Many families lose critical people when they don't appreciate those who take care of their investments.

[13:39]

"And big mistake, because I see many, many families lose critical people when they're not respectful and don't appreciate the people around them who do business, um, who do business for them and take care of their Investments."

[12:43]

"And sure enough, I bought the company. In the first seven months our ebit cash flow was 150% of our Equity check, so pretty much after that I didn't have to write any invest memos after that."

[01:18]

"I work for another billionaire family right now, working with the kids, um, and then doing large deals for the um, you know, for the founding principal, and I worked for another, also billionaire family."

Full transcript

Subscribe for 1,000+ investor videos & insights.. So, first of all, thank you so much for Richard and his team for inviting me to uh to come up and talk today. Um, just share a little bio with you. I was a banker at Chase for seven years in the workout group uh, my nickname there was the Pitbull, so when somebody needed uh, when they needed to get their loan collected, I got to collect it for them.

Um, I then had my own Financial advisory firm doing advisory work in and around bankruptcy and distress, turnarounds, bankruptcy and distress, m&a, bankruptcy and distress financings. And then I got this idea that maybe I could buy companies uh in bankruptcy, but I didn't really have enough money to do it. So I cold called a bunch of billionaire families and said: hey, I got a great idea we can make. Uh, we can make a lot of money doing this and believe it or not.

Uh, one of them said: come on down and join us. And that was the Mall of America family. I worked for them for 15 years. I started in and their direct private Equity business. I bought 11 companies to them and a bank, uh, I'm on the board of the bank and chairman of the credit committee for the last 13 years.

And then I uh, of the 11 companies I bought, I was chairman of five of those companies. Each company was in a totally different industry and everything like that. And so I've worked in the world of billionaires. I work for another billionaire family right now, working with the kids, um, and then doing large deals for the um, you know, for the founding principal, and I worked for another, also billionaire family.

That's more of a deal junkie, um, doing different deals, um. So Richard asked me to share with you how to billionaire scale their business, invest, how do they do business, how do they operate and how do they, uh, you know, how do they make it work, and I want to share one. One key thing is work on your business, not in your business. So you are the Visionary to think about how to make it work, how to put all the pieces together, um, don't get lost in the weeds.

And I remember one of the family members gave me a great example. He and another person. They each bought a hotel at the same time and the other person was busy, nervous. Maybe people are taking money out of the cash register, maybe they're stealing from him, maybe this and that. And the other investor, the, said: look, I want to be in the hotel business.

If I'm going to be watching that cash register, I'm going to be here all day and all night. And he ended up buying four hotels a year later and the other guy was still at the uh Hotel counting his money, making sure you didn't get cheated. And so you have to have the big picture of you. You have to believe in what you're doing, have a have, play the long game, and if you play the long game, you'll be able to go through and navigate.

You know a lot of different things that might, that might occur along the way, um, but this, this hotel analogy, very, very important. The other thing is that all of these people are people. People, you know. They like people. Now, in a deal, they may twist your arm a little bit or a lot bit, um, but at the end of the day, they're all people that that are interested in people and um, I just remember um a great story that one of them had told me that uh was during the Depression there was a suit store and suits for $15 and the guy hadn't sold a suit in months and a young guy came in he said listen, uh, I want to be a suit salesman.

He said listen, you know you're welcome to do it, but I haven't sold a suit in fif in in 3 months. He said let me try it. And their suits were $15. Guy comes into the store he says how much is the suit? Says $20. The owner's like I couldn't sell a suit for 15.

And the guy says he says try on the suit. And the guy goes in, tries on the suit, comes out. He says I'll take it, unbelievable, he haven't sold a suit in three months, and takes a suit. Another guy comes in looking for a suit: how much is the suit? $20. He says he'll try on the suit in the uh in the fitting room, tries it on and I'll take it, and the owner's like I can't believe it.

He sold two suits in one day. I haven't sold a suit in in three months. So he asked the kid. He said: tell me, you know, I haven't sold a suit for $15. You're selling a suit for $20. Like what's going on?

He said I Stitch a $5 bill into the pocket of the pants and when they go in to try the suit on they see the $5 is stuck in the pants and they think they're getting a deal. So they buy the suit. They they made five bucks and so that's how I sell the suits and it's a great lesson in life. You know you always have to be focused on not only your own interest but other people's interest.

I mentioned yesterday when I spoke uh in Florida for Richard is that, um, sometimes you get an email, a group email, and somebody says I can't make it. You know family emergency and many people. They just write back and say, oh well, we'll reschedule it. They don't write and say, oh, I hope everything's okay. And if you're the kind of person that stops and says I think I hope everything's okay and then find out if you could be of help, that's what.

That what makes what makes success. And I mentioned the other day that I had three different incidents. I'm just going to recite two of them where people appreciated that I had helped them out and put me on their boards. The first one was an African-American man. Um, I'd met him at a conference and we stayed in touch.

Whenever he come to New York, I'd say: you know one, we have lunch, everything like that, and it's no big deal. I didn't think like I'm a big hero or anything like that. And now he has. He just formed a company to go public and he asked me to be on his board. He said: I remember every time I came to New York you had lunch with me.

You asked: how am I doing? What could you do to help me? And you'll see this in in the billionaire families as well, constantly helping people. Um, you know that you have to be looking out for people, because every business is really people. You might have the great qu greatest Quan strategy, but you got to raise money from people.

You got to have hire people to run your Quan strategy. Whatever it is, everything comes down to people and knowing how to treat people right. I just said this story, too, was: I just got on The Advisory Board of an AI prop tech company and what happened was a year ago I had spoken in California at a conference and this young guy was on my panel and there was a person from a brand new uh prop Tech Venture Capital fund there and I was very impressed with this Young Guy's company. So when we finished the panel, I said, Gee, you know, to the guy from the prop Tech fund I said: you know, you should take a look at this guy's business.

I think he's got something really interesting. At least start, you know, snob me out, snubbed him out and I was like, okay, I guess you know, maybe I'm wrong. So a year later I I met this uh young guy with the prop tech company. I didn't even recognize him. Actually, he was on my panel. I didn't recognize him.

He said: you know, I I'll tell you. I never forget something. When we finished that panel and you said to the guy you should look at his company, and that guy snobb me out and you stood by me to to recommend it. I'll never forget that and I want you on my Advisory Board, even though I didn't actually even remember what he looked like, what I saw him.

But if you're there for people, in the long run, people make everything work and if you're loyal to people, that's how have success. I mentioned also, you have to be in, you have to dream big, but you have to. You have to get into the details, because the details, as I mentioned, um, you know, you, you have to dream big, but don't trip over your shoelaces. You know, like you, you can be running to go do something, but if your shoelaces aren't died, you're going to fall.

So you got to, you got to know the details and I just give you a couple of examples of that. Recently I've been advising the fund. They put in $5 million about 13 months ago and the company went bankrupt, um, and I said, listen, guys, you know, let me help you. Work with your lawyers to get you know, try and get your money back.

And they said, gez, we're already paying $1,000 an hour for these lawyers. You know, now, with you were, you know, our billing is going to be super high. I said, okay, but I'm saying, like your lawyer, he knows law, he, he doesn't know business and finance. And they said, no, no, he'll handle it, he's great and, sure enough, he filed awful papers that had nothing to do with the numbers, like had some gobble deg.

He didn't understand the difference between a cruel counting and cash accounting, and they're probably going to lose $5 million. So very important to surround yourself with people that know the details that you studied when you first got into the business, but they can execute, um, super important to know so many instances. We have a case at our bank where, um, we let money to a guy and of course you know we wanted personal guarantee pgs. He didn't want a PG, so we compromised.

We said, okay, after a year the property is stable, the the PG will burn off. You know, if you do XYZ so low and behold, five years later says here's the keys. You know this thing is a is a dog. Take it back. And you know I'm off my PG. So I told my guys, send me those pgs.

I want to read them, those personal guarantees and little things. In order to get out of the personal guarantee, he had to show us all the leases and show us that he had achieved The Debt Service coverage ratio of whatever it was. And he never did it. And guess what? He's on full guarantees and we're going to get all our money back.

So Details Matter and you could be sitting at a meeting with some of these uh, billionaires. You know, every week we have a board meeting, we discuss all our properties, what's going on, and literally he could tell you the carpet on the third floor when it was changed and when it's due to be changed. Like, you make money by the details, and Richard was talking about the choke points, but there are many details and things like that where knowing little nuances and being aware, keenly aware of it and then have people to execute it for you is super important. Again, I mentioned, you know, work on your business, not in your business, but as you're starting out to build it.

The details are very, very important. Many people I know, oh, would only use lawyers too expensive. I hate lawyers. Well, I was involved in trying to buy a company where they had a deal to ship 30 armored Escalades to Dubai and the guy, of course, then read the contract and the contract said: you don't get paid until you finish all 30 Escalades and they're all armored up and they are accepted in Dubai.

Well, there millions of dollars out of his pocket and he thought he was going to get paid when he sends over a couple of them and and he went bankrupt. So very important to get into the details. Um, the other thing is: don't don't be afraid of a not many of these families. Sometimes it's embarrassing. They'll say: offer X.

I said I'm like: but that's ridiculous, just offer X and I offer X. Lo and behold. They say sometimes the first time I say no, no, no, we got a lot of people, they were going to pay a lot more than you, and then 30 days later you get a call: oh well, they went away. It didn't work out, da D.

Whatever it is, lo and behold, your offer of X is is the one that's in the money. So don't be afraid to ask um. To ask um, you know, and say what you think it's worth. Don't don't be colled into paying more, cuz if you pay more you're bailing out the boat already before you've even started. And I see many private Equity firms do that.

You know they get all excited about it and they pay seven, eight times and before they know it. I just had this thing over here. I went to park my car here and the parking guard said: you know, it's really full. You're probably going to have to park like way, way down there. Now I just mentioned offand I said: oh, okay, that's fine, no problem, I'm, I'm speaking he said: oh, you're a speaker, let me moves the cone park right over here with the faculty.

Now I, I mean, I wasn't trying to get it space, but if you don't ask, you don't get. And and these guys know how to ask, believe me, um, I've been in many deals and sometimes you're sitting there like I can't believe. They're saying they're asking this proposal, this is like ludicrous. But you don't know what the other side is thinking, you don't know what their game is and you make your offer that you think is sustainable.

That's going to work. And I've seen it many times and I see many people who are trying to become billionaires or trying to become big on this thing. It's never going to work. Well, if you don't try it, it's for sure never going to work. And many people have that mindset like not even going to ask. Well, if you don't ask, yeah, you're not going to get.

Ask the question. Maybe somebody will say, yes. I mean I ask these billionaires: hey, I want to start a business buying companies. I've never bought a company before in my life. As a matter of fact, the night before I bought my first company I s on the 20th floor of our of our building. It was 11:00 at night and I said: are you, cra?

You have convince these billionaires that they're going to buy a garbage truck company. You don't even. You don't even know how to drive a truck. You don't even know how to bend metal. I mean, for God's sakes. I mean I got two left thumbs.

I said you are crazy, you're going to get sued out of here. Petunia, and as a war big guy, just let me go over that due diligence. Do I know what the cost of every truck? Do I know how it's made? Do I know the channels? And sure enough, I bought the company.

In the first seven months our ebit cash flow was 150% of our Equity check, so pretty much after that I didn't have to write any invest memos after that. So that was a good thing. I remember when I bought the bank I had like six inches of papers showing the whole portfolio, the analysis, this, that, and they, they like, look at a few pages. They said: get, we're ready, we're putting in 20 million.

I said, guys, don't you want to like? I did a lot of analysis on the loan portfolio here. It make it work, you did it, we're good with it, and so you have to do the work. The details, the devil is in the details, um, and so very important to do that. One thing I would say is, sometimes people get a little full of themselves and then they start to hurt the people around them and you know they think, oh, I don't need this guy, I don't need that guy, I don't need this lady out there.

And big mistake, because I see many, many families lose critical people when they're not respectful and don't appreciate the people around them who do business, um, who do business for them and take care of their Investments. Um, very important, you know, sometimes you can get caught up on the wealth, right, you know, I'm going first class, I'm going private, I got my yach and you forget that you only got there. People help you and people continue to help you to build your business and keep make sure your business is strong. And I see many families, um, you know, get hurt by forgetting that they're it's a team, even though, yes, they're the dreamer and they thought of it and they were the one who created it.

But without a team, very hard to, uh, very hard to succeed. Um, they're also constantly learning, curious, always thinking: you know new way to do it. Hey, I heard about this idea. Maybe we can apply it to some business that we're doing. Maybe we could add this technology or this software or this person. Um, you know, you get the call at 11:30 at night and you know it's the billionaire calling.

Say, oh, just reading about this idea, I just met somebody at dinner. Maybe we could do this in our business. I'm like, okay, it's 11:30, yep, we'll do it. But you know I take calls until midnight. Uh, you know, as a result of this, I mean I take calls until midnight every night, basically, um, to be available and be ready, um, and don't get up.

I, I worked on a huge mega deal. We spent two years trying to find a way to get it. We try it this way, try it that way, try it the other way. And these guys are IND fatigable, one of the one of the four brothers in the family that owns the Mall of America. I've been all over the world for him.

It' be unbelievable. I mean, like you know, it looks like it's a fail. No, no, no, he's trying another thing. We're had another thing. We're in Cypress Bing on the oil and gas licenses out there. You know multi-billion dollar deal and one of our partners reneged on us.

So he's R. I said like the we're dead. I mean this is going to be our operating partner. And he's like no, no, no, running around, we're going to find a different operating partner. We're going to find a different Capital Source. We're going to do all these things completely revamp the deal, never give up, and that's that's one thing you see, these families is is never, be, never.

Um. Don't, don't, ever give up, um. Richard mentioned also that insights in terms of scaling, and you know I mentioned dreaming big, but it's not can't be a dream. Also, you have to put it down on paper, on numbers, and look at the numbers and and do the details, because I see many times there are dreamers and you know a lot of times they call: oh, we got this hot deal.

I'm like, did you think about that? No, we didn't think about that. Well, it's pretty basic to your old assumption here. Um, you know, make sure you know the details of what it is. And talking to people, again, they're very paretic, these billionaires talking to a lot of people, maybe they don't give out their phone number, that they constantly talk to people, constantly learning from people, trying to find the smartest people they can learn from and and become better with.

Um, the other thing question that Richard asked me addressed is in working with ultra wealthy. How do you do that? How do you get in? And, very important to be succinct and know what you're talking about: I um I did an event with the United States Department of Commerce to introduce minority and women owned businesses to family offices.

I had seven family offices there and seven minority women owned firms and I worked with each of them on their elevator pitch. I said: listen, they don't care how long you worked. You know that you worked in a shed for 10 years. What is your business and what is it going to accomplish? And what's my return? And I can't tell you how many times I have on LinkedIn I don't want to say all son ho people, I'd love to meet you.

Well, that's nice. I'd love to meet myself too, but, but, um, you know what is it about? What's the subject? What do you want to accomplish? You know you're in real estate. Well, that's great.

Hotels, multif family, single family, like, what are you doing? And so I I many times I write back, and pardon me for saying this, but I write back in three or five sentences: please tell me what are you doing, what's your interest in talking to me, and then I'll decide if I want to have a conversation. I don't have back and forth. I just had it literally the last day.

I'm in real estate, okay, great, what kind, what size? What type are you lending, are you Equity debt, like? Just say what you are three or five seconds. So when you deal with these people, you got to be on the money. You know, this is what I'm interest. We can make a 30% return in.

You know X number of the the year and a half a year, whatever it is. This is my plan. This is what's smart, creative about my plan. I'll just give you an example. I I met a young guy, uh, he was in the credit repair business and he came up this idea that if he does credit reporting for multif family landlord, so every month he pulls the rent roll and he looks who paid on time, who paid late, who didn't pay, and he reports it straight to Experian, your um and uh, TransUnion, whatever it is.

People start paying their rent. When your credit score drops 6 to 120 points for a one late payment, you start paying your rent on time. They like, wow, that is an ingenious idea. He said to me one sentence: I'm like bam, I am in and so I'm, I'm now part of this company. I mean you get the idea right one minute.

Who who wouldn't want this? It's $1 month per lease. So you got to know what you're doing. Be focused into the point. The other thing is loyalty. If you come to family office and you say, oh, I've got a deal and we start doing diligence, and then you find out, oh, you've got your finger in the pie, oh, you're get a 10%, uh commission, it's like why do you tell me that up front?

Don't, don't come to me and try and sell me something when you're getting paid in the back end, on the back pocket. So very important: if you are getting paid, be straight up about it. Say, hey, I'm a broker, I'm getting a commission on this. So I just had it last night with a family where I've known a company for 5 years.

They're in a little bit of trouble. They need a special loan. I said to the guy: listen. He said why don't you do the due diligence to me? I said, listen, I don't want to be in an awkward position. I've known the guy 5 years, you know I, I don't want to be in an awkward position.

You do the due diligence, I'll help you with it, but at the end of the day, I don't want to be in the middle of something, and so it's very, very important, um, very important to um, have loyalty and also relationships, and I want to talk about relationships a minute whenever I reach out, cuz I do a lot of networking too. Um, I was trying to value, so here's an article about something that might be of interest for your company. Here's a statistic that maybe hadn't seen. Here's something that, uh, you know that might be helpful to you.

I do a lot of medical Consulting. I help people on medical matters. I mean, I'm not a doctor, I play one on TV, but I do a lot of medical research in the medical journals. Um, and you know people are grateful and they see that you care about them, and that's how relationships are built. All about caring and, um, you know, and uh, and taking care of you know to be helpful.

Just a few ideas about routines. Richard asked about Richard routines, Communications, again, Communications. Short and sweet, this is my name. Uh, this is what I'm all about: debt Equity, this the return, this is the yield, this the time frame, whatever. Blah, blah, blah. This why I think it could be interesting for you and, of course, try and make it relevant.

So I just give an example. Many people come and say, oh, I got a real estate deal. Now I'm working for two billionaire real estate families. Do they want to invest $5 million in some apartment building in Kansas City? I don't think so, right. So don't don't ask me about stuff that makes like, with all due respect, no sense.

You want to tell me about a prop tech company you could save me money on the air conditioning building in myund, buildings that I want to hear about. You want to tell me how I can, you know, manage my buildings remotely and you know blah, blah, blah and do with this other stuff that I want to hear about. But don't ask me about a you know5 or $10 million investment you know in in some company that is in real estate, where our na is on our front door. You I'm not going to put 5 or10 million doar in somebody's apartment building in Kansas City, with all respect to Kansas City, um.

So preparation, very important. Every night, have a plan for what you're going to do the next day, triage, sometimes different things come up. You got a triage, appointments and in the morning be prepared, think about what am I doing, what, what I hope to accomplish today. Very important, because if you don't have a goal, as they say, uh, if you don't know where you're going, any road will take you there, and so you have to know where you're going.

What do I hope to accomplish at the end of this day? I want to call five people, I want to make three contacts. I want to do X, Y and Z, and so super important to do that. And, again, stay focused and details, Details Matter, so the communications crisp, to the point. And what am I trying to tell you about?

Um, and those are some of the things that, again, very important, you don't need to be the smartest person in the room. You need to be a great Orchestra conductor to bring everybody together. But again, that's not only their loyalty to you but your loyalty to them and complimenting and being being um positive with people super important, um, the other thing I would say is just values. Sometimes people make it and they get very lost in the wealth, um, and don't want to give to any details, but, um, it can be very deleterious to the children.

You know, when the parents are. I mean, I have a situation through: I'm in the middle of a deal and I'm working with a son and like he's in Paris, I'm like you didn't tell me you're going to Paris, we're in the middle trying to get something done, or he's at a spa for 10 days. I like, well, geez, how am I going to get something done when you're in a spa for 10 days? You know, okay.

So you know, making sure that you build, build the work ethic, um is very, very important. I just take any questions, if anybody has any questions or comments on anything, and so, oh yeah, oh okay, and that is and that is it. But, uh, I would say, be Fearless, be Fearless. You know you can. You can get to a lot of people.

Be Fearless, but to the point, what are you writing about? What are you calling about? And you can, you can accomplish what you want to do. Great, thank you, Ira. Appr, sayate it what we can. Uh, sit down here and we'll do some Grace.

We're going to do a little bit of uh Q&A now, but feel free just to raise your hand and we can take questions from the audience as well. So obviously, paying attention to details is super important. Um, one of my favorite quotes is from, uh, Bruce Lee. He says that calm is a superpower. Um, and yesterday it came up a few times in your talk that you know, kindness is a superpower.

Um, but, as I mentioned, Warren Buffett says at his annual shareholder meeting that he noticed over time some people are just really hard to do business with and disagreeable and not pleasant to work with, and he, on purpose, has tried to change some little quirks about his personality to be a little bit more pleasant and easy to do business with. And uh, I've known Ira for probably a better part of a decade now. He's been speaking at my events for a long time and he's very easy to work with, and so one of my questions to you is how much of that has been? You know where you just born.

You know uh kind of friendly, you know uh outgoing, how you are now, or is that something you've worked on over time to be better at doing business? Um, I think it's something that that I've worked on. Um, sometimes you meet people and they have a certain Grace, a certain um, a certain dignity, and you say, gosh, you know I could use that a little bit better. Maybe no more interruptions or slow down them, pay some interruptions, or you know a little more thoughtful about other people.

So I would say I'm a work in progress. So if anyone has any improvements, let me know. Sure, sure um. Also personal question on: you know being in the Northeast working in the family office sector. Uh, how often are you suit and tie when you meet with clients? Um, obviously, when you speak in an event, sometimes you wear suit and tie.

But just how formal are you when working with your clients? Um, so, with the clients, I, I don't necessarily have to wear a tie, um, but we buy companies all over the country so we could be in noville, nowhere, and um, I still do wear a suit in cuz, um, uh, and usually a lot of times I'm with the nextg, so I, I did a lot of work with the nextg, so, believe me, they're not wearing a suit and tie. Somebody's got to, so um, got to be the adult in the room. But, uh, I tell him, we're not renting a Ferrari, we're going to show up in a nice Chevy to the go of the company be and we're GNA.

As I mentioned to Richard yesterday, we're going to have a deluxe meal, Applebees, and we're going to enjoy it. So that's great. Um, can you talk about, I think you once sourced like a deal from the classified section of a newspaper. Can you talk about that in any other creative ways? You Source deals over time, sure? So I specialize in buying companies in distress, rescuing companies.

So I get a list every day of every bankrupcy in America and I Look to try and help companies. But I did, um, our bank was actually there was an ad in the Wall Street Journal bank for sale and it was the craziest thing. I called, the guy said: you know, I'm very interested in the bank. And um, and he said, well, why, why are you calling me?

Why do you want to buy a bank? I'm like I want to buy a bank, like what, what's it? Do you anyway? But whatever so happens, the family owns the largest privately owned bank in Canada. Um, it's one of the largest fintech banks in America. We bought a little small Bank in Queens, New York, from a baker and a Candlestick maker.

You know, in those days you could just start a bank, like you know, any time, and they were in deep trouble. We bought it and we've turned it into one of the largest fintech banks in America, over a billion in assets, um, so you know I talk to a lot of people. I do deals. I, I mentioned yesterday and uh, Fort Lauderdale.

I said I have a 10 number secret for getting deals and of course somebody asked what I said: it's nine, pH number. Um, but but, um, you know, talking to people and hearing, and you know, I just want to express, when I'm talking about caring about people, I don't mean for utilitarian purposes, like I'm not going to be nice to you so I can say, oh, you know how do I can, you know, get something. We should love every human being and care about every human being. And I I mentioned when I spoke, I did this event with the United States Department of Commerce, the mbda, minority business development agency, to introduce minority women owned businesses to family offices to try and help build Bridges, and we had an incredible event.

And you have to genuinely care about people and all the good stuff will come from that. You don't need to look for it. Sure, I think the idea of buying troubled companies and being able to, you know, turn it in, you know, lemons into lemonade, and that I had done, I had already done billions of dollars of advisory work, but I had never actually done it before as a principal, so I think that got them kind of interested. Um, you know, hey, wow, we can, you know, buy stuff cheap and like um, and every company I bought actually, believe it or not, was an industry-leading company.

And it's incredible like our garbage Tru company were the number one automated side loader company in America and the biggest guys in the industry were um private labeling our product, but they had fallen whatever, and a lot of these businesses get in trouble for doing bad boy stuff. They to cheat their workers and I see a lot of businesses fail. When you try and cheat, believe me, there's Karma and a lot more than that. So be good.

I mean, I think you need somebody who has a global view, right, because you mentioned a lot of disparate types of assets and not all of them are necessarily cash flowing in the near term. Sounds like a lot of them aren't. So you need to evaluate um. What are the goals of your portfolio, right? If you're financing cash flow, holding a land probably isn't going to work.

If you're really after long-term appreciation, your cash flow is taken care of, let's say, from an operating business, that's something. But then also looking globally, uh, just to understand globally what's going on, I mean, and just to give you one example, there's $1 trillion of mortgages coming due before December of this year. Most of those loans were at 300 basis points, 300, 350 basis points. No Bank can finance a loan at that basis.

Well, all that is going to collide in the next six months and you're going to have a lot of bank failures and a lot of things. So, as you're thinking strategically about where you want to be, number one, if you have any real estate loans, make sure you extend those maturities as soon as possible. There's a meme in the industry called survive to 25. It's not going to be long enough.

You got to extend out at least four or five years because it's going to be devastating. Because if the building next door to mine sold for 30 cents in the dollar, guess what next time I need to come up for to get my loan approved, they say, well, the building next door sold for 30 cents in the dollar and there could be a death spiral in real estate and banking. So just very important to have a global perspective or or have people who can sort of be on an investment committee or advisory committee to sort of give you that global view of what's going to happen. It.

It came down to a detail actually. I bought a street sweeper Manufacturing Company where the number one most patented street sweeper in North America, and this was the little piece that caught me. The diligence was great, great product. But the vendors who supplied the um unique products to make the street sweeper, they had gotten mad. I bought, we bought from a $60000 million public company and the vendors were mad.

Because those vendors were told: we're going to sell thousand sweepers a year, so you make the dyes and the tooling for free because we're going to buy, you know thousands of items from you. When that didn't happen, the suppliers got mad and when I came in and said I'm going to sell a th units a year they said, oh no, no, no, we've played that game before. You need to pay us for the dyes and all the manufacturer, you need to pay us up front for that. Well, that set me back and, um, it hurt quite a bit.

So you need to do the full due diligence: everything: who the suppliers, what, what's the terms, what your customers? I mean the whole thing very important. Um, you know, to look in across the entire chain. I would say, actually, I would say no, um, probably to my detriment. I'm mostly self-taught, but I I read a ton and I just, I mentioned this the other day, is I was when I got my MBA.

I joined the, uh, Chase Manhattan bank and the Real Estate Group and at the time the entire portfolio was in workout. The bank had been devastated in the real estate business and they were basically shutting down the whole department and so people you know were sort of knew that they were going to be fired or laid off. And so people take two-hour lunches, you know, leave at 4:00 and you know that was sort of just the mood in the department and I could of started to get into that, like what difference does it make? We're going to get fired, blah, blah, blah.

And I said wait, AE, I'm a brand new NBA. They just hired me, they put me through their Chase Credit training program like the best training on Wall Street. They're going to fire me. But if I act like a jerk, they are going to fire me. And I decided this desk, this is the irj store, and if you come into my store, I'm going to know every appraisal.

I'm going to know every loan agreement, I'm going to know the defaults, I'm going to know everything about every loan that I'm responsible for managing. And I ended up doing more deals than anybody in the department that year, cuz I changed my mindset is I'm going to read that 150 page credit um, you know credit agreement where most Bankers, oh, the lawyer will, he'll tell me what it is. It's like: no, no, no. I need to know it because lawyers make mistakes and you need to be on top of your game, and so that was a very important lesson for me is you should have mentors, everybody should, but also you got to know your own game too.

So I do the general advisory across the entire portfolio, to be clear. So you know fund Investments and you know moving around all the chess pieces. But in terms of that business, I'm looking for great companies that have a great product or service. Suggest they maybe had a litigation or had a, had a stumble, where I could pick it up and and grow it.

But it takes a lot of work. I mean I bought 11 different companies, 11 different Industries. I don't know anything about any of these industries, but I read voraciously and also talk to people. That you spend time talking to people, and I don't mean the guys with the ties, is you got to talk down a level on the factory floor.

The people are sweating and you say, oh, you know what's going on here. Believe me, they know what's going on. They'll tell you: oh yeah, this boss, you know he's a liar, he's cheating the customers. Uh, you know we're supposed to do two layers of pen paint and we're just doing one layer of paint and, um, everything comes full circle.

You know, and so they'll tell you what's going on. And then you number one or better position to know what you're buying and to negotiate a better deal. But you'll know what's going on and talk to a lot of people. Um, you know both inside the company and outside the company to understand what it is. But, um, I bought the garbage truck company.

I bought two military Parts, businesses were sole source and over 3,000 parts to the United States military, like nobody in the world could sell. Sell my parts. Um, I bought a generator company in bankruptcy that were only, and it was a small company3 and half million doar company and they didn't have health insurance for the workers. This I mentioned yesterday.

I said, listen, I'm not buying the company without health insurance for the workers. Now it was 21 workers. I didn't have to buy health insurance. I said I'm not doing it. I got a health insurance. I cut my profit 25 % in the first year.

But when I walk on that factory floor, everybody says: thank you for respecting me, thank you for respecting my family, and when I needed them to work a little overtime or and work a little better, or say, hey, we could do this better or smarter, they're tell me because they're grateful for how we treat our, treat our people and so, um, but you got to talk to people. I actually did the first fully electric garbage truck. I did it together with byd. Um, and this is another example.

What I said is: don't be afraid to say no or or to get a no. Byd announced that they had a deal with another garbage truck manufacturer. Now I knew these guys didn't really care about electric. They were just, you know, just some marketeering thing. We actually produced the most energy efficient garbage truck in the industry. We tried CG and propane and you know whatever, every new fangle thing that came out of there.

That didn't work. What? Um, the company was in Iowa, but we sold all over the country. Um, it was. The company was called Wayne engineering. So I reached out to the CEO of byd America again I don't knowah from Adam and I said: listen, you know, we have the best, best, most energy efficient garbage trucks in North America.

Like to come see you. I flew out to LA, I met with her and she said: oh, you know, it's going to take us months. We have to study the Duty Cycles and how much energy everything takes. I said, Miss, we already know exactly how much energy every single function on the garbage truck takes. And you know exactly.

She said: unbelievable, nobody else knows that. I got a 5-year exclusive deal with byd and knocked out the other guys for for the garbage TR. Uh, I'm very tight with the new owners, but but, uh, but we sold it. But again, you know, I, I get to say byd, who are they going to take my call? 17 billion company.

My garbage truck company was $25 million company in Iowa, right, Iowa, run by. You know who's going to take that call, but you don't ask, you don't get. I mean real estate, I think is going to be a layup. Um, there's going to be a ton of. Already the number of real estate forclosures and UCC sales is way more, you know, than it was in like the last two or 3 years.

There's going to be people are buying multifam, the treasury bond of real estate for two and three caps. Well, interest is 6, 7%. You're 4 500 basis points underwater. You're going to be able to buy a lot of things. Very, very sweet. I mean, if you look at some of the sales that are going on, 30, 40, 20 cents on the dollar of what it was.

So I would buy a lot of real estate that's coming up. But wait, be careful, make sure you do your due diligence. You know, and there's going to be a lot of opportunity. Um, I've done business all over the world, um, and I would say there's nothing as great as the US OFA. We have a rule of law.

You know the game, you know the people. Um, I've done things internationally but I really prefer America. We live in the greatest country in the world and there's so much opportunity here to do things. Um, you know, I mean there's there's so much to do and there's just a lot of risk. You know we had a um, a pulp deinking plant in France, $300 million investment.

We, we, the bank, when I was a Chase, we lent $300 million and there was like another few hundred million invested in it. And they had a new strategy: how they're going to take uh paper pulp and recycle it. And there was a a contract to build the plant and everything like that. And the contract said: if when they turned on the plan it didn't work for 7 days straight, full refund.

Well, guess what? They didn't realized that when you recycle envelopes, you know they had the little cellophane window. It gummed up the whole thing and the whole thing did not work in full, was fizzing out of it and going into the river, big mess. And it was under six different rules of law. So the credit agreement is under UK law.

It was in France, so we're stuck with French law. The UPC contract was under German law. The owners were in in the Netherlands. I mean you know, having an alus, I mean the legal bills were through the roofs. I, I like the good old USFA, right? Yeah, I think one thing that's uh obvious from hearing you yesterday and today is that you're more thorough, more paying attention to the details.

Legal contracts, uh, very thorough due diligence. Obviously it's a big strength of your. I would imagine some of the ultra wealthy families they're running and gunning and super busy and maybe growing their operating business and they see the strength in you of really looking at the details and say, oh, I need to to have his hand on this, cuz I know he's going to be super thorough. Um, that's pretty obvious after listening to you.

So I think, if I remember right one event a while ago, you said you have a little bit of like an an auditing or accounting background. Is that where that detail orientation comes from? Or we just born like super analytical, thorough, or? Um, no, I have a psychology degree undergraduate and I remember when I went to chase they gave me accounting books this thick and in the small print it says if you fail the accounting test they fire you and like holy smok, ex I anything about tea accounting or whatever.

But I studied my uh brains out on that and, uh, you know, and learned it and came to appreciate it. You know that the accounting is very, very important. Um, you know, you have to know accounting. So I, I, I sort of saw so many times there were little mistakes and it could cost you hundreds of millions of dollars for a mistake.

So we had a company that had a very leading software and they were doing a thing called capitalizing software expense, so basically money that they spent to build a software that they were then going to sell. So you're allowed to capitalize it, meaning you take it off your p&l, off your income statement, and you put it on the balance sheet. Well, if I'm looking at that company's p&l to see if they could pay me back my loan, um, you know, and I don't realize that millions of dollars are being spent. So you have to look at free cash flow, not e, not, not net income.

But if you don't know that, you're going to get killed. Now just one other story on details. So this company had cheated the bank out of millions, tens of millions of dollars. And I got the. I was a lucky relationship manager that had to deal with them. I defaulted them on a foreign currency translation adjustment on their on their tangible net worth statement and they went crazy.

It's a public company that report 8K. Oh man, they went nuts. But again, that detail: even their accountants didn't know what a foreign currency translation adjustment was. And boom, so great, yeah. Well, um, yeah, we're. We're almost out of time here.

What else should I have asked you? That would have been a really good question. Or what else do you want to share with the room? I'll tell you this: you have to love what you're doing and you know, um, if you love what you do, you never, you never work a day in your life. As Mark Twain said, and I, I always tell people by that measure, I'm the laziest guy in the room.

So all I do is, you know, look for trouble, look for situations where, um, I could get in and help. I mean, I'm advising a lot of families on situations where they put in money and you know, sort of jum leap first and then, uh, you know, look afterwards and very important not to do that um. So find an area where you love doing whatever it is that you do, or learn how to love it. I mean, believe me, I don't love accounting but I learn.

Like it's so critical that I'm I'm able to spend time doing it, even though not my favorite thing. I'm a people, person, um, but you know you got to right. I, I think, like also the um, if you can show value to a, a client or a family immediately in a sentence or two, they can just sense the value as an entrepreneur and it changes everything right away. And I remember one time you said you're doing due diligence on a company and they claimed to have like 90 customers, service people, on their expense sheet and they were faking the expenses cuz you went and you counted there's like 20 seats and even if people were working 24/7, there's no way to have like 90 people sitting there.

And another time you mentioned there was um interest due on a company and the company is bankrupt and you're able to acquire that company, find out that the interest actually broke Usery laws and all of the interest was void and that you actually owed nothing. And you picked up a company out of bankruptcy, didn't owe the debt that made it bankrupt and were able to lift that company up very quickly. All by showing that immediate value by telling stories like that: 100%, 100%. You have to do the homework and one of the cases, this garbage truck company I bought, so the largest unsecured claim was there.

It was like a $500,000 claim and two law firms both said: we are, you know, we are the largest unsecured claim. I did a little research. It turned out the claim was secured. So I tried to buy the claim for pennies on the dollar and I was going to flip it as a secured claim and then I could bid with it on the company.

Um, so you got to do your homework and you know it's fun to investigate. You have to be curious, you know, and think about things. Ask the second question and people say, oh, yeah, it's just like that. Well, yeah, just like that. But how does that work? And how does that work?

And that's where you find a lot of times the value is in the second or third question, great, awesome, yeah. Well, at our investor Summits we have 120 speakers on stage over 3 days and you know it's like a fire hose of information. So when I talk about the super, ultra wealthy successful being vicious Learners, one way to be a vist learner is to come and listen to people from. I think probably we all got at least one Insight or five insights of things that we could be either more detailed on or more thorough on or more concise on.

So, um, hope you enjoyed that. We're going to break for lunch now, which is right in the back of the room. As a reminder, the bathrooms are out to the right there. Um, we've got coffee and drinks there as well, and then we'll probably start back up in about 45 minutes just to make sure we can get through all the content in time today.

But I appreciate everyone's attention. Let's give big round of applause. Thank you, join the family office club by visiting family offices.com. We look forward to seeing you at our next live event.