Starting a business just to make money and exit is a terrible business plan.

[05:17]

"We are building senior housing collaboration with the Catholic Church in a proprietary relationship where we have a 90-year ground lease that's flat rent and auto renewal."

[07:48]

"When I started creating my own wealth, I was like a dumb kid with a lot of candy and I just started looking at everything and just access, oh my god, I love that deal."

[09:34]

"He was clipping tickets at 18, 20 years old and then he grew through 20 years in the real estate, excuse me, the railroad business and then ended up buying a railroad."

Full transcript

We would now like to have our fireside chat guest come up uh Patrick to the stage. And um by the way, there was a statistic that 2 and a half times as much capital was raised in 2022 compared to 2024. So it shows in many industries, not just energy, how much more capital was flowing before. Um also if you look at graphs of the gigawatts worth of energy being put online by China, you know it looks like this.

The US pretty much looks like this right now and that I think that does have to change at some point. Um, and anyways, if anyone has any other keynotes that you see at other events, investment conferences or otherwise that you think are amazing that we should have here at Family Office Club, then let us know over time. Sometimes we get our best keynote ideas from you as participants at our events. All right, welcome Patrick.

Thank you. Yeah, appreciate you being here. So, we're going to do a fireside chat because Patrick gave a a talk at one of our recent events and um followup with him was one of the most popular uh in the room at that event. So, I thought it'd make for a great chat right here. Uh Patrick is the founder and CEO of Patrick Ventures family office.

Uh owns and operates real estate operating businesses, technology companies, etc. Uh the family owned the Ann Arbor Railroad and related distribution facilities in Michigan and Ohio. And he spent about two and a half decades on investing. Now at this point he's on the board of Aanthus Senior Living United Tiny Homes and is an adviser to Integro Bank.

Uh he lives in Scottsdale, Arizona. We used to be neighbors there and had come and speak at some of my local events and um he's going to share a bit today on on his background. What else would you add to your bio just for everybody in the room to understand you better? Well, first of all, thanks so much.

I mean, you've gotten big. You're working out. Good. Hawaii's well, huh? CrossFit. Yeah, good.

Also a sponsor. Yeah. Yeah. No, thank you so much for putting this on and I love your team. I mean, Jimmy and Amy and, you know, Charlie and all the guys, just amazing, amazing group and this is probably my eighth or so, uh, conference and every time's gotten better and better. So, thank you so much.

Thank you. Um, as far as myself, uh, the name Patrick Ventures actually came from my father off a railroad, uh, entity that he had where we were the, uh, distribution center for all Chrysler cars, uh, near our Toledo Junction yard. So, very, very lucky. Uh, I didn't name it after myself, so not that egotistical, but uh, carrying that same theme, um, I named my real estate company's Taylor Street after my daughter Taylor, who I'm very excited that she's here for the first time.

So, it's very exciting and I love that your family's here as well, right? So, my 18-year-old, she's a ballerina and a rockstar intelligent person who I know that I'm on the, you know, basically the chopping block to be fired to take over. So, but uh that's that's kind of what we are. We we look for opportunities in the marketplace that fit within our ecosystem in real estate, finance, and tech.

Um we understand logistics and just, you know, we're fun. We want to be around great people doing great things. Yeah. Yeah. One thing I appreciate about Patrick is that um he'll come up at one of our masterminds and talk about how they made money on one deal, maybe lost money in another deal, we learned lessons over here, and he doesn't try to act like uh he's super human, has never made a mistake in his life, and that came up on the last panel.

It's just something that comes off as inauthentic when that happens. And in the family office space, sometimes you get that. Um so, how many transactions, you know, has your family done over time, do you think? And what's kind of the number one insight you could provide to investors here in the room, you know, after all those deals?

Yeah, it's a great question. Um I lucky enough my corporate career I've done about 11 billion in transactions being at Inland and G Capital. It's like a lot of experience almost 25 years in commercial real estate and finance. Um we've done about 40 investments in commercial real estate in small and you know mid-market space. Uh as far as PE and VC about 20 opportunities either we own operate or invest.

Um as far as pontificating what I think I know uh yeah it it's you make a lot of mistakes. Actually my father says we we we learn we make lessons right you know um we try to focus on you know how we look at things from Marcus Lonus people process and product and so we look for opportunities where people are the for foremost part of it products means something process means something but if you don't have the person and the experience the values that we share the understanding of you know the overall economic market of what they're going into but also the never die attitude it never works. And so we've gotten into a lot of great investments thinking it was the right time, right person, right everything. And sometimes some of the entrepreneurs are a little too junior and when things get tough, they start getting distracted.

They start looking at other things and they look for the shiny object where well this vertical is not working the original business plan. We should jump somewhere else and that's where you get killed. You got to stay focused and stay grinding. If you believe in the product and believe in what you're trying to invest and what you're trying to do, stay the course.

Got it. So, you know, if if people here in the room imagined, you know, who is the largest real estate owner on planet earth, you know, on the top 10 list might be McDonald's or Putin or but th those are not your partners. Who is your partner on the senior living facilities? Just you can explain your unique project there because you have managed to partner with one of the largest real estate owners in the world.

Yeah, that's actually pretty funny. Uh, so it's kind of crazy. Um, we are building senior housing collaboration with the Catholic Church in a proprietary relationship where we have a 90-year uh ground lease that's flat rent and auto renewal. And if you know, the Catholic Church is the second largest owner in the in the country or in the world, excuse me.

I guess the British Empire is number one. I guess the Mormon church is number three. But it's really interesting. The story itself is a family office brought me an opportunity said, "Look, you're in structure finance and real estate. There's this crazy guy in Scottsdale doing something with the Catholic Church you need to see." And basically the gentleman I've known for quite some time, he's built 15,000 apartment units in senior housing.

And the Phoenix Dascese came to him and said, "Look, we know you built high quality product. We're really good at the youth. We're really good at middle age. We tend to forget about our elderly. We want to build senior housing on our land. Will you help us?"

And he's like, "How do I do this?" And so he came up with this proprietary ground lease. And the beautiful thing about it is that it's it's so impact investing. It's on steroids because you're helping the elderly. You're helping the parish. We're donating 10% of the NOI to the parish.

So the parishes all around the state and around the country are all over this because we're solving a need for them. It's a 24/7 facility for them. But really, you're solving the need for the graying of America. 73 million baby boomers um 10,000 a day literally turn 80 years old starting in January. My mom is 80. My dad's 81.

She goes to church twice a week. Like this is somewhere that my mom would want to go. This is something for us. We made a decision as a family to not do commercial. Let's be in all things housing. So, affordable housing, market rate housing, uh, student housing, and senior housing.

And this is the best thing I've ever seen because you have just an incredible perpetual demand of Catholics in the area. In Phoenix, there's 2.1 million Catholics in the Phoenix Dascese. I just need 1% which is 22,000. We have 2,000. We just reach reached it. 2,000 on a waiting list just to build five facilities.

So, it's very exciting for us. Awesome. Yeah. Deal structure can change everything in a transaction. Having access to land like that and an aligned partner, the massive balance sheet. Yeah, it's wonderful.

We don't have to pay for land. So, yield and cost for apartments, if you guys know, are six or seven. We're a 13. So, we're ahead of everybody else. And we can keep rents very low and make sure it's egalitarian for everyone to win for the investors as well. So, we're raising money.

It's $100 million fund. So, um, one thing I've noticed is that the, um, the wealthiest, most successful families I know have been around long enough to kind of realize when they're getting lucky and then go 100x deeper in that moment because there's so many things coming at you you have to say no to. So, can you talk a little bit about either your mindset or how you filter deals or get access to deals that maybe led to this situation in the first place? Oh, man.

When I started creating my own wealth, I was like a dumb kid with a lot of candy and I just started looking at everything and just access, oh my god, I love that deal. Let's do that. And we started just no rhyme or reason and just having access to opportunities that we thought was really good. Uh after a number of years of just getting kicked around, we had to focus in our due diligence.

You know, you have a great due diligence question uh checklist and we started doing it for things that we're so invest in. And I had to take a lot of time to think about what are we good at? We're really good at real estate. We're really good at finance. We understand technology a bit. So let's stay in fintech and prop tech.

But how we filter through is the word no really helps out. We tell exactly what our action criteria is. We have a good team that puts together people and you know the the opportunities are presenting themselves. They've got to be organized. They can be well thought out. It's got to be a great story and it's something that's already proprietary, something that's I call it motable.

It's protective. Um something that's scalable. Um something that you know not a lot of people are doing. Um and it fits in with our ecosystem. Something we know. Got it.

Um, so what would your insight or advice be for somebody here who wants to negotiate with a publicly traded REIT, uh, you know, a hundred billion dollar balance sheet company, etc. To win over their trust? Like how did you know any insights from the deal you put together that allowed you to get into the position you are that they could learn from? You mean as far as, you know, how they need to present themselves to us to invest or so?

Right. Integrity is number one. I mean, you got to have experience to know what you're doing. I mean, let's not BS your way into something that you just found a shiny object system and like, oh, this is great. I think I could do this. We wanted you to have at least a couple, you know, 10 years, 20 years experience in the business itself.

My father risked everything, you know, to buy a railroad out of bankruptcy. He was clipping tickets at 18, 20 years old and then he grew through 20 years in in the real estate, excuse me, the the railroad business and then ended up buying a railroad. He stayed in that industry. Very important. Um having your story set, understanding your team, and have the humility to understand that you don't know everything.

And be able to have the understanding that what you're trying to accomplish, I hope you're doing great things with it. If you're just trying to do it to make money and do an exit is a terrible business plan, which I've seen before. Right. Right. For uh I think Bezos says that there's there's mercenaries and then there's I forget what he calls the other group like um Oh, yeah.

I forget the other word, but basically it's like some people are there just to get the quick flip and other people are there in a mission like missionaries. We got caught. We we looked at some of those guys who were just in and out because the wave was great before SPB Bank blew up and so everyone was just getting amazing amount of money for an idea. You know, angel investing was crazy.

Right. Right. Right. Yeah. For sure. Um are you doing anything in here in Hawaii in the real estate space?

Yeah. Very kind of you. So, one of the one of my most proudest investments is that I invested four years ago in United Tiny Home Manufacturing Company and started by a phenomenal woman founder, lover death, Gail Kingsbury, you know, heart of gold and cares about our customers and clients. So we're building 200 to 400 foot tiny home in um a manufacturing facility in Goodier, Arizona.

And we're solving a need for affordable housing. We have a lot of veterans. We have a lot of wonderful elderly. Also, think about the ADUs putting the cassita in the back for mom and dad instead of going to a facility. And we've been fortunate enough, she's lived in Hawaii for a long time and we helped out Lahina during the fire issues.

And so we've been shipping over our uh homes over here to help them out. And we're working with the local municipalities to help build um tiny home parks and things of that nature. It's fantastic. We just got Inc. 5000 uh list, which is really cool. And the governor, I guess, is coming out in six weeks to present us with something.

But that's the most rewarding thing I've seen and it helps out Hawaii. I'm really excited about it. Awesome. I've heard before like, oh, they're not, you know, they're not creating new mo mobile home parks these days, etc. Have you found exceptions to that in Hawaii with tiny home parks or tiny home communities or is that just because of the fire that you that Yeah, you know, it's like uh what is the uh Rahm Emanuel said?

Don't let a you know, emergency or so go unnoticed or something, you know, where you know, it does create opportunity because before land is so difficult, especially in Hawaii, but the need is so great. Housing is so expensive here just like it is across the country. Uh same in Arizona. We may have a couple hundred unit orders from the city of Phoenix and hopefully what we have in Maui and a couple others just because you need the housing and so land and zoning entitlements are being kind of lifted a bit and hopefully solving a problem, right?

Got it. Are you seeing that in California as well with the fires there actually? Yeah. Yeah. So what's really cool about I mean look California politics are difficult but Gavin Newsome put something together about ADUs and they're doing zero lot lines for multif family and you could build more housing on these different parcels and they open it up for ADUs and so everything's all about the housing as much as possible and the governments have start to recognize that you got to stop going through the bureaucracy of the triple layer systems of all these things.

I was trying I owned apartment buildings in Tucson and I was triple layered with three different zoning uh municipalities just within a block of what I needed to do and it was brutal. I I bought a building. It took me two years to try to change the zoning so I could build more. I eventually couldn't do it.

I've heard in the state of California that if there is a certain size, you know, lot you can put an ADU down and the local county can't really deny you as long as you meet some very basic criteria. Have you found that similar here in Hawaii or is it not as Not yet. We don't know. We're still working through the zoning autonomous.

It's a slow slo. They're they're learning, right? You know, they're trying to figure it out. What I know from Gail, she was telling me that they're very receptive to what we're doing because we shipped three of them really quickly to everybody just to solve that problem about a year and a half ago when the fire was. So, we're kind of helping them work through the process because we've already had to work through the process in California, Arizona, Nevada.

We delivered in New York, which is obviously very tough, too. And so, we've gone through some of the battles and we're just sharing the uh changes that we've kind of made in those different counties and different states to Hawaii. And so they've been receptive. It's pretty awesome. And then um if somebody has acorage somewhere and they're like, "Oh, I want to put down four tiny homes, etc.

What does that look like? They need to lay a cement pad and bring utilities over and they just set the thing down and hire locals to connect it or what what's what's the process look like?" So from a Yeah, thank you. From from a logistical standpoint, we'll handle it from Arizona. We love working with local partners here in Hawaii.

Um the contractors, installers, uh you know, you bring in utilities to them. You know, sometimes sewer system if you know you will. There's actually some really cool technology where it's biodegradable from a waste product which is really helpful. We have solar. Some people are completely off the grid which is great. So we have all these different little products that we can put together.

Um it just depends what the land looks like. You know sometimes the land's like this and they want to build a house so it needs to be flat. Um but a lot of times you could either you could dig under and put the wheels underneath the way it's set up and it'll make it just completely flat to the ground which is kind of cool because they're all on wheels because it is chatt. Um others you just put a little skirt around it or you can put a deck which is great.

Okay great. Um, any questions from the room here? If you want to raise your hand, we'll bring uh the microphone over to you and we have time for one or two questions, but also I just wanted to say like what else what else should I have asked you, what else are you working on that's either the most exciting or another insight you'd want to share with the room for today? It's a great question.

Uh, you asked me, you know, one of the things I didn't, you know, talk about. So, I will tell you this, something about life is short live it. In the past year, I went to eight funerals and I lost three of my mentors. And I was at a funeral Saturday with a woman who passed away at 44 years old with a mother of three.

And it just really rocks you to the core. And I don't quote actors very much, but Timothy Shalomé says something about, you know, life doesn't come at you, it comes from you, which means that it's your perspective. It's your life. You live live it. Try new things. Take risks.

We're in Hawaii. Enjoy the moment. Enjoy your family. That's really what I think everything's about. I mean, you've done a great job. I mean, look at the beautiful family you have.

Yeah. Thank you. At least uh one of the three girls is here. So, you know, 33%. Yeah. Um so, what else would you share about uh NextGen since you you know, have your daughter here in the room?

Um anything about, you know, your your second gen going on third gen in your family office. You know, what what have you learned from your father that was the most helpful? What are you passing on to your daughter that's more important than anything else? Talk to your kids early about financial matters. My dad at dinner table talked to me a lot and really taught me, you know, this the vissitudes of how tough life is.

And Taylor knows, you know, the vissitudes of some of the things that happened the last five years, how difficult it's been from, you know, gez COVID to hyperinflation to interest rates to, you know, interest rates for longer. Talk to your kids. Start early. I hammered a guy that was an MFO. He's managing a family office thing. And he said, "Look, you know, leave your kids alone.

Let don't let them know anything about the money until they're old enough, 21, 22. By then, it's too late. You got to teach them financial, you know, engineering and mathematics and financial acumen early so they understand the value of money. So important. She's really good at spending money and she looks at me like, "Dad, why are you spending money?"

I'm like, "Yeah, you're right." Okay. So, she keeps me in check. That's great. Yeah. Uh Bella, my 13-year-old, and I went down for lunch and she had just heard the Hornet ETF talk, and she was like, "You know what's digital money?

Why would I want digital money? I want I want real money." And I was like, "Well, why do you want real money? It's the same as, you know, why you'd want digital money perhaps, right?" So, great. Yeah, talking about that is super important, I think.

So, and uh lots of the families who have been through ups and downs in multiple generations say exactly that. If you hide it, then just becomes like a shock. You might as well talk about it, pass on the lessons, etc. If it's taboo, then nothing you learned will pass on to them. And many times, that's why we talk about family values so much.

Cuz if you lose all the money, you could earn it back through those lessons and the values. But if you pass on the money without the values and the lessons, you might just burn the money and they'll lose it. You know, it's always a third generation that loses it. So, Taylor, you're you're going to break that, right?

Okay, great. Let's give Patrick a big round of applause. Thank you. Thank you, guys. Thank you. My hero