Dental Real Estate Partners

Macro Volatility & The Flywheel Effect: Mastering 2026 Real Estate Operations

• Josh Cochran

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In this Wealth Strategy Session, Josh Cochran and Dr. Reed Faldet break down the intersection of global macro-economics and granular real estate operations. As we navigate the complexities of 2026, they explore why understanding the "why" behind market shifts is just as important as the "how" of property management.
 
In this video, we discuss: 
• The Macro Ripple Effect: How geopolitical tensions and oil price volatility are currently dictating interest rate trends and your cost of capital. 
• Multifamily Project Pearls: Reed shares direct insights from his 500-unit portfolio, focusing on fast feedback loops to solve lease-up bottlenecks.
 • The Development Advantage: Josh breaks down the strategic play in income-restricted housing and how to leverage relationship equity with city officials. 
• The Flywheel Effect: Why the hardest part of any system is the first turn, and how to build the operational momentum that leads to "effortless" success. 
• Institutional Systems: Practical banking and organizational strategies to manage multi-state investments without the operational drag.
 
Whether you are an active developer or a passive investor, this episode is a roadmap for staying prepared, staying persistent, and acting when the right opportunity strikes.
 
🎧 Tune in for a deeper understanding of real estate investing strategies and how they can unlock your financial future!
 
🔔 Subscribe for more insights on the future of wealth building, energy, and smart investing!

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SPEAKER_02

I mean, oil prices were like pretty low, right? And then we had this war. And the US guys, right? They're like, dude, we're oil prices are l are too low. Like you we're not covering our cost to operate, right? Which was kind of an issue for the US uh oil industry. And now all of a sudden like things have jumped.

SPEAKER_00

Primary, secondary, third, tertiary orders of effect from that one thing. And so I I tried to do that and just see how I can kind of parallel that to real estate. Um, but yeah, so that's kind of how I absorb it. But anyway, so lately the big conversation's been around the iron of war. Like this is tax time, and so I'm getting all my K1s organized from all our partnerships. I mean, I'm talking about like 15 to 20 K1s, right? It's ridiculous.

SPEAKER_02

I think it's great. So the war chest is where I you know send money, receive money on a personal, like not a not a business LC, it's like my personal account. So like contributions of capital, uh, short-term loans, like everything just comes back to there.

SPEAKER_00

Oh, the biggest thing found we found time and time again is is lead delete time, right? Like the process is just like how fast you can get back to that lead, and that could that has created the highest convergence.

SPEAKER_02

To weekly headlines and project pearls. In headlines, we unpack this week's biggest stories and share how they're shaping our own personal wealth-building decisions in real time.

SPEAKER_00

Then in Project Pearls, we'll hold back the curtain on our real estate deals and share the wins, the challenges, and the learning opportunities.

SPEAKER_02

We have a great headlines in Project Pearls for you today. With me is the Sultan of Smart Money, Dr. Reed Faudette. Reed, what's new with the family, buddy?

SPEAKER_00

What's new with the family? What's new with the family? We got Easter this weekend, right? So we'll go to uh my in-laws and celebrate with the rest of the family. There'll be about nine kids under five, so it'll just be like straight chaos and dirty diapers everywhere. But and then someone will be inevitably be sick when we get home. But that's that's that stage of life. It's fun.

SPEAKER_01

Or the joy.

SPEAKER_00

But yeah, and then also uh we're getting excited. We have a couple weeks. Um, my wife and I are going with her sister and uh brother-in-law to the Bahamas, and I've never been, so just doing kind of a chill, just couples vacation without kids. We haven't done that for a little while, so looking forward to that too. Just get some sun and have some fun.

SPEAKER_01

Who's watching the kids?

SPEAKER_00

The uh combination of grandparents and the nanny. So nice. Yeah, we got we got a deep bench of babysitters. We we just realize like you need it, so we just keep we just keep adding. That's awesome, man. What do you got going on?

SPEAKER_02

We're going to uh my sister moved to Missoula, Montana last year. Uh her uh husband's parents over there, they're awesome. So we're gonna drive uh over there. They uh they just built a new house, so uh it'll be good. Uh go to church, Easter egg hunt, uh hang out at the uh my my sister's parents-in-law's place. They got kind of like a little homesteaded farm thing out there, which is awesome, like the four-wheeler, you know, and the elk in the yard, like all that stuff. So that'll be good. And they cook it up too. So anytime you go over there, you get like a massive meal, right? You know, you're well fed. You're well fed. Yeah, you're well fed. And uh my my girls get to see their cousins. They've got a couple cousins about their age, and so they're close. And so, yeah, it'll be a good little uh oh, and my sister just finished a house, so she built a house, and so I'm excited for her. Uh, you know how that goes. It's uh yeah, it's always fun.

SPEAKER_00

It's always fun to see the the brand new home and they walk you through it and their thoughts behind it. It's exciting for them and exciting to see it too. Yeah, you're gonna you're gonna need like a 72-hour fast after your Easter holiday then to get back on track.

SPEAKER_02

A lot of steps up the 10,000, uh 20,000 steps for a week. Uh so it'll be good. Uh okay, headlines and uh Project Pearls. So headlines, what's in the news this week, Reed? Or I mean yeah.

SPEAKER_00

Do you do you check in how often do you watch the news? Or or like do you what's your source of information? I'm just curious. Where do you get it from?

SPEAKER_02

Yeah, so I really like the uh data I'm getting from uh X. I really like that information. The um the challenge is that once it kind of knows you, it just sends you stuff you want to read. And so I also have to check some of the other news sources just to figure out kind of what's going on overall. Um how about you?

SPEAKER_00

Yeah, so I I mean I I every morning, I probably shouldn't do this, but like I just have like a few YouTube channels that I like will just quick get some reels on, get some, and there's certain ones that do like market updates. So from like the the public markets to what's happening geopolitically, and it just I don't spend that much time on it, just kind of get a pulse of where things are and I find it interesting, even though it's it's not like super productive always. Um, but I've been watching, I like to watch some of the traders on the uh the stock exchange, like how they view actually commodities traders, equities traders, and just hear their perspective because they look at the geopolitical um scene and then they try to drive like primary, secondary, third, tertiary orders of effects from that one thing. And so I try to do that and just see how I can kind of parallel that to real estate. Um, but yeah, so that's kind of how I absorb it. But anyway, so lately the big conversation's been around the Iran war. So, right, uh the closing of the Hermuse Strait and the limited oil supply going through there, crude oil and liquid gas. I think it's something like 20 million barrels a day usually passed through there, so which equates to 20% of the global supply. And so I think if anyone's been watching, like you see, group crude oil prices have skyrocketed. I don't know where they peaked. I think maybe it was 120 some a barrel. Are you muted right now, Josh? I was, yeah. Were you saying something? No, not to you.

SPEAKER_02

Oh make sure my wife knew that we were recording the show.

SPEAKER_00

Okay, okay. Yeah, so so basically we've seen group prices kind of skyrocketing and all goes based off of like what President Trump says about uh when the war is wrapping up versus how long we're gonna be there. And so people are trying to price price in that effect. But if we just assume that this war or that the the strait is gonna be closed longer, we can we can kind of assume that oil prices are gonna stay higher longer, which means energy prices are gonna stay higher higher longer. And so just trying to figure out how is that gonna flow into everything else, right? And the big the big thing is people worry about is like, well, if if energy prices stay high, that's gonna lead to inflation because all prices are gonna go up and stay up. And if the Fed before was planning to maybe cut rates as or we've been forecasting that they're gonna cut rates, now it looks like they may not or may even raise rates if if that energy shock causes mass inflation across across the market, right? So now we're starting to look at okay, what's the likelihood of an interest rate hike now rather than a cut as we were we were planning on? Now we know that the the um the administrative administration, right, President Trump really wants to lower rates, but it it seems like the Fed will have will be hard pressed to do that if energy prices stay high. So what does that mean? I mean, as we've talked about in prior shows, right, is like the cost to borrow uh influences so many things in our economy, right? We have a credit economy, so um may slow down a lot of things, may make it harder to refinance debt, um, may make it harder to buy a home or or whatever you need debt for. So I I just saw this. So I refinanced some of my student loans because I was kind of looking at this and I was like, okay, the treasury rates have come down. Like I should probably refinance now because if this thesis plays out, uh the treasury is gonna go up, right? Maybe the Fed raises rates or whatever, and then I'm gonna I'm gonna be stuck refining at a higher rate than I want to. And I literally, so I refinanced my student loans, and it wasn't a whole lot, but I just wanted to get it done. And then I refinance, I was gonna refinance my wife. So I sent her, like, hey, get this going, right? Within two weeks, like she was a little slow, so I took it over and did it. It was like a 0.3% uh rate hike on that, which that's that's significant in such a short period of time. So that's how I kind of look at the global and then look at like how do I need to plan around it, as simple as something is refinancing um student loans. Also, you know, we completed a home reno, right, on a private note, and and like we're in that place where I need to get a new appraisal done, right? And then we get to basically lock in our late rate when we want based on when that construction loan runs out. And so I'm like, I need to push to get that appraisal done so that I can kind of wait and then lock in that rate at the right time. So, but I also look at this from our investment standpoint, too. If we're refinancing a property, so everything comes back to rates on the personal side as well as on the investment side.

SPEAKER_02

Yeah, no, I mean it's tough to predict this stuff. Um I mean, oil prices were like pretty low, right? And then we have this war. And the US guys, right? They're like, dude, we're oil prices are low are too low. Like you we're not covering our cost to operate, right? Which was kind of an issue for the US uh oil industry. And now all of a sudden, like things have jumped and uh yeah, it it's interesting. And I also think like you know, we've been going green so hard that we've like cut off our our our our energy. Domestic production, yeah, not just here, but other countries like Northern Europe, especially right, Europe. I mean, um, so it really affects folks. And we've already had massive inflation in energy the last three years. Um I've replayed some of those numbers on here, but it's massive, like I forget like 20% a year or something on average, uh, for energy costs. So it's like energy costs already have skyrocketed the last three or four years, and so um this is becoming more and more not a cheap resource like you know, 50 years ago when the dams were built, right? And then like electricity was kind of like an afterthought on monthly costs. Um it's becoming more and more significant, and then there's much more pull with all the uh the compute resources are gonna continue to increase, you know, going from oil to you know gas-based vehicles to electric vehicles, robots. I mean, it's just gonna continue the demand to increase. So um I think we just need to have a better plan around uh all of us need to have a better plan, both individually and and city and state around energy, because it's it's gonna be more and more significant.

SPEAKER_00

Um so so I was looking just to track this, what you said. So, you know, when I'm going through my investment thesis, I still invest in equities and everything, and I just like to check indexes. And so um VDE is Vanguard Energy Index Fund, ETF. And so more broad energy sector, I could tell you everything that's in it. But basically, within the last six months has gone up 33.8% in this index fund. That's that's a lot of movement in six months. So uh I was looking at it as like, oh, should I be more invested in the energy sector? It's done well, but this is the thing about timing with these kinds of things, is like I'm already behind, right? So every now and then I check these indices to kind of see where things are. And um, yeah, you have to be ahead of the curve on these trades. But then you look back and you look back at at years past and it's traded flat for so long, right? So then it kind of like uh the same with gold. How long did it trade flat before it took off? Which is another story. Have you seen gold prices, silver prices plummet? Have you seen that lately? So I don't own I don't own gold, so I don't pay that much attention, but it's it's more um it's more an indicator, they say, of liquidity issues, right? Amongst many of these countries that are they're getting pinched on oil prices that they can't borrow, so they need to liquidate a lot of their assets, which sometimes are these the precious metals. So um, yeah, it's it's hard, it's hard. Your head spins every morning you wake up if you try to look at all this stuff. So sometimes it's not just that a clean business, focus on the thing in front of you. Um every day.

SPEAKER_02

But that's how I look at it too. It's like I like to hear this stuff, but yeah, if I spend too much energy on this stuff, I just I'm like, wait, I need to get done. I'm supposed to get done. Uh and I agree. I mean, gold, you're like, oh, okay. Um, when things are rough, like usually people flee to gold. Well, with the war, things are rougher, and it's the opposite, right? So it's really hard to predict those things. And so, unless you know something so deeply that you can, like you said, have a good sense of the primary, secondary, and tertiary like effects, then it's like you're just wasting your energy. And I would think I would almost if I ever like I hear about these things, like when people are like, Oh yeah, I invested in data centers or invested in energy, right? Like, like I'm more of a general I'm in real estate, but if I were to be more in stocks again, I would be just in index funds, right? Because I would have to test my thesis for like two years, right? I'd have to follow the information, gold, energy, all these things, right? Make bets and see how my bets turned out. And after two years of lots of trades, lots of data, right? Uh, if I actually did well, then I'd be like, oh, look at this. Okay. I've read, I've read up, I'm doing well. Now let's use real capital, right? But otherwise, um, I just think the the evidence, the research out there says you're going to lose money doing that. And so um I wouldn't do it with real money the first time. I would uh have one of those fake portfolios like my kids use at school, right? And just see how I did over a two-year run.

SPEAKER_00

Um yeah, I'm with you. I I try to people will say this, right? Like, like I trade and I made these big bets and these work, but you have to make such big bets to make any so if a stock runs up, let's say even 100% in a year, right? Which is phenomenal, there's no there's no saying that you're gonna continue that run-up, right? It's just gonna be some freak thing you bought at the right time, you sold at the right time, whatever. But how do you repeat that year after year? And also you have to put so much money into that one stock, you have to be so convicted, right? But you're so far out on the risk curve then at that point, too, that you can go to zero. So something like historically 90% of stocks have gone to zero, right? That's just how it works. Businesses come, businesses go out, new businesses come in, right? And so that's that ed and flow. So you can't really be long any specific business forever, just doesn't work.

SPEAKER_02

So yeah, and you have to know, right? Like I don't invest in businesses outside of dentistry and real estate because I don't know other industries, right? I have to put so much time and energy in. And like you said, there there's return on your investment, then there's return on time. And so if I only have enough time to really understand two things, right, then gosh, I better be investing in those things, and then I'm comfortable making bigger bets, and then my return on time makes sense, right? Like if if something doesn't have six zeros after it, like I try not to put any energy into it because uh it's just the opportunity cost of your time. And I know when I uh uh diffuse diffuse my time, I'm gonna revert to the mean.

SPEAKER_00

That's a well said, I feel like that's a very good statement. It's true. And it just I think sometimes it's it's interesting and it's it's information uh information porn, or whatever you want to say. It just like your brain likes it because it sounds interesting and intriguing and like makes you trick tricks you into thinking that you're probably more competent than what you are just because you've consumed a lot of information. But uh it's just not enough information and skill to act on in a meaningful way that's gonna produce a good outcome for you, or a meaningful outcome for that matter. Like you said, you'll just revert back to the meat. It's most of the time, yeah.

SPEAKER_02

And most of the time, I mean, dentistry's definitely on things are more and more challenging every year in dentistry, right? I mean, we're definitely on that track versus the things are getting better and better, I feel like, as far as financials due to the economic pressures. But at the end of the day, um if I'm focusing on macro, yeah, it's a lot of time and energy out there that doesn't directly produce results locally for me. And then two, like whatever industry I choose to play in, if I commit my energy and time to getting better, right? Like there's usually value in that industry, like that industry's there for a reason, right? The society values it. So what I'm really trying to do is just get better than a lot of the other folks in that industry, right? Because if you're better than the other folks, you're you're gonna do well, right? And so you gotta watch out. I mean, every once in a while, certain industries like you know, VHS, uh rental shops, right, are gonna get obliterated, like you're done, you're obsolete, right? So you gotta watch out for uh obsoletion risk, but if but as long as you're watching out for obsolete obsolete obsolescence, thank you. Then um then I think you're good, right? Yeah, so I I just hunker down on real estate, and we can talk about that on our Project Pearls here. I mean, that was one of my main pieces we'll kind of get to. So uh anything else on uh new news stuff that's out there that you're that you're reading, that you're seeing. I got one.

SPEAKER_00

Yeah, you go for it. I mean, there's there's a lot of things you can talk about, but I think that was the big one. So you go for it.

SPEAKER_02

Okay, so one of the big ones here, um you know, since I about a third of my projects have been like community involvement with like the city, the state, you know, funding from those applications on programs, etc. A lot of compliance stuff. Um you know, from the federal level, they're really trying to cut um compliance stuff, like less free up banking, free up construction. I mean, that's what they're trying to do. But on the state level, it's it's been the opposite, right? It's still, I live in Washington State, so it's still been about like adding laws, adding structure, more taxes, more government, like deciding as opposed to the people deciding, right? It's kind of the opposite to federal. And one interesting thing to happen this month is you know, as we're you know, building townhomes uh that are income restricted, right? So instead of uh say average income around here is 100 grand, and instead of being able to sell these uh townhomes to anybody, we got to sell them to people who are making around 80 grand or the family is okay, and the city supports that affordable workforce housing. One of the ways to do that is you get like down payment assistance from the state, and they have a bunch of programs uh they've created, but like there's like one big one. And when you read about the program, it's really interesting. It's like, you know, if you are white or Asian, you cannot apply for this, right? Oh jeez. And so, you know, you laugh, but like affirmative action, like all these things, right? You're really identifying like race or genders that are uh inequally represented in the results, right? And the outcomes. And so you're like, hey, how can I like help these populations, these genders, like really have more of a um an equal bearing in this industry or whatever, right? And so you know, Washington State does home, so I'm not getting political, I'm just gonna talk about like actual facts and and how to react to them. So like you're seeing that like home ownership has been a challenge for like you know, non-whites, non-Asians, right? And so you create a program to like help out with that, right? Um, but then it's always the counter-argument. Well, what about like merit-based? Like, well, these people are working hard and they need it and they're white or Asian. Like, is it really fair to anyway? So, Washington State's kind of taking the stance of like we're gonna represent like historically prejudiced populations or whatever and support them, right? Well, the feds who uh fund a lot of this stuff and HUD, uh, so they're they're suing Washington State, they're suing this program now because of that identification of specific populations. So um, you know, for me, this is significant because this is one of the funding sources. Like, we're looking like who do we sell these townhomes to, right? And we still got time, so it's not like a thing, but it's like it actually like affects me. And then um what I want to share with everyone who's listening is just like um, you know, depending on what your state's you know goals are or the plans are in the federal, like you gotta you gotta keep an eye on that stuff so you can kind of see where things are going, right? And and so um yeah, I thought that was an interesting one. Um yeah. Yeah. Okay, Project Pearls, you want to dive in?

SPEAKER_00

Yeah, I think uh the segue when we were talking about just like you said, and I were talking. About, like, you got to go deep on something, right? Something you believe in and understand. And the further I go into even a specific asset class like multifamily, um, the more you realize there's a lot of nuance to it and strategy, and right, there's you start to see the red flags and the risk points. So, for example, I had my string of asset management calls today. We have a little over 500 units in Kansas City, and so we kind of crank through those properties. Um, and most are doing well, but we also look ahead at like being proactive. So one of the big things is like if you do a heavy leaseup and you had some kind of rent incentive or um concessions that you're given to lease up the property. So that might mean um you'll do six months lease leases instead of one year, right? That might be kind of a concession. It's not ideal. You might do first month's rent off or whatever. So we did a leaseup on a property because we had um a flood. We lost a bunch of units, and then we kind of gave these concessions to refill it as fast as fast as we could. Um just the strategy you use, just like discount pricing, whatever. Um and what you look at is like, okay, now you have a cohort of tenants that in six months' time could vacate, right? And so so you're looking at that because you're gonna maybe give them discounted rent for those six months, tell them they're gonna pop up to market rate rent in six months' time. But now you may have one of two things happen, right? You may have a good amount of them retaining and bump up to that market rate rent, and you may have a good amount that leave, right? And now you have unit turn costs. And so, how do you mitigate that risk? How do you go through that? Well, there's really this tight renewal process, focusing on sales, focusing on going on to each of those tenants. You can send them a renewal, you can talk about what they like about the property, if they need any anything fixed, like really just do that customer service side of it to see if you can get them to stay. But the key thing is being in communication with them on the front end. Now it's very hard to build systems around this because one is you can say, you can tell a property manager, here are your metrics. You have to talk to each of these people three times, blah, blah, blah, blah, blah. It's another time thing to talk about like quality of like sales, like how do you communicate with the tenant? How do you get them to sign that renewal? How do you get basically ahead of this problem as soon as possible? And so that this that's just like a nuanced thing on one small part of multifamily investing. So um those are the things we kind of talk about on an ongoing basis. Um, any questions on that? And I can jump to the next thing.

SPEAKER_02

Well, um, you know, I've got a lease up coming in a few months. Uh, we're gonna use bildium for our software. Um we're a little too small for uh what's the big one? Um I can't remember the there's a big one that a lot of people use, we're a little too small because we're starting out, but bildium is is is quite quite good. So we're gonna use that one. Um this is a smaller one, this one, so it's only 30 units. So you know, absorption rates in my area, let's say at worst are 10 units a month, uh better, maybe 13, right? Plus, you're gonna get the pre-lease, you know, a certain percentage, right? Maybe five to ten units. So, you know, we're probably only looking at like a two to three month lease up on this one. Um, one of the questions I have for you is like advertising. How helpful have you found it to advertise um those first couple months? Like when you're trying to do, like you said, like a fly, you're trying to release. Like, are you spending money on like uh Google ads, Facebook ads, you know, in addition to Zillow and Apartments.com just being on there and Google Maps?

SPEAKER_00

Yeah, I think Zillow and Apartments.com are like the big ones. The most of the leads filter through there. We do do fake, we we found good luck with Facebook, but at the same time, we're C class B-right. So that's a different demographic of people that you're targeting, probably with your class, class A multifamily. So might be a little bit different, but vast majority of leads come through come through there. Um, and I think we've experimented with some other ones too, um, that are more like ground-based marketing stuff that the property manager can do. Um, we're really just trying to incentivize the on-site manager to just like get it done, right? Like you give them some of the marketing infrastructure at the back end, but man, if they got to go out to the community, put flyers up, talk to people, right? Anything to to get people uh to showings and then ultimately get them to sign. Um, so yeah, I I I don't have I think it's just market specific, but we use kind of the big platforms already. Makes sense. Yeah. Oh, the biggest thing found we found time and time again is is lead to lease time, right? Like the process is just like how fast you can get back to that lead, and that could that has created the highest conversions. So if you if you take a day to get back to that lead, like you're gonna be in trouble. So we have automated, I don't know what the name of the software is that we've plugged in that is AI related, that gets back to every tenant as soon as pop some every lead as soon as possible, so we can really cut down that that time frame and get higher conversion. Um so that's what we've noted too. I mean, you just this is this is true of every business. Uh you just gotta layer it on to multifamily. Um trying to think of the other other side of that. Yeah. The other thing I was gonna say is um feedback loops. You need you need fast feedback loops to know if something is working or not working. So uh for example, if you're gonna implement a lease up process over two to three months, you need like weekly, almost daily feedback loops to make sure that your your marketing is working, that your um lead to showings metrics are where they should be, that people are showing up, that the conversion after showing is high enough. So it's just a funnel. But um the the shorter your feedback loops, the more you can iterate and the more you can improve on your process and then ultimately get a better outcome. And this is the same as dental offices too, but just that's my kind of advice around that.

SPEAKER_02

That's how I set up things now, too. I mean, my most successful thing is I usually have a who in charge of everything, right? And we kind of align and they're good and they're proactive. And then as they have questions, they just text them to call me, and we just solve it and then keep going, right? We don't have like we have a meeting in a week, so we'll just talk in a week, right? It's like if you need something, just text call, we'll just knock it out. Um that's a much better not that we don't have the weekly meetings to keep things like you have your asset management meetings, right? Like once a month, right? You have those meetings to set the cadence and whatnot. But if there's a problem that comes up two days after your asset management meeting, like call or text me. Let's just knock it out. Let's not wait a month until it got bigger or hasn't been solved, right? So um but that's the speed, yeah. The speed to solution, speed to solution is very important. Speed to solution, yeah. Yep. These these little things are all nuances, right? I mean, you read books, business books, and you hear one thing or another, but eventually you just kind of experience things and you just choose a path that you think and feels right based off of all those experiences you've had.

SPEAKER_00

Um, there's no business books that can prepare you for it. You just you just do it and you just get really good at problem solving. Like you, that's it. Like I am the uh we were just an asset management call, and yeah, like I'll go talk to our property manager and we'll come up with a plan for this and blah, blah, blah. And I said, Oh no, no, I don't we don't need a plan from now until next week. We need action from now until next week. So tell me like what is gonna get done from now until our next meeting. And you know, like I sound a little intense, right? But at the same time, I just can't help it. I just like I don't want to be at the same point next week because I this speed to solution is so important that we're gonna lose a week if we don't. So I need something taken now.

SPEAKER_02

Um this guy. Um yesterday I had a meeting with a developer. Uh he's looking to bring on local uh somebody for like a hundred and unit in the the university district. It'd be a cool like student housing project, like super fun. And so uh he flew over and we we had lunch yesterday, and he's like, Hey, like we'll we'd be doing the construction too. And he's like, Hey, you know, I've had projects in the past where like I just fell out of the loop, like people were communicating with me, and like I'd be like, and I was like, dude, you're preaching to the choir here. Like, hey, like this is why I have my own construction company because like that happened to me too. Like, these, you know, the architect, the engineer, and the uh the contractor were just like blaming each other in a triangle, and I'm just like, this is not productive. So, like, I'm the same way. It's like once I find like a good partner, I told him, like, look, like I don't like micromanage, right? We have regular canes of stuff, but I don't micromanage, but but a I need to be CC'd on everything, like there's a nuance, right? Like, I don't want to be in the middle between people, I just want to be CC'd so I'm in the loop, right? So you you and then and then if you want to be involved in all the conversations, we'll just CC you on everything, right? And then if you want to chime in, you chime in. And so it was so nice to hear like someone else had had shared pain points that I have, right? And I just said, Look, like, yeah, like this is also the things that bother me. We this is how we deal with it. And he just like absolutely loved that because he because he knew the pain, right? And you know the pain, and I know the pain, and and um yeah. So I've I guess what I'm saying is these concepts that Reed and I are talking about as you're listening, listeners, like these aren't esoteric, these are like things we use in our daily lives that have allowed us to like separate ourselves from the the flock, the pack, right? So um utilize these little nuances to really um leverage who not how.

SPEAKER_00

Yeah. I think and I'll just I'll just put an exclamation point on it and just say like the the confidence, you need the confidence to push, right? And the confidence only comes from doing, um, from going through these problems in the past and seeing them coming up in the future, and then pushing hard to not allow them to come to fruition. Like that is it. Like, I can push so hard and almost like made people uncomfortable on the accountability side because I'm like, I've been here before, guys, I don't want to face this problem. Let's just take care of it now. So yeah, yeah, that you need the confidence to push. So when it comes from doing it, yeah.

SPEAKER_02

Um okay. I what else you got on your list for you?

SPEAKER_00

I got one one last, one last thing on uh so this so this is the time of year you and I were talking before the show, just about like systems and process and like compliance stuff that's so boring. Like this is tax time, and so I'm getting all my K1s organized from all our partnerships. I mean, I'm talking about like 15 to 20 K1s, right? It's ridiculous. And on top of that, I have to pay PTE payments for certain states where properties are, right? Like I have uh uh either a refund or a payment to make in for certain properties. I have property tax, like you just you have it's just a mess of, I should say mess, but it's you need once you grow to a certain point, you really need structure to organize it, or why it makes your brain go crazy. So I needed a few years of going through it to realize that like I don't want this next tax season. So this is the system I'm gonna build now so that I'm on top of it. And I'll even if I don't understand something, I call my CPA and say, tell me, like, I don't want to, I don't want to think about this again. So tell me exactly what this is gonna look like next year and the year after and the year after. And then I'm also like building a system with my CPA who really appreciates it because they like really organized clients as well. So um that's just a little tip there. But a fun thing is so I got like all my depreciation for the year this year for for everything. I think I'm gonna have like two and a half to three million dollars of depreciation this year off of all. Nice, dude. So that's awesome.

SPEAKER_01

Yeah, so that's that's so nice, and so yeah, then any extra, you'll just be able to carry forward, right? Like a piggy bank. So that's pretty sweet, man.

SPEAKER_02

Peace of mind in Q April 3rd, yeah, beginning of Q2, right? You're not waiting until like Q3 or Q4 to figure that out with all the stress. So that's that's really good that you're doing that. It's a great habit. Not surprising. You're always on top of things. Good job.

SPEAKER_00

Tribe, what do you got?

SPEAKER_02

Uh yeah, so um, I think last time I mentioned a little bit, but the banking system I got going on now, we're using Fidelity Cash Management for all like my personal war chest, I think is great. So the war chest is where I you know send money, receive money on a personal, like not a not a business LS, it's like my personal account. So like contributions of capital, uh short-term loans, like everything just comes back to there. Um, you know, it's it's working well. I can quickly wire money out. Uh, I don't have to like call the bank or whatever. I earn like three percent or something on my money, it's just sitting there. Um, so having to combo those two, um, the percentage, but even more of the wiring, just failed to do it super quick. It's working great. And then still using meow for all my business accounts. It's so easy. I can set them up for LLCs, wire money, transfer money, like liquidy split, um, no fees. I mean, both of these two, that combo I highly recommend. Um, the the other thing that's interesting, uh you know, feedback loop. So, you know, I always talk about the flywheel. And if you haven't read Good or Great, you gotta read it. But the flywheel is is uh, you know, this is one of the common themes I need people to really understand about success in life, because some most people fail because they quit too early. So picture like a 3,000-pound wheel or gear, like heavy iron or stone just sitting on its side, and then a fulcrum in the middle, like something it's spinning on. Okay, due to the weight, even though it's spinning, I mean it it's uh got like one little focal point in the middle, just due to the weight through the mountains, it is gonna be super hard to get that thing spinning. I mean, you got to grab the edge, push with your leg so hard. And uh, I don't know if you've ever seen Conan the Barbarian. That was actually the intro scene to Conan the Barbarian. I don't know if you've seen it, but it's wood. It's yeah, so you're pushing so hard just to get this thing started, right? And that's every business you ever go, right? You you feel like you're doing all this work, but like nothing's moving, okay? And then once that once you get things spinning, it's easier to get it spinning faster because you've already kind of overcome that initial inertia. And then, you know, a few years down the road, you can actually take your hands off that wheel, and because it's 3,000 pounds, it'll spin on its own for a while, right? So I always think of every business in Deborah, I do like that. Like no matter what, it's gonna be super hard in the beginning. And then, but once you get it spinning, now you're kind of ahead of everybody else, and you've gone over that hump. The obstacle is the way. So this week, here are some of the feedback loops on some of the things I started. So, you know, as I said, you know, a little over two years ago, I sold a majority shares in my my dental and really focused. I just decided focusing on just real estate and and the the capital uh piece as well with the fund, right? So on the real estate piece, um uh last year, uh as I mentioned, I I decided to um commit to learning how to um work with the city and the state and and do community impact, income restricted housing products, right? I was like, hey, this feels good to do in my community. These sites that I want to do them on are super cool, but rents are never gonna be high enough to validate the construction project. So I have to get city funds. And the city and the state want affordable housing, they want workforce housing, right? So we're in alignment, me and the city and the state. So it's like, okay, great. Well, how do I do this, right? So you got to talk to like a thousand people and fell out, like a thousand applications. So that's all the inertia at the beginning, right? You know, a year later, I am talking to the city on the phone yesterday, and we're chatting about the next project. Um, and they're like, you know, uh, I just want to tell you, like, you know, you you uh and and your uh partner on on these on the uh putting this together are like so wonderful to work with. Like we really appreciate working with you too. And um, you know, your project is so like what we want. Um, this is the one with 42 apartments for rent and 12 towns for sale, uh and they're like in an infill and like an important part that the city cares about. Um, that we send this to everybody now and they ask.

unknown

Right.

SPEAKER_02

And so it it, you know, to me, I'm like, I've only been doing this a year. We're not five years in, right? Like, like our expertise will continue to grow over time, but to quickly go from I have no idea what I'm doing, to hey, you guys are kind of like our poster model, right? Uh, for what what what we'd like to see more of here in in our city. Um, it's just nice feedback. So, all of you listening, you're starting a new business, like like find a vision you believe in, right? Build alignment and then keep at it. Um, another one is I had one, two, three people reach out to me about doing um housing projects. Okay, and these are three like well-established like go-to's in the city. And I've been doing this two years, right? And all three of them said, like, hey, like your expertise, your knowledge, like this is kind of like one of them just emailed me yesterday, he's like, it's it's a developer, it's a contractor, like a large contraction company, and they're like, hey, this is a little over our head. This is in your wheelhouse. You know, do you want to do this project? So when you're getting testimonials from people who have been doing things for a lot longer than you, right? And you're getting testimonials, it just gives you that when at the beginning, yeah, the validation. When you're starting at the beginning, you're like, you get no validation, you get no positive feedback. You're just all you see is work with no results, right? And to have it quickly go, um anyways, the funny part is I got kind of referred to three projects within a like a two to three block radius.

unknown

Right?

SPEAKER_02

Within within like two months, right? Or a month. So now it's like um you know, you do so the one is like the flywheel spins, right? And now you're getting the feedback, but then as you grow, you have the next, there's always the next challenge, right? And um oftentimes taxes is one of the big challenges that comes up when you start spinning well. But another one is stakeholder um integrity. So if you're working with three different groups building within two blocks of each other, right? There now you have other challenges like information sharing, right? Like what's the integrity, high integrity way to information share here? You you don't want people to feel like they're caught blind because they thought they were building this building, and then two more are getting built within a block of the first building, right? You don't want people walking into that knowledge when you could have helped them and let them know ahead of time. The other thing are competitive advantages, right? Let's say this project's doing this, which is a super cool idea, this one's not. How do you help one project conflict of interest, right? Conflict of interest, yeah. So, you know, as I all three of these projects have kind of been brought to me, now I gotta go through like a list of questions, right? To make sure like I'm working with highest integrity, uh, conflict of interest. Thank goodness for AI, so I don't have to like self-like like go through this stuff, right? I can also like ping back and forth with AI, but um I I think uh, anyways, it's just some some project pearls that I took home.

SPEAKER_00

Uh just quick provide a little clarity. So, what would be is would your role be the same in each project? What would they be wanting out of you?

SPEAKER_02

A little different in each project, actually. Um three different levels of uh commitment. One's like the highest level, basically I'd be running everything. The second one is uh I'm equal running, and the third one would be uh I don't have to commit on things, I'm more helping out, right? Support um support if they need it. Uh but um just kind of helping, right? Hey, have you guys thought about this? Hey, uh, do this.

SPEAKER_00

So um yeah, I think I think you can see this example of a flywheel in like many aspects of your life too, right? Whether it's your dental practice at first. How long that took to get going. And then once you did, everything else started getting a little easier. You could find employees easier, better quality employees easier, your new patient flow was increasing. Your everything just got more and more efficient as that thing spun and spun and spun. And now you can be like, well, how much this is where everyone gets, a lot of people get to is like, okay, well, how much effort do I want to keep spinning this thing faster and faster? Am I good just taking my hands off and letting it spin as it is? And then you go to the next flywheel, which maybe is real estate or whatever it is, and you start spinning that one. But I think, like you said, it's you know you recognize that that is the pattern. And it's if you know it's the pattern where you're like, man, I'm gonna have to grunt this out for a year, but then after that, it's worth it because I got another flywheel spinning. That's like the satisfaction. It's the builder mindset that is fun. Uh and it makes you kind of want to keep doing it.

SPEAKER_02

Just so long as yeah, yeah.

SPEAKER_00

Just so long as that flywheel doesn't uh start slowing down too much and you have to re-re-create the inertia again. You'll have to do some of that, but you don't want to grind to a halt.

SPEAKER_02

No, you don't. Yeah. Um so yeah, don't give. I think the main lesson there, folks, is don't give up, right? Year one, year two, just you know, it's nice when you get those feedback things, but don't give up. Um keep at it, and things will as long as you're just outperforming others, right? You're just doing a little bit better on multiple areas and then the average. Um, eventually you will get succeed. You'll yeah, you'll succeed and people will um okay. I think that's it for me. Anything else, Reed?

SPEAKER_00

I think we're good.

SPEAKER_02

Okay, thanks for tuning in, everyone. I hope you uh hope that helped you kind of make your decisions with uh you know your investments, with your time. Uh appreciate you tuning in. Feel free to reach out anytime or join our Dental Real Estate Partners uh Facebook group to interact directly. Have a good day.

SPEAKER_00

Thanks for joining us today. If you want to connect with us directly and keep the conversation going, join our private Facebook group. We'd love to have you in the discussion. If you want to see or listen to any of our other shows, you can find them on our YouTube channel by searching Dental Real Estate Partners. Or if you prefer to listen in podcast format, look for us on your favorite podcast app or streaming platform.

SPEAKER_02

Content from Dental Real Estate Partners is for informational purposes only and should not be considered financial, legal, or investment advice. All investments carry risk. Past performance does not guarantee future results. Always consult a qualified professional. Dental Real Estate Partners is not responsible for outcomes from actions taken based on this content.