Billionaire's WARNING: The Housing Market Will NEVER Be The Same (Do THIS Now)

OpusClip: Start clipping at https://opus.pro/ich Gusto: Try Gusto for FREE for 3 months at https://gusto.com/ICED Upwork: Post your job free at http://upwork.com/COFFEE and connect with top talent to grow your business. Shopify: Stop waiting for permission to build something. Your next revenue stream starts free at https://shopify.com/ich FanDuel: Every Goal Matters! Visit https://fanduel.com to get started Follow Richard Baker Here: https://www.instagram.com/baker_house1921/ *𝗖𝗢𝗡𝗡𝗘𝗖𝗧 𝗪𝗜𝗧𝗛 𝗨𝗦* 𝗜𝗚: https://www.instagram.com/icedcoffeehour 𝗝𝗔𝗖𝗞: https://www.instagram.com/jlsselby 𝗚𝗥𝗔𝗛𝗔𝗠: https://www.instagram.com/gpstephan 𝗖𝗹𝗶𝗽𝘀 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: https://www.youtube.com/c/TheIcedCoffeeHourClips 𝗫.𝗰𝗼𝗺: https://x.com/TheICHpodcast 𝗧𝗶𝗸𝗧𝗼𝗸: https://www.tiktok.com/@theicedcoffeehour 𝗦𝗽𝗼𝘁𝗶𝗳𝘆: https://open.spotify.com/show/5c2uoXBQkOjIiCOf60jJj7 𝗔𝗽𝗽𝗹𝗲: https://podcasts.apple.com/us/podcast/the-iced-coffee-hour/id1515070058 For sponsorships or business inquiries reach out to: [email protected] Apply for The Index Membership: https://entertheindex.com/ For Podcast Inquiries, please DM @icedcoffeehour on Instagram! 00:00:00 - Intro 00:01:08 - The $1.1 Billion Insight: Buying Dying Retailers for Their Real Estate 00:02:54 - Developer vs. Investor: A Different Way To Think About Real Estate 00:04:19 - The No-Money-Down Playbook: Creating Value Before You Close 00:06:29 - "Get Out of Your Room": Why Hustle Beats Google Maps 00:07:33 - Where To Meet the People Who Make These Deals Happen 00:08:48 - Is This Only for Veterans & Insiders? The "Average Person" Debate 00:10:38 - Real Estate Inefficiency & the Long Island House That Was Underpriced 00:12:54 - The Buy Box: Becoming an Expert in One Neighborhood 00:15:49 - The Great Wealth Transfer: Aging Owners & Off-Market Jewels 00:16:50 - Is Getting Wealthy Just an Effort Problem? 00:17:43 - How He Pitches Sellers & Structures Refundable Deposits 00:18:00 - Sponsor: OpusClip 00:19:15 - Start Small: Is This Harder To Do in 2026? 00:23:53 - The Billion-Dollar German Department Store Flip 00:25:58 - Buying Lord & Taylor With Almost No Money 00:28:48 - The Whiteboard Trick: Splitting OpCo and PropCo 00:32:41 - Sponsors: Gusto & Upwork 00:35:17 - Explaining Hudson's Bay & the $500M Bet From Abu Dhabi 00:40:31 - The Zellers Bidding War: Playing Walmart Against Target 00:46:22 - How Much Did He Actually Make? & the Net Worth Mystery 00:47:42 - Conviction & the "Reality Distortion Field" 00:49:11 - What He Owns Now & Smart Debt vs. Dumb Debt 00:50:51 - Where the Economy Is Headed & Debating Jeremy Grantham 00:53:37 - The University Housing Play & Betting on Top Schools 00:54:23 - Politics, Mamdani & Whether the Rich Give Back Enough 00:57:09 - Is the Housing Crisis a Money Problem or a Spending Problem? 01:02:09 - Diversification vs. Concentration 01:04:15 - The $200M Loss on Guilt & Failing Small 01:05:06 - Sponsors: Shopify & FanDuel 01:07:35 - The Largest Amount He's Ever Lost 01:09:28 - Massive Net Worth Swings & Keeping Life in Perspective 01:11:51 - Nature or Nurture? Office Hours & the Nepotism Charge 01:14:56 - Knowledge vs. Access & Talking to Claude Two Hours a Day 01:15:45 - Negotiation Secrets: Overpaying, Overselling & Knowing the Other Side 01:18:41 - Stalking Deals for Years & Why It Can't Be a Commodity Asset 01:21:37 - The Biggest Mistake the Average Person Is Making 01:23:31 - Individual Choices vs. the Economy & Raising Driven Kids 01:25:04 - The Exact Steps To Become a Real Estate Entrepreneur 01:25:58 - Why He Closes 99.9% of His Deals 01:28:24 - The Cornell Baker House Project 01:31:10 - The Ego Trap: Why Successful People Stop Taking Risks 01:32:10 - What To Optimize For Next & Where His Drive Comes From 01:33:26 - Tiers of Wealth: Private Jets, Economy Flights & Spending on Value 01:36:21 - The Cessna Story: Using Bigger Planes To Motivate Bigger Deals 01:39:47 - What Money Means & The Best Things To Spend On 01:41:16 - The Science of Spending for Happiness (Quiet Homes & Short Commutes) 01:42:47 - The Coming Entrepreneur Revolution & Opportunities for Women 01:46:06 - His Grandmother's 1921 Immigrant Real Estate Story 01:47:48 - The Harshest Truth About Money 01:49:03 - The Power of Yes: Marriage Advice After 30 Years 01:53:19 - Gratitude Rituals & Is There Such a Thing as Too Much Money? 01:54:42 - When He Felt Richest (And Why It Was Depressing) 01:56:16 - Wrap-Up *Some of the links and other products that appear on this video are from companies which Graham Stephan & Jack Selby will earn an affiliate commission or referral bonus. Graham Stephan & Jack Selby are part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:01Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:26Jack Selby?

  What is the total value of all of the businesses you own?

• 0:28Speaker 02

  If you put them all together at any given time, we're worth between 10 and 20 billion dollars.

• 0:33Speaker 03

  Canada's iconic Hudson's Bay Company is snapping up luxury American retailer Saks Fifth Avenue.

• 0:40Speaker 04

  Richard Baker, the head of Hudson's Bay, has told analysts he plans to move quickly.

• 0:45Speaker 02

  And by the way, I bought each company for almost no money. I bought the companies and borrowed against the real estate assets that were inside the company.

• 0:54Jack Selby?

  Is recreating this harder in 2026 than it was 10 years ago?

• 0:58Speaker 02

  We're going through an unbelievable period in the next 10, 15 years where folks are aging out and these families are selling these properties. And Blackstone doesn't want to buy them. These are great properties and they can buy them efficiently.

• 1:12Jack Selby?

  Where do you see the economy heading over the next 10 years?

• 1:15Speaker 02

  If you believe in a world that's going to have a lot of inflation, you want to buy as much real estate as possible with as much nonrecourse debt as possible, and you're going to make a lot of money.

• 1:31Jack Selby?

  Richard Baker, thank you so much for coming on the Iced Coffee Hour.

• 1:34Speaker 02

  Nice to be here.

• 1:34Jack Selby?

  So you spent nearly two decades buying and reshaping some of the most iconic names in retail. You acquired Lord & Taylor for 1.1 billion dollars. You purchased Hudson's Bay Company in 2008 and took it public in 2012. And you later bought Saks Fifth Avenue and Neiman Marcus together in one of the largest luxury retail deals ever attempted. What do you understand about money that most people do not?

• 1:58Speaker 02

  So I had a premise in 2005. The premise was that there were a whole series of operating companies that owned their own real estate, and the financial markets didn't understand. Stand or appreciate the value of the real estate that was hidden in these companies. So in two thousand and five, I literally put together a memo where I wanted to buy Lord and Taylor, Hudson Bay, Galleria Koffhoff in Germany of all places, Saks Fifth Avenue and Neiman Marcus. And my goal was to buy all of those businesses because they were all dying department stores. But underneath, hidden in those dying department stores, were these huge real estate portfolios that were worth tremendous amounts of money.

• 2:41Graham Stephan?

  Why did no one else see what you saw?

• 2:43Speaker 02

  I don't know, because I grew up thinking there was something wrong with me because I always walked around and saw things differently than everyone else saw them. And by the way, this didn't just happen in one day. I bought them over a series of, you know, ten years. So people knew exactly what I was doing, but for some reason, other people couldn't do it the same way I was doing it. And by the way, I bought each company for almost no money. I bought the companies and borrowed against the real estate assets that were inside the company.

• 3:14Graham Stephan?

  So what's the biggest difference between how wealthy people think about money and how everyday people think about money?

• 3:20Speaker 02

  I just work hard every day to figure out how to create value. And I do look at things differently than other people. So I listen to you and watch your show all the time. And a lot of the folks that are on your show, or a lot of the folks that are out buying real estate today, are buying on cap rates and are buying on returns as an investor. I don't think of myself as a real estate investor. I think of myself as a developer, someone who creates value, not someone who buys to get a return.

• 3:50Graham Stephan?

  And if you're teaching someone how to think differently like you, where would you start?

• 3:54Speaker 02

  Okay, so I think the average person is thinking about real estate as an investor, and how do I get a good return? And I'm thinking about, and I'm thinking like an operator when I buy real estate. How can I make the real estate a lot better? And that is very important because I'm less prone to the problems with interest rates and what's going on in a particular market. So I'll give you an example. We were with someone this weekend and she had a Yoga studio. So her yoga studio was doing great. She was able to move her yoga studio from Pittsfield, Vermont to the next town over, which wasn't as good. And she was able to buy a building and her customers moved with her to the not so good area.

• 4:36Speaker 02

  And she bought the building super cheap and she was able to create value with content and in an operating company.

• 4:45Jack Selby?

  And in terms of what you were doing, you said you bought with very little money down.

• 4:51Jack Selby?

  How do you explain exactly what you do to someone who has no idea?

• 4:55Speaker 02

  I'm looking for situations where I can create value between the time I first see the property and the time I close. So, and that's done with relationships and that's done with knowing a particular area very well. I'll give you like a simple example. If I have a great relationship with Starbucks and I know that they're growing and expanding into Western Massachusetts. And I can find a site in Western Massachusetts that I know would work well for Starbucks. My goal would be to negotiate to buy the property. While I'm negotiating to buy the property,

• 5:33Speaker 02

  before I have to close, I sign a deal with Starbucks. So when I go and finance that deal, I finance it with a signed Starbucks deal. Tremendous difference and I get more financing, put much less money or no money in and create a lot more value.

• 5:49Jack Selby?

  I think my problem is that in order to capitalize on this education or the information you're giving, you need to already have a ton of money, a ton of resources.

• 5:57Speaker 02

  Totally disagree with that.

• 5:58Jack Selby?

  You disagree with that?

• 5:58Speaker 02

  Totally.

• 5:59Jack Selby?

  You think anyone can just go out and buy and just buy a Starbucks?

• 6:03Speaker 02

  Every situation is different, but yes, I do. And it happens all the time. And in fact, I still do deals all the time with no money. I know I have more resources and more relationships, but one of the things that we do is we coach folks on how to do a deal. Just go back to the lady with the yoga studio. That's a great example, or think anything. Pop-Up Bagel just sold 250 master franchises in one day. They're going to open up pop-up bagels all over America.

• 6:30Speaker 02

  So if you're friends with someone who has the pop up bagel franchise for, you know, Nevada, then you can work with them in order to figure out where they want to be and find a location that they're going to be happy to rent from you because they can't do all of them themselves. And you sign a lease with them simultaneous or before acquiring the property. And if that doesn't give you 100% financing, it's going to give you a lot more financing.

• 6:55Graham Stephan?

  What if you don't know the the bagel guy?

• 6:58Jack Selby?

  Yeah, the average viewer listening to this right now is like sitting in their room. They're not living at their, maybe they're living at their parents'.

• 7:04Speaker 02

  They should get out of their room and go out and meet people and go and walk around and understand what's going on in different communities. I was on the phone today with someone who was asking me about a deal. I was like, have you been to the property? Oh, no, I was on Google Maps and I look, I said, don't ask me questions. Go drive around that property. See what the neighbors are. See how the parking works. See how the the stoplight works. See if it's a good piece of property. By the way, I bet you the future tenant for that property is probably within 200 feet of what's there. There's some car dealer or some bagel guy or whoever it is who's looking for more space or a better location or a different location. So you have to go out and look at things. And you're

• 7:49Speaker 02

  right, it's not easy. If you want to create value the way I create value and the way millions of people create value in real estate, you have to have something called hustle. You gotta like, get ahead of it.

• 7:59Graham Stephan?

  So where do you meet these people? Because I knew a guy in Vegas who claimed that he knew the guy who was like in charge of the Starbucks West Coast locations and he'd be able to buy like this plot of land, call up his buddy, and then his buddy's like, yeah, we could put a Starbucks there. Then he builds it and he sells it at like a forecap. But if you don't know these people, where do you meet these people?

• 8:19Speaker 02

  It's a process. So I'll give you an example. Let's just say you have a job presently and you work for a shopping center company and you're in charge of leasing. That would be a great place to start. Or you're in charge of construction at this shopping center company. I'm just using an example. You're meeting people. That want to lease space in those shopping centers. So I'd be working my day job leasing space in the six shopping centers that I'm responsible for. And as we're renting space to Dollar Tree or whoever it is, you're meeting those reps and you're getting a rep a relationship with those representatives. And sometimes they switch to other companies and you stay in touch and you communicate.

• 9:01Speaker 02

  And then I'd be out looking to buy a vacant piece of property or a vacant building near one of those other buildings that I'm presently managing. Cause I have relationships with tenants already in that area. And that's how you do it.

• 9:14Jack Selby?

  Yeah, I would say that's a pretty huge if though, like, you know, let's say we have 300,000 people that are watching this. And 10 of them are in that position of like, you know, they're already working leasing at some sort of shopping. Like that's, that's a very huge.

• 9:28Speaker 02

  Okay, let's go to a different scenario. Fine. So multifamily. So there, and there's, uh, let's use veterans for a moment. So veterans have a tremendous advantage in multifamily. And they can live in one unit. They can buy a four unit multifamily project. They can get a hundred percent financing. They can live in one unit. They can, if they're handy or capable or whatever, they can fix up the units and do what they want to do in the units. And that's a great way to create value.

• 9:56Jack Selby?

  But I think that's also another huge if, like if we're only applying things to certain like small demographics people. You have veterans and you have other people working like shopping centers. So like, let's just say the average person out there watching this.

• 10:07Speaker 02

  Maybe this isn't for the average person. So this is for people who want to create value and want to hustle and want to work hard. I deal with hundreds of people who do this. So you're right, maybe it's not for three million people, but it could be, and it's not that hard. And by the way, go to a single family house where they're buying a house and there's an opportunity to renovate. Let, let's go back for a second, how to do any of this. You need to be an expert in something. So you need to have a plan. Like I want to buy a multifamily in this particular neighborhood. Or I want to buy a single family in this particular neighborhood. Or I want to buy retail or hospitality or whatever it is. And then you need to be really smart on what's going on in the prices in those particular areas.

• 10:52Speaker 02

  Because real estate, as you know, is super inefficient. And everybody has a different price for a particular property. What I see as a price for a property might be something different than someone else has.

• 11:04Graham Stephan?

  Explain inefficiency. Why is it so important? And why can someone use that to make a lot of money?

• 11:10Speaker 02

  Okay, so inefficiency is super important because if you're buying IBM stock, for example, IBM stock always trades. Everyone can buy IBM stock for the same price every day and it sells. Everyone sells it for the same price. But a house or a commercial building, I might imagine I can do something with my vision and my creativity that someone else didn't imagine. Someone else might imagine they could do something more. So I'll give you an example. We bought in Long Island a house that was like 4,000 square feet. It was 30 years old, but renovated kitchen, renovated bathrooms, had a garage with a big room over the freestanding garage, had a barn, had like, you know, an acre of land

• 11:54Speaker 02

  and it rights half a block to the water and it writes on the water. That house was for sale for $1.4 million. He had like a dopey above-ground pool that looked ugly, which I guess maybe freaked people out. He took the above-ground pool away. The day he took it away, he dropped the price 1.4 to 1.2. My wife saw it. We made an offer on it. We bought it for $1,175,000. Around the corner on the main street, no water access, brand-new house, little driveway, lots of traffic. Two new houses, $1.6 million, each of those two houses. So why should this house that we bought,

• 12:36Speaker 02

  that was better in every way and bigger than the other two houses, be selling for hundreds of thousands of dollars less? I'm not sure, but just, you know, inefficiencies in the marketplace.

• 12:48Graham Stephan?

  How do you know you're correct? And how do you know that 1.2 house that you purchased is just old? It's got some, you know, issue. It needs to be renovated versus new house.

• 12:57Speaker 02

  To me, it was, it solved what it was we needed. To me, it was worth every cent. I look a lot at replacement cost. So I was in that house for 40% less than replacement cost. So to me, I'm very happy. I owned another house near it. It worked for me. So. That's all that matters to me. A lot of your folks listening or watching, they're looking at all kinds of things all over the place. I would say to them, focus in on a play. I was in Brooklyn, if that's your, you know, in a neighborhood in Brooklyn, there was like 5,000 units within two blocks. Focus in on those two blocks. Get the information on every trade, get the information on everybody who owns every single piece of property

• 13:42Speaker 02

  and be an expert. I'm an expert on the neighborhood and the house I bought, so I know exactly that I got a good deal. Someone who was coming in maybe from New York City might not understand all of the anomalies, but I understood.

• 13:54Jack Selby?

  That's interesting. That's very similar to what Michael Zubor, who's a guest on this podcast, says, which is establish what he calls a buy box of like, these are the exact parameters that you're looking at. Anything outside of this area code, this size, three bedroom, two bathroom, two car garage, lot size about this, you know, 8,000 square feet, don't even consider it.

• 14:14Speaker 02

  Totally agree with that. Totally agree with that. And that's what I counsel people all the time, be an expert, something. And by the way, walk the streets. I get up every morning at 5 o'clock in the morning and I'm walking up and down streets. I get, I can't, I was up at, in Ithaca, New York, at Cornell, the police arrested, they arrested me. They pulled me over, wanted to know what I was doing and all that. Because

• 14:34Jack Selby?

  You were casing.

• 14:34Speaker 02

  I was casing.

• 14:35Jack Selby?

  Kind of peering in windows.

• 14:37Speaker 02

  Exactly what I was doing. Exactly what I was doing. And by the way, I bought over 100 million square feet of properties in different platforms and very, very rarely I can count in one hand how many times I've used a broker. I don't use brokers. Not that I don't look at all that information I do, but I walk around and I can tell what's for, I could tell what will be for sale because maybe there's no leasing sign, it's a little rundown, there's missing a tenant. I have a nose and I can tell like anyone else can tell that maybe the person who owns it is, you know, advanced in years or they've died and their families got it and someone's not paying attention. And then what I do is I ask the tenants, because there's usually not a for lease sign even, and I ask the tenants,

• 15:22Speaker 02

  who's the landlord? I have a problem. Usually get the landlord's name. I call the landlord and, you know. Certainly not always, but you know, some, a low percentage. Oh yeah, maybe we would entertain an offer. I mean, I'm in the process, I'm closing next week on 250 beds of housing. At Cornell, on Cornell's campus, tremendous location, wasn't for sale. So off-market deal. By the way, the seller is giving me 80% financing and I put no deposit down.

• 15:53Jack Selby?

  That's really interesting. So what you're saying is that you, it's purely a value play. And you think that if a place looks like it's run down, if something looks like it's not being tended to or taken care of, then realistically, the owner isn't getting as much value they should out of it, or they just don't care about it enough to hopefully, you know, you as a potential buyer can investigate and maybe buy it off their hands.

• 16:15Speaker 02

  It's amazing, for some reason, real estate, there's owners that age out and they, and the market changes and they just don't pay attention and these properties run down. We are, what's so exciting to me, when I talk to folks looking to buy properties, is we're going through an unbelievable period in the next, you know, sorry, started in the next 10, 15 years, where folks are aging out, they're passing on, their estates are getting stepped up values, their children don't want dad's old hardware store, dad's old four-unit multifamily or whatever it is. And these families are selling these properties and Blackstone doesn't want to buy them. So these are great properties for the folks listening to us today,

• 16:59Speaker 02

  that they can buy and manage and buy them efficiently. Also, there's been so much inflation in the cost of materials that you can buy buildings in better locations at materially lower dollar amounts than what they cost to reproduce.

• 17:16Jack Selby?

  A common theme that I'm seeing, based off of everything you're saying, is that it seems like it's an effort problem. So do you think that that is the biggest obstacle in becoming wealthy today? Is people just don't want to go out, case the joints like you do, you walk the streets?

• 17:30Speaker 02

  I don't know, I work really hard and I got a lot of money already, so I don't have to work that hard. But it's my nature, I work very hard, I'm very creative, I put. Uh, I don't think linear like, oh, I'm gonna buy this and get a return. I have three plays going on at the same time. I'm going to buy that building and put the bagel guy in that I have a relationship with. I'm going to redo the apartments upstairs and I'm gonna put a sauna and a cold plunge in the basement that's presently vacant. And I'm gonna figure all that out before I close.

• 18:05Graham Stephan?

  And what if you don't?

• 18:06Speaker 02

  Then I don't buy the property. Then I don't close it. Then I don't do it. Every purchase agreement, by the way, I'm very good at negotiating purchase agreements without deposits, but every deposit's refundable. And by the way, if people don't refund your deposit, you can always put a list pendants down and people are happy to give you your deposit back. No one wants to have a fuss.

• 18:25Graham Stephan?

  So explain, what do you put in the contracts that gives you such a big advantage?

• 18:29Jack Selby?

  Here's the truth. If you're not creating content for your business, you're a [BLEEP]. And also, you're leaving so much money on the table. The problem is that creating good quality content is incredibly time intensive, very expensive, and honestly, just really hard to do.

• 18:42Graham Stephan?

  Which is exactly why we've partnered with Opus Clip. They just launched Agent Opus and it genuinely changes what's possible for content creation.

• 18:50Jack Selby?

  Agent Opus takes your ideas and turns them into real, polished, social media-ready videos. All you have to do is upload an audio file and it builds the entire video for you. No cameras, no editing software, and no production team.

• 19:01Graham Stephan?

  Like, if you have a product or service you wanna promote, just drop in your audio file or script and Agent Opus handles the rest. Text to video, done, and it actually looks good.

• 19:10Jack Selby?

  And that's the thing, most AI video tools feel clunky and robotic. Agent Opus does not. The output is clean, professional, and something that you would actually want to post. And trust me, we have many times.

• 19:21Graham Stephan?

  So start making content for your business that actually works with Agent Opus. All you gotta do is visit opus.pro/ICH to get started. Again, that is opus.pro/ICH or just click the link down below in the description to try it out and get started today. So explain, what do you put in the contracts that gives you such a big advantage?

• 19:41Speaker 02

  Every contract has a due diligence period, an environmental, a title, and, um, you know, you do a good job at having the proper documentation in advance and you get a period of time to figure it out. By the way, often, the per- It takes 30 or 40 days just to sign the purchase agreement. Then you have 60 days and maybe you have an extended period of time if there's environmental questions or environmental issues. You take advantage. The time between you see a property and the time you close, that's not a due diligence period to just check that the roof doesn't leak. That's your time to create value. So it's all about hustle and pace and that's what's missing. So the people who have hustle, and you know who they are, you've had lots of them on

• 20:26Speaker 02

  the show, those people are making money hand over foot. The folks that, you know, are waiting and will figure it out later, that's not the way to do it.

• 20:35Graham Stephan?

  And what's your pitch when you give one of these owners a call and you want to buy their building? What do you say that convinces them to sell on good terms?

• 20:43Speaker 02

  Okay, first of all, normally I pay more than anyone else. I overpay for everything and I pay because I'm going to create more value or I'm not going to buy it. So it's either going to be worth it when I buy it or I'm not going to buy it. By the way, 99% of the time I buy it because I have a very good nose and understanding of what I'm doing and I'm not wasting my time and I'm not wasting the seller's time to do all this and not put it together. So I usually have a story. So I spent 17 years building Walmart stores across the East Coast of the United States and did all of it with no money and knew exactly what I was doing and closed on every single deal that we signed up with.

• 21:27Graham Stephan?

  How does someone know when they know enough to be able to do something like that?

• 21:33Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18 plus.

• 21:58Speaker 02

  I think that the secret is to start really, really small. So I love little deals and happy to work on little deals. And then grow the, then grow the platform, grow the platform. Start at the beginning, have a buy box and then do a smallest deal you can in that buy box. And then keep going and keep going as long as you know what you're doing.

• 22:20Graham Stephan?

  Is recreating this harder in 2026 than it was 10 years ago?

• 22:24Speaker 02

  Okay, so real estate is incredibly cyclical. So for example, I started in real estate in 1988 and it was boom times. And I had from 1988 to 2005 and I developed 100 shopping centers, 10 million square feet, spectacular growth. And then it stopped, literally just stopped altogether. And I went on to do other things. I bought operating companies that own their own real estate and then played that game out, if you will, for 20 years. But not a lot of real estate deals and great opportunities as far as I'm concerned. That was sort of a slower period. Right now, I think is a really exciting and dynamic period for a variety of reasons.

• 23:10Speaker 02

  Some we've discussed, folks aging out, properties transferring, conventional financing being available. And also, of course, bonus depreciation and being a real estate professional is a super exciting moment and gives a lot more juice to the real estate professionals doing deals right now.

• 23:28Graham Stephan?

  Do you see any red flags in the market? Because a lot of people could say, well, there are a lot of people aging out. There's going to be more inventory coming on the market. Interest rates are pretty high. A lot of retail is now going online. You just need big warehouses in the middle of nowhere that are pretty cheap.

• 23:43Speaker 02

  Okay, you're talking just broad. There is a jewel everywhere. So I'm in the jewelry business. I'm out looking for that little jewel and you can go anywhere. And some of the best jewels are in the most secondary tertiary markets in the country because people aren't there paying attention. So the interest rates don't bother me. The general economy doesn't bother me. I'm out looking for opportunities.

• 24:10Graham Stephan?

  When in your life has it been the easiest to make a lot of money?

• 24:14Speaker 02

  I've had a pretty consistent long run, old guy here. For the last 40 years, I've been cranking it out. And to me, you got to change your play up. So if one play isn't working, I was building strip shopping centers. That ended. I had to do something else. I was doing operating companies. That ended. Now I'm doing smaller deals and bonus depreciation. So I think you have to keep changing up what deals work in a particular time.

• 24:41Jack Selby?

  What deals, single-handedly, positively affected your net worth the most?

• 24:45Speaker 02

  I bought a German department store chain in 2016 called Galleria Koffhoff. And three years later, I sold it to our competitor and made a billion dollar cash profit. And that was sold in August before, right before the pandemic. By the way, the story is much better. The guy was this crazy rogue. I was running a public company. I had to finish the deal. I had to fly in on a plane, land my helicopter on his yacht, finish negotiating the deal on his yacht. And then he finally closed in August of 19. By May, he went bankrupt. So he bought the business for three and a half billion euros. And six months later was bankrupt. The company went bankrupt three times.

• 25:29Speaker 02

  And then my son bought the company for one euro two years ago.

• 25:35Jack Selby?

  Wow. Wait, so you bought this company for how much?

• 25:41Speaker 02

  Galleria Koffhoff, we bought for 2.6 billion euros. Three years later, I sold it to Rene Banko for a billion dollar cash US dollar profit. And we closed in August of 2019, right before the pandemic. Unfortunately, the pandemic hit and the business went bankrupt six months later. And it went bankrupt three times. The German government took it over. By the way, Mr. Banko unfortunately is in jail right now. And the private equity firm that my son runs, and our DC Equity Partners, bought the business at a bankruptcy from the German government in July of 2024.

• 26:24Graham Stephan?

  For one euro?

• 26:25Speaker 02

  For one euro.

• 26:26Graham Stephan?

  Why didn't someone else bid two euros?

• 26:29Speaker 02

  Cause no one wanted it because no one wants these dying old department store chains. And I've been able to buy and sell and in and out of these businesses, but they're not for the faint in heart. They're very difficult businesses.

• 26:41Graham Stephan?

  What's the risk though? Cause I feel like I would pay 20 bucks just to say I own this thing for like a day.

• 26:46Speaker 02

  Well, next time I need 20 bucks, I'll call you up and, uh, and we'll do it.

• 26:50Graham Stephan?

  Consider me.

• 26:51Speaker 02

  Um, well, I, I guess the, the most, uh, uh, game changing moment for me was when I went from, uh, developing shopping centers to buying Lord and Taylor department store chain. So Macy's had merged with May company. They own Lord and Taylor. They didn't want to own Lord and Taylor. They wanted to sell it. And I sort of before it went on the market, I got a wind that it was going to be for sale. And I did a lot of analysis on it as a real estate guy. And I analyzed the real estate. What I found was 49 spectacular properties, including the Fifth Avenue Lord and Taylor building. So I wanted to buy it for its real estate. Macy's wanted to sell it and they wanted to sell it for 1.2 billion dollars. They didn't want anyone else. They didn't want to take anything less.

• 27:36Speaker 02

  And I made a deal, even though I wasn't a logic, I wasn't a private equity guy and KKR and all kinds of people were bidding on it. They wanted me to buy it because they thought as a real estate guy, I was going to liquidate it. That's what they wanted to happen. They wanted Lord and Taylor to go away. They just didn't want to get their hands dirty that they were the guys.

• 27:53Graham Stephan?

  Their name was still attached to?

• 27:54Speaker 02

  Yeah. They didn't want to be the people, they didn't want to be the people firing all those employees and liquidating the business. So I went in and I negotiated a deal with them to buy, uh, Lord and Taylor for 1.2 billion dollars. So now me and my real estate attorney, we're negotiating with Federated, this mini billion dollar company. And, um, uh, we're turning papers and negotiating every day. And my father starts calling me every day and like, what are you doing? We don't buy 1.2 billion dollar companies. They're going to ask for a deposit. They're represented by JP Morgan, Scadden Arps and Goldman Sachs.

• 28:34Speaker 02

  Your entity, you're, I had just done a hundred shopping centers with single purpose LLCs. And so with no money, I had gotten purchase agreements and then I had gotten approvals and closed after I had done all the work. He's like, they're not going to sell you a 1.2 billion good dollar company that way. I said, relax. I have my entity NRDC Equity Partners Fund Seven, which was a single purpose entity. And when they figure out or when they want to see a deposit or that there's money in the account, I'll go to one of my friends and I'll get someone else to do the deal and I'll manage it and get it promoted.

• 29:14Speaker 02

  So we're doing the papers, we're doing the papers. And of course, you know, we're fairly high profile people and whatever. One day, I, at midnight, I called my father from Tiers Square because the lawyer's office was in Times Square. And I say to him, they signed the purchase agreement. And so all the consultants, all the best lawyers in the world, and no one had asked to see the financials for my single purpose entity, and they just kind of assumed that we were some fund.

• 29:40Jack Selby?

  So you created an LLC or like some?

• 29:43Speaker 02

  Yeah, like an LLC, like every time, every deal we do, I have, I have 200 LLCs.

• 29:47Jack Selby?

  And you just created a random one?

• 29:49Speaker 02

  And I put a name on it, NRDC, which was the name of our private equity firm, NRDC Equity Partners Fund Seven. There were no ones through six. I just, by the way, that's, I tell people all the time, have a landing page. Take your baseball hat off, wear a jacket and a white shirt, you know, look the part. So I looked the part and they entered into a purchase agreement with me. So now my father says, well, that's great, but we're going to come up with the 1.2 billion dollars. I said, I'll work on that tomorrow. So hung up the phone, went back to my office, my little team.

• 30:27Speaker 02

  And we created on a piece of paper on a whiteboard, a holding company called Lord & Taylor Holding Company. The operating company had 120 million dollars of EBITDA. So we created an operating company and a property company. The operating company paid. Eighty million dollars in rent to the property company. And so now I had a property company that owned Fifth Avenue and Scarsdale, New York and Stanford, Connecticut and Manhasset, Long Island, forty nine properties. It was two thousand and six, the beginning of two thousand and six, markets were very great and bubbly. I went to these three nice institutions, Bear Stearns, Lehman Brothers, and CIT before they went bankrupt the first time.

• 31:10Speaker 02

  And the three of these firms lent me one billion, one hundred and seventy five million dollars to buy Lord & Taylor. So I now had to go back to my father and my two partners, Bill Mack and Lee Nybar. And the four of us, and I had to pitch them, this was the hardest sell of my life. Cause in my family real estate business, we don't put money into deals. Like if you're not smart enough to figure out how to do it without any money or almost no money, then it's not our deal. So for them, for my family, my gang to put up twenty five million was a hard sell. But to control a one point two billion dollar company, a hundred percent for twenty five million dollars. Everyone agreed, my father was a little grumpy, but we all put it in.

• 31:54Speaker 02

  And now we owned Lord & Taylor. The idea was to liquidate the whole thing as fast as possible, get all our money back and go. But a crazy thing happened on the way to the closing, which was Macy's was rebranding all of the May stores and everything Macy's instead of Marshall Fields and instead of Filene's. And some of the customers were like, I don't want to be a Macy's shopper. And the Lord & Taylor sales, even before we closed, started going up by ten percent.

• 32:22Jack Selby?

  Wow.

• 32:23Speaker 02

  So I was like, oh, how hard could it be to run a department store chain? I'll run it instead of liquidating it and I'll liquidate it in the future when the time comes. So I ended up operating as a chairman, this Lord & Taylor business from two thousand and six to the, it kept running to the pandemic, a business that would have been bankrupt and or closed three months later in two thousand and six. And we did very nice. We sold the Fifth Avenue building to, first to WeWork and then to Amazon, who paid one billion, two hundred million dollars just for the Lord & Taylor Fifth Avenue building.

• 33:00Jack Selby?

  Just for one building?

• 33:01Speaker 02

  One building.

• 33:03Jack Selby?

  The entire

• 33:04Speaker 02

  Business for 1.2 billion.

• 33:05Jack Selby?

  So you got it all back from one building.

• 33:07Speaker 02

  We made money. We had that doesn't include, you know, hundreds of millions of dollars of inventory and properties. We did fine, but more importantly.

• 33:14Jack Selby?

  Fine. We did. We did. Okay. We do. Okay. Yeah.

• 33:18Speaker 02

  We do. We do. We got by. So, but more importantly, I used Lord and Taylor to buy Hudson Bay Company, which was a tremendous company and totally screwed up in every way you can imagine.

• 33:31Jack Selby?

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• 36:09Jack Selby?

  Explain Hudson Bay Company.

• 36:11Speaker 02

  Hudson Bay Company was the longest continuously operating company in North America, founded in 1662 by King Charles II, who signed a charter giving all the lands that drain into the Hudson's Bay to his cousin Rupert, who was the first governor of the Hudson Bay Company. So I unfortunately was the last governor of the Hudson Bay Company. So I took over this company. Actually, I bid on buying it. I got outbid by this other fellow, very talented entrepreneur named Jerry Zucker, and he was running the business. I called him up and said, I'd love to be your partner. I did all this work on it. I'm the chairman

• 36:54Speaker 02

  and owner of Lord & Taylor. I can help you in Canada. So we made a deal and I bought 20% of the Hudson Bay Company, but I needed $100 million. So I wasn't going back to my guys. So I went and I borrowed $90 million against the $100 million investment on Hudson Bay. So now I was short $10 million. So I went back to my father, my partners and said, we need another $10 million. My father said to me, This is the last money you ever for the rest of my life or your life taking out of this family business. I said, all right, relax. Last, last money ever. Relax again. So, relax. So, we took the $10 million. Now we own 20% of the Hudson Bay Company.

• 37:39Speaker 02

  Now it's March of 2008. My phone rings. It's Jerry Zucker. I've been on the board. We've been working. Didn't make much progress. And he says to me, Richard, I have a brain tumor and I'm gonna die in the next three months. I'm like, oh my God, that's terrible. You know, what can I do? And he said, I want you to buy the balance of the company. And I said, uh, okay, we'll look, you know, we'll look at it. Got his people on the phone, talked to him, hung up the phone, never spoke to him again. He died three weeks later. Wow. So we bought from the estate, the balance of the Hudson Bay Company in and closed in July of, uh, July of 2008. The world was about to blow up. It was that, you know, the world blew

• 38:23Speaker 02

  up in September of 2008. So how did I come up with the money to buy the balance? Well, I needed $500 million because I needed to buy, I needed 200 or 180 million Canadian to buy the balance of that deal. But my other deal had a lot of debt and I was getting nervous. So I needed $500 million. So I, my partner, Lee, introduced me to these wonderfully nice people from Abu Dhabi. And they flew in and I showed them all the real estate and everything that we have. They loved it. And I went back to the whiteboard, created a new, so I remember I had Lord & Taylor Hold Co., Lord & Taylor Real Estate, Lord & Taylor Prop Co. I now created Hudson Bay Trading

• 39:06Speaker 02

  Company on top that would own the Lord & Taylor Holding Company and the Hudson Bay Holding Company. And I sold the nice folks from Abu Dhabi for $500 million, 49% of the Hudson Bay Trading Company, the holding company that would own all of it. So inflows $500 million. I pay down my debt. I buy Hudson Bay Company. But now I call up my father and I say, well, Dad, you know, we put $35 million in and we own half of this thing. And these nice people from Abu Dhabi put in 500 million. So I guess our 35 million is now worth 500 million. Plus 50%.

• 39:47Speaker 02

  Well, if half the company was worth fifty percent, five hundred million, our half was now worth five hundred million. Okay. So my father says, and my father was wonderful and we had a great relationship, but it was a little angsty, it was two thousand eight. He's like, just because you found someone stupid enough to buy half of this department store business that is heading for god knows where, doesn't mean that our half is worth five hundred million dollars, which is by the way, true, you never, you know, just because some one person sees one thing. Anyway, so, long story short, we close, the, the great financial crisis hits, but I had merged these two companies together. They were so screwed up.

• 40:30Speaker 02

  So I had run this real estate company with forty employees and we were great, we were building a million square feet a year of, of shopping centers. I now had seventy five thousand employees. I was the chairman and the governor of this thing. I'm a real estate guy, not an operating company guy. I had a great guy by the name of Don Watros, who was chief operating officer. He cut five hundred million dollars of expenses out of the business between October and December of that year and, and basically saved the enterprise. We fired ninety seven of the top hundred executives. People say, oh, how do you change the culture of a company? Well, you fire everybody, that's one way to do it.

• 41:15Speaker 02

  And, and we broke the company up into pieces and it survived and did fine and grew. And then a little less than two years later, Walmart contacted us and said they wanted to buy a division we had called Zellers, which was like the Kmart of Canada, which was kind of a crappy, least valuable of the companies and the things that we had in Canada. And they came to visit me and they said, Richard, we've heard that Target was interested in buying Zellers and we have all these stores in Canada. I said, well, if you want to pay for it, you can, you can buy it, sure, we'll sell it. And they said, well, how much do you want to sell it for?

• 41:59Speaker 02

  I said, well, we don't look at it as an operating company, we look at it as four hundred leaseholds that are five dollars a foot under value. And if you take the dollars under value and put a six percent cap on it, we'd like to sell it to you for two point two billion dollars. Of course, we just bought the entire business for 1.2 billion, you know, two years before that. So they said, oh, that sounds a little steep, Richard. I said, it's going to be terrible if Target comes in and takes $5 billion of business. So I said to them, this is what's going to happen. No brokers, CEO of, I'm going to speak directly to Target and I'm going to speak directly to Walmart.

• 42:41Speaker 02

  Whoever signs a purchase agreement first with no outs can have it. And I'm going to tell each of you what the other guy is bidding. They're like, okay, I guess, you know, do we have a choice? No. So they left, they had come to my office. I pick up the phone and what do I do? I call Target because I wasn't talking to Target at that time. And I said to Target, I said, this is your last chance. If you ever want to come to Canada, because this is the last set of boxes available. And they had looked at it, we had talked about it over the years, but we weren't talking. So my contact, the head of real estate, spoke to the CEO. He said, we're interested, come and visit us. So I flew up to Minnesota and they said, well, we're very interested. We'll take your best 50 stores for $500 million.

• 43:27Speaker 02

  I said, that doesn't work for me and I got other people. And if you don't want to come to Canada, no worries. And I flew home. So then I got my first bid from Walmart. They would take 80 stores or 90 stores for 800 million. And I said, that doesn't work. Then Target came up to a billion dollars. And then Walmart came up to a billion too. And then I went back to Target, back and forth, back and forth. By the way, I was the Walmart guy, so I was kind of shocked that I hadn't, you know, that it was going this long. Finally, I get a call from Target saying, we'll take all of it for $1,850 million. We'll give you 900 million at closing and the balance 90 days later.

• 44:12Speaker 02

  So I said, okay. So I flew up to Minnesota. By the way, Walmart at this point had kind of like just stopped. And you know, I don't think they believed me that I had really gotten that much money from Target. Cause I told them. Billion eight fifty, it's your call. And so I fly up to Minnesota with my small little team and the entire management team of the Target Corporation and 25 lawyers, all in conference rooms. And we spent four and a half days. This was the HR conference room, the logistics conference room, and we went and negotiated a purchase agreement. Imagine selling a division, you know, this large to Target. And by the, by Friday morning, we had a completed purchase agreement.

• 44:57Speaker 02

  The Target board meeting was on Monday and the closing would have been on Tuesday, was scheduled for Tuesday if the board approves. I get on a plane, fly back, go to my office. I'm sitting in my office Friday at five o'clock. My assistant comes in and she says, "The CEO of Walmart and the CEO of Walmart International, Doug McMillan, is on the phone. They want to talk to you." I'm like, "Oh, this is, you know, your worst nightmare." So they were very gracious. They got, they all knew what each other were doing. By the way, they all have spies at each other's offices and whatever. So they said, "Richard, we are so sorry. We screwed up. We have to own that company. You cannot sell that business to Target."

• 45:42Speaker 02

  I'm like, "And it's our fault. We are prepared to pay you another hundred million dollars. I will send a team to your office this weekend and have it done and signed by Sunday night."

• 45:56Speaker 02

  So I said, "Guys, I'm heartbroken because I'm a Walmart guy. I did all this business with you. I had known Sam Walton and Rob Walton and I have this great relationship." But I shook hands with Target. Thank God they didn't say they would pay me 200 million more. But for a hundred million dollars, my word was still good. And I said, "I'm going to finish with Target. If for some reason the board of directors of Target Corporation turns me down, votes it down, I'll be back to you hat in hand, but I can't, I can't back out of the deal." And they said, "We respect you, Richard. We understand."

• 46:33Speaker 02

  Click the phone Monday on needles. Target approves a deal. The next day, $900 million in cash gets wired in. And then another 900 million. The nice folks from Abu Dhabi got their $500 million back. Plus another 250 million during 2010. There wasn't a lot of people getting their money back. All my investors got lots of money. My father, who was the loveliest, smartest guy ever, had a smile on his face till the day he died. He never fussed with me, never raised his voice, never looked at me sideways till the day he died. And so that was that story.

• 47:15Jack Selby?

  How much money did you make on that deal in total?

• 47:18Speaker 02

  It's complicated. All of these deals, because you know, you reinvest back in the stores and you renovate stores. But basically from 2006 to this January, when Saxon Neiman's went bankrupt. We bought and sold and bought and sold and did a whole series of transactions. And we did fine. We would have done better if Saxon Neiman's hadn't gone bankrupt. That would have been a good move, but we did just fine.

• 47:44Jack Selby?

  So in doing some research for this podcast, I just Googled it. I'm like, okay, Richard Baker net worth. Google says five to $10 million. Chat GPT says conservative estimate $750 million. And then you have other things that are saying like 1.2 billion dollars. Explain this discrepancy.

• 48:00Speaker 02

  I guess we shouldn't be looking at those, those Google and those places for people's net worth. They seem to be wildly incorrect.

• 48:08Jack Selby?

  To me, it seems a little bit reminiscent of like War Dogs. If you've ever seen that, how they're like selling government contracts and they end up in this room, placing a bid on something that they have like no business doing. But they're up against a team of probably 20 lawyers and executives. And yet they end up closing this deal. That kind of reminds me a little bit of what you were doing. I mean, you were like stepping foot into places that you had never thought you would be in, doing deals that were completely unimaginable. Do you think that there's some credit to like fake it till you make it? Not saying you're faking it, but like you were kind of in a deep end.

• 48:40Speaker 02

  I would say this and have this translate. To all the folks that are listening, you have to have conviction in what it is that you understand. I had spent my entire life in retail real estate. So I understood the value of the real estate inside of those operating companies. The people that ran those operating companies didn't understand the real estate and a lot of people, a lot of other people didn't understand the value. And I was able with great clarity and surety to buy those companies and finance those transactions because I understood what the real estate was worth inside those companies. Now, the world's changed and markets go up, markets go down.

• 49:19Speaker 02

  But we bought Saks in 2013 for $2,600 million. Six months later, we got a financing against the Fifth Avenue building and the third-party lender did an appraisal on the building of $3,650 million, six months after we bought the entire company in a public process. The largest shareholder was Carlos Slim, at the time, the richest man in the world, and he sued Goldman Sachs for seven years that why did Goldman Sachs sell us the business when the one building was worth a billion dollars more than what they sold the whole company for?

• 50:02Graham Stephan?

  What do you currently own?

• 50:04Speaker 02

  I'm in and out of all kinds of different assets. So last year, I, on my, my spare time, I created a, another real estate company called ROIC, where we built a portfolio of 10 million, another 10 million square feet of West Coast real estate, and I sold that to Blackstone last year for $4 billion. So that's sold. I'm out of Saks and Neiman's. Right now, I own a, I own 10 million square feet of super high-quality East Coast Walmart-anchored shopping centers, which is great. And I have a private equity business with a variety of different investments.

• 50:47Speaker 02

  And I'm playing around with new investments and doing new things.

• 50:51Graham Stephan?

  Now, a lot of people are taught to avoid debt, but you really embrace it. Where do you define the line between taking on smart debt and just being dumb with it?

• 51:01Speaker 02

  Let's call smart debt non-recourse debt.

• 51:05Speaker 00

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• 51:30Speaker 02

  So we should all take as much nonrecourse debt as we can get our hands on. For folks who don't understand, nonrecourse debt is debt that's only recourse to your LLC. So if for some reason the property goes bad and doesn't pay the interest or doesn't pay the amortization, all the bank can do is take back that one property. So my business model is to put as little equity in every deal as I can and to take as much nonrecourse debt as possible. If you believe in a world that's going to have a lot of inflation, you want to buy as much real estate as possible with as much nonrecourse debt as possible, and you're going to make a lot of money.

• 52:09Graham Stephan?

  Where do you see the economy heading over the next 10 years? And where do you see the biggest opportunities?

• 52:14Speaker 02

  First of all, I think we're on the brink of a revolution of entrepreneur activity. I think that corporate America is going to deconstruct. We've already begun to see it in the last 10 years, but it's going to go dramatically faster. And a lot of people are going to get pushed out to the curb. And I think those people aren't just giving up. Those people are going to become entrepreneurs, many of them real estate entrepreneurs, and they're going to replicate the money that they were making in corporate America or do better. And so I think that that's going to be good for the economy. So I'm really bullish in the United States that there's going to be growth, and that's going to create tax revenue and all the things that we need to have a good society

• 52:58Speaker 02

  and make sense here. By the way, I don't believe that's going to happen in Europe and in certain places in Asia, because in Europe, they have laws that protect employees and require companies to give very long, you know, periods of. Coverage when they exit people and they also have a big safety net. So I don't think there'll be the same motivation for people to become entrepreneurs like they will be here in the United States.

• 53:25Jack Selby?

  What's really interesting about that is the investor Jeremy Grantham just went on Diary of a CEO and said that he's actually not bullish for the US economy. And says that emerging markets and international markets will outperform and the US economy will crash. What are your thoughts on that?

• 53:42Speaker 02

  I totally disagree with that and the risk reward of investing in the United States versus international. So much safer, much better returns for the risk that you're taking to invest in the United States. I think the answer is really, you gotta know what you're doing and you gotta be thoughtful and smart. And now, when I look at the landscape of all the things that I could invest in today, securities and AI and all of these things. I'm actually very excited and motivated to invest my money in these below the radar real estate opportunities that we're talking about. You know, Main Street retail, little unanchored strip shopping centers, multifamily.

• 54:23Speaker 02

  But I like it to be, to have a theme or a play, if you will. So right now, I'm very excited about branded university, you know, college housing, multifamily college housing. I like that as a play. I'm focused on that.

• 54:39Jack Selby?

  Jeremy Grantham, I know you're listening to this right now on YouTube Premium because there's no way you don't pay for YouTube. As a member. Come on as a member of the Ice Coffee Hour as well, paying a few bucks a month. Come on the Ice Coffee Hour podcast to debate Richard Baker. That would be really, really, really interesting.

• 54:55Speaker 02

  I'm there for it. Bring it on.

• 54:57Jack Selby?

  If you're bullish on university housing, I, that would suggest that you're bullish on just broader education in general.

• 55:05Speaker 02

  Well, I'm bullish on the top 10 universities in the United States.

• 55:08Jack Selby?

  The top 10 universities.

• 55:10Speaker 02

  So I wouldn't, so or maybe top 20. So by the way, I think the other universities will play out in different ways. There'll be consolidation and mergers and all kinds of things. But for a moment, I'm investing heavily at Cornell University. Cornell University has incredible graduate program and they're growing their applicants every year and they're building new facilities and research. I don't have any worries about investing in a place like that.

• 55:35Jack Selby?

  How could you be wrong about your thesis of the United States economy over the next 10 years?

• 55:41Speaker 02

  Oh, well, lots of, you know, uh, you know, uh, Mayor Maldani, Maldani.

• 55:46Graham Stephan?

  Maldani.

• 55:46Speaker 02

  Maldani, Mayor Maldani could become your next president. That wouldn't be helpful. But, uh, I mean, none of us know really what's gonna happen in the future, but to me, I'm in the economy on a, you know, everyday basis and it feels very strong and all the concerns about labor, you know, AI, people losing their jobs, still not enough labor in this country. And, um, so I think people will have jobs and have incomes and, you know, uh, I stayed at a hotel last night, you could barely check in, there were so many people. In Las Vegas in July.

• 56:25Graham Stephan?

  What's the impact that Maldani's had in New York?

• 56:28Speaker 02

  So, um, you know, I've been calling it for a while and it looks like it's happening. So, uh, the Trump story has pushed everything way to the right. So obviously the risk in the next election or in seven years from now, or six years, whatever it is, uh, the risk really is it can go way left. And that would be, uh, I'm not a fan of way right, honestly, and I'm not a fan of way left. It's very unfortunate in this country. We don't have any middle movement.

• 56:58Speaker 02

  But I think it would be, uh, I think it would be terrible for our economy, uh, to have the sort of, uh, policies that our mayor in New York City has been talking about.

• 57:07Graham Stephan?

  What are the real world implications that you have seen since he's taken office?

• 57:11Speaker 02

  You know, this, uh, tax on the, uh, pied-à-terre, you know, the second apartments and all that. But meanwhile, I haven't seen any of my friends selling their second apartments and, you know, uh, it's not tenable in the United States for people like Elon Musk to be a trillionaire and not get back to society. spaghetti is a genius and we love him and he's giving back because he's so clever and so good for the economy. But how much money did he give to charity last year? And what is he doing for people who don't have resources? And he's making a terrible mistake. So is Bezos and so is a lot of that gang. They're not giving away nearly enough money to the people who need it. Giving money or investing money in rocket ships and their passion projects don't count.

• 57:56Speaker 02

  So in this country, um, uh, there's a lot of risk that if the rich spend too much money and don't give back. I mean, just think what Elon Musk could do for the housing crisis in San Francisco or the housing crisis in New York. I mean, he could allocate $200 billion to San Francisco and New York for low income housing. Think what that could do for, uh, for those cities and for people who don't have resources. And, um, I think the resentment.

• 58:26Graham Stephan?

  Is it a money problem though? It doesn't seem like the housing problem is a money issue. It seems like more of a policy issue and the people in charge are maybe more to blame than throwing money at it.

• 58:37Speaker 02

  It's everything. Uh, believe me, a couple hundred billion dollars would certainly help. And it is certainly a policy problem, easily fixable. They have to take large chunks of land and approve very dense housing and they gotta build it. They gotta pay for it.

• 58:52Jack Selby?

  Logistically, how is that even possible though? If like, everyone always says we need to tax the rich more that, and I'm not necessarily saying I disagree nor agree, but they're saying that we need to tax the rich more. They need to give away more money to charity. When in actuality, how much money does Elon have sitting in his JP Morgan checking account? Like, we don't necessarily.

• 59:09Speaker 02

  How much money do you think Elon gave away last year?

• 59:12Jack Selby?

  I have no idea.

• 59:13Speaker 02

  Someone here could figure it out, but my understanding is it was something like, uh, he built a not-for-profit school for $200 million on the campus of SpaceX for his employees.

• 59:25Graham Stephan?

  Yeah, but isn't he also paying like $400 million a year in taxes or it could be more than?

• 59:29Speaker 02

  I don't think he's paying 400. I'm not the expert, but how is he paying taxes? He's not getting income. He's just creating value, so he has nothing to pay taxes on.

• 59:38Jack Selby?

  You would then suggest that it makes sense for him to borrow against his companies? Or like, how would he get the money in order to?

• 59:44Speaker 02

  I'm suggesting that, uh, uh, that we're gonna have problems in this country. If we have a class of very wealthy people who live extravagant lifestyles and don't contribute enough to society to do good things.

• 59:59Jack Selby?

  Do you live an extravagant lifestyle?

• 1:00:02Speaker 02

  I live a very comfortable lifestyle.

• 1:00:05Graham Stephan?

  Where do you draw the line between comfortable and extravagant?

• 1:00:08Speaker 02

  I'm not here to judge how other folks live. I'm saying you asked a question about politics and society. And I'm telling you in this country that if people don't participate, I'm spending a lot of my time and energy helping to teach people about real estate entrepreneurship. I give huge amounts of money to different types of charities and different types of organization. So do lots of other people, tremendous sums of money. You know, the Gates Foundation and Warren Buffett and, and a lot of these folks do. I think it's important for society that there's a balance. And I'm all for, I'm not for taxing the rich and I'm all for, uh, you know, people being able to enjoy the sweat of their labor and the benefits that they make.

• 1:00:52Speaker 02

  But I think we're living in a very dangerous time and we have to be careful.

• 1:00:57Graham Stephan?

  I completely agree with you that I think when the rich keep getting so rich and the poor are, are really struggling to get by, I agree that that's, that that is something worth addressing. But I'd also tend to think that, my gosh, it's, it's more of a spending problem. And it just seems like-

• 1:01:15Speaker 02

  Spending problem by who?

• 1:01:16Graham Stephan?

  Just the entire country. Like when you look at the deficits of like individual states too.

• 1:01:21Speaker 02

  Disastrous, yeah.

• 1:01:22Graham Stephan?

  It's insane. And even like the California rail line, how many tens or hundred billion dollars that is wasted there? And it just seems like, you know, why tax rich people more when there are so many problems? Like when you, when, like you ever look at an individual-

• 1:01:39Speaker 02

  The pressure to tax rich people will go down if rich people continue to be responsible members of the community and participate proportionately to whatever needs to be done.

• 1:01:50Graham Stephan?

  See, I just tend to think that if you were to solve someone's individual problem, let's just say that someone has, uh, you know, they're not saving enough. The first thing you'd look at is how much are you spending? And if the spending is going to be out of control, it really doesn't matter how much money they make because just as many people are living paycheck to paycheck, making $200,000 as like $70,000. So it's obviously not an income problem, it's spending problem. So we solve the spending problem first and then we work on everything else. So it seems to me like, why don't we solve spending issues and the deficit? Then see how much you really need and then try to bridge that gap.

• 1:02:22Speaker 02

  I'm all for it. Who do I vote for? Tell me who to vote for. I'm all for it.

• 1:02:25Graham Stephan?

  Wish we had an answer on that.

• 1:02:27Jack Selby?

  It's kind of similar to your philosophy on investing in the first place because you say you don't pay attention to like the macro economy. You just consider on like a day to day basis and what can you do, not even with respect to what's going on out here to better your position. And I think Graham's kind of saying the same thing with the average person. It's like, they can say that I'm not wealthy because Elon Musk has a trillion dollars, but in actuality, that's not going to change their financial situation. What will change their financial situation is taking all of that thought, all of that belief and putting it in their mind of like, how can I make myself better today than I was yesterday?

• 1:03:01Speaker 02

  Anyway, I think that there's a lot of entrepreneurial opportunities for folks, whether it's, you know, on one end, driving Uber car or another end, creating a real estate venture or a small business or it's a great country. We have a lot of ability in order to create new businesses. And I think people who have that entrepreneurial energy and desire, we have opportunities for that.

• 1:03:27Graham Stephan?

  I'm curious about this one. Do you believe in diversification? Or do you think that most fortunes come from concentration?

• 1:03:35Speaker 02

  That's a great, great question. So intellectually, I would say diversification is very smart and intelligent. And I have very smart friends who are well diversified. I can't seem to ever get myself there because I'm so, you know, when you're a real estate person, you're ill liquid and

• 1:03:53Speaker 02

  and you have to keep, in order for me to get bonus depreciation, I have to buy more real estate. And so I just keep getting more and more concentrated in real estate. And when I had a large real estate portfolio, what did I do? I went out and bought operating companies that owned real estate. So I guess I tend to do what I know. And I wish I knew more about, you know, AI companies and, and that type of thing and diversify my interests that way, but I don't.

• 1:04:25Jack Selby?

  How are you currently investing then? If you were to divide up your portfolio, what does it look like? You have like, you know, this in, you know, department stores, retail stores, you have this in like stocks, bonds, treasuries?

• 1:04:38Speaker 02

  I would say, you know, 80 to 90% of my net worth is in real estate and, you know, 10, 20 in liquid assets.

• 1:04:48Jack Selby?

  What is a liquid asset to you?

• 1:04:50Speaker 02

  You know, liquid asset stocks.

• 1:04:51Jack Selby?

  So stocks?

• 1:04:52Speaker 02

  Yeah.

• 1:04:52Jack Selby?

  And is it like real estate based stocks? Or like, I'm curious, a realty group?

• 1:04:57Speaker 02

  Yeah. How dumb would I be to be buying real estate stocks?

• 1:05:01Jack Selby?

  I know, that's what I, well, that's, but I thought it was funny.

• 1:05:03Speaker 02

  Yeah.

• 1:05:04Jack Selby?

  Yeah, yeah.

• 1:05:04Speaker 02

  Having said that, my, my, having said that, my, my, my very clever son, uh, uh, recently put some of my stock into Vornado stock. Cause there you go. So how dumb, so that's back to your point, you know? Now, of course, we have, uh, all Elon stocks and SpaceX and all those kinds of things. And that's been great. But, um, yeah, occasionally we're, you know, we have a lot of respect for a guy like Steve Roth, who runs Vornado. By the way, it's up 30% since we bought it, so it's just fine.

• 1:05:32Jack Selby?

  So it's, yeah, concentration, there you go.

• 1:05:34Graham Stephan?

  It seems like everything you touch is doing well.

• 1:05:36Speaker 02

  That's not, that's not true.

• 1:05:37Graham Stephan?

  What's the, what's the biggest loss?

• 1:05:39Speaker 02

  Oh, my God. I've had so many, I've had so many failures and so many losses. And I hope the people that are listening, don't for a minute think that me or any of the other people that are on, that come on and talk, win, win, win. Cause that's not the reality of the world. The reality is that life is one miserable failure after another. And what you have to do is try to make your failures small. And you need to be resilient and able to bounce back up and go do something else. And, um, I'm very, uh, entrepreneurial, energetic, and I do a lot of different things and a lot of them don't work. And I fail small and I've had all kinds of failures. And, um, uh, and when I win, I try to put myself in a position where I can win big.

• 1:06:23Jack Selby?

  What's the largest amount of money you've ever lost?

• 1:06:25Graham Stephan?

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• 1:06:42Jack Selby?

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• 1:07:10Graham Stephan?

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• 1:07:58Jack Selby?

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• 1:08:41Jack Selby?

  Call 800-327-5050 Massachusetts. Call 1-877-8HOPENY. Text HOPENY, New York. Call 1-877-777-07867 Louisiana. What's the largest amount of money you've ever lost?

• 1:08:53Speaker 02

  I've lost $200 million in a company called Gilt. We bought Gilt and it didn't go the way we wanted it to go.

• 1:09:01Graham Stephan?

  What happened? Where did you go wrong?

• 1:09:03Speaker 02

  So we bought it because they had good technology or so we thought and we thought that the good technology would be good for our bigger business and maybe we got some benefit out of it. But in the end, the culture of the folks that worked at Gilt didn't work well with the folks that worked at Saks. And so it was not a successful acquisition.

• 1:09:24Jack Selby?

  How did you lose the money? Was it a sale?

• 1:09:27Speaker 02

  We bought it for 200 million and then over time it became worth very little. We sold, then we sold it off. I sold it to Michael Rubin at Fanatics.

• 1:09:36Jack Selby?

  What did that feel like, losing 200 million?

• 1:09:38Speaker 02

  It sucked really bad. And I still wake up in the middle of the night and go, oh, what did I do? How dumb was I? And by the way, I've made billions and billions of dollars, but I, it keeps me up at night and I've lost 100 million here and 100 million there. It's not my only bad thing. I've lost plenty of money inside of some of these operating companies. And you second guess yourself and you try to rethink what you did. But as a general rule, I'm really a small time entrepreneur where I put a little bit of money and, and create value. And I do everything in a separate company. This Saks global thing, I invested

• 1:10:19Speaker 02

  $6 million, which I had taken out of a refinancing that I had done the year before. And the $6 million turned into a $10 billion company. And I sat there on top of this $10 billion company. Oh my God, what am I doing here? I like my little deals where I could, you know, not put a deposit down or figure out my little deals. And I was trapped in this monster. And, but we accomplished a lot and I don't regret it.

• 1:10:46Jack Selby?

  So a question that I asked Michael Saylor was, you know, back when we filmed the podcast with him, I think his net worth was publicly like $4 billion. And MicroStrategy and Bitcoin would fluctuate 1%, 5%, you know, like quite a bit per day. And so his net worth would swing, like if he just checked, you know, his Schwab portfolio, Robinhood portfolio or whatever, like he could see maybe. $50 million just on a given morning, $100 million gone like this. And I asked him, how does that put into perspective other problems that you exist outside of finances on a daily basis? Like, I asked him, for example, if your house floods. It's like, does this not even bother you at this point?

• 1:11:29Jack Selby?

  Because your tolerance has gotten so high for what you have to deal with on a daily basis. If you, you know, if you freaked out every time you lost $50 million, you'd be freaking out or gained $50 million. You'd probably be freaking out 10 times a day. And so I'm curious, how has this affected your overall problem solving tolerance? Or just things that you encounter on a daily basis, having these huge financial swings, $6 million to $10 billion, losing $100 million because of a phone call? You know, stuff like this.

• 1:11:58Speaker 02

  Okay, so you have to keep life in perspective. So when it all boils down, you have your spouse, you have your kids, you have your family, you have your friends. And I recently lost two friends who, and that so trumps, whether your net worth goes up 5%, 10%, 20%. And I think you get to a point in life where you have to really keep things in perspective. My, my grandfather was a great entrepreneur, a great real estate guy, and was very successful. And I remember going to his funeral. And to me, he was like a king. And I went to his funeral and this horrible, ugly cemetery in Brooklyn,

• 1:12:43Speaker 02

  on the side of a mountain, side of a hill with the highway there. And, you know, at the end of the game, the king and the queen go back in the same box with the pawns. So don't over, you know, don't over imagine all this stuff. In the end, we all die and it doesn't mean anything. So keep it all in perspective, try to have fun, try to work with good people, take care of your family and your friends, take care of yourself. That's way more important.

• 1:13:09Jack Selby?

  You've always been good at spotting opportunities. Do you think that's something that you learned growing up? Or something that you're just intrinsically good at? Like, you're born with this, like, way to see.

• 1:13:19Speaker 02

  I think it's, I think it's, I think it's both, honestly, but.

• 1:13:25Speaker 02

  I've identified a key factor. So I was very blessed as an entrepreneur to be able to have my father to talk to, and I have my son to talk to now. My son talks to me. We talk all the time. And what I recently set up was this conference, we call it office hours, where anybody can come on the office hours and ask questions. What's happening in this country is there's all these entrepreneurs and they're sitting at home on their computer, and they're looking and they're thinking and they're watching this or other things. They don't have anyone to talk to or ask questions, simple questions. And these lawyers and consultants cost a fortune. So I'm doing these office hours, I'm doing these bootcamps,

• 1:14:07Speaker 02

  and these kids and these folks are asking great, but pretty basic kind of questions, and I give them the answer in two seconds, because to me, it's like nothing. And that's really valuable. So, um, living, uh, uh, living, uh, in a box by yourself, not having someone to be able to communicate with and ask questions is a big disadvantage. Trying to figure out how to get these folks who are working on real estate deals to be able to have groups to talk to and ask questions is a huge advantage.

• 1:14:37Jack Selby?

  What do you say to people that would claim nepotism on your end, saying that you grew up in a wealthy, real estate, knowledgeable family, and so you had access to certain resources that others don't?

• 1:14:48Speaker 02

  Look, uh, everyone should take advantage of every single opportunity they have. So if I was opportunistic to having grown up in a real estate family, I'm gonna take, I'd be stupid not to take every advantage I could. And, period. That's it. I'm gonna take every, by the way, uh, if there's a deal down the street as I drive out of here, that I see that, you know, I'm gonna take advantage of that opportunity, because that's America and that's what we do. Having said that, I think everyone has a responsibility to participate in the community and give back and be responsible, and that's how the world goes. I'm a responsible citizen. My wife and I support Cornell and all kinds of charities. Uh, I'm here talking to you in order to help entrepreneurs figure out how to be real estate entrepreneurs and what have you. And we all do what we do.

• 1:15:33Jack Selby?

  Do you have access to investments that the average person does not have access to? This is like a big argument that people have that are not where they want to be financially. They say the rich people are able to, you know, buy

• 1:15:47Jack Selby?

  A business or something that the average person can't or like leverage their money in other ways. What would you say to that?

• 1:15:53Speaker 02

  I suspect certain people do. That's just, I don't see a lot of that. I have regular securities that anybody can buy, nothing special there. And I go out and I buy real estate assets and create value because I'm on the ball and I know what I'm doing.

• 1:16:11Jack Selby?

  So it's more of a knowledge thing than it is like an access thing?

• 1:16:14Speaker 02

  Having access to knowledge is really important. And I think we're in a very interesting moment in time. It used to be the people who were the smartest, they were the winners. So, but now I have this, this friend of mine Claude, who sits in my pocket all day. I talk to Claude two hours a day until he cuts me off or whatever the problem is. And I now have all the knowledge in the world in my pocket. So creativity, effort, desire now trumps knowledge. And so I think that's a great equalizer for a lot of people who don't have as much knowledge. Now, what's really important is being creative and, and having that hustle to get things done.

• 1:16:59Graham Stephan?

  One thing I've noticed is that you seem to be very good at negotiating. What tips do you have to negotiate that the average person is unaware of?

• 1:17:08Speaker 02

  I would say, I would say that I overpay. How did I get all those deals done? I must have been willing to pay more than anyone else. But I don't overpay to buy every company because I only bought a handful of companies. So I think the issue is that I see value where other people don't see value.

• 1:17:28Graham Stephan?

  Yeah, but you also oversell. Like you get these companies to like, you know, pit against each other and then you, you sell for these like incredible prices.

• 1:17:36Jack Selby?

  That's a ballsy move saying, hey, look, I'm just going to shop exactly what you offer me with this one other company. Because like you said, all these companies have spies in the other companies. And so they could have just gotten in cahoots and said, hey, how about we just split the difference? You know, we don't want the other person to have this company.

• 1:17:51Graham Stephan?

  Coin flip it.

• 1:17:52Jack Selby?

  Coin flip it, you know? And we'll just, we'll just make sure that we can not overpay for this asset.

• 1:17:57Speaker 02

  Well, just, you know, intelligent, careful guy, you know, that's, I handled that process well and.

• 1:18:04Graham Stephan?

  What tips would you give someone though who's coming to you and be like, "Listen, I want to know, how do I negotiate? How do I get my way on this deal?"

• 1:18:11Speaker 02

  Boy, I'm never, I'm never gonna make another deal if I give that to you. I don't know.

• 1:18:16Graham Stephan?

  You don't have to give us everything, but can you give us 20% of it?

• 1:18:19Speaker 02

  Yeah, look, I think, and we read about this all the time. I think a good deal is when both sides feel happy that they got something good. And understanding what something is worth to the other party. So I understood that both Walmart and Target, the prize of having that asset was big bucks to them. And I had a partner, that little junior kind of partner who was working for me when I was doing that deal. And when I offered the asset to Walmart for 2.2 billion, the other fellow wanted me to offer it to Walmart for 900 million. And yelled and screamed and big fuss because the EBITDA was only 90 million.

• 1:19:03Speaker 02

  He wanted me to chart, he wanted me to look at it as 10x multiple on EBITDA. And I said, "What does that have to do with anything? We're doing a multiple on the cap rate on the rent savings." So, you know, I was, it was thoughtful, thoughtful, a good thinker.

• 1:19:21Jack Selby?

  That's interesting. So if you reframe your brain and you have like an actual light at the end of the tunnel, like an exit strategy, maybe it's knowing what other people that have more money want. And then knowing it before they know they want it and then getting that.

• 1:19:37Speaker 02

  Yes, you said it exactly. I don't know, you said a lot of words, but yes, you said it exactly right. Another way of saying it, they accused me of creating a reality distortion field, which I don't really think about, but I have my way of thinking about it. So I guess you're right. I'm analyzing what it's worth to them and I'm trying to get closer to what it's worth to them when I'm selling something.

• 1:19:59Jack Selby?

  Okay, that is fascinating. I've never, I've never, when you buy assets, do you already have someone else in mind that you know will want to buy it?

• 1:20:08Speaker 02

  As I told you earlier, everything I've ever bought, I stalked and worked on for years. So in 2005, I had identified all five companies that I wanted to buy during the next 20 years. I spent 20 years finishing this one memo. So it wasn't like I woke up and that's why a lot of these kids that are out and young folks and all kinds of folks looking at real estate deals, they're just randomly looking at listings. Stop, go back to your box, have a box and live in that box and be the expert in that box. I had a box. I wanted to buy those five companies. I wanted to just do Walmart deals. That was my box. I have a box now that I'm playing with and you need to have a plan and execute that plan.

• 1:20:52Jack Selby?

  And this can be applied to like any business. Like if you know that there's a certain guy who's very ambitious and he wants to run all of the power washing in a certain city, you're like, okay, well, I know that there's this one other person that could be operating better. And I know this guy will eventually want to buy out this person, but they just don't know it yet.

• 1:21:07Speaker 02

  You should go on my Instagram, Baker House 1921 or my website. And we have all these principles. We have 10 principles that work for every business you can imagine as an entrepreneur and understand those principles and you can buy anything.

• 1:21:22Jack Selby?

  How much variance can you get out of a sale price based off of sales strategy? Like 100% variance? Because that's what it seemed like it was in this case. 900 million to 1.8 billion.

• 1:21:35Speaker 02

  It was worth to us 900 million and it was worth to them 5 billion. And I sold it for a billion 850. That's how I think about it. This is the other very, very important detail of all this. It can't be a commodity asset. It has to be a blue diamond. There was no, it's not like there was three other chains to buy in Canada. It was the only chain left in Canada that you could buy if you were Target or Walmart. Primarily target to come into the country. The Lord & Taylor building that I sold to Amazon for that Amazon paid a billion two for, that was the only building of its kind in that area that they could buy and they wanted to be in that area.

• 1:22:15Speaker 02

  So constantly looking for unique assets is different than buying a commodity asset.

• 1:22:21Graham Stephan?

  How unique do you go though? Because I understand getting that one of one property, but how do you know it's not too unique so that you don't find anybody? It's like, maybe it's too specialized.

• 1:22:33Speaker 02

  It took me a lot of years. I spent a lot of time. I found the one guy, this nice guy, Adam Newman from WeWork, and he wanted it. And he had a plan and an idea and he wanted it. And that was the one guy. And then they had troubles and it got sold to Amazon. But yes, when you buy unique assets that have one of a kind buyers, it can take a while to sell it.

• 1:22:55Graham Stephan?

  So I'm curious, what's the biggest mistake the average person is making right now when it comes to being successful?

• 1:23:02Speaker 02

  Yeah, I think they're sitting in their home office or their computer or their phone, and they think they can do it all from there. And I had someone today I was talking to about a property. And I said, did you drive and did you walk around the property? Oh, I've been looking at it on Google Maps. Well, you gotta get out there and look at these properties. You can't do it that way.

• 1:23:24Graham Stephan?

  So if you turn down places 5%, 6%, you know, 10% cap rate, whatever it may be.

• 1:23:31Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 1:23:56Jack Selby?

  I'm curious, what like rate of growth do you strive for on a year to year basis? Like, how do you know if that year was a success?

• 1:24:03Speaker 02

  Uh, I'd like to cover all my expenses so I can lose any money. I'd like to cover all my living expenses so I can burn cash. And um, uh, I like to make deals that I think are going to be accretive and make money going forward. I don't look at it that way.

• 1:24:18Jack Selby?

  But I think that this could be educational for the viewer watching this right now, because that's kind of the language that they speak. And so if you were to talk to them, communicate with them in the language that they speak, they think, oh, well, my portfolio grew 15% this year. You know, it grew 5% this year.

• 1:24:31Graham Stephan?

  It grew 5% more.

• 1:24:32Jack Selby?

  It grew 180% this year.

• 1:24:34Graham Stephan?

  My international allocation.

• 1:24:36Jack Selby?

  6% this year.

• 1:24:37Graham Stephan?

  It's 50% Jack.

• 1:24:39Speaker 02

  So are those liquid assets or those real estate? Yeah, but that's not real estate. So sure, for liquid assets, we could talk about that. But it's very hard to mark to, uh, mark to market every year, your real estate assets.

• 1:24:51Jack Selby?

  So you don't really see real estate as an investment. You see it more as like a career, like a job. Like, and if you treat it as an investment, maybe it's better if.

• 1:24:57Speaker 02

  I don't look at it as an investment because my goal is not to leave cash behind. So my goal is to put little to no money in a real estate deal and then to refinance and get the money out. So to me, it's not an investment. It's a, it's my craft.

• 1:25:12Graham Stephan?

  And in terms of people becoming either wealthy or successful, how much blame would you put on individual choices versus the economy?

• 1:25:21Speaker 02

  Look, I think the government and the economy and the education system, and there's lots of things that you could look at that could help people live a more productive and profitable life. But in the end, it really comes down to each individual. How do we live in a world where some people are constantly creating value and getting things done and making money and other people aren't? So I think we need to embrace and figure out what the successful folks are doing and whatever that means, and try to train yourself to mimic that and create value like they do.

• 1:25:54Graham Stephan?

  How do you instill those values in your children, growing up in an environment where they don't need to necessarily make money?

• 1:26:02Speaker 02

  I think that falls into a couple of buckets. One, I think folks are born with a desire to create value or to be successful and to strive. And some people perhaps aren't. So that's one characteristic. Secondly, I spent a tremendous amount of time with my family, my kids, my nieces and nephews, teaching them and spending time with them, talking to them. When your kid is in the back of the car, that's code for talking to them. And getting their brain to understand what to do and how to do things. And every child is different. I have an artist, I have a business person, I have a daughter who's getting her advanced degree. Each child is different.

• 1:26:47Speaker 02

  And I think you want to put them in a position where they can be successful in whatever it is they want to do.

• 1:26:53Jack Selby?

  If the average viewer were to follow these exact steps to become wealthy, what would you say they are?

• 1:26:58Speaker 02

  I would say if they want to be a real estate entrepreneur, they should focus in on a category that they really enjoy, whether that's retail or hospitality or multifamily. And they should focus in on a very narrow category or location. Build a plan, a business plan, if you will, for how they want to execute. And then they should work really hard to execute that plan. And the best way by far to create value is to create value before you close on the transaction so that you can get the largest amount of nonrecourse debt or a purchase money mortgage possible. And that's the best way to create value.

• 1:27:42Jack Selby?

  What percentage of the time when you get into contract on a deal, do you actually end up closing?

• 1:27:48Speaker 02

  Hundred percent, I mean, ninety nine point nine percent.

• 1:27:50Jack Selby?

  Oh, really?

• 1:27:51Speaker 02

  Yeah.

• 1:27:51Jack Selby?

  Okay, so I was kind of under the impression that you would do like a shotgun approach and get like a lot under contract. And then from there, that's the time where you kind of want to do all the due diligence and negotiate hard.

• 1:28:02Speaker 02

  I'm a shotgun looking at a lot of things and then, and I might put in offers. But by the time I sign the purchase agreement, I'm usually pretty sure that that's a property I want. So I don't want to waste my time or the seller's time unless I'm really sure. Now, something could change, a tenant that I thought was coming could go bankrupt or something could happen. And I might adjust my thinking, but once I sign a purchase agreement, I feel pretty good about what I'm doing.

• 1:28:29Jack Selby?

  How do you divide your time up now then? Because it seems like you've made a few hail Mary plays that ended up making you a ton of money. And now you could be like, and sorry, that I didn't mean to diminish it down to like a few hail Mary plays. A few very calculated, but crazy.

• 1:28:44Speaker 02

  Actually, I would, I would, I would pause you for a second. I spent 17 years and I built a portfolio of 10 million square feet of Walmart anchored shopping centers with no partners, not a lot of debt. So that's a tremendous chunk of value. So that was long, hard grinding out work. And then I segued from that into buying a series of unusual operating companies that owned real estate that turned into kind of crazy situations. That's how I look at it.

• 1:29:16Jack Selby?

  It's like the slingshot analogy, which I keep thinking about as of late, which is like, it only launches because you pull it back. And so like this part was just as important as the launch. All of like the 17 years that you did prior. But I am curious, after having a few deals make tremendous amounts of wealth, how do you choose what to spend your time on now when it's like?

• 1:29:37Speaker 02

  Ironically, I'm spending my time on these types of deals, these small starter kind of deals that the general population is sort of very enamored with doing. And because I think this is a roadmap to a lot of value going forward. And I think they're deals that anybody can do. And I'm not working on big, complicated multinational corporations. I'm working on buying, as I said to you, 250 beds of housing I'm closing next week on.

• 1:30:08Jack Selby?

  And why does that excite you?

• 1:30:11Speaker 02

  I think the whole process excites me. It's amazing. So I'll just give you a little more detail. At Cornell University, I bought, I used to belong to a fraternity. They were having problems. I was sitting in on the meetings and I ended up making a deal to lease the property for 99 years. So beautiful Greek revival mansion. It's going to be called Baker House, a private club and think tank for entrepreneurs. And it's going to- Have a Nordic spa and a gym and a restaurant and all kinds of event space and tons of content. Then uh uh I was with my lawyer in the house, local guy.

• 1:30:51Speaker 02

  And uh he's like, you know, you really should buy some of these housing developments around the house. I said, I'd love to. Were they for sale? Oh, no, but I know the guy. He's a kind of an older fellow and you know, maybe he'd be interested. I said, call him up. I'm interested. So we called him up. A beautiful pre-war building right across the street and then like a whole bunch of housing right next door. And he called up the guy and the guy said, sure, I would sell the properties. So off market. So I did the analysis and the properties were doing terribly. And they were 40% vacant on Cornell University's campus. How could this be?

• 1:31:33Speaker 02

  Well, because uh they're graduate housing. The guy's 83 years old. What happened over the years at Cornell is a large percentage of the graduate population are foreigners. They need furnished apartments and they want washer dryers. This project, these projects, he wasn't putting furniture in them and they didn't have washer and dryers in the apartments. So I made a very, so I said to him, I'd love to buy your property, but they're unfinanceable because you have 40% vacancy and no bank's gonna lend. It's like, all right, if you give me my price, I'll loan you 80% of the money at four and a half percent interest, non-recourse, no brokers. So I said, okay.

• 1:32:14Speaker 02

  So now I entered into a purchase agreement to buy the properties with just 20% money, no deposit. And I'm going to renovate them and make them beautiful, bonus depreciation for a real estate professional. So that's great. And I'm gonna brand all the housing Baker House. And now you can be a resident, um, you can be a resident member of the club if you live there. So imagine the value uh per month increase that the apartments are worth after they're renovated, furnished, washer and dryers, fantastic real estate entrepreneur uh content.

• 1:32:51Speaker 02

  So I'm having fun. We're renovating buildings and it's all good.

• 1:32:54Jack Selby?

  What do you think is the biggest mistake successful people make after they've already made money?

• 1:33:01Speaker 02

  There's this terrible thing called ego. And I think that successful people all of a sudden start to believe that they're important and successful. And they don't want to make mistakes and they get scared to fail. So if you clutch and you're scared, I'm not scared to fail. Because I'm used to, you know, failure is my friend. I fail and I fail small, but if I thought I was such a big shot and I would be embarrassed to fail, then I wouldn't do anything new. And I think that's the biggest problem I see with my very successful friends.

• 1:33:37Jack Selby?

  Is it failing or is it losing money?

• 1:33:39Speaker 02

  I think publicly looking like they that they failed at something. They might have tons of money, but if you have tons of money and everyone's laughing at you because you failed at something. Some people have an ego problem.

• 1:33:52Jack Selby?

  I'm more curious about like what to optimize for next.

• 1:33:55Speaker 02

  Well, Graham, do you have a spouse? Do you have kids?

• 1:33:58Jack Selby?

  Yes, spouse.

• 1:33:58Speaker 02

  Okay, so.

• 1:33:59Jack Selby?

  It's one day.

• 1:34:00Speaker 02

  Okay, so is that spouse kicking you in the ass? And, you know, I need a house at the lake and I need this and I need that.

• 1:34:07Jack Selby?

  No.

• 1:34:08Speaker 02

  Well, maybe that spouse needs to give you a little more of a kick in the ass.

• 1:34:10Jack Selby?

  That would, that would upset, that would really upset me though, because I don't like being pushed either.

• 1:34:15Speaker 02

  Well, look, I think all of us, many of us, you know, want to live better lives or give more money to our favorite charities or take care of our parents or take care of our siblings or whatever it is. And I think that's part of what drives some of us to create more value for ourselves and do more.

• 1:34:32Jack Selby?

  But that's also just not real because at a certain point, you don't need to continue making money to actually take care of people. If anything, if you continue trying to make a ton of money and spending all of your time and energy on that, that must mean that that energy is coming from something else, like spending time with people.

• 1:34:47Speaker 02

  Have you been talking to my therapist? I don't know what's going on here. So, uh, yeah. So, um, I don't know. Yeah, I'm driven. I have plenty of money. I don't ever need to work again. And I like working. I like doing things and I have people on my team that I'm looking to create value for. And that's important to me and I'm just not ready to go hang out at the beach.

• 1:35:07Jack Selby?

  Are there any true tiers to wealth?

• 1:35:10Speaker 02

  It's a great, it's a great question. Last year, I flew around 500 hours on a private plane because I was running a $10 billion company and it was exhausting and that's made sense and that was very logical, logical expense. This year, I'm working on very small deals. It's hard to justify to fly on a private plane to go look at a little deal. The plane costs more than, you know, whatever. It's like my, it's, it's mind bending. So I don't know the right answer. I, I kind of, I kind of spend money based on, you know, what it is I'm working on.

• 1:35:54Speaker 02

  So I came to see you nice folks. I flew commercially on this nice airline called United and it was great and they served me lunch when I came over yesterday. I thought that was great and that was perfectly suitable. I wasn't going to spend, you know, a hundred thousand dollars to come and visit you guys as charming as you are. And though I certainly could afford it, it just doesn't seem to make sense. So it is a, it is a debate. How much do you spend? We, we went, we were in Beverly Hills a week ago and we stayed at the Beverly Hills Marriott. It was very nice and I think it was, it wasn't cheap by the way. And I, I think spending based on what's going on in any particular situation, if you're

• 1:36:39Speaker 02

  taking your spouse and your family on a vacation and you might choose to spend more. But I think in business, I try to be as thoughtful and careful on spending what's appropriate for the situation.

• 1:36:53Graham Stephan?

  Do you fly economy?

• 1:36:54Speaker 02

  I often fly economy because I'm like, this is, first class is so bad, it's such a waste, but not if it's a long, long flight. I'm finally getting to the point where if it's a long flight or it's international, I'll fly, I'll fly first class.

• 1:37:07Graham Stephan?

  When do you fly first class versus economy? Is there like a number of hours or?

• 1:37:12Speaker 02

  Well, is there a net worth? Nothing to do with it. So.

• 1:37:16Graham Stephan?

  It's purely value.

• 1:37:17Speaker 02

  It's purely like, you know, I'm flying to Boston, like who cares? Like from New York to Boston, why, why do I care? But if I'm flying to LA, I'll either fly private or I'll fly first class.

• 1:37:30Jack Selby?

  So it's more of a value of what you get for it.

• 1:37:32Speaker 02

  I don't know. These are warped. I'm sure you, these are all warped, uh, kind of response. We were all a little weird, like, you know.

• 1:37:38Jack Selby?

  Well, I'm just curious.

• 1:37:39Graham Stephan?

  Because I always fly economy, no matter what. And it's only recent.

• 1:37:44Speaker 02

  And if you fly to Europe, and if you fly to Europe.

• 1:37:46Graham Stephan?

  It was always premium economy.

• 1:37:47Speaker 02

  Right.

• 1:37:48Graham Stephan?

  Always.

• 1:37:48Speaker 02

  Right.

• 1:37:48Graham Stephan?

  And it was just recent that we had a guest on the show who said, you're flying back from Europe, get first class. And I resisted it. And I was like, no, premium economy, why would I spend the extra? I spent the extra money, but still in the back of my mind, I think, was that really worth it?

• 1:38:05Speaker 02

  I, uh, I'll tell you a funny story. So, uh, when I was starting out building shopping centers, uh, I had a travel lot and I bought a little Cessna. And I had a pilot and I'd fly from place to place and the plane went up and down and I'd get sick. It was horrible. And one day I sat down and I said, I am going to do bigger deals so I can get a bigger plane because this is making me sick. So it motivated me to do bigger deals. Then I did bigger deals and I got a bigger plane. And I kept doing bigger and bigger deals and getting a bigger and bigger plane because the business could afford. If you have a bigger business or bigger deal, it can afford the costs related to the plane.

• 1:38:44Speaker 02

  So, uh, a lot of my motivation for all those big companies were to be able to fly in a better situation.

• 1:38:51Graham Stephan?

  Now, here's what I'm really curious about. Do you get the plane before you could technically afford it as motivation? To then do the deals or do you do the deals first to pay for the thing that you wanted?

• 1:39:02Speaker 02

  I think you fly in a plane that's a little less than what, you know, the next deal is going to get you. By the way, now, you know, if you have a spouse and you're like, and your spouse will be like, you know, you were fussing with me on redoing the, uh, the deck for $10,000. And you're flying to LA on a private plane? I don't think so, honey. So, you know, if I'm going to keep control over the rest of the family, you have to be, you have to show some discipline also.

• 1:39:27Jack Selby?

  To me, it's very funny because I'm just trying to understand the way in which you make decisions, like the decision-making engine that dictates. How you're going to approach a problem. And for me, if I see, okay, well, you need to build another business in order to afford a bigger plane. And with this bigger plane, you can then travel to these businesses. That's sort of like a circular problem. And if you wanted to, like, if you actually wanted the plane, then you technically, probably you could have afforded the plane. You didn't need that as a motivator.

• 1:39:55Speaker 02

  I know, but it just sounds so wasteful. And so.

• 1:39:58Jack Selby?

  But that's not tied to reality. That's just an emotional.

• 1:40:01Speaker 02

  You're ass, so I'm telling you. So I want to be efficient. I do a lot of travel and I take helicopters, boats, planes. I had a boat. My office was downtown. I live in Connecticut. Every day I would, the car would drive me to the marina in Tarrytown. I would take the boat down the Hudson River to my office and then back again. And I would save 30 minutes in traffic on a high speed boat. So I'm very efficient. I count my time and I like to be thoughtful of the value of my time. So that, that decision, you know, impacts, you know, what I do a lot.

• 1:40:40Jack Selby?

  Do you think that that is the most productive decision engine that you could be running on?

• 1:40:47Speaker 02

  The product, my time?

• 1:40:48Jack Selby?

  Um, yeah, I suppose you could say it's your time, but it's also more than that because your, your time value is not consistent.

• 1:40:57Speaker 02

  Up until very recently, I was tremendously busy. So for me, every hour that I was able to be home earlier or whatever, to have the time to do other things was super valuable to me. So whatever I spent on transportation the last decade, well worth it. I'm very efficient. Now I have more time. So, you know, do I need to save two hours to come here and, you know, or four hours and fly private to Las Vegas? Absolutely not. I had plenty of time. I came early. I'm staying late. We're having a good time and, um, and I'm not stressed about it.

• 1:41:31Jack Selby?

  What's the first thing that comes to mind if I ask you, what does money mean to you?

• 1:41:35Speaker 02

  I think money means security and ability to take care of your family and, uh, and do good things.

• 1:41:45Graham Stephan?

  What are the best things to spend money on?

• 1:41:48Speaker 02

  Okay, remember, I'm a guy that just came off of mind-boggling travel schedule. I was in Africa three times last year. I was in Paris four times, traveling around like crazy. So I am so happy this summer. I have a beautiful place on the North Fork of Long Island. I'm not going anywhere this summer, other than you. You're my last, I'm not going anywhere. I'm gonna be at my office in New York City, or I'm gonna be in Long Island. And I have my dog, and my kids, and my family, and it's gonna be great. So if I have to go somewhere, I'll either fly private, or I'll take a commercial flight, depending on the situation.

• 1:42:27Graham Stephan?

  Are there any purchases that you found?

• 1:42:31Speaker 00

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• 1:43:26Graham Stephan?

  Were 100% worth it and contributed to a life increase. Let's just say, like, for me, as examples, I'll just say, like, the eight sleep. I sleep way better having the

• 1:43:40Jack Selby?

  They're not sponsoring.

• 1:43:40Graham Stephan?

  And they're not sponsoring, but I will say in eight sleep. I also think that having a peaceful place to come home every night is really, really, really important. And I really like the Tesla because I could precool it before I get in the car. Like little things like this.

• 1:43:58Jack Selby?

  You know, it's interesting is there, there is a scientific answer to like the best way to spend money to get like a return on happiness. And everything that you've said is actually in accordance with the most scientifically correct way of spending money. For example, one of them is having a quiet home. If you live in an apartment near a bunch of road noise, that actually decreases happiness according to the science.

• 1:44:22Graham Stephan?

  What's also really interesting, the biggest decrease to happiness is how long your commute is.

• 1:44:26Jack Selby?

  Yeah.

• 1:44:27Graham Stephan?

  And I think it was a commute of more than 45 minutes saw significant life dissatisfaction.

• 1:44:34Speaker 02

  I don't collect watches. I don't care about cars.

• 1:44:39Speaker 02

  I live nicely in a nice, quiet, great communities, safe and all of that. So I'm very lucky about that. The more you talk about it, I value efficiency in travel. So that is probably my number one thought about spending money in a year is how many hours did I save? Uh, so that I could be home in my quiet place with my family and my, you know, whatever my situation is.

• 1:45:04Jack Selby?

  What are the worst things to spend money on? Like things that you've tried and you just said, that's not worth it.

• 1:45:09Speaker 02

  Well, uh, maybe I'm too clever to try some things, but you know, people, uh, uh, you know, people have, uh, boats and all kinds of, uh, you know, cars and watches and all kinds of crazy things, clothes. Um, and, um, but that's what makes them happy. I think everyone should be able to do what they want to do.

• 1:45:27Graham Stephan?

  What are you working?

• 1:45:28Speaker 02

  On now. I went away for a month and first time I got a chance to have a full break in like 20 years or longer 40 years and I walked 40,000 steps a day and I thought about where is the world going? And as I said, I believe that there is going to be a revolution of entrepreneurs in the United States where companies are going to exit all kinds of very high quality capable people. And these folks aren't just going home to do nothing and they're not going to another company. They're going to start their own businesses and they're going to scrape a little bit

• 1:46:09Speaker 02

  from the company they were at. So whether it's newscasters at CBS who start their own podcasts or whether it's a law firm who exits half of their lawyers or whatever it may be. Those folks are going to be entrepreneurs and what I wanted to do was I want to do something that I thought would be good for the world and good for that I would enjoy, that would be fun and something I've done my whole career and that is helping entrepreneurs and coaching entrepreneurs. As I told you earlier, my wife and I sponsor this program at Cornell for real estate folks. It's a two-year masters called the Baker Program at Cornell and it's awesome.

• 1:46:52Speaker 02

  So people who weren't born in a real estate family could have the opportunity to learn about the real estate business and they reached out to me and said, Richard, could you build us a real estate, a two-day real estate entrepreneur program for credit? And I said, that's a great idea and I built it and it's awesome. And we have done two practice sessions. We did one this past weekend sponsored by Joe DeSena from Spartan Races up in Vermont. We had 51 people show up. They flew in from Brazil and Japan and kids from Stanford, Wharton, Cornell,

• 1:47:32Speaker 02

  Babson, local people from Pittsfield, Vermont. And we spent two days talking about real estate entrepreneurship. And, uh, and people pitched deals and we dissected deals. And, um, so very exciting to me, very great opportunity for folks to be able to have this two day bootcamp. And really I have a book, they take the book and they learn everything there is about real estate entrepreneurship. But the most exciting part, I think for me is the opportunity for women to be real estate entrepreneurs. We talked earlier about, yeah, there's lots of women brokers, but being a broker is a totally different thing than being a real estate entrepreneur. The opportunity, there's so many women in the United States in the military or all

• 1:48:17Speaker 02

  parts of society where they've left their career to raise their family, take care of the house, take care of the family, whatever it is. And then those kids leave and there's the most dynamic, incredible workforce in this country and they're looking for something where they can, uh, be creative, be fulfilled, make money. And we have it. It's all of these deals we've been talking about being a real estate entrepreneur is perfect for women and all kinds of folks in the United States. I know this because my grandmother who came here in 1921 from Poland, didn't speak any English, arrived on the 4th of July, uh, at Ellis Island.

• 1:48:59Speaker 02

  By 1933, she had married my grandfather, who was a lawyer and they were living in Hoboken. And all the big mansions on Hudson Street were vacant and the kids were breaking the windows because the stock market crashed, the rich families lost all their money, gave their mortgage, gave their properties back to the bank. She went to go visit the bank and said, you guys have to clean up these properties. They're breaking the windows. And they said, there's nothing we can do. No one wants the properties. And my grandmother said, well, why don't you break them up into multifamily units and we can, and they said, Because it's not approved by the planning board. So my grandmother made a deal with the bank. Her friend was the sister of the mayor.

• 1:49:41Speaker 02

  She went to the planning board and she got the properties rezoned. She bought the properties from the bank with no money. Uh, uh, fixed them up uh with the help of the bank and then kept them, managed them, eventually sold them and did more. And a woman from Poland barely spoke English, spoke English by that time, spoke no English when she got here. And she was an awesome real estate entrepreneur. And four generations later, her grandson, my son, is still doing deals similar to her. So there's no reason that any capable, thoughtful man or woman in this country can't do, be a real estate entrepreneur at a very basic starting level and then work their way up from there.

• 1:50:26Speaker 02

  It's been going on for over a hundred years.

• 1:50:29Jack Selby?

  What's the harshest truth about money that you've learned over the past 25 years?

• 1:50:34Speaker 02

  Money won't make you happy.

• 1:50:37Speaker 02

  Make you more comfortable though.

• 1:50:38Jack Selby?

  And so you used to think that it would.

• 1:50:40Speaker 02

  I don't know. I think I worked very hard to make money because I, you know, uh, uh, good things would happen when you had money. Then you have a lot of money and you're like, uh, you know, uh, that's not the good thing in your life. The good thing in your life is the relationships with your family and your, your, your spouse and your kids and what have you. The most important lesson is don't blow your relationship with your spouse or your kids while you're on this epic journey to create more money. That's a mistake. You'll be very unhappy if you make all the money and then you're, you don't have the wife or kids at the end.

• 1:51:17Jack Selby?

  When do you think you learned that? And how often do you reflect on that now?

• 1:51:21Speaker 02

  My father was, uh, was, was wonderful and we had a great relationship, but he was a flawed guy sometimes. So I was able to learn from his mistakes, so I didn't have to make his mistakes. So, um, he, my father, my, my parents got divorced when I was young and I got to live through that. And I'm like, oh, that's such a good idea. So I was able to sort of learn without having to make the same mistakes.

• 1:51:44Jack Selby?

  What advice do you have for people in a marriage to keep the marriage happy?

• 1:51:49Speaker 02

  It took me a long, long, long time to figure out the answer. I spent a lot of time arguing with my wife. My wife would say, go left, go right, go up, go down. And I'd say, well, why go left? You know, the right, go right and go down, go up. And, and by the way, she was usually right. So I just eventually said, okay. And we call that the power of yes. So sometimes the right answer is just yes, okay, let's do it.

• 1:52:18Jack Selby?

  Why do you, how do you know when to let her win? Like, you know, you.

• 1:52:22Speaker 02

  You're not married, obviously, right?

• 1:52:23Jack Selby?

  No.

• 1:52:24Speaker 02

  No, so you'll know when they, you'll, you'll marry, you'll find the right person or whatever. And the right answer is always yes.

• 1:52:33Graham Stephan?

  When you say the right answer is always yes, what are we talking, are we talking like anything? Are we talking like, hey, what's for dinner? Where do you want to go? And just like you just say yes to what, like what?

• 1:52:43Speaker 02

  My guess is you were the very thoughtful guy and you married someone who's very thoughtful and appropriate and logical and whatever. And I'm sure there's not a whole lot of conversations where that person is asking you to do unreasonable things. And it's just not, it's not worth it. Yes, dear. Just, that's it. Yes, dear.

• 1:53:01Jack Selby?

  What about the idea of like, you know, you give them an inch, they take a mile? Is that a thing?

• 1:53:06Speaker 02

  Uh, not if you married the right person.

• 1:53:09Graham Stephan?

  I'm still trying to figure out what the yes, dear is. Is it like, hey, don't go into work this weekend? Uh, cause you gotta be doing this instead. And it's like, yes, dear. Or is it like a, hey, this, this deal that you brought, I don't have a good feeling about it. Don't do that.

• 1:53:23Speaker 02

  Um, life got much easier when I learned the word yes, instead of the word no. I'm not allowed to use the word no at home. It's not, it's a very painful situation.

• 1:53:32Graham Stephan?

  So if she comes to you and says, hey, we gotta redo this whole closet.

• 1:53:35Jack Selby?

  I literally was, I was gonna say, for example.

• 1:53:39Speaker 02

  That's a great, that's a great example. I have a very good, you want to hear what you say? Yes.

• 1:53:48Graham Stephan?

  What if you don't want to redo the closet?

• 1:53:51Speaker 02

  Oh, that's really good. Know what you do then? Yes, you suck it up.

• 1:53:55Graham Stephan?

  Okay, but okay, here's here's another example. Let's say you redid the closet a year ago, but she wants you to redo it again.

• 1:54:01Speaker 02

  Is your wife irrational and and difficult? No.

• 1:54:05Graham Stephan?

  I don't think, no.

• 1:54:06Speaker 02

  No, so she's not going to tell you to redo the closet unless you did up dramatically or whatever it was. So I it just it took me a long to. By the way, I'm much older than you. It took me like 25 years to have this epiphany. And the epiphany was it wasn't worth it. So you want to know why I'm still working so hard? I'd rather go make more money than worry about whatever money is getting spent on the other side of the.

• 1:54:28Graham Stephan?

  What made it not worth it?

• 1:54:29Speaker 02

  Because if I say no, then there's a discussion and an argument and why and it just wasn't worth it. It was easier to let her go do whatever it is she wants.

• 1:54:37Graham Stephan?

  How important, though, are those disagreements and discussions? To like set certain boundaries in a relationship? Or is it just like?

• 1:54:46Speaker 02

  You guys are so young. You guys are so young. It doesn't matter. And by the way, I'm only, yes, 99.9% of the time, every, you know, one out of 100, I lose my mind and I say no.

• 1:54:56Graham Stephan?

  When's the last time you've said no?

• 1:54:58Speaker 02

  I still can't control myself. Sometimes I say no, and then I say, oh, okay, yes, I don't care. Do whatever you want.

• 1:55:04Graham Stephan?

  So it wasn't really a no?

• 1:55:06Speaker 02

  My wife is usually right, so whatever she says is usually just fine. And that's the way. And I've been married for over 30 years.

• 1:55:15Graham Stephan?

  And that's and that's the secret.

• 1:55:17Speaker 02

  That is, yes, is the secret. By the way, we we talk, yes, is the secret for a lot of things. Sometimes we're negotiating on a deal and some and everybody wants a little more and the cap rate is five point there's whatever. Sometimes yes is the right answer. We call it the power of yes.

• 1:55:33Graham Stephan?

  And just just agree to it if it if it's small enough where it's not going to make that big of a difference.

• 1:55:38Speaker 02

  Yes. We talk about negotiating, how to get done in negotiation. Sometimes the right answer is yes.

• 1:55:43Graham Stephan?

  Graham's favorite word is no.

• 1:55:46Jack Selby?

  That's like his all time favorite word.

• 1:55:47Speaker 02

  Right. So you should practice. Yes. It's really powerful.

• 1:55:52Jack Selby?

  How much better has your life gotten outside of relationships? Saying yes.

• 1:55:57Speaker 02

  It's just a way of getting things done. But I'll give you something else that I do. We talk about rituals. Sorry. Talk about rituals. So I wake up every morning and the first thing I do when I wake up is I think about three things that I'm very grateful for. And in the evening, before I go to bed, I think about three things that I'm very grateful for. And I basically rewired my brain because I used to wake up and like, oh my God, what do I have to do? And I'd go to bed like, oh, I got all these problems, all these things I have to deal with. And now it's totally changed the way I feel and the way I live. Think of it like those people who were like, that glass is half full and other people are half empty.

• 1:56:38Jack Selby?

  Yeah.

• 1:56:39Speaker 02

  And so, you know, there's some rituals and some things that you can do to make your, you know, make yourself more efficient or feel better.

• 1:56:48Jack Selby?

  Is there such thing as too much money?

• 1:56:52Speaker 02

  I don't think there's such thing as too much money because you can give it away and do good things with it. And, um, but I think, uh, I think people shouldn't be hoarders and I think people should, uh, and I don't think you do good things for your family if you spend too much money and have too much money.

• 1:57:08Jack Selby?

  Is there a sweet spot to wealth and income though?

• 1:57:11Speaker 02

  I think it's good to be motivated to work hard. I employ lots of people and I produce for the economy and I pay lots of taxes and all that kind of stuff. So I think that's what we're supposed to be doing.

• 1:57:22Jack Selby?

  When in your life did you feel the most rich?

• 1:57:25Speaker 02

  When the digital businesses were worth multiples of revenue. That was a good time.

• 1:57:30Jack Selby?

  And what did that feel like?

• 1:57:31Speaker 02

  Ironically, it's a great question. Ironically, in the end, it was very disappointing because it did. There was nothing I could buy, nothing I wanted to buy different. There's nothing I wanted to do different at all. It was really, uh, maybe the best lesson of my life. Having the net worth go up dramatically because the world decided that certain businesses were worth more had zero impact on my lifestyle.

• 1:57:53Jack Selby?

  And what was it like realizing that?

• 1:57:55Speaker 02

  Depressing.

• 1:57:57Jack Selby?

  And was that like immediate or was that like a?

• 1:58:00Speaker 02

  I kept like, oh, what should I buy? I could go buy a big yacht. I don't want a yacht. Well, why would I want to? I mean, there was nothing to buy or do.

• 1:58:08Jack Selby?

  And so like, how did you come to that conclusion then? Like, what was it like crossing that bridge? I'm curious, like, the entire like emotional journey of wanting all these things.

• 1:58:16Speaker 02

  I don't, I don't want all those things. And I work because I enjoy working and I enjoy the process and all of that. I think that's what it clearly, you said earlier, you know, why do you, you know, why do people work so hard when they have so much money or whatever? Cause they actually like working and they like being productive and doing things. And I'd lose my mind if I was at home saying yes all day, sitting at the, at the whatever, at the pool. So I'd go crazy. It'd be horrible. So I work because I enjoy it and I love being with people and, and creating value for myself and my partners and people I'm with. And that's what's fun. And having more money doesn't really mean that much.

• 1:58:57Jack Selby?

  All right, Richard, thank you so much for coming on the Ice Coffee Hour. That was an awesome episode. Thank you to everyone for watching this. Thank you to the members. Thank you to the sponsors. Really means the world for, for tuning in. If you've made it this far, appreciate it. Would not be here without you.

• 1:59:10Graham Stephan?

  We're also going to be linking your information down below in the description, your Instagram.

• 1:59:15Speaker 02

  Yep, great.

• 1:59:15Graham Stephan?

  And any other information you want to include, it's down below in the description. Highly recommend you go and follow it.

• 1:59:20Jack Selby?

  Cool. Until next time.