a middle class he was a um uh he worked on like the machines he wasn't a factory worker but he worked in the factory the big cup U but um the reason I mentioned that is my my whole drive right now is so that my son is privileged right like my whole somebody the guy uh drew that was on the podcast yesterday ask what like I have a goal to sell the business potent or be in a position to be able to exit the business in five years for like five million whatever it might be and he's like well what's what's your backup success if that doesn't happen I go it all that matters is to me like my whole drive that supports what you're saying is if I've got some money in the bank that can help my kid do what he needs to do when he gets to be professional if it's college education or if it's starting a business whatever I want to have money to be able to support that and then I want him to have a name that he can lean on reputation wise not not to open doors like for whatever but to have something that that if he comes to Riverside and wants to be a professional an entrepreneur or have a business or whatever that he has a reputation behind his name so yeah I say I on one hand I'm like I don't know about if I like that term but the other hand I'm trying to build that scenario for my son so it's kind of a bit of both I guess yeah and and all things are not equal so like when I look at that thing I could have not been hardworking I could have not taken the opportun there's a lot of people that get complacent in your situation and still have a nice comfortable life but they don't leverage it anything bigger and make it like you did so the mindset part yeah you do you do get to if you have the mindset and you get a higher jumping off point there's value in that that can't be argued the back stopping I think was was a really big factor for me as I go out and take risk um and have taken risk in the past where it's like hey I know that worst case scenario I'm going to be able to figure it out even if I need to borrow money from my dad like yeah that's huge no that's huge and I haven't had to do that that wasn't that wasn't my thing at the same time but somebody else is like if I take this risk and it fails and I'm on the streets yeah I don't have that back stop and and then also um yeah I mean so I don't look at privilege as a derogatory term I don't I don't see that I think that's my problem is a lot of people use it derogatory and that's what my mindset is thinking when you're saying that yeah and and I and I get that like I I see it I I do think that one of the best positions that I can be in life is where I am able to look at things for what they actually are and I'm not saying I do that I tried to do that and so um I had somebody early on in my career that said something to my dad as I was having success um and he he was in the a similar business to me and had done business with my dad in the past and he's like oh well if if Scott was my dad like I wonder where I would be and it dude at the time when I was like 29 years old and I'm more I'm pulling 880 hour weeks like that stung and I'm like hey that's BS like I'm working hard da but the farther that I get in my life I now this particular person yeah maybe maybe they would be farther ahead but I don't think that they would be in the same place because their drive and their different things and just they're not the same person that's fine but well I do think that it was meant um as a bit of a insult to me and and like a slight to me and a uh like a uh hidden compliment or whatever to my dad yeah yeah yeah I I've looked at that now over the last 12 years since that happened or like then since that comment was made and it has had an effect on me and so I I'm I'm not a religious guy I grew up religious but I a while back saw on TV um Joel Olin was talking and um and he said something that stuck with me like and just like hit me to the core and he talked about how his dad had started this small community church and that he stood on the shoulder of giants there shoulders of giants and so he's like I didn't just do all of this it didn't just show up and happen for me I leveraged the thing that I had that the understanding that I had the privilege that I had to be in that scenario and then the opportunity the opportunity yeah and so that's what I see and that back to back to your question or or like your statement about what you want for your son I got six kids and so I I'm driven to make sure that they are in a position to find whatever that is that's going to make them happy and I believe I believe that in Western Society like just probably the world in general it's fine money is power right and so this the classism that exist within our society does make it seem like well one job is more valuable to society than another but I no longer believe that concept I think that things that I do are important to me and to the people around me and I'm not saying that it's not important but damn it my kids teachers are very important yeah they matter yeah the people that run nonprofits and they go out and do good things amazing things for our world they matter yeah they may not make a lot of money they don't right I mean at the end of day they don't but they inform the kind of community that we currently live in and the kind of community that we get to live in in the future and so I want my children to be successful in life but what successful in life means doesn't have to be money right and so if I am able to generate enough wealth over a period of time that not only maybe do I get a back stop them but maybe download some of the things in life to them even in their young adult lives that that are beneficial and that like you I don't want you to have to work 80 hours a week I don't want that for you unless that's like your drive like and you're super excited about great go do it support it all day long I think people should do things that they are well suited for and that they're happy doing I I think that those things are important for happiness in life but I don't want my kids having to trade 80 hours for money to survive just to just to be in the system essentially or or or even if they just want luxuries right they're like oh I really well okay cool if I'm successful enough and I create the opportunity for those luxuries to exist for them yeah and so so th those are some of the things that I think about my oldest uh just got married last year and um her and her husband are going to school and they're looking at graduate school now and so one of the things that that we were able to talk to uh them about is like hey as you guys are making decisions like I think that it's important that you that you were aware and I and I've told my kids this growing up like my goal is to pay for their education like how ever height they're going to go I like I want to be that's what we've been doing um with our now we have two in college um but and then I want to help them out with a sizable down payment on their first house so that they can afford to live in the area that they are are trying to be now I'm I don't live in Beverly Hills so I ain't trying to put them in Beverly Hills but um we want to be able to help them get that first leg up yeah and so by helping them not come into life with debt that's privilege right by helping them have a down payment to create Financial stability for their future um and stop that housing inflation that's privilege and I want to download that to them yeah and but then because of that we want them to be able to like I said look at those career paths look at the things that they feel like they can contribute good things to the community and they can contribute a healthful existence for themselves and happiness within their work and so and not have to decide if the paycheck is good or not for that good effort like to put them where they want to be in life for sure and personally and professionally I guess yeah and my my son-in-law um is getting into uh Finance uh he's he's about to finish his degree in December um and then is looking at Master's programs probably doing NBA and so I have my daughter is going the social social um work not social work um marriage and family therapy um track and so my business isn't probably like a super great fit for her but for him it may be and so I was very clear with them I was like look I believe in nepotism so absolutely like if you guys think that this is a fit for you if my family built something why wouldn't I let my family take advantage of it like that's I want I want to create that and so but now nepotism where the person's useless and they have the job anyway no but if you want to work towards it and and like best thing in my world would be for my son to take over my business that'd be fantastic yeah yeah and so so that's that's fun and so you know who knows we may never work together that's fine but I I at least wanted that to be out there and for them to know that that's that's my value system that's my belief is that um I I got six of these people that are mine you know my wife Ashley and I um you know we chose to have a big family and we love all the kids that we have around us and it's a fun thing but those are the one things that I can count on like that I need to make sure that I'm showing up for them I decided to bring them into this yeah life that we've created and so my responsibility to them I feel like is to download the benefits that I've been given as well as you know it's kind of like when you go to a campsite and you're supposed to leave it better than you found it like that's what I want to do for my kids as you should like yeah there shouldn't be any reason that that's yeah that's the way it should be what's the point of working for all this stuff if you can't for sure pass on your kids that's the only reason you're even freaking here right like I mean and especially if you get into the position we're now in the position with what we we own as rental property we're in the position now where we've created generational wealth that's cool it's exciting yeah that's exciting that's a goal for sure it's a big go we're we're like we're we're coming into this position over the next five or six years if our if our trajectory Remains the Same we're coming into a position where we create multi-generational wealth and so then from that perspective as I'm looking at my kids and I'm looking looking at like what are the things that we could do with this life and what do they get to do that it it's a different perspective that I'm making a mind shift into I'm not there um um but that's that's one of the things that I keep looking at but as I over the last couple years is my daughter's pretty young U she got married pretty young she's 19 years old and so really it's been over the last couple years where my head started turning on like crap how would she even afford a house like how's that a real thing like with what she can make and want to speaking back to privilege and I'm I'm sure I'm going to get some hate this but a lot I see a lot of silly snide remarks from Boomers um that are like oh well like those people that are renting like they're lazy or that there's a reason that they can't mess up right now we saved up for our house and it's like cool when you made $113,000 a year and the average house price was $40,000 guess what you could afford that payment with zero down or the high interest rates of the time or whatever it was yeah yeah the affordability index is out of control right now so so for the average family that's now with two incomes making $8,000 a year but the average house price is $600,000 yeah that that's much less afford payments are czy well and even even renting isn't easy there's a a young kid in my office uh that used to be here and he wanted to get an apartment but they want three times your yep your income is going to be three times your rent right right so he needs to be making seven eight nine grand a month at at 20 years old like who's doing that yeah and so so the opportunities are different and so as I've looked at that um that that becomes this intersection where my personal reality starts to inform my understanding of the world around me and what that looks like for my kid to get a leg up yeah and you know so that those are the things that um that we're concerned about with housing and condation we feel like is a really big deal for that because if I can go out in the average entry level house is somewhere in that $500,000 range to high the med $697 I think was I just saw yeah yeah and so even those condos I told you about that I lived in they're like $430,000 um but you're in this huge condo complex it's like it's this thing yeah and so now if I can go out and create something as an investor or as a homeowner that cost me $150 ,000 maybe 200 Grand and it's now worth 350 or 400,000 how many affordable units hit the market over a 10 year per a lot it just blows up potentially which will also make Supply now sky rockets and hopefully that helps bring prices to a more reasonable Place yeah and so and you know I I had a little online debate with somebody um I like to get on the socials and have fun from time to time where they were like well no like that's uh in a fixed price Model this is a variable price Model blah blah blah and okay cool cool what and what they were saying is that homz will be horrible for housing they're saying that that is going to cause upward pressure on all of the housing prices and I disagree with that and now what it does do is it makes a big backyard more valuable well yeah that's fine true true but if that big backyard now is worth $100,000 or $200,000 more and then I take a look at housing inventory on a whole I'm like yes but now I have four units and so if you take the average cost per house if I've got three $350,000 units in my backyard that that main unit itself that was maybe $700,000 is now if you sell it individually is probably only worth six and a quarter you degradated the value of that by DED all the and so you end up with more affordable housing and so I don't believe that what it does is it drops the value of housing at all what I do believe that it does is it drops the housing inflation especially for entry level and especially for renters and I I know that this has been happening in Washington Oregon and in Hawaii and so there are case studies on this and you can see what the effect is there are some new laws in California with multif family units as well that that are similar um to that kind of thing where and where they're they're coming out and saying hey here's what needs to happen the beginning of that law that has to do with multif family um the the Nexus for that in all of the notes and like they do these studies on laws that they're about to drop so uh the notes for that were very specific um and it's we are 3.5 million housing units short in California so that's why we're creating these Adu laws that's why we're creating these multif family laws and the reality is without inventory We cannot put pressure on the housing inflation we can't put pressure on the not just the housing inflation from a sale value but from a rental value and I argue that the rental value is much more important to the bottom end of our society from a financial perspective because you go to somebody that's making mid six figures a year and you're like hey you know what yeah that house that you wanted to buy it was $3,500 a month uh to years ago now it's 46 and if you're making 250 G's a year it's like oh that sucks but I'll still do it but you know what you're doing you're still going out to dinner yeah you're still going on vacations it's okay but if you tell a renter that was renting a one-bedroom apartment four years ago for $1,600 a month and now you're telling them it's $2,200 a month that is Earth shattering yeah they not going out to dinner whatever yeah they're not going out to dinner they're living on Mac and yeah and so I I I do think that it is important that that housing inventory gets created and hate groups be damned we're going to do it and it has been fun for us though to be a part of that thing we've worked with some nonprofits that rent those properties from us um we've we've been able to do some of those alteristic things but then also being able we in 2016 we took so many of our investors out of state because that was the only place that it made sense anymore but being able to pour money into our economy into our society matters to me and so we have 43 construction projects actively going on right now today and in Riverside or um in the Inland Empire yeah and so when I look at that the economic impact that has is a thing it's significant and we're we're in the process now of starting to scale that so maybe that number is up to 75 or 100 projects at any given time within the next year or so I I think that that's important because those people that are working on those jobs go out and spend money in our Market yeah the building materials the fees that go to the city like the loans that we get on them after the fact Laura lock is are lender we work with her um almost exclusively and that matters to her office they care about that of my title my escrow all of these these people care um you know and so by being able to bring that money back in state I get to see the benefits of the economic impact of that I get to see the housing that's created and then I love helping people build wealth through real estate you know you get a dentist that calls you and it's like okay great I'm just finishing I'm 47 years old I'm just finishing paying off my student loans and now I've got 20 more years that I'm going to work but how do I retire and you know it's like these golden handcuffs that you give to them when yeah they may make $500,000 a year which sounds like a lot of money until you take their taxes until you figure out that they were in school for 14 years or whatever have 750,000 $600,000 yeah and had to pay that down so they don't really get to worry so much about retirement until they're coming up on 50 and so that's disadvantaged and we need dentist they got 10 years potentially to they probably want to retire in 10 years or so yeah yeah and so like as I look at that being able to sit down and consult with those people and show them that vehicle and then and then do all the other things in the process has been it's been very rewarding for me and then also um being able to get in the position over the last few months or it's been about a year that we've been in development on the private Equity but where we get to say to them like hey actually if you go out and do this yourself and go through the pain you're going to get 100% of whatever that creates but it's likely that you'll do it once or twice and with the fun the cool part is they come in and bring in the money they don't have to touch or do anything but when they exit at the end it's we're doing a 10year fund at the end if they would have run their own projects at least with our case studies and what we've been doing um they will come out making two to 3x what they would have made if they went and actively did these projects themselves because instead of doing a thing one time we get to take that same FL of money and recycle it over and over and over within them funds so what may have been one event you know per a pool of money now becomes 6 to 12 to 15 or 20 events over that 10year fund time frame and so with conservative returns we still do better for them they get all the benefits of real estate that they get the appreciation they get the depreciation expense they get the increase in cash flow um so they get all of these because not only are you able to re inv money pulled back out of a project but then you also have cash flow from the rent yeah and as you add more and more and more and more properties now that cash flow is increasing and right gives you more opportuni yeah and so it's it's fun for us to finally have a product like I've been partnering up and doing flips and things like that with investors like this for years but it's now fun for us to have a product where it's like no we don't have to go out and do a deal with you return your money and then in three months we find another deal and do it again that that's like the hamster wheel in helping people make a good return on the money that they have but it doesn't do the wealth building mechanism um from a perspective of safely leveraging real estate because if if I get to put $100,000 down on something that's worth 500 Grand but that $500,000 property doubles in value in a 10-year time frame well I made $500,000 in equity off of $100,000 and so what was my return um you know it was an annualized return of about 50% that's really cool that's crazy um but where it gets really powerful which is what we've kind of been doing with our own portfolio is where you put that 100,000 bucks in but when you're done with developing the project you've pulled it back out and so you get to go use it again it's like going it's like going to Vegas and gambling and then once you've doubled your money you put your original money back in your pocket and then you keep G yeah and then whatever then it's all profit at that point yeah yeah and so that's that's one of the fun things for us as we've kind of um grown throughout our journey and kind of morphed into something different now I I identified as a flipper real estate investor and real estate broker before that like if you ask me a year ago what did I do that's what I would tell you now what I would tell you is I'm a micro developer like we develop small projects 30 units and under we're about it we're interested in doing that kind of a project so I have to be a real estate agent um or have a great understanding to do that and so that's a vertical of our business I have to know how to get the plans permitted and pushed through the city so we have the design company I have to be able to get the construction done and so we develop that construction company and run all those projects and then I have to be able to manage the projects at the end right and so we've got to do all the property management and so we have that arm of our business so it's put us in a position now where I'm not a real estate flip hacker I'm you know we're we're these micro developers and so as as that's the case though um it it gives us an opportunity to download returns and download opportunities to our our inv s that otherwise are pretty untenable that's full service and yeah yeah so that was a good seg I was going to ask even before you mentioned that I was about to ask so um for the viewers you know entrepreneurs thinking about how to leverage the different businesses what business they should be in or something I think it's neat that you guys have taken your opportunity and and taken control of a lot of different components in the process right like you were just saying so if you could just take a second and touch on each of the six or seven business that you have just maybe the name of it a brief synopsis of what it's about and then kind of how they all tie together I think that would be cool yeah for sure so we have um to start out we have power of two realy it's a real estate company we buy and sell houses through it for ourselves for clients um mainly that's a retail facing business with people that just need to sell their house or buy a rental or just buy a home to live in okay then we have investors First Property Management which is our property management arm and it was really specifically created for people that have multiple properties and really our main goal through that is to help them maximize what cash flow they can make out of those properties um Adu Design Group is uh our design company where we we do plans for lot splits we do plans for adus uh we do the engineering for all of those plans in house we have a few Engineers that work on that team and permits to right sorry permits to on that side or is that permits to yep so we get permits issued um so we take somebody that wants to build an Adu they don't have to work with us construct it but we can help them get their plans done um and then we have our construction company uh which is called Adu makers and that company goes out and builds adus for our business and then also um for just regular individuals that are looking to do that or investors and then we also have this group called Triplex millionaire it's community that we've created to teach people who are flippers that want to get out of the business of flipping like you do Flipping is also these golden handcuffs right like you can make good money at it but how you exit if you keep a certain percentage of the properties that works but you can't just keep them because even if you buy something $100,000 under the market it doesn't cash flow right now so you've got to do value ad to be able to make that work and so there's that's what we're teaching people in our community how to do we have coursework and whatnot like that that we teach people how to do that and then um we have Vector escrow um and so we're partners um on that company with a few other producing agents out in Tula and so we've been involved in that for a couple years um and so those really are the verticals that we have in our business now there is one thing that's in common with all of those businesses and that is development that's real estate sales that's attraction so what I have learned over the last three years that I didn't really quite understand previously was that if you want to be very successful at something then and and that's my that's my like uh projection of where we're going not specifically where we're at I'm not saying oh we're super successful um Prett success we we are successful but what I'm saying is like um this isn't brag this is real if I would have Dove and deeper sooner into a specific thing we would be in a better position as a company and so it is I now look at most of the companies that are very successful in any space and what you find is that they specialize in a thing and then that thing that they specialize in whatever is T tangential to it they control they control yeah because that's how you scale you can't scale when you send a guy a set of plans and you don't actually know where he's at on it and you call him up and he won't tell you yeah um or and what he tells you is not quite true when you call and the costs are different like he's there's margins that are added through the process yeah the Drew was here yesterday we're were talking about a construction guy that did just that um he was he's he was like 150 million a year or something in part of that was like they uh he started bagging the concrete in Vegas he bought the you know the material company you know I mean so like anybody that was relevant to that process he was like all right time to control it that's yeah you know for sure and so what we're doing now like we're not done with our verticals like those are those are just some of the things um that we've done and so there will be a few more companies um that we start over the next couple years but the key is there only things that take us directly into our Niche and that we're dealing with on a daily basis that we need otherwise we don't have interest you could tell me about this new startup and it's like gosh you could make 50% on your money if it everything goes right fine whatever I'm not interested and I'm not interested does support the overall goal because it doesn't support what we're hyperfocused on and going deep is so much more important than going super wide I wanted to pick up every deal that came over and made sense I don't do that anymore yeah and and in our fund one of the things that we've done to support that thought process is we have decided there are four cities that we're buying for in that fund and so because once again we specialize in this product but if we also specialize in a city we talk to City of Riverside every day rep life we talked to the city of Marina Valley the city of Redlands and now L Melinda and that comes back to who you know making the opportunities or the situations easier to work through right and then the the relationships that you build and people knowing what you're about and being able to push back and not be have candid conversations and respect each other and so but from a scale perspective and that doesn't mean that we'll never work in other cities absolutely we will but in this thing at this time that's what we dive into and so what I my recommendation is to entrepreneurs if if the goal is we want to go from a 100 projects a year to two or three or 400 projects a year we can't do that unless we control the verticals we have to be able to go a little bit wider to go deeper yeah and that's what we're we're acknowledging and um a few of my business partners are very ADHD like me like we go like you just go go yeah and so some of these things have been extremely difficult for us to set up all the backend systems and and do that and we have brought on support staff to help us in those things and yeah because you still got to tie them all together and make sure they communicate clearly just because you own them all doesn't mean they're going to work well together they're still Yes individual silos of people and processes and stuff so do that and so so that's that's what I would say to the entrepreneur I regardless of what business it is now you have to have enough of a scale of a thing to support the the adjacent business yeah yeah but there are lots of opportunities to look at in that in that position and so um I we are excited about what is going on in our business but we're more excited to see how it affects the lives of other people we're excited for the opportunity for us to create a massive amount of Housing and one of the tangential businesses that we are going to start working on and we're working on this right now is a business that does what we're doing but specifically as a nonprofit nice so we want to do that where we are only right now we're building like this middle housing but our goal would be to build like true affordable housing like the tiny house project like that kind of nonprofit house stuff yes but using the same concept that we're already using and so of the purchase refinance rents repeat that kind of a thought process because but now that income has to be put back into creating more opportunities for people to live because you can't pull it out profit it's a nonprofit well yes I mean look the way that nonprofits work is they work like as a for-profit business as well like you can you can take income from that you can have salaries right which unfortunately can be up to like 96% of or something but and we're not I'm not looking at this from a perspective of how do we get rich off of this vericle not at all I'm looking at this and saying there are there's a project that was just done that I came made of aware or made aware of recently for affordable housing um in the Inland Empire and it was 100 units and it cost $24 million to build so there was lots I believe the way that it all went down was credits and grants and things like that and so now that stays affordable housing fine that's a good thing but I look at that thing and I say if I can make our capitalism and the model that we figured out couple it with alter and say how now do we take that same kind of pool of money and instead of just standing up one 100 unit apartment complex that's affordable housing which is an awesome achievement but how do I use the model that I've learned how to do and create out of that same pool of money 14 16 100 2,000 doors over a 10year period of time spread out geographically too so they can be not some concentrated area right right projects yeah and and that it's that's a good segue for me because one of the things that I'll say too is like great you have that affordable apartment complex at the end of your street are you happy probably not most of but what we do um is been coined as quiet density so if you have 10 of these projects within your neighborhood of 300 homes you barely notice it yeah but those 10 projects if they were all in one building at the end of the street it's going to stand out yeah yeah and so so we're looking at this and saying how do we leverage this thought process and Prospect and these kinds of projects to create the most housing and look there's some benefits that come from creating affordable housing um if you're doing that in a nonprofit you don't pay property taxes if you are doing that um in this kind of a product you also get incented loan types so Fanny May and Freddy M Mac and um the other institutions out there have product that's like hey I know my regular interest rate is 7 and a half% but if you're doing affordable housing it's five and a half and so the way that we look at it the cost of the project can be exactly the same to build but if I've got no property taxes and a lower interest rate and that cost me per unit 500 bucks a month less then I can put that property out in the market and serve somebody for $500 a month less than I would have had to otherwise and then we just like keep well then and I I could be wrong but the more you do that the more you impact the overall rent prices right for affordable housing because now you're I mean you're bringing down prices you're putting more inventory out there to a lower cost so people are going to have to lower to compete if they want or whatever yeah and and people have asked me like aren't you concerned about competition aren't you concerned that other people are going to learn how to do this and you're and I'm like like there is they need a million houses or whatever if I could be in my wildest dreams wildly successful um with my partners and our team over the next 10 years we would create like 10,000 units yeah 1% no 0.01% 0.01% oh God yeah yeah so we need the competition come help yeah and so like it's it's just it's a nothing burger like we're just we're not really able to put in um to what is actually needed yeah yeah the is way too big to worry about other people yeah and and actually your your math was correct it is 1% like 10,000 on a million um but that even still that's without the need growing right like so well that's a 100 competitors of equal success like I mean and that's big success like that's an accomplishment so yeah that that's a lot and so we look at it and we're like no everybody should go out and figure out how to build this and that's why we launched our community that's why there we tell people like we have made significant money we made million doing this volume of project yeah but we've also lost hundreds of thousands of dollars on making mistakes and I on my social media I'm I stand up and I say it I'm like oh here's where we had a hit on this one and here's what it was like there's no secret in the fact that um your batting average includes a lot of strikeouts like that's it is yeah you got to swing pop up flies and you know like all that some are as bad as the others but they're still not home run yeah and so um that's that's why we've downloaded this community to people because like when they get a run a thought or a scenario past us or past the other people in the community um they're able to determine like oh no this is a project we're not doing yeah and here here's why we're not going to do it well you joined EO too it's a similar thing like having people similar mindsets you can run ideas off of and commiserate with or celebrate with is is super valuable so yeah but that those are a business those are verticals and that's like for other entrepreneurs the umbrella of all of that though is or at least most of that is cash flow California right that's kind of the the umbrella that could be funneling stuff through correct so um cash flow California is our Instagram it's our website um that we're uh soon yeah and um that's the way than for that by the way yeah but that we can connect any of the verticals to the people um so um one of the companies that I didn't mention the fund is its own company too right right and so Adu fund right yeah yes so the California Adu fund it's um it's the first of its kind to go out and create this as an investment product and so we've been early to Market on many of these things but ultimately um each of those businesses you can connect with through uh cash flow California and so we wanted as we've grown and had some breath we wanted to be able to download those resources to other people and through doing that a lot of the the pain that we've experienced we can um resolve or take away or at least mitigate somewhat for people that want to come in leely into the water hopefully they'll drink right well and whether we transact or not like if somebody is able to make a better decision that saves them a lot of time or a lot of money um or helps them not go down a path that is is going to um not result probably in what their end goal is then we're here for that and that's a win yeah yeah and so so in each of those verticals um like we can be contacted that way but then also um we do have agents that are investors that reach out to us a lot on Instagram and ask us questions and for the most part like couple times like will be like oh yeah do this try that thing instead but we launched our community for a reason yeah because when I can do it in a spot then well and if they ask that question in in that Forum or whatever it is and like if you direct message respond to them they learn yeah but if they ask that question in a group of 100 thousand whatever it is right right now everybody gets to learn from it right and so that's that's where we at some point push back and say like hey we've we've created this so that people like you that are that are doing this thing can have success but like I you know I can't sit and answer everybody's question all day long and so that that's why we've um we've created that Community to be able to help people that want to do this as an investment strategy yeah for people that want to just take a safe bet and get into middle housing and have the benefits from it but don't want to be um particip atory from a perspective of any of the lift signing on the loans like um if a rental payment is Miss like having to cover the mortgage anyways like if they don't want any of that that's why we created the fund and so but either way they can connect with us on any of those things and yeah awesome I um I could talk to you all day man it's interesting stuff it's not it's a space that uh I missed the mark on I'm way behind on wealth building especially through real estate I mean I I short so M oh8 it was my biggest Financial mistake that I regret to this day right I'm still trying to come back around from that but I have big dreams and aspirations in real estate and and this is always a fun topic uh but I know we're run a little bit long I have an interview that I've got to get to and and I know you've got a super busy schedule so I just want to thank you for being here pleas covering all that stuff um Everybody check out I'll put the links for the different businesses U definitely follow uh cash flow Califor on the socials there's a lot of need I love watching the videos and the projects you're going through in which you guys are accomplishing so really appreciate you being here today yeah thank you