#754 Build An Amazing Life By Owning Boring Businesses w/ Nick Huber

Nick Huber an Entrepreneur, Investor and the founder of Sweaty Startup. He's built a great portfolio of self-storage facilities and service businesses. In this conversation, we discuss real estate, inflation, cash flow businesses, and how young people can get started today. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit compassmining.io to start mining bitcoin today! ======================= Crypto is all about democratization and freedom of choice. But many companies limit their offerings to centralized trading products. The crypto companies leading the pack in terms of innovation are those that extend access to the industry's cutting-edge products and services — bridging CeFi and DeFi. If you're searching for a platform that reflects crypto's promise of a more open and less restrictive financial future, look no further than OKEx. On OKEx now you can easily switch over to the new DeFi mode, connect OKEx's bespoke Web 3.0 wallet via browser extension and start exploring opportunities at the bleeding edge of crypto. From the DeFi Dashboard, you can monitor your portfolio of self-custodied assets across a range of blockchain networks and generate passive income from yield-farming with top DeFi protocols. In the NFT Marketplace, you can participate in exclusive drops and trade nonfungible tokens without secondary market fees. Meanwhile, the GameFi section is your portal to the latest and greatest in play-to-earn and blockchain gaming. Venture to the forefront of crypto innovation and connect with OKEx DeFi today. =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Nick Huber is an entrepreneur and investor. He's built a great portfolio of self-storage facilities, and he's also run a number of service businesses. In this conversation, we talk about everything from real estate to inflation, cash flow businesses, and how you, if you're a young person or not, can think about building a career as an entrepreneur. I really enjoyed this conversation with Nick, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest

• 0:43Anthony Pompliano?

  pool of crypto liquidity on the planet, underscored by 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships and ultra-low latency technology. LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. If you've never heard of LMAX Digital, it's probably because you're not an institution. They have no retail, only institutions. They feature a central limit-order book streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US Dollars, Euro, and Yen. LMAX Digital, they're secure, they're liquid, and they're trusted. Learn more at LMAXdigital.com/pomp. Again, LMAXdigital.com/pomp. Next up is Compass Mining. Compass Mining

• 1:27Anthony Pompliano?

  is the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. Their team makes it easy to start mining wherever you want, at home or in one of their 23 hosting facilities around the world. Through the Compass Marketplace, retail miners can access mining hardware with similar prices and purchase plans as the world's largest mining companies. Compass miners own their machines, they choose whatever mining pool they want, and they mine directly to their own wallets. Miners who don't want to host their machines can order ASICS directly to their doorstep. Simple and low-cost hosting agreements, coupled with best-in-class customer service, are the reasons why Compass is the simplest and most popular way to mine Bitcoin. Start mining your own Bitcoin today by visiting

• 2:11Anthony Pompliano?

  compassmining.io. Again, compassmining.io. Go check them out and let me know what you think. Last but not least are my friends over at OKX. Crypto is all about democratization and freedom of choice, but many companies limit their offerings to centralized trading products. The crypto companies leading the pack in terms of innovation are those that extend access to the industry's cutting-edge products and services, bridging C-Fi and DeFi. If you're searching for a platform that reflects crypto's promise, but more open and less restrictive financial future, look no further than OKX. On OKX now, you can easily switch over to the new DeFi mode. Connect OKX's bespoke Web3 wallet via browser extension and start exploring opportunities at the bleeding edge of crypto.

• 2:54Anthony Pompliano?

  From the DeFi dashboard, you can monitor your portfolio of self-custodied assets across a range of blockchain networks and generate passive income from yield farming with top DeFi protocols. In the NFT marketplace, you can participate in exclusive drops and trade non-fungible tokens without secondary market fees. Meanwhile, the GameFi section is your portal to the latest and greatest in play-to-earn and blockchain gaming. Venture to the forefront of crypto innovation and connect with OKX DeFi today. Again, go check them out at OKX. That's where you can find OKX DeFi. All right, let's get into this episode. I hope you guys enjoy this one.

• 3:32Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:55Anthony Pompliano?

  Nick's here with us. How are you?

• 3:57Speaker 02

  Doing great, man. Thanks for having me, boys.

• 3:58Anthony Pompliano?

  Awesome. We got a lot to talk about.

• 4:00Speaker 02

  This is a great city.

• 4:01Anthony Pompliano?

  Yeah, you like this city?

• 4:02Speaker 02

  Great.

• 4:03Anthony Pompliano?

  Where you live in Athens, Georgia?

• 4:04Speaker 02

  Athens, Georgia, yeah.

• 4:05Anthony Pompliano?

  All right. I don't know if you noticed, my wife went to Georgia.

• 4:08Speaker 02

  Okay.

• 4:09Anthony Pompliano?

  And I've been to Athens. Sorry for your loss.

• 4:12Speaker 02

  Yeah, I know.

• 4:14Anthony Pompliano?

  Damn, bro, I wouldn't even go there.

• 4:16Speaker 02

  We got another chance, though.

• 4:21Anthony Pompliano?

  Just let's get the college football thing out of the way. They're in the playoffs, which mean, but they are the four seed?

• 4:26Speaker 02

  Yeah, we play Michigan first, yeah.

• 4:27Anthony Pompliano?

  Okay, and then if they win, they go to the national championship?

• 4:29Speaker 02

  Play Alabama.

• 4:30Anthony Pompliano?

  All right. Are you gonna come here to watch the game? What is it, December 31st or January 1st?

• 4:34Speaker 02

  No, I got a pregnant wife and two kids, so I try to keep travel to. Thank you. I moved to the suburbs already.

• 4:42Anthony Pompliano?

  Let's start first with you took Twitter by storm and you started talking about real estate, self-storage, all this stuff. I think some people may know your story, but some people may not. You in college, I think, had other businesses, kind of service-based businesses, and then eventually got into the self-storage. But just walk us through quickly, kind of, how did you start getting cash flow to actually go ahead and buy some?

• 5:02Speaker 02

  Yeah, we bootstrapped a small business pickup, storage for students, grew that over the course of 10 years, sold that in January of this year, used the cash flow from that business to build a self-storage facility in 2017. And then it went really well. It was a life-changing event, and we've refit it a couple of times. And now we're building a real estate private equity company with a lot of help from Twitter, building a team. And we have about 30 folks now, and we, on January 15th, we'll close on, we'll own about 42 self-storage facilities. So, we're growing quick.

• 5:33Anthony Pompliano?

  Take me back to college first. There's a lot of young people that watch this. And I think that there's an allure and a, almost a sexy aspect of like, let me build the next Facebook, let me build the next app, etc. Which-

• 5:45Speaker 02

  And also, let me start in real estate. They want to jump right in and get started in real estate. And-

• 5:49Anthony Pompliano?

  You guys started a business, and I don't want to make assumptions, but I'm assuming you just like, got a truck, or one of you had a car or something, and that's how you started? And you just started picking people's stuff up? Or like, how did you actually start this business?

• 5:59Speaker 02

  Yeah, we had no website, no business plan, no, we used, yeah, I had a big car, I had a room, we stored some stuff in it, and made some cash. Like, we just went out and made five grand in a weekend. And we're like, damn, let's, let's give this a go. And it wasn't about calling ourselves entrepreneurs, it wasn't about startup mentality, it was just like, hey, let's be scrappy, let's be entrepreneurs who find an opportunity and go, and go make a little bit of cash. And I learned a lot over those five years, right? We built a business, a lot of hiring, a lot of management, a lot of, basically giving me the entrepreneurial chops to now do and go on to do bigger things. And that was-

• 6:30Anthony Pompliano?

  So when you're doing this as a college student, like, I think of businesses in phases to some degree. So like, my brothers and I have done plenty of things where it's like, let's just go get cash. Like, whether shoveling snow, whatever, especially when you're young, you don't have the vision, the resources, the experience, whatever, to do anything. But at some point, you go from like, hey, I'm using my car and my time to go pick- Stuff up and go ahead and store it in that to, oh, I should hire somebody. Maybe I should buy a truck. Like, walk us through that transition and like, what were the things that you saw where you're like, okay, bam, now it's time to actually go do this rather than you guys doing it yourself.

• 7:03Speaker 02

  Yeah, business is about momentum. People think that they can just go in and leverage all these tools that they don't really have yet, right? We had nothing. So we had to go first, make a little bit of cash and then we leveraged that cash to hire a couple of people and then we grow to a couple of new schools and you and you do those basic, you know, unsexy sweaty things for five years. And before you know it, you have a couple hundred grand to start to put to work. You have more leverage. You have a lot more skill and that's when, you know, you can do bigger and better things. So people think it happens quick and, you know, Zuckerberg is the story of getting rich really quick. Most entrepreneurs, most of the wealthy people around us, even your guys' media company, it's been a slog, right? You spend a lot of time, you learn a lot and take steps forward every day for five or 10 years.

• 7:43Anthony Pompliano?

  And so when you're doing this, at what point do you realize like, oh, I could be the service business, which is like, I can go pick stuff up and go bring it to a storage facility versus like, what if we owned one or we built one?

• 7:55Speaker 02

  So in my mind, it's all about working your way down to easier businesses as you get more leverage, as you get more talent, as you get a better network. It's finding a way to, okay, I'm going to be like water and I'm going to chase opportunity down the mountain and I'm going to go the easiest route possible to accomplish my financial goals. That's what entrepreneurship's about. And once you hit your financial goals, then it's about living your dream. Too many people start with, oh, I'm gonna, I'm gonna go do something I'm really passionate about because I love it. And then they realize that all business is the same. You gotta market, you gotta sell, you gotta hire, you gotta fire. And if you're just tinkering inside your business, it's, it's not really going to work. But I think, yeah, the point was, we were in a shitty business at first. It was tough. It was hard. We were driving around box trucks. We had part-time employees. We were getting calls that they were driving in Boston on Sturo Drive and hitting the box truck and ripping the whole top of it off, you know, putting diesel fuel in a gas engine.

• 8:41Anthony Pompliano?

  It's real life.

• 8:42Speaker 02

  Nightmares. Yeah, it's nightmares. We were in a hard business, but we learned a lot. And, and yeah, by the time 2016 came around, we had half a million bucks of our own capital sitting aside. It's like, let's put this to work and let's get into an easier business, which is, hey, I looked around a room and I said, okay, what are a lot of dumb people making really good money? Real estate. So yeah, it was self-storage facilities in these small towns where the owner doesn't really have a website. They don't answer the phone all the time. They're crank, they're making a lot of money. They're doing well and they don't really, they're not sophisticated operators who want to get better.

• 9:11Anthony Pompliano?

  Walk me through the legacy businesses in terms of.

• 9:16Anthony Pompliano?

  A legacy self-storage facility, like when you say they're making a lot of money, what are they doing? How many employees? Like, what's like the quintessential?

• 9:23Speaker 02

  Our target, yeah, our target market is a facility with 20,000 to 30,000 square feet. Maybe they spent a half million dollars to build it over the years and it generates 20 to 30 grand a month in cash for that family. And it's not that much work. You got tenants, you got tenants in it and, um, you know, no website. They hang out at the country club. They live their life. And it's just a great family business with-

• 9:43Anthony Pompliano?

  500K to build it and makes 20 to 30,000 dollars?

• 9:47Speaker 02

  Well, you know, they built it over, over the years. So a long time ago. So it costs a lot more to build a big self-storage facility today. But yeah, then we come along and say, hey, would you rather have 20 to 30 grand a month? Or would you rather have, you know, three to four million dollars now and we'll buy it and we'll optimize it. We'll, you know, increase the revenue, you know, do some good marketing and turn it into a-

• 10:05Anthony Pompliano?

  Yeah. What are the things you guys do to increase the revenue and stuff?

• 10:08Speaker 02

  You talked to me a year and a half ago and I'm really excited about cutting costs and the fact that we can operate it with a team from the Philippines and do a lot of these tech-forward things in a small sweaty business where nobody else is really doing a lot of that work. Nowadays, we go into a small market and we realize that, hey, you can't rent a storage unit in this town. The whole town is full and they're charging $30 for a 10 by 10. Whereas over in Chattanooga, 30 minutes away, they're charging $130. Something's off here. Like they haven't done the work to find true market, where the market should be, where you have some units available, you know, maybe you're operating at 92, 93%. So revenue management has been a huge opportunity for us. We'll buy a facility that's doing 20 grand a month and do the work to like find the market rent. And that's where-

• 10:48Anthony Pompliano?

  Double the price, have a few more open units, make more money.

• 10:50Speaker 02

  It's not always about doubling the price. It's because some, the people who look for cheap units, like they'll go, they'll go find a cheap unit somewhere. We, you know, offer them to pay online. They can rent all the time. We're going to make it easier for the customer. And yeah, some leave, but then we replace them and six or eight months later, a year later, you're doing, you know, you bought it at 20 grand a month in revenue and you're doing 35.

• 11:09Anthony Pompliano?

  Yep. And how do you come up with the valuation? So 20, 30 a month?

• 11:13Speaker 02

  So, yeah, I heard you talk, I heard you, you guys did a great job explaining inflation and how a house, you know, it's all about what other houses sell for. It's not really based on income. But when you move over to into commercial real estate, it's about how much money that house makes.

• 11:25Anthony Pompliano?

  Yep.

• 11:26Speaker 02

  About NOI, it's about that building, the revenue minus the expenses called net operating income, and it's all based on that net operating income. So when you buy something that's doing a hundred thousand dollars a year in net operating income, and you can turn that into 150 or even 200, you've essentially doubled the value. So if you come in and you have a system, a well-oiled machine to come buy storage facility, it's worth 2 million, do these things to it, and now it's worth 4 million, that's how the value is really created.

• 11:52Anthony Pompliano?

  And is that 20 times NOI is basically the way that you would value?

• 11:56Speaker 02

  Yeah, so we use these things called cap rates, which is dividing the purchase price or the value by that net, by the net operating income by that. A five cap is 20 times earnings. That's pretty standard. Yeah, that's about where the market is now in the towns that I shop in. In Miami, you know, it's 25 or 30 times earnings on some nice assets, but we buy in small towns. So that's about right.

• 12:15Anthony Pompliano?

  Yeah. And then what are people putting in these self-storage facilities? Like, I think of self-storage facilities, everyone I've ever been to, there's a whole different group of people there, right? I mean, it's literally people who are like storing their home goods all the way to like it's some professional business thing or whatever.

• 12:30Speaker 02

  Yeah, we have businesses, we have a lot of Amazon sellers, we have a lot of retailers that have different things, and we have a lot of hobbyists who collect things.

• 12:37Anthony Pompliano?

  Oh, interesting.

• 12:38Speaker 02

  And then you have people, the Ds, the divorced, the death, the, you know, getting laid off, like you need, you get downsized, you come in and you need a storage unit. So yeah, it's, it's just people's stuff. Man, America, America buys too much stuff.

• 12:51Speaker 03

  What about like, what's the show, Storage Wars?

• 12:53Anthony Pompliano?

  I was just gonna say, that's the show where they go and they like pop it open.

• 12:56Speaker 03

  Is that like a real thing?

• 12:57Speaker 02

  No, no, that's a

• 12:58Anthony Pompliano?

  That's for TV?

• 12:59Speaker 02

  Dramatic, I have to have your say. Yeah, it's a, we found some decent things in abandoned units, but it's almost all junk.

• 13:05Anthony Pompliano?

  What's the craziest thing you found?

• 13:07Speaker 02

  We found a mint 1968 Camaro that we're trying to figure out what to do with up there.

• 13:12Anthony Pompliano?

  What?

• 13:13Speaker 02

  Yeah, we think the guy passed away because he paid, he paid, he paid. We have records of the previous owner, we bought it, and then the unit hadn't been paid on for six months. We did a lot of research on the person and their family, couldn't really find anybody, couldn't find an obituary. We're doing a lot of detective work to figure out who owns that car because it's worth 20 or 30 grand.

• 13:30Anthony Pompliano?

  What happens when someone stops paying?

• 13:32Speaker 02

  Yeah, there's a lien law, so you have to auction it off. You can't go in the unit. We're kind of custodians. It's like somebody's renting from us. It's really their space, right? So we open the door, we take pictures of it, we have to go through a lien process, then we let it, let people bid on it and buy it from, you know, but it's not nearly as sexy as Storage Wars.

• 13:48Anthony Pompliano?

  And then when you think about building this type of business, right? Walk us through, you're going, you're buying assets that already exist. They have some sort of cash flow to them. You can put a valuation on it. What's like the science of the deal, right? So like, do you put down cash? You're taking debt from a bank and you're able to buy it that way? And you're just paying it back off? Where do you get the?

• 14:10Speaker 02

  I'll do my best to explain the capital stack. Real estate private equity is very complex.

• 14:14Anthony Pompliano?

  Yep.

• 14:14Speaker 02

  Where the money comes from.

• 14:15Anthony Pompliano?

  That's why we have you here to explain it.

• 14:16Speaker 02

  Yeah, yeah, we can do, we can do it. So I, you know, when the real estate is changing quick. As you guys know, values are going crazy. It's really tough for an operator like me to keep deploying capital when things are 25% more expensive than they were a year ago. Is it the top? Are we, you know, are we going to be over leveraged? What's going to happen? Is it going to be a crash? The last crash, a lot of people like me went broke. So we've reduced our leverage a little bit. So every building that we buy is 50 to 60% bank debt. And then the rest of it is through what we call limited partners, LPs. They put in cash. They don't want to be involved, but they want the tax benefits and they want somebody like me to, to manage it. And I'm called the sponsor. I'm the GP. So there's LPs, limited partners, who are basically passive investors. And there's GPs that run the show. They have the investors, you know, they manage the deal.

• 15:00Speaker 02

  They operate the deal. And what, and who gets the money when the income comes out? It's a, the LPs is generally, it's a, it's called a preferred return. When you give money to a deal, you get a preferred return, meaning you get money seven, eight, 10% a year before the GP starts to make money. And then there's a promote, which is the split beyond that. So all the cash flow first goes to that preferred return. And imagine it like a waterfalling bucket, like that first 8% fills up. They've, they've become whole and they're preferred return. You get to the promote, which is where the sponsor, me, starts to get a cut of everything above that that's made.

• 15:32Anthony Pompliano?

  And so when you think about this, banks are lending this money because it's a hard asset that they can underwrite easily. You're not putting a ton of leverage on it. Like they feel pretty good about, hey, if the prices fell 20%, we're still going to get our cash back in terms of we can, you know, confiscate the asset, sell it, whatever. Is that generally?

• 15:49Speaker 02

  Yeah. And so there's all different types of risk in real estate. You can, you can buy development, you can buy raw land that makes no money that you're speculating that may be worth a lot of money later on. That's a covered land play. There's developers who may buy a piece of land and three to four years later, it becomes profitable. You know, it's, it's a, it's a big risk adjusted return game where you need to be adequately compensated in real estate for the honor risk that you take and banks see that too. So yeah, we, we're buying right now what we consider to be a frothy real estate market. We're focusing on year one cash flow. So every deal we buy, we want to have six, seven, eight percent year one cash return on the money we're investing to kind of keep our risk down, right? Because we finally have something to lose now. If the real estate market really goes bad, we need to be able to ride that out.

• 16:32Anthony Pompliano?

  So I have a rule. I don't do public math, but I'm going to try.

• 16:35Speaker 02

  Yeah, it's tough. I find myself all the time in this.

• 16:39Anthony Pompliano?

  So if you buy something for $2 million, if you're putting 50%.

• 16:42Speaker 02

  Want me to give you an example deal? I'll try to be the one to do public math.

• 16:48Speaker 02

  It was a trick. Yeah. So we bought a, we bought a rural Pennsylvania self storage facility that was doing $13,000 a month in revenue and about $8,000 a month in expenses. So it's had $7,000 a month of what you call net operating income. 7,000 times 12, I'm going to try to do some rough math, about 80 grand, between 80 and 90 grand, somewhere in there. And you value that times 20 times earnings. Anybody got their phone out? 20 times 80 grand. What, what's that worth? About, you know, 2 million bucks, maybe around that. But then, then we, then we drive revenue.

• 17:19Anthony Pompliano?

  1.6 million.

• 17:20Speaker 02

  1.6.

• 17:21Anthony Pompliano?

  Yeah.

• 17:21Speaker 02

  Okay. So it's worth 1.6. We actually paid 1.3. So the market, it was maybe six cap, so 18 or 15 times earnings was what we paid. But we increased revenue through amenities and finding the top of the market to $20,000 a month while the expenses stay the same. So we go from 13 to 20. The expenses are still seven, so 20 minus seven is now how much monthly net operating income?

• 17:42Anthony Pompliano?

  13.

• 17:43Speaker 04

  13, yeah.

• 17:43Speaker 02

  13,000 times 12, that's the annualized.

• 17:47Speaker 04

  156.

• 17:48Speaker 02

  So now we're at 156,000 of net operating income and divide that by the point of six, divide by point of six, that's basically like an 18 times multiple, what's it worth now?

• 17:56Speaker 04

  2.600, yeah, 2.6.

• 17:58Speaker 02

  2.6 million. So we buy it for 1.3, work our magic, increase revenue, increase net operating income. Then we go back to the bank. This is where it gets fun. We go back to the bank and say, hey, bank, this is a lot more profitable now. It's a lot less risky and it's a lot more valuable. Like, everybody can agree that this piece of property is a lot more valuable. Why don't you give us a new loan based on that 2.6? And we say, okay, let's get 70% leverage. So what's 70% of that 2.6?

• 18:21Speaker 04

  1.8.

• 18:22Speaker 02

  So we get 1.8 million dollars of debt out where they send that cash into our checking account. Remember, we only paid 1.3. Maybe we financed about 1 million of it originally. We put 300 grand in. That's what you call a cash out refinance. That's the holy grail of what I do. That's the holy grail. Not every deal goes that well.

• 18:39Anthony Pompliano?

  So I want to make sure that people understand this because this is really important. So you buy for 1.3, you take a million dollars worth of debt, you put 300 cash, your 1.3, you go, you buy the facility, you then increase the value of it and that's now 2.6. But you go back to the bank, you take out another loan. A portion of that money you're using to pay off the first loan.

• 18:55Speaker 02

  All the LPs get their money back.

• 18:57Anthony Pompliano?

  Correct. You pay out all of your LPs and then the leftover capital, what do you do with that?

• 19:01Speaker 02

  That's the fun part. That's where we get to buy a house in the suburbs. No, no, I'm just kidding. That's where we, our team is going to grow and buy more storage, maybe make hires, invest in our company to, and honestly, in our business, you have to keep a lot of cash on hand because the number one rule of what I do is do not run out of cash. If I run out of cash, it's game over. So.

• 19:22Anthony Pompliano?

  How much cash is the target based on the value of the portfolio? Do you like, look at it as, hey, if we have 20 million dollars of real estate, we should keep 2 million dollars of cash? Or how do you think?

• 19:29Speaker 02

  It's a little bit of a moving target. We invest, we're young and we also have buildings that are producing some cash flow. So we get to get maybe a little bit more aggressive, but right now we want to keep about 3 million liquid. A million of that's in. You know, investments that are easily become easily made liquid and then the rest of it's in cash reserves. It really sucks to keep 2 million bucks liquid because it's, you know, it's losing 25% of its value a year right now with inflation, but you kind of have to do that. It's just the cost of doing business.

• 19:57Speaker 03

  He said the 25% inflation.

• 19:59Speaker 02

  And I actually did.

• 20:00Speaker 03

  They officially say it's only 6.8, but what do we know?

• 20:02Speaker 02

  When we talk about inflation, you, you were making really good points earlier about how it really hurts the lower class and I'll kind of, I'll kind of argue that. I'll challenge you. Whereas the wealthy people who have assets that's making money, like we're operating at a surplus. So our expenses are going up 25%, but also our income's going up 25%. So we only need to go up about 7% to cover that 25% expense because we're operating at an expense ratio that's much lower. We have a surplus. So it just creates a lot more profit. The wealthy get a lot wealthier.

• 20:29Speaker 03

  Correct.

• 20:30Speaker 02

  The, the bottom class, let's say the service looks, I'm hanging out over on Miami Beach right now. There's 10,000 people that work there, work those hotels. They already spend everything that they make.

• 20:39Speaker 03

  Yep.

• 20:39Speaker 02

  They make it and they spend it all, almost all. Well, many of them can actually earn a lot of money at some of those places, but let's say that they were making 15 to $20 an hour, their income goes up 25% as well. They're, they're doing really well right now. I've been talking to bartenders. They all got 25% mandatory service charges on a lot of the stuff that we're, we're buying over there. They're actually paying 25% more for their goods and they're making 25% more. They're in the same situation. The people who get really roasted are the middle class, the people who are working for corporate America. They've got that $60,000 a year job. Who's going to go in with a $60,000 a year job and say, I need a 25% raise because my expenses are up that much. Well, those are the people that get toasted.

• 21:16Speaker 03

  Yeah. My response to that, I guess, though, would be a lot of them don't own investable assets, right? Which is where they'll see the real benefit from. So even if they're getting more money and spending more money, the rich are still benefiting much more because of those investable assets, right?

• 21:28Speaker 02

  Yeah, but they've never like the, it's just statistics that the lower third, like the poorest 30% of America has never had investable assets.

• 21:34Speaker 03

  Yeah.

• 21:34Speaker 02

  They never will.

• 21:35Speaker 03

  Yeah.

• 21:35Speaker 02

  Right? To make it, to make your way up, you gotta start a business and some of them are like, some of them are saving and like buying assets.

• 21:40Speaker 03

  You gotta start somewhere.

• 21:40Speaker 02

  And they're, and they're getting their, working their way up, but the people who really get killed are maybe the, the family renting the home that is, their income's not able to grow 25%.

• 21:48Anthony Pompliano?

  Walk me through, for the young people that are watching, they want to get into real estate, how, commercial, residential, flip homes, whatever it is. If you were starting all over again right now, what exactly would you do?

• 21:58Speaker 02

  I would tell them to start a business first and forget real estate right now. I'd first ask them how much cash they have. And if they say, if they say they have no cash, I'd say find a better business right now because we are, it's a, it's a really frothy market. You gotta have a lot of cash to play and you gotta take a lot of risk. Right, that's just the bottom line. But if you have a small business, if you have operational chops, if you have a half million sitting aside, I would try to find a business with an operational advantage. That would be my advice. Like, find a business where you can go in and you can do some things, pull some levers, like we do with self-storage, to make that asset more valuable. Because a lot of people just buy, they think passive, they think real estate is about cashing checks. Like, I'm gonna sit back, I'm gonna play golf, and I'm gonna cash checks.

• 22:37Anthony Pompliano?

  Mailbox money.

• 22:37Speaker 02

  Yeah, they think mailbox money. I don't need to do anything, it's passive. The real value and the way you can generate a lot of wealth very fast in real estate is if you have some levers to pull to out-operate other people, to get that competitive advantage.

• 22:49Anthony Pompliano?

  Can you talk about your process for acquisitions? And like, how you find a building?

• 22:52Speaker 02

  Yeah, we've, we've had to build out, so our, our evolution, 18 months ago when we met, we had six buildings. We were very small. We had three full-time people on the self-storage side, one of them was me. Now we have 30 people focused on self-storage. So we've had to build out a business, and we're really running a real estate private equity company that's funding the deals, finding the deals, and we're also running a management company to actually answer the phone, collect the rent, keep these buildings clean and safe, right? That's our job. So acquisitions is a division, and it's honestly the hardest part right now, because everybody wants to buy real estate, it's tough to buy. So we devote a lot of money and energy into acquisitions. So yeah, it's, it's a lot of pounding the phones. We have three full-time cold callers, they call self-storage facilities, they build relationships with, with the owners, and we, we say, hey, look, like, let us make you an offer.

• 23:36Speaker 02

  Try to get an offer out to as many self-storage facilities as possible. So behind the scenes there, you have to be able to underwrite a lot of deals and figure out what this storage facility is worth, because we might make 10 offers and only get to buy one of them. So we gotta do a lot of work, it's, it's building a lot of processes.

• 23:49Anthony Pompliano?

  Are you guys still building self-storage facilities, or you're just acquiring older ones now?

• 23:53Speaker 02

  Built, that, building that first self-storage facility was a life-changing deal. I mean, we built it for 2.9 million, and we refi it out at 5 million, and now it's worth about eight and a half. So it's like, it's, it's been the thing that has really fueled our growth. But no, it's, it's, the thing about development is... From the time you spend your first dollar to the time you make your money is three years. It's a lot of risk to take in an environment like this and development costs are going way up. It's really hard to find people to build. It's getting harder and harder to find land to build on and towns don't like storage much. So we have focused on, hey, where can we use our operational advantage to just get instant yield and reduce the risk a little bit? We may build sometime when it makes sense. Right now, we don't have the risk appetite for development.

• 24:31Anthony Pompliano?

  Walk me through the tax advantages of real estate. I don't think people really understand this. Yeah. So any type of real estate, just walk me through like, what are the things that real estate owners do from a tax perspective that drastically change their financial position?

• 24:44Speaker 02

  So the leverage is the key here. I mean, the bank is going to help you buy anywhere from 50 to 80% of a piece of real estate. So when you're going in and you, we put that $300,000 down on that $1.3 million deal. Let's just keep playing with that deal. There's this thing called depreciation and because that building is an expense. We bought the building and most business expenses, like if we go out to dinner tonight and we have a business meeting and we pay for that meal, you can write off that entire hundred dollar meal right now. It's an expense, but a building, they don't let you write off the whole $1.3 million right away. They say it has a useful life. A building has a useful life. In commercial real estate, it's almost 40 years. It's 39 years. So you get to straight line and deduct a little bit. What's 1.3 million divided by 39 years, right? It's,

• 25:28Speaker 02

  we'll try to get some math here for some bull.

• 25:30Anthony Pompliano?

  Johnny calculator.

• 25:34Speaker 04

  It's $33,000 a year.

• 25:36Speaker 02

  So about $33,000 a year of a tax deduction. Remember, we only made about $80,000 in net operating income when we bought it. So that 33,000 is a deduction against your $80,000 of net operating income that you make. So that shields your income. But then there's something called accelerated depreciation and bonus depreciation because we say, hey, look, IRS, yeah, we bought this self-storage facility, but the landscaping, that doesn't, that's not worth, that's not going to last 39 years. The windows, that's not going to last 39 years. The improvements, the driveway, the security cameras, the HVAC systems, the roof, that's all got a shorter lifespan. So let's accelerate that stuff faster. So we have an engineer come in, they look at it and say, okay, of that $1.3 million you spent. Let's say 300,000 of it, about 20% is, has a shorter lifespan. We can write off all that stuff a lot quicker.

• 26:21Anthony Pompliano?

  This is the segregate.

• 26:22Speaker 02

  This is the cost segregation study. We're getting in the weeds now, but it's a, it's a really important part because, and then there's something called bonus depreciation, which in 2017, the big tax act, they allowed you to bonus depreciate and anything that had a shorter than 15 year timeframe, you got to write off all in year one, all in year one.

• 26:37Anthony Pompliano?

  So when you buy the 1.3 million dollar facility.

• 26:40Speaker 02

  Remember, we put 300K in.

• 26:41Anthony Pompliano?

  Yep. How much do you think that you guys get to write off in year one on a general deal like?

• 26:45Speaker 02

  300K.

• 26:46Anthony Pompliano?

  So 300K.

• 26:48Speaker 02

  Is a tax deduction. So all the cash we used to buy that building is a write-off year one.

• 26:52Anthony Pompliano?

  Yep.

• 26:52Speaker 02

  A deduction. And remember, we only made 80K.

• 26:54Anthony Pompliano?

  So you then carry the loss forward. And so out of the 300K you wrote off in year one, it shields your 80K in actual profits. So you don't pay any taxes.

• 27:03Speaker 02

  There's a little more because we have a million dollars of debt and on that interest rate, about 4%, we have another 40 grand in interest. So even if we did straight line depreciation and no bonus, it would be 33,000 in depreciation and then you have another $40,000 in interest.

• 27:16Anthony Pompliano?

  Yep.

• 27:16Speaker 02

  That's 70 of your 80.

• 27:18Anthony Pompliano?

  Yep.

• 27:19Speaker 02

  You're almost break even right then. So yeah, when you get that $300,000 write-off on year one, plus that interest.

• 27:25Anthony Pompliano?

  So it's like 340.

• 27:26Speaker 02

  Yeah, it's about $340,000 of deductions, year one to offset.

• 27:29Anthony Pompliano?

  80K of income. So basically you wipe the 80K from a tax perspective and now you carry forward, what is that, 260 or so into future years. And so if you just ran it at 80K, right? Again, I don't do public math, but you could basically run it for almost four years and your first four years of income would be completely shielded from income tax because you were able to write off all the.

• 27:54Speaker 02

  Absolutely right. And if you have a real estate private equity company that buys a hundred million dollars of storage a year, which is our, what we'll do in about in 2022, you know, if we buy a hundred million dollars worth of storage, we'll get to write off 20 million dollars of bonus depreciation.

• 28:06Anthony Pompliano?

  You wrote off that interest?

• 28:08Speaker 02

  The interest and also part of that cost of all those buildings we bought. You're right. So it gets pretty crazy from a tax perspective.

• 28:14Anthony Pompliano?

  Yeah. And then help me understand from an LP perspective, they basically get their pro rata share of the tax deduction.

• 28:21Speaker 02

  Yep. So there's, there's something called real estate professional status, meaning like if you guys would never be able to buy a building and say, I'm a real estate guy now, and I'm going to use that depreciation to offset what I make here on this podcast or in your W2 job, if we had, if we had W2 jobs. But then there's something called real estate professional status. If you spend more than 700 hours a year focused on real estate, you're classified in the eyes of the IRS as a real estate professional. So I do a lot of media, like you guys, I have a podcast, I do a lot of stuff online, sell a lot of courses. And since I'm a real estate professional, I get to carry those real estate losses over into my normal income from my, essentially my W2.

• 28:56Anthony Pompliano?

  So 700 hours, 50 weeks a year.

• 29:01Anthony Pompliano?

  Trying to figure out how much. 15 hours a week, right?

• 29:05Speaker 02

  Yeah. Yep.

• 29:07Anthony Pompliano?

  It's like two days of work. Sounds like what we do.

• 29:08Speaker 02

  13.4 hours a week.

• 29:10Anthony Pompliano?

  Yeah. It's basically what we do, right?

• 29:12Speaker 02

  Yep. And look, the government does this for real estate because they realize that it's a, it's a, it's necessary infrastructure. We spend 97, Americans spend 97% of our time inside of buildings. So they want to tax incentivize people like me, people like you guys, whoever wants to go out and buy real estate. All right, we're going to make it pretty tax efficient to do this because it's pretty good for our society to have buildings that work.

• 29:32Anthony Pompliano?

  Yeah. Talk to us about all the media stuff that you're doing, because you have the podcast and a bunch of this other stuff, like walk me through.

• 29:37Speaker 02

  Yeah. Building this business has been really fun. I'm a pretty frugal, humble guy, so I don't need a lot of money from a month to month standpoint to live the life I like. So I've been spending a lot of time over the past year, really the past three months, I've been doing a lot of work. I'm here in Miami with some guys. We're getting together as kind of a mastermind group to think and talk about this stuff of like, what do you want to be doing with your life? Like, what, what really makes you tick? What makes you excited? And teaching and sharing and, you know, challenging myself to grow and learn through spreading ideas, just like what you're doing with your media companies is really fun. It makes me feel alive to get in here and meet people like you and, and help people get smarter, hopefully, and challenge them at least to, if they disagree with me, then they'll, they'll at least become a little bit more firm in their opinions.

• 30:20Anthony Pompliano?

  Yeah. We have some of your tweets that we want to talk about.

• 30:23Speaker 02

  Let's do it.

• 30:23Anthony Pompliano?

  Which, John. You got excited.

• 30:27Speaker 02

  I'll tell you a lot about how Twitter works for me. I mean.

• 30:30Anthony Pompliano?

  Oh, yes. Let's do this first.

• 30:31Speaker 02

  So we can even talk about some of the tweets as we do this. But look, I mean, I have a lot of. Loose opinions. I change my mind often, but I'll, Twitter's a great place because you have a lot of smart people there that will make you smarter if you have an open mind. So a lot of my tweets are like loosely held opinions that I'm, I'm thinking about something. I'm not really sure about it. I'm gonna, I'm gonna take a hard stance. I'm gonna tweet this because I know that smart people will challenge me. And that's, that's a great way to learn.

• 30:54Anthony Pompliano?

  It's one of the best ways to use Twitter.

• 30:55Speaker 02

  It's a, it's a great way to learn.

• 30:56Anthony Pompliano?

  You have to have thick skin in order to face any sort of blowback, controversy, challenging, et cetera. But if you're looking at it from, I'm trying to learn, then, and I have thick skin. So if you tell me I'm an idiot, like I'm not gonna get offended. It's one of the best ways.

• 31:10Speaker 02

  And I think clear and concise communication is one of the most important skills that you can have. I mean, some people would come onto this podcast with you guys and it would have taken me, what are we 20 minutes in? It would have taken me 20 minutes to tell you my story of how I started my company. But now we're already deep into hopefully adding some value to people because Twitter forces me to think in character limits. So I can't talk and talk and talk and talk and talk on Twitter.

• 31:28Anthony Pompliano?

  Yeah.

• 31:28Speaker 02

  So it makes me better at communicating.

• 31:30Anthony Pompliano?

  One of the best things Twitter did, and everyone forgot about it, is when they went from 140 to 280. I was very against it. I was like, oh, this is stupid, whatever. It's probably one of the best feature updates that a company's done in a long time because it allowed people just enough room to write.

• 31:44Speaker 02

  It's all about, so writing copy on Twitter is all about like making a statement that not everybody agrees with. They're like, ah, I'm not sure about that. And then following up with like a definitive statement that's related that, okay, I agree with that. And then, and then spending the rest of the thread of the tweet teasing the nuance. It's all about nuance.

• 32:01Anthony Pompliano?

  Yeah.

• 32:01Speaker 02

  Nuance is lost on almost everybody on Twitter. But I think that's a beautiful, that's a feature, not a bug.

• 32:06Anthony Pompliano?

  Correct. All right. What's the first tweet, John?

• 32:08Speaker 04

  No one's always gonna agree with you on Twitter, no matter what. You have to have thick skin.

• 32:12Speaker 02

  Great thing is you can block jerks. I mean, I spent a lot of time on Reddit. And on Reddit, people would just brutalize me being super mean and I couldn't do anything about it.

• 32:21Anthony Pompliano?

  Yeah, but on Twitter you can't.

• 32:23Speaker 02

  At least the jerks, like I, if people are gonna respectfully disagree with me, I love those engagements. But unfortunately, a giant chunk of the population is very just hateful.

• 32:31Anthony Pompliano?

  What is your policy on that? Early and often? Basically, if you say something like stupid, disrespectful, like egregious, you just block them?

• 32:38Speaker 02

  Yeah, definitely. Block right away. I have 3,000 plus people that I've blocked.

• 32:43Speaker 04

  I agree with you.

• 32:45Speaker 02

  I would have more followers than this guy.

• 32:50Speaker 04

  I completely agree on that.

• 32:51Speaker 02

  So it's the only way to manage it. I mean, people are mean, right?

• 32:53Speaker 04

  Yeah. So the first one we'll talk about is your, I believe, just viral tomato comments. Tomato farms and passive income.

• 33:02Anthony Pompliano?

  Hold on, what is the tweet, though? Do you have it?

• 33:04Speaker 02

  I'll tell you, the side hustle guy said like, I would rather have $50,000 a month or $50 a month for the rest of my life than a million dollars right now, like passive income. Somebody on Twitter, some guy, very few followers, and he was just getting roasted by everybody. He said, I'd rather have $50 a month for the rest of my life than a million dollars right now, because I understand passive income. He left out a zero. He's like, I would rather have $5,000 a month for the rest of my life. And he, people were just going nuts on him. Like, he was getting quote tweeted everywhere. This guy doesn't understand compounding. Like, that's a point zero zero zero. Like, obviously, pretty silly to have $50 a month instead of a million bucks. And I was like, all right, well, I'm gonna just troll here. I'm gonna troll and I commented, I responded and I said,

• 33:48Speaker 04

  We have your comment here.

• 33:49Speaker 02

  Read it to me.

• 33:50Anthony Pompliano?

  You don't understand scale. Use $50 to buy 10 tomato plants.

• 33:54Speaker 02

  No, no, no, you're missing the one before that.

• 33:55Anthony Pompliano?

  Oh, is there one before this?

• 33:57Speaker 02

  My response was just like, $50, he's right. Like, I agree. You can rent a power washer. You can go make a bunch of money. Like, $50 is, like, having that the rest of your month. You can buy a cellphone. Think about how powerful a cellphone is. I was goofing. And then Parik Patel, like, the troll, he trolls me. He didn't know I was kidding, or maybe he did. I think I got him. I think I trolled him. And he trolled me right back and said, sir, this is horrible math. You're doing a very bad job. And that's when I did the.

• 34:20Anthony Pompliano?

  And that's when you said the tomato thing. And so the whole idea was, you don't understand scale. Use $50 to buy 10 tomato plants. In six months, you have 250 tomatoes. Plant those into 250 plants. Six months, you have 6,250 plants. Plant them. Six months, you have 156,000 tomatoes. Plant them. Six months later, you have 3.9 million tomatoes. Sell them for $1 each.

• 34:42Speaker 04

  Your original tweet was, what people don't understand is, half a million, half that million will be paid in taxes. $50 a month can be used to pay my cellphone bill, which I'd use to make more money. Or my internet bill, which I'd use to get smarter and make more money. Or rent a power washer each month to make more money.

• 35:04Anthony Pompliano?

  So the whole idea is basically that.

• 35:06Speaker 02

  I was sticking up for this guy in a funny way. Everybody started piling on me and I'm like, I'm gonna get even more ridiculous to see if they find out that I'm joking. And that tomato tweet, I thought was the most absurd thing. Everybody's gonna know that I'm kidding.

• 35:15Anthony Pompliano?

  Yeah.

• 35:16Speaker 02

  And they didn't. It went over, it was, the farmers were very upset. Like, you don't understand the nitrogen mix for growing tomatoes. Where's, where is the water coming from? Like, this guy doesn't understand anything about farming. And then people screenshotted it, went over to Facebook, these farmer groups, and they were just calling me the biggest idiots. My family was calling me. Ben Shapiro retweeted me. They're all like.

• 35:35Anthony Pompliano?

  Ben Shapiro retweeted you saying what?

• 35:36Speaker 02

  He's just, I don't know.

• 35:38Anthony Pompliano?

  He was trolling as well?

• 35:39Speaker 04

  We have some DM comments that you sent back to people.

• 35:41Anthony Pompliano?

  Oh, what did it say?

• 35:43Speaker 03

  If you think you're, so someone DM'd this to you. And they said, if you think your tomato idea would give you $3.9 million in two years, why don't you try it and show the results? Honestly, bro, that is the most elementary retarded. I don't go outside and I know nothing about reality shit I've ever seen. Do it, man. Document it. Show the hard math and have two independent auditors confirm the $3.9 million dollar results. He arrogantly lectured us, telling us, we don't understand scale. Yes, we do. Couple curse words. You don't understand agriculture. And then you responded, you're wrong. You're a crappy farmer, obviously.

• 36:21Speaker 02

  And here's another one. What's this one say?

• 36:23Speaker 03

  You don't even know the proper nitrogen mixture for tomatoes, you fraud.

• 36:29Speaker 03

  In fact, you didn't even know that this was a thing until I just told you. You, you have soft bitch hands.

• 36:36Anthony Pompliano?

  Bitch hands, yeah.

• 36:38Speaker 03

  You've never farmed a goddamn thing in your life.

• 36:42Speaker 03

  And then you responded saying, I think you are jealous of my idea.

• 36:48Speaker 02

  So it was my chance to troll the whole internet and I had fun with it. I mean, when, the thing about this Twitter, to get serious for a second, Twitter, it's such a herd mentality. And like, when things start going poorly, there's nothing you can do. You can, you can let people just continue to shit on you. You can delete the tweet, or you can have fun with it. And the only real way is to either delete the tweet or have fun with it. You can't fight them.

• 37:11Anthony Pompliano?

  So another question I have for you is when you think about a business like farming or power washing comes up quite a bit, like, how do you think about actually trying to start like a business like, hey, I'm gonna sit down, I'm gonna create a company name, I'm gonna, you know, create a website, I'm gonna have a brochure, like all that versus, no, I'm just gonna go get a power wash, I'm gonna walk around the neighborhood, I'm gonna find somebody who's willing to pay me 50 bucks and I'm gonna do it for two hours. Like, like, how do you think about actually starting?

• 37:37Speaker 02

  Yeah, the, all the wealthiest people that I know started what you would consider small, boring businesses that aren't even really entrepreneurship. They didn't go to their family gatherings and their uncles say, this is a great idea. Like, I can't believe I didn't think of that. It's, that's not what entrepreneurship is. It's almost always somebody seeing an opportunity to make some cash, yeah, getting out, washing people's driveways. I mean, there's just such a shortage of people willing to maintain and work on our homes that a hundred dollars an hour is pretty feasible in almost anything you do for somebody, right?

• 38:06Anthony Pompliano?

  Can you talk about, so you had a great thread about how people are spending more money on their homes and kind of the power washing business in specific. Can you talk about that?

• 38:13Speaker 02

  Do you guys own homes now?

• 38:15Anthony Pompliano?

  Nope.

• 38:15Speaker 02

  No. So when you own a home, you learn that it's very, very hard to find people who want to come and help you maintain that home. If you don't value your time and you don't want to mow your lawn and wash, you know, clean your house and maybe do the plumbing, it's a generational thing, right? My grandpa knew how to do all that stuff. My dad still knows how to do almost all that stuff. So when I have a problem with my house, I'm gonna call my dad. I'm gonna say, Dad, you know, my, the doorknob is messed up or whatever it is. And he'll be like, yeah, you know, you gotta do this and that. Our generation is not that way. And we're not going to be that way. We pay people to do things. 15 years ago, no, 20 years ago, like, 10% of people paid to have their lawn mowed. And today, it's 43% of people.

• 38:55Anthony Pompliano?

  Whoa, that's a big jump.

• 38:57Speaker 02

  And it, do you think it's gonna go the other way?

• 38:59Anthony Pompliano?

  20, hold on a second. 20 years ago, 10% of people paid someone else to mow their lawn. Now it's 43%. Yeah, I definitely don't think it's going the other way either.

• 39:06Speaker 02

  It's gonna continue to go up, if anything. I mean, it makes perfect sense. You can make, you can make 60 grand a year out there and get home tired and try to hang out with your kids and value your time, or you can pay somebody who's really good 50 dollars an hour, 50 dollars to show up, zip around your lawn and head out. And like do it efficiently, do a better job than you. It's a no brainer. Specialization is the future. Like people who are really good at marketing, media management, they're going to hire out all this stuff.

• 39:30Anthony Pompliano?

  I have a friend, I don't want to say his name because I don't know if he'd be comfortable me kind of identifying him, but he has what I'd call kind of a private equity type business. And one of the big plays that they've made over the last couple of years is they have acquired a lot of electrical kind of operations. And his theory was basically three things. One, young people have no clue how to do it. It's a very specialized type of job. It's not, you know, mowing your lawn to some degree is an effort thing, right? You don't have to be a genius to know how to mow the lawn. Fixing the electrical components of your home is. The second thing was lots of young people do not go to trade schools. And instead, they want to go build the apps or, you know, go to some other type of school, more creative type stuff.

• 40:14Anthony Pompliano?

  And so the trade schools have seen a decrease in the number of applicants and also attendees. And therefore they're churning out less kind of electrical engineers to go do this. And then the third thing is that there's not a lot of competition. So in a given city, there might be two or three electrical providers. If you have the relationship with somebody, it's really, really hard to screw it up.

• 40:37Speaker 02

  It's just like self-storage. I mean, we looked at people who didn't really, they weren't innovators in their business. And we said, we're going to go compete with them. They're not, we don't think they're very good at business. We're going to compete with them. Would you rather do a tech startup and compete against Stanford grads and Harvard grads with venture capital money and big data? Or would you rather compete with the plumber down the street who does not even know how to send an email and has a pretty darn successful business? I mean, it's not easy. I, one of my fears is that I talk people into this stuff. It's so easy. It's really not. It's, it's, everything is hard. It's hard to make money in life. But like, the way that this stuff is going, it's really easy in a Twitter echo chamber. And as we get more influential and as we build wealth, it's really easy to forget that this entire city is full of buildings and electrical

• 41:19Speaker 02

  and HVAC and things that need to be done that robots will never be able to do. But there's just this entire economy that the Twitter bubble misses.

• 41:27Anthony Pompliano?

  Yep.

• 41:27Speaker 02

  In my opinion.

• 41:28Anthony Pompliano?

  And I think, I forget the exact numbers. I think it's like 50% of all businesses from like a GDP standpoint are in what we would consider more of the kind of blue collar industries, right? And that

• 41:40Speaker 02

  We're still a service economy. We're still a service economy.

• 41:42Anthony Pompliano?

  Yeah.

• 41:43Speaker 02

  And people don't realize that.

• 41:44Anthony Pompliano?

  Yeah. If you think of that, like that, that's pretty interesting. And then also I think that there's a world where a lot of those service businesses, like I would think a lot of things that we did as kids, we're very much service business, but we never thought of them as a business in the sense of like, hey, here's the name of the business. Like, I don't think that any of us ever had like a business card with a company name on it or whatever. Instead, it was like, yo, I'm gonna take my dad's lawnmower that is like a push lawnmower. And the guy next door needs somebody to do it. Like, will you pay me $25 to come do it? Yeah. Okay. Can I come every week? Oh, you only want me to come every other week? Okay, fine. And that was like, quote unquote, business, but it was never, uh, let's go scale this. And I think that, uh, young people, it's easy to get started, like from a, oh, let me just do this one guy's lawn.

• 42:29Anthony Pompliano?

  I think the hard part for them is how do I go from that to, no, now I have a business where like I hired two people. Now they cut the lawn, I go and I just try and find new customers. And that's why I think of it in like phases.

• 42:40Speaker 02

  It's hard. Yeah.

• 42:40Anthony Pompliano?

  Is the scale part, I think, is where people, they, they either give up or they're not, they, they don't know to be aspirational enough to go chase. Well, what if I don't spend the time to mow the lawn? Or what if I don't do the power washing? What if I hire somebody to do it and then I pay them less than what I'm charging? And then therefore I can just play this game over and over again.

• 42:57Speaker 02

  Understanding leverage, I mean, it's hard. The service businesses are very hard to scale. It's we're in a very tight labor market. So you have to spend almost all your dollars recruiting workers instead of recruiting, like, marketing to customers. But like, you don't have to scale. My brother is a perfect example. He's not wired like me to want to take a lot of risk. He loves enjoying his life and fishing. Honestly, he's happier, probably he'll end up happier than I am. He has a, a little lawn care company in Bloomington, Indiana, where it's him and one other guy. He has his book of 200 customers that he services. And every year he just raises his prices and gets a couple of new clients and then raises his prices and gets a couple of new clients. And he's in his third full year out of school and he'll net 150K and spend 20 weeks in the Florida Keys fishing.

• 43:39Speaker 02

  Yeah. Guys, that's a pretty darn good life. Yeah.

• 43:42Speaker 03

  Yeah, yeah, yeah. It's not bad at all. What is the biggest mistake you see young people making when they're leaving school and they're trying to get into business or try to make money or any of that type of stuff?

• 43:54Speaker 02

  I think the people in entrepreneurship that we idolize, the Elon Musk, the Mark Zuckerberg, all these business books that we read, all this business content that we put out, even I'm a victim of it, is it's very, it's got a severe survivorship bias. You hear from the people who win, but you don't hear the story of how hard it actually is and what your odds are of success. I don't, I think of business, you should think of business as a poker player thinks of winning a hand. Where can I put my resources with the best odds of accomplishing my goal? First of all, nobody even knows what their goals are. I know what my goal is. I need 20 grand a month. If I have 20 grand a month coming in, I can live a damn good life. And anything above that's butter. People don't start with a goal to realize, actually, okay, that's pretty darn attainable in some other ways that don't involve starting a unicorn business.

• 44:39Speaker 02

  And then, you know, they may not think about the odds of success when they try these moonshots. When you're in a, when you're in a passion, a passion business, like you're doing something that's fun, you're competing with other people who are interested in it, they're passionate about it, they're not making wise financial decisions, you're not competing with a true market of like, hey, I'm passionate about business, I don't care what it is, I'll, I'll start a business hauling garbage around if that's where the opportunity for me to add value to the world is. And separating, separating your passion from business, like the point of business is to earn financial freedom and then spend your time doing what you want to do. Why do you need, you're a selfish entrepreneur if you think, hey, I'm passionate about this, so that's what I'm going to do to make money? That's a pretty selfish way to think, right?

• 45:23Speaker 02

  Make your money, add value to the world, and then spend your time doing what you want.

• 45:27Speaker 03

  Yeah, I feel like I've seen one of your tweets before about the idea of donating money, basically, or like trying to make a change in the world. And your whole idea, I think, or you can correct me if I'm wrong, is basically to go out, make your money, and then focus on that kind of stuff because you can't do much without money.

• 45:40Speaker 02

  The people, the people who change the world are the people with money. That's just the sad facts. I mean, you can be, you can be super caring, you can have the best intentions, you can do special things, you can be a special person with a lot of talent. And if you don't have resources behind you, capital behind you, it's really hard. You're one person, you can only do an hour of work to make an hour of impact. But if you're well, if you say, all right, I really want to figure out how I can have the biggest impact on the world. If you had a lot of money and a network and influence, that's when you can go do some really special things. So make the money and then change the world.

• 46:16Anthony Pompliano?

  Yeah, it makes sense. What is your investment portfolio look like? Is it all real estate or do you have other assets?

• 46:22Speaker 02

  I have some crypto. I don't understand it, but a lot of, a lot of really smart people do. And I'm, I understand that I have, I have 24 hours a day of life and I have so much brain power that I can devote to so many things. I punt in a lot of areas. Like I'm going to get good at what I'm good at and I'm going to trust other smart people in a lot of other areas. So yeah, some equities. I love Apple. I can't really talk about stocks on here. This is not a recommendation. I personally like Apple, Facebook, Google and Microsoft. I don't think there's four companies that are better than those. Again, investing outside of that right now is, is a waste for me.

• 46:53Anthony Pompliano?

  Do you buy indexes or you just buy the four?

• 46:56Speaker 02

  I buy those stocks, yeah.

• 46:57Anthony Pompliano?

  Those four. And how do you think about every month when you get cash flow in, you're like, okay, I need X dollars for expenses and the rest goes to investing? Or do you have like, do you think of like, like a rainy day fund? Just, and numbers aren't as important as just like, how do you conceptually think about as cash flow comes in? In terms of, a lot of people I think are like, okay, cool. This is all sounds awesome, but like, what do I tactically do? And everybody's situation is different, but I think that the concept of, you gotta pay your expenses, right? You should have some sort of like cash fund or emergency fund. And then everything else like, it's just, I think of it as like a savings account. Just keep saving into investments and then just, hey, I'm never going to sell them.

• 47:38Speaker 02

  Yeah, it's, I think there's two types of people. There's entrepreneurs and there's W2 workers. As an entrepreneur, my goal is to build a machine that is an asset that can create capital and cash. And once you have that machine, you feed it as necessary and it continues to create what you can. And a media brand is that, a business is that it can be whatever. But yeah, I have what I need to live on and the rest of it gets invested the best that I can into different buckets, equities, cash, and the majority of my net worth is in my real estate portfolio.

• 48:08Anthony Pompliano?

  And on crypto, talk to me about that. Like, what you say you don't understand it. What do you think about it? Do you think it's viable? Is it more of like a lottery ticket in your opinion, in terms of like, maybe it works, maybe it doesn't?

• 48:21Speaker 02

  Yeah, I don't think Jeff Booth and this, the price of tomorrow and the deflationary environment, I don't think that those people understand this big aspect of our service economy and how much work it's going to be to actually for humans to maintain and build our world and that technology advancing can only do so much to decrease the cost of everything. Some people believe that technology is going to take over the world and it's going to do everything and humans won't really have a role. That, in that case, a deflationary environment where you use something like Bitcoin to spend and earn and buy works. But if your currency is getting more and more valuable and everything else is getting cheaper in relation, I don't think it encourages spending and growth and people to enjoy their lives. So I look at it as a store of value and it's definitely something really serious

• 49:04Speaker 02

  that I, I know great things will come from it. I don't know what they'll be.

• 49:08Anthony Pompliano?

  Yeah. And you just have Bitcoin or you have other cryptocurrencies as well?

• 49:12Speaker 02

  I don't have much Bitcoin, a little, and then Ethereum and Solana. I'm a, I'm a Solana fan because I've, I've toyed around with some NFT projects and some crypto projects and it's, it's a great learning experience.

• 49:21Anthony Pompliano?

  What, what did you do with the NFTs? You sold a lot of these in it. You're like, oh, I played around with it. You sold a lot of them.

• 49:26Speaker 02

  The tomato, the tomato meme has just been something that follows me around Twitter and people, everything I write, they comment on it about tomatoes and understanding scale, right? So we built, we did a tomato token crypto on Ethereum. We learned a lot about Ethereum. It was a, it was a yielding coin. So we learned a lot about that. It was a massive failure because nobody understood the yield part of it and staking is kind of complex for, for me and my crowd. And then we built a bromado NFT project where there's 4,000.

• 49:54Anthony Pompliano?

  We had some of them that we're pulling up now.

• 49:55Speaker 02

  Yeah, 4,000 bromados. We had an artist, a really cool artist that we're going to disclose after we finish all the, all the other projects that we're going to do with it. But. I looked at it and said, hey, I'm an influential member that's not inside of crypto. I'm not an insider. I say a lot of ignorant things. I'm really thankful for the crypto folks on Twitter that are patient with me as I learn, as I put these soft opinions online on Twitter and get better and smarter. But yeah, we've released a bunch of these bromatoes and we use it as a philanthropy area and also a community building tool to get a lot of new people into Solana. Going from Ethereum to Solana was excellent because the gas fees, there was no errors. The gas fees were nothing. We didn't waste hundreds of thousands of dollars on gas like the Constitution Dow was millions drained, right?

• 50:37Speaker 02

  And it was great, man. We're building a fun community and we're going to release like female, we're going to call them babe-matoes. And then they're going to spawn, like we're trying to airdrop them like bro babies, like baby bromatoes once a year. As Solana continues to advance, we're going to do more cool things with this NFT product.

• 50:54Speaker 04

  What do people get when they buy these tomatoes?

• 50:56Speaker 02

  Right now, just to hear me goof off in the Discord, but I think it's a like, so 10%, we have a 10% royalty. So when they're traded, we get 10% of the funds and that's been 100 sole so far. And all of, half of it is going to buy more bromatoes that we basically put on ice and half of it is buying bromatoes that are then auctioned off on Twitter to raise a bunch of money, which was really fun where, you know, some big name folks that I'm not going to disclose have some with the plans of like auctioning them off to raise a bunch of money for their favorite charity. We've raised over 50 grand so far. That's been a cool angle. And I think Solana has a lot of potential. So as it gets new tools, we'll do some fun things with it.

• 51:32Speaker 04

  Can you talk about your strategy with it? Like, did you just hype it up on Twitter, release them all at once? Like, how did you think of that?

• 51:37Speaker 02

  No, so you have to prepare for a mint. We actually had to invest about $20,000 to $30,000 to get the project. We had to do all the art. We had to get, you know, all the different attributes. We had to build them on the chain. And then we had to build the website and actually mint them, which was just a little bit of hype, but we made them really cheap, like 20 bucks each, no gas again. And so we sold them all out for 80 grand in like 32 minutes, which was, which was fun. It was like, that was a success for us. And then the market took over and it went from 0.1 sole, I think what's the floor now? 0.3 sole or something. So people, we didn't, nobody lost any money so far. So that's, that's cool. I like, I like it when the people who follow me don't lose a bunch of money.

• 52:12Anthony Pompliano?

  By the way, when I tweeted it, we were live with you. People are already responding saying Bromados understands scale. So quite literally, they follow.

• 52:20Speaker 02

  It's cool because in that Discord, a community is growing of like a bunch of real estate people. But it's their first ever crypto. It's their first, they had to buy Solana and they bought a Bromado and it's, it's kind of like their intro to the wallets, how it works, the technology, which I'm doing my part, I think, to kind of advance the community.

• 52:36Anthony Pompliano?

  Is, uh, is the point of the Discord for the Bromados or was it a real estate one? And then you just also did this with?

• 52:42Speaker 02

  No, the Discord is a Bromado community. The people own them. We trade them in there. Um, it's just people getting to know each other.

• 52:47Anthony Pompliano?

  Yeah, but most of them end up being real estate because.

• 52:49Speaker 02

  I'd say it's half, it's half crypto enthusiasts that are artists, some artists, some crypto enthusiasts, and then half real estate people who have never owned an NFT and they're trying to figure out how the hell this all works.

• 52:59Anthony Pompliano?

  We pulled one up, Matt. I don't know if you can pull up the one that's got the straw hat and the goatee, kind of look like John a little bit.

• 53:04Speaker 02

  We'll send you one. We'll send you guys some.

• 53:07Anthony Pompliano?

  The one that we, uh, we pulled up earlier, this one looks just like John.

• 53:12Speaker 04

  Probably looks good.

• 53:14Speaker 03

  Do you think any of this, uh, these crypto related things or decentralized systems will roll over into like the real estate world? Like take a, uh, the Constitution Dow, for example, would a Dow ever go purchase self-storage facilities or anything like that?

• 53:25Speaker 02

  So the, this decentralized nature does not lend itself well to for-profit endeavors. If there's not a leader, if there's not somebody in.

• 53:33Speaker 03

  Centralization plays a big role.

• 53:34Speaker 02

  It needs to be centralized, but I think the future is like, we're, we're building our real estate portfolio. We're thinking about the long-term plans.

• 53:43Speaker 02

  Going public on the New York Stock Exchange does not seem necessary in 10 years when we can tokenize ownership shares that then our owners can trade like NFTs, right? Maybe it's, maybe it's stable coin, just because real estate needs to be more stable. We're paying debt, we're collecting cash, but maybe, it's a tokenized ownership across our entire portfolio and people can trade them 24/7, just like they trade NFTs. I don't know. It's, it's gonna be really exciting to see what happens. And I think I'll be, I'm, I'm just curious enough and I'll take a lot of these stupid chances. That we're gonna have some fun with it for sure in real estate and see what happens.

• 54:17Anthony Pompliano?

  What's your daily routine? Like you get, you get a lot of stuff done and I'm always interested in terms of like, what time do you wake up? What do you do in the morning? What time you go to sleep?

• 54:25Speaker 02

  Yep. So like all of us, I have social media addiction that I've been managing and trying to figure out the best way to get away from that.

• 54:32Anthony Pompliano?

  First rule of, of an addiction is admitting it. So.

• 54:35Speaker 02

  Yeah. Yeah. And for the year where my Twitter account was going nuts, I was getting to meet people. I came on your show, it was like a whirlwind of like, okay, this all happened in the last six months, it's kind of cooled off and I've downed to two hours a day or so on Twitter. But it's a job. It's an important part of what I do. But I'm all, I'm all about leveraging my time and really saying no to a lot of opportunities and doing what's, what matters to me, which is try to be a good husband, try to be a really good dad. Those are really hard problems for business people. Like we're, we're so driven and you have to be so obsessive to be good at business and to be good at media and getting better at other areas of life is, is hard. And it's something that doesn't come natural to me and something that I'm putting a lot of work in.

• 55:14Speaker 02

  So I wake up, try to do some right before input, like before I roll over and check Twitter, my phone's not in my room. I'll, I'll take some notes and I'll do some, try to do a little bit of deep thinking on like uninterrupted on input, like just output, like just organizing my thoughts. Some of that turns into really valuable two hour stretches where I'm revolutionizing a part of my business or having new ideas. And some of it's pretty worthless and the kids get up and I start playing with the kids. By 10 a.m. I'm in the office and I try to have focused work from 10 to one. And then.

• 55:45Anthony Pompliano?

  And when you do the focus work, that is like external, you're doing calls and stuff like that, or you're just.

• 55:50Speaker 02

  So I, the way I think about building my business, and again, I'm in a much easier business now. Real estate is simpler. It's still hard, but it's simpler than the student storage business where it was always coming at us. My mindset over the past three months is if I'm getting an email that requires action from me, that's a problem. I want to be getting emails in my team that are, I'm just kind of observing my business work. Does that make sense?

• 56:13Anthony Pompliano?

  Yeah.

• 56:14Speaker 02

  I've never understood the.

• 56:15Anthony Pompliano?

  You purchase a system and then you're just overseeing the system.

• 56:17Speaker 02

  So if, if I find, I constantly figuring out what, what in my business makes me the bottleneck? What depends on Nick Huber to happen? And if that depends on me, then I don't have a business, I have a job. So I'm really trying to leverage myself out of those things. And so a lot of my effort right now is spent on chasing talent, trying to hire talent. Searching for discovering and then solving problems in the business and the operations of the business. And then, yeah, I do have to, you know, I'm alive, I'm a human. So I have to take care of a lot of things that you just can't delegate. So.

• 56:48Speaker 04

  Can you talk about when you're scaling a business? Like, do you just look, for example, the the storage business in college that you started? Did you just like find anyone that was willing to do it and just kind of give them direction and say, hey, I need you to or power washing, like, I need you to power wash this driveway, like, go do it?

• 57:03Speaker 02

  Yeah. So I think the that's a great question. And the one shift that we made, it was like in 2013, that really ramped up our business and like, allowed us to actually, it clicked, was when we simplified, we spent the first three years of our business complaining about our employees. Our employees are making mistakes. Like, they don't know how to do it. Like, it's always the employee's fault. And eventually, my partner and I look at each other and like, these other companies are doing it. It's our fault. Like, it's on us. It's me. It's our management. It's our system. So we tried to simplify the job to the point where an average employee who doesn't think like Nick or care about the company like Nick could deliver a good product to a customer. So we're going to simplify it to the point where the job can be done pretty easily and efficiently. So like, we took extreme ownership

• 57:45Speaker 02

  of like, we realized our drivers had like 20 jobs. They had 20 jobs out on the truck. They had to call customers. They were making schedules. They were. And so when you have that many jobs, you can't do any of them well. So we said, how can we simplify this to where they get to focus on the five things they need to do? And then from there, like, it clicked. And like, that's how you leverage. Because I thrive on chaos. I'm an entrepreneur. I love making decisions. I love solving problems. But it took me a long time to realize that the average person does not. Not everybody's like me. Not everybody likes chaos. People like to show up to a job, know exactly what's expected of them, know exactly how to do it, and how to like, add value to the team. Like, that is not me. But the overwhelming majority of people like, want structure. And that is hard for entrepreneurs to figure out.

• 58:26Speaker 04

  What is your process for learning new things? Right? Say you find a subject or something you want to go die deep into and learn more about. How do you do that?

• 58:34Speaker 02

  I mean, it started with college. I had to find a way to get through the Ivy League with all these other interests. So I figured out what 20% of work I needed to do that was going to get me 80% of the way there. So like, I'm trying to get good at golf right now, for example. And I know that just getting out and hitting, drinking beers with my buddies and smacking the ball around is not going to make me better at golf. I have to do it the right way. I have to focus on the right things. So yeah, it's an 80/20 process for me. Like, what 20% of work is going to achieve me 80% of the results? And I'm going to tack that first until I can get competent. And then it's about figuring out the intricacies. Tuning from there, fine tuning.

• 59:05Speaker 04

  Where do you and what do you consume like content wise, just to learn?

• 59:10Speaker 02

  Man, I love listening to podcasts and audiobooks and taking notes. I think content, it's almost all in how you apply it to your life. Your content, the stuff you guys put out, people, people think it's only about the things you're interested in, but you can apply the concepts to anything. So I love listening to people who are in totally different situations, how they think, how they apply frameworks, and then taking that and doing the work to apply it to my life. That's the important stuff. So, and then I can reframe it and repurpose it and present it to my people, my, my followers on how to apply it to real estate or small business. It's fun.

• 59:42Anthony Pompliano?

  Yeah. The thing I think about real estate, a lot of people don't realize is there's a science to it, but there's also an art. And the science part of it, people don't recognize, like, I don't know, if you look at the Forbes 400 as a kind of a proxy, how many people on there are there because of real estate? Probably a lot of them, right? I don't know the exact number. I bet you more of them are there for real estate and owning cash flowing assets than let's say, Wall Street traders, would be my guess, right? I don't know that for a fact, but if I had to guess, I don't know, let's say maybe 20% of the Forbes 400 is there because of real estate and the business they own in their real estate. How many traders, like, like actual hedge fund managers are in the top,

• 1:00:28Anthony Pompliano?

  I don't know, 400 richest people in the world?

• 1:00:29Speaker 02

  Yeah. It's about leverage, right? It's about working your way into high leverage situations where things that you've done in the past earn you money. If you have to continue to do things like do deals, if we were buying and selling, for example, instead of like holding on to these assets for a long time, then we have to buy and sell to do make money. Like, we gotta buy, we gotta sell, we gotta buy, we gotta sell. We're a service business. And if we stopped that, We would stop making money. So like finding high leverage activities where you can do work once, like you guys record this show once and you repurpose the content 10 different ways. You're going to have pages and like you do this for a couple of years and it's going to be an asset, right? It's going to be a long-term asset that's going to continue to build the brand. That's the way that most people should think about their little niches. And the thing about businesses, like there's thousands of ways to win. It's an art, like you said, there's

• 1:01:12Speaker 02

  no one way to win. It's like there's, you're making so many decisions every single day about what to do and how to do it, that that's what makes it kind of fun, right? It's uncertain.

• 1:01:20Anthony Pompliano?

  I have two last questions for you. One is, have you guys won a deal yet because of the Twitter following?

• 1:01:26Speaker 02

  Twitter has totally changed my life. I mean, we, we raised, we've raised over $20 million of outside capital. 99.9% of it has come from people that I met on Twitter. I don't, I can't advertise for investments, right? But I meet people, they get to know me, we get to know them. I've done consulting on self-storage deals and those people are out deal hunting and they find a lot of deals and send them to us. So yes, we have. And we've made hires through Twitter. Twitter has accelerated my career 20 years.

• 1:01:50Anthony Pompliano?

  Yeah, I could easily see that. And then the other one is, talk about the relationship with banks. Like, do you guys try to optimize one relationship? Do you try to have many? And I think a lot of people don't realize how important the banking relationships and the access to capital markets is for obviously a real estate investor. Like, how do you think about that?

• 1:02:07Speaker 02

  It's the same applies to LPs investors. Like, there's different types of banks and there's different types of investors. There's institutional investors that want to do a lot, big deals, and maybe they don't want to give a sponsor as much. Then there's retail investors that maybe want to put 25 grand in and they just want somebody that they can trust and they need high returns and so on. But there's different types. So, and then there's different types of banks. There's banks that lend on small deals. There's banks that lend on big deals and there's different types of debt. And it's a really important job for me as a leader to nurture all those relationships so that in a changing environment, if shit hits the fan in real estate and it's time to go buy, I have some institutional investors that have more cash, maybe they're ready to deploy. I have different banks. So. Real estate is a, is a, is a roller coaster. You have ups, you have downs and the environments are changing consistently.

• 1:02:51Speaker 02

  So it's my job as a leader to build and nourish a lot of different relationships that maybe they can't help me right this second and I can't help them right this second, but we can begin to build trust with each other. They can get to know me, I can get to know them so that when it makes sense to work together, we can, we can do that. And that's all types of business, but it's pretty, it's a tough thing.

• 1:03:10Anthony Pompliano?

  Got it. John's got one last question for you before we let you go.

• 1:03:13Speaker 04

  This is one of my favorite questions. So if you wanted to make money this weekend, basically starting with nothing, what would you do?

• 1:03:22Speaker 02

  Do I have a, so I have no capital?

• 1:03:24Speaker 04

  You can have a hundred dollars or $200.

• 1:03:26Speaker 02

  20 year old me, scrappy.

• 1:03:27Speaker 04

  Scrappy person.

• 1:03:28Anthony Pompliano?

  It's a thousand dollars.

• 1:03:30Speaker 04

  Thousand dollars.

• 1:03:30Anthony Pompliano?

  You gotta make a thousand bucks.

• 1:03:31Speaker 02

  I would, uh, I would make a, this, this is what I was thinking. I'd find a, I don't look enough like Santa Claus. I would find a friend, uncle, whoever that looks like Santa Claus. I have an uncle that's kinda chubby. He's got a white beard, a real ripe white beard and he's Santa Claus in the malls. I would find somebody who could spin up a quick app that allows me to pay five or $10 a minute to have my kid FaceTime with Santa Claus. Like I can say like, hey, you're gonna fill out this little form of what time you want me to call this number and this is my kid's name. And then I'm gonna let my kid FaceTime with Santa Claus, a real life Santa Claus and pay $10 or $20 a minute. And I think we could, we could do eight hours on Saturday and eight hours on Sunday. And with one tweet, um, you could make, you could, I'd find a guy like somebody with influence and say, hey, let's split the profits.

• 1:04:16Speaker 02

  You make one tweet for me, I'll, you know, pay you half the Santa Claus money that comes in and I'd make a little app where you can pay $10 a minute to have your kid FaceTime with Santa Claus because my kids love Santa Claus, but like they only get to go see him once and they talk about him and think about him every day. So if before bed one night, they could call him and FaceTime Santa Claus, that'd be pretty cool.

• 1:04:33Anthony Pompliano?

  That hits.

• 1:04:34Speaker 04

  For sure.

• 1:04:35Anthony Pompliano?

  That's a good idea.

• 1:04:35Speaker 04

  Definitely hits.

• 1:04:36Anthony Pompliano?

  Someone's gonna do that.

• 1:04:37Speaker 04

  Also, that's low key a parent hack. Tell Santa what you want so I can hear.

• 1:04:42Speaker 02

  I was talking to a friend last, any, last night and he pulled up this little app that is just a recording. It's a really low budget recording, but he's like, my kids have done this a hundred times and they don't know this is not the real Santa. And he pulls it up and it's like a, an app where Santa Claus is like, Clayton, what do you want for Christmas?

• 1:05:00Speaker 02

  You know what I mean?

• 1:05:01Anthony Pompliano?

  Yeah.

• 1:05:01Speaker 02

  But if you had a real person that could ask them some questions, it would, it would make your kids so happy to be worth it to throw 50 bucks at that.

• 1:05:07Anthony Pompliano?

  Yeah. If, uh, if somebody builds it, will you do it with us?

• 1:05:10Speaker 02

  Let's do it.

• 1:05:11Anthony Pompliano?

  Somebody will definitely.

• 1:05:12Speaker 02

  We gotta hurry though, cause we gotta. Twelve days to Christmas.

• 1:05:18Anthony Pompliano?

  No, doing on Christmas Eve is the big winner. Like Santa, get ready to work.

• 1:05:24Speaker 02

  You're gonna need a lot of coffee.

• 1:05:25Anthony Pompliano?

  Yeah, listen, we ain't got, we got commentary coffee for you. It's perfect. But we didn't, you just drink some water, shut up, sit down, talk to the kids, be quiet. No, but I think that people are literally saying, okay, you Santa Schillers.

• 1:05:39Speaker 03

  People have a problem with everything.

• 1:05:40Anthony Pompliano?

  I don't think you can patent that.

• 1:05:41Speaker 04

  I think, I think that would bring kids joy.

• 1:05:44Speaker 02

  It would, of course. And some Santa that has to sit in a mall day to earn a couple hundred bucks could earn a couple thousand bucks.

• 1:05:49Speaker 03

  Damn, and my idea was to go caddy for the weekend.

• 1:05:52Speaker 02

  Oh, I love that stuff too. I mean.

• 1:05:53Speaker 03

  Yours sounds, that's the easy one.

• 1:05:55Anthony Pompliano?

  Much more lucrative.

• 1:05:56Speaker 02

  If you, if you don't have the ability to make the app or network to, to spin it up, it'd be real hard to get traction. So in that case, I would, I'd hang Christmas lights or go do some fall cleanup. Fall cleanup is big. People have leaves all over the lawn. I'd get rid of them.

• 1:06:07Anthony Pompliano?

  Yeah, fall cleanup, I feel like is like a super easy, just effort based. Like, I love the effort based ones where it's like, look, dude, grab a rake, shut up and start raking. And like.

• 1:06:16Speaker 03

  Yeah, I mean, a thousand dollars, a thousand dollars is right in that realm of like, if you do physical labor for the weekend, you can do that.

• 1:06:21Anthony Pompliano?

  You're gonna do it.

• 1:06:22Speaker 02

  Hanging Christmas lights is a phenomenal, a growing, I don't, won't say it's a phenomenal business, but it's, it's a growing business. I mean, there are wealthy neighborhoods in Athens, which is a small town where every single house has spent five grand to have them come in. People come in and put up a little tree in the front lawn and, and put up, like, it's not much that you pay is five grand to get Christmas lights.

• 1:06:42Anthony Pompliano?

  Five thousand dollars to hang Christmas lights?

• 1:06:45Speaker 03

  I feel like that's a lot.

• 1:06:46Speaker 04

  That's awesome.

• 1:06:46Anthony Pompliano?

  Y'all could do a show tomorrow yourselves.

• 1:06:48Speaker 04

  Go put it up and then take it back down and have the lights for next year.

• 1:06:51Speaker 02

  And you storm in my storage unit.

• 1:06:54Anthony Pompliano?

  Yeah, I mean, if you really think about it, like, somebody's paying five thousand dollars to get their Christmas lights hung up, right? You could run through a neighborhood.

• 1:07:00Speaker 02

  A guy, uh, let's say a family, they're both lawyers, they both make 300 grand a year. Is it really wise to get up on a ladder and try to figure out hanging up Christmas lights and risk going to the orthopedic surgeon with a messed up back? Like, if you want your house to look really nice for a whole month, like, it's, it's worth it, right?

• 1:07:16Speaker 04

  Yeah, same thing as the law almost.

• 1:07:18Speaker 02

  And then there's a, then there's these, like the botanical gardens at UGA. I took my kids there and, and they spent like $750,000 to bring a company in to outfit the entire botanical gardens full of Christmas lights. And it's an awesome spectacle. Like it was great to take the kids, it was worth the $15 entry fee, but some company got contracted for 750 grand to set up a ton of Christmas lights in about a five acre garden.

• 1:07:40Anthony Pompliano?

  Yes, someone in the chat said they just charged someone $12,000 to hang up lights on a restaurant in New York.

• 1:07:46Speaker 02

  Now we're talking.

• 1:07:47Speaker 04

  Out of curiosity, how do you know it was 750 grand? Publicly available.

• 1:07:51Speaker 02

  Well, I'm.

• 1:07:52Speaker 04

  I feel like you like went around asking people, you're like, who, what company did this?

• 1:07:57Speaker 02

  I'm like, I drive my wife nuts because everywhere we walk down any town, I'm like, how does that business make money? How does this business make, like, we're staying at one, we're staying at one Miami, the hotel, one hotel, and I'm, we're trying to figure out, we're sitting around trying to figure out how much revenue that place does in a day. And we think it's over a million dollars a day of revenue. Cause they have 850 nights, it's a thousand dollars, 850 rooms, it's a thousand dollars a night, then they have three bars, they have all these restaurants, all these little coffee shops, it's like a huge operation.

• 1:08:21Speaker 04

  Yeah, that's, that's a great thinking process though. Hotels.

• 1:08:24Speaker 02

  That's how you spot opportunities. That walk around, learning to think about how businesses work and you'll spot opportunities quickly. It's fun.

• 1:08:32Anthony Pompliano?

  All right, where can we send people to find you on the internet?

• 1:08:34Speaker 02

  I have Substack, sweatystartup.substack.com. I send out a lot of deal breakdowns on self-storage. Like if you want to hear about that one in greater detail of how we negotiated the debt, how we raised the equity, how we found it, what we did with rents after we bought it, what it's worth now. I send out these deal breakdowns that are really popular on my Substack and on Twitter at sweaty startup. And then I mess around and make a couple of podcasts and YouTube videos too, so.