The Real Estate Syndication Show

WS1936 How These Successful Partners Manager Their Time | Paul Larson & Jeff Guo

February 08, 2024 Whitney Sewell
The Real Estate Syndication Show
WS1936 How These Successful Partners Manager Their Time | Paul Larson & Jeff Guo
Show Notes Transcript

Welcome back to your daily real estate syndication show. I'm your host, Deana Berg, and in today's episode, we had the pleasure of speaking with Paul Larson & Jeff Guo, two real estate investors who are truly living the dream. They joined us from different parts of the world, with Jeff calling in from Oxford, England, and Paul from Alabama.

Jeff and Paul are partners focusing on affordable housing, small multifamily, mobile home, and RV parks. They have a portfolio of over 500 rental units across Alabama, Mississippi, and Florida. Jeff, with a background in asset management overseeing multimillion-dollar properties and a BA in finance and real estate, is also an accomplished endurance athlete. Paul, on the other hand, has extensive experience in sales and has successfully transitioned from the automotive industry to real estate, where he has significantly increased revenue and built strong investor relations.

During our conversation, they shared their philosophy on time management and the importance of focusing on high-value activities. They believe in empowering their team to make decisions and solve problems, which allows them to spend more time on creative aspects of the business rather than execution. This approach has led to a more enjoyable work process and has been key to their success.

They also discussed their unique deal structure, which focuses on reducing risk and increasing the velocity of capital for their investors. They aim for a buy-and-hold strategy, with a goal to return investor capital within 36 months while maintaining ownership percentages, effectively creating infinite returns for their investors.

Jeff and Paul emphasized the importance of mindset in achieving success. They encourage entrepreneurs to work on themselves and become the person who deserves the success they seek. They also highlighted the value of being in the right environment, such as mastermind groups, to find like-minded individuals and potential business partners.

It was an inspiring episode that showcased how it's possible to build a business that serves your life, not the other way around. Jeff and Paul are a testament to the power of a strong partnership, a clear vision, and the right mindset.

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Jeff Guo : So when it comes to time, I mean, every single. Activities that we do personal or business has a different value attached to it. There's certain activity that's worth $10 per hour. There's certain activities that's worth $500 an hour. There's certain activities that's priceless, right? So what point I keep evolving is what can we do such that we will spend time on those items that's worth, I don't know, a thousand, $2,000, $5,000 an hour.

Deana Berg : Welcome to your daily real estate syndication show. Today, I'm your host, Deana Berg. Today, my guests are going to talk about what it means to live the dream while being real estate investors. This is something we often talk about or aim towards, but these guys I've observed are actually doing it. Jeff joined us from halfway across the world in Oxford, England. Paul joined us from Alabama, but spends a lot of time on the road. So Jeff and Paul are partners, and they focus primarily on affordable housing, small multifamily, mobile home, and RV parks. Paul has a great track record of experience as a sales director, previously for a real estate firm, where he established and trained the sales team, managed investor relations, and increased revenue by 50% per month in the South Alabama market. Jeff's experience as director of asset management at various firms include overseeing over 750 million in shopping centers and in multifamily. Jeff also holds a BA in finance and real estate. He also is an avid endurance athlete. He's completed a full Ironman distance triathlon. This gives you an example of how these guys are committed to mindset. to engaging and being successful at living their dream while operating, and I say operating with an emphasis that we're soon going to hear about, their real estate company. Well, welcome to the show, Jeff and Paul. I'm glad to have you guys today. Thanks for joining.

Jeff Guo : Thank you for having us here.

Deana Berg : Yeah, this is going to be great. Having both of you, a couple of different voices talking about what you're doing. There's a couple of things I want to talk about what you guys do, but why don't, why don't you start Jeff and give us an overview and then Paul, why don't you kind of wrap up the overview and then we can jump into some questions about what makes you guys unique and special.

Jeff Guo : Yeah, absolutely. So we're a full-time real estate investor and our main focus is RV park community. And together in our partnership, we own. a little over 500 rental units in Alabama, Mississippi, and Florida. So my background after college, I started my career working for REIT, just kind of learn how, how the institution learn, you know, manage commercial property on a very high level. And the division I used to work for the person, my boss, who was a good friend of mine, he asked to manage almost single handed, like $400 million worth of property, like, how did you do that? So I kind of learned that from the young age, and just super grateful to have that opportunity. And then a few years later, I decided to take a step and do my own thing. And, uh, you know, I bought some property on my own and, uh, that's when Paul and I met and the, Hey, let's do something together. We bought a four units or five units and still liked each other. Hey, let's do something else about a 48 unit. A few years later, you know, we own over 500 and still, still enjoying working with one another and still on the call every single day, Monday to Friday. And, uh, yeah, the rest of history.

Deana Berg : That's amazing. What about you, Paul?

Paul Larson: Yeah, so Paul Larson, I live here along the Gulf Coast in Alabama. And so my background has always been in sales. I was in financial services, loved people, didn't enjoy the work, and then also worked at many highline dealerships to kind of build revenue and grow sales teams, BMW, Jag, Land Rover, Cadillac. And then I had the opportunity to be a director of sales at a real estate investment company. And what this company did, it was very small at the time, It was great, though. I mean, it was it was getting in ground level, you know, and what we did there was we had a wholesaling company and a flip company. So if we didn't really care for the deal, it was a good deal. We would sell it to an investor and let them do what they wanted, whether it be a rental or a flip, and then we would cherry pick those deals, and then we would flip them. So we'd run a big construction crew. There, built out the investor relations, learned how to raise capital, and build the investors list to be able to move the deals. There for a couple of years, and just burnout, I was buying rental properties at the time. I bought a mobile home park and then my first RV park. And I came home one day and my wife was like, hey, I got a deal to look at. And I said, no, I can't. I mean, I'm just so slammed right now. She said, no, sir, not going to give up on our dream. So I exited that company. I still talk to those guys today. Great company. And I started my company. And that's when I met Jeff about a year later, and the rest was history. He kind of let you guys know a little bit about that. But yeah, it's been great. Jeff and I have become best friends. We're like family. Our families travel together, and it's just been a beautiful thing.

Deana Berg : Something I picked up on. No, sir, we're not going to give up on our dreams. Pivoted, and I'd love for you to launch in, Paul, and talk about this. You guys are unique. Jeff, you and I have met a couple times. I met you on a call with Financial Journey, which is an investment group that we're both part of, and then at the retreat in North Carolina, which was a lot of fun. Um, but you guys have done something very distinctive. A lot of folks own a lot of units, but you guys have built your business in a way that serves your lives, not the other way around. So no, sir, we're not giving up on our dreams leads to y'all building a business. Paul, tell us more about that and what some of those dreams are and how you're reverse engineering to get there.

Paul Larson: My wife is Laotian, which is Laos right next to Thailand, so she's been working since she was a little kid. Very hard worker, very inspirational woman, and quite honestly seen a lot more potential in me than I've seen. So there was a lot of those conversations. Yeah, so very thankful for her and her family. But anyway, so yeah, no, sir, we're not going to give you're not going to give up on our dreams. So basically, we had been working so much. And so we have two kids. And not many people know this, but we have a kid on the way as well. So hey, congrats. Appreciate it.

Deana Berg : Today.

Jeff Guo : Your podcast is kind of the come all party now.

Deana Berg : Thousands will know.

Paul Larson: So, you know, my wife working so long and us working so long, we owned restaurants for 10 years as well. That was her passion. We exited those in 21. So you can imagine the amount of hours we would work to accomplish that. And we just knew there was more. One, we wanted a better marriage. We wanted to spend more time together. We wanted to be with our children every minute we could. Dance recital, baseball game, whatever it was, we didn't want to miss it for anything. So that was basically the biggest thing was, let's build our business. Let's make sure it surrounds our life. And we can pick and choose what we want to do to have a life that we can be proud of. And show our kids that, hey, you can do this. You can live a great life, have a great business, and it doesn't have to run you. So that was kind of the path that it led me down. And the cool thing about it was my wife bought a ticket to this event. And this is the event that Jeff went to. And this was like a $7,000 check, and we've never been to an event before. And I was like, wow, this is… But my wife, again, she believed in it. She said, hey, we're going to go there. We're going to learn some new things. And we met Jeff and we had a sandwich that day and pretty much the rest is history. But yeah, she led me down the path of, hey, we want to live a good life. We want to be proud of what we do. We want to travel more. We want to see more of the world. We want to do it on our terms. And Jeff obviously has the same vision. And it was just such a great thing because he and I and our family shared the same vision. So it was just It was so easy to build what we had from a sense because we had the same vision in life. Would you say Jeff?

Jeff Guo : Absolutely. And talking about the word dreams, you know, you brought up one thing point out we want to be mindful of, right? Because we're entrepreneurs, right? We're driven people just like the DNF entrepreneur, right? But one thing that we like to remind each other of often is, I mean, dream is a word where it's somewhere in the future, but we're like, we're like living in our dream right now. And with that mentality, what that does is for any new deals I look at, we want to buy that deal. We don't need. to buy that deal. One word difference, but what a big difference. We have zero, we feel zero pressure of pulling any trigger. We don't buy a deal for a year. That's fine. We buy two, three, four good deals in a year. That's great. But we want to buy that deal. Why? Because we don't need that deal to live in a dream somewhere in the future. We live in a dream right now. Talking to you, gosh, from, I don't know, three different time zones. It's a dream. We're having fun, you know? So we live in a dream right now. It's just a reminder that we continue to remind each other all the time. Like this morning I was running and Paul texted me, hey Jeff, I'm gonna, you know, go through my Bible in a year and the strategist, oh this is what I do, this is what he does, and that's that's part of our daily conversation, you know, and we live in a dream, so cannot be more thankful, man.

Deana Berg : You're living the dream. Where are you living, Jeff? Tell us about your where you're residing and and why and how.

Jeff Guo : Absolutely, so you met my wife, you know, Chloe.

Deana Berg : Chloe's awesome, lovely lady, inspiration.

Jeff Guo : Yeah, there's a work on married up that point. I would both agree. We're both married up to our wives, right? So we've been married for coming up to 10 years and we have moved our home. I don't know, 809 different times. We're not military, not being kicked out by the landlord, but just like to explore different cities. So one day Chloe said to me, Hey Jeff, I want to go back to school and study. Sure. Yeah. Pick a school and let's go. So she's, Oh, I got accepted into Oxford and I say Oxford, Mississippi. So no Oxford in the UK. So we packed up, say, Hey Paul, to take a bit of trip for my wife to, you know, study, and she's studying theology. And here we are doing this podcast from Oxford, UK, and looking out the window, and it's an awesome day today.

Deana Berg : That's amazing. Jeff, when I first met you, you were talking about time management. And we can talk about that in a little bit. I'd love for you to talk a little bit more about your business together. I kind of walked away from that first podcast that I heard you on or the call that we were on. And I was like, what am I doing with my life? Jeff's working four to five hours a week. I'm just grinding away. So I loved your story and inspiration. And I love the way you guys are. You're living the dream. And there's no pun intended. I really believe and see that you are. I'd love to talk about how you guys do that with your business we can circle around just more practicals about time management wanna hear more we have to say because it's rare what you're doing you know i think it's really easy as. Business owners as entrepreneurs, as parents, and I don't know, I struggle with this all the time to think how many times have we told ourselves, well, we're going to live the dream, but there are seasons. There's a season where we have to push in and sometimes those seasons just kind of don't ever end. And then before we know it, they're their habits and habitual. Um, I see that you guys have really worked hard to, to. retain the dream that you're wanting. How do you do that? Talk about operations. Talk about looking after the things that you have. Jeff, you mentioned we don't have to buy anything. We're fine the way that we are. We want to buy them. How do you maintain such a peace, calm over your business? I mean, I know a lot of operators and there is like a frenetic, almost anxiety sometimes around asset management. Tell us what your strategy is.

Jeff Guo : Yeah, I'll just touch base quickly on our perception, our view on the time management point. Maybe you can touch base a bit on our operation. So when it comes to time, I mean, cause we'll learn this from our mental, you know, everything that I'm sharing right now, I did not just come up with it. We learned that from other people who's done that was practice it. We'll just take one or two pages is that every single. Activities that we do personal or business has a different value attached to it. There's certain activity that's worth $10 per hour. There's certain activities that's worth $500 an hour. There's certain activities that's priceless, right? So what point I keep evolving is. What can we do such that we will spend time on those items that's worth, I don't know, a thousand, two thousand, five thousand dollars an hour? And what are some of those items? Every single day at 9 a.m. CST, no matter where I am in the world, no matter where Paul is in the world, you know, he'll call me from his hotel in Bangkok at 11 p.m. or something, which I'll call him at somewhere from Japan. Guess what? We'll be on a call for anywhere between some sense as short as 20 minutes to an hour. We'll have two to three bullet points. I'm talking about on the business. So this hour, this half an hour, in my opinion, is priceless because we catch up, we run the operation and then we delegate. It's pretty rare that we need to dive into the weeds and do the actual thing. But we kind of know what are two to three things that we should push forward. The next thing we do is we delegate. Right. So we kind of get rid of a lot of lower level. I'm just a lower level, lower dollar value activity. either eliminate, automate, or delegate. So we spend a lot of time on that. That's our mindset. And an operation point, maybe you can touch base on a bit of what our operation structure will look like.

Deana Berg : Give me an example of like the most priceless way that you spend your time, like maybe two or three things, the way that it would be like in the median and like where you're burning daylight and doing something that somebody else could easily do. You still need skill and talent, but according to your level of experience, what would that look like?

Jeff Guo : Yeah, I'll say most of those higher, higher value things. I think when it comes to business activity, I can touch on the personal just a little bit. It kind of falls into two bucket, in my opinion. One is we use our creative part of brain. The things that are not the operation side of things is creative. The other side of is execution. So almost anything we do in business can fall into one of those two categories, creative or execution. And I think that a lot of entrepreneurs does is they'll spend 99% for the right reason of their time and effort into the bucket. We call it the execution. We need to get this executed. And over time, with the help of our mentors and friends and coaches, et cetera, over time, we try to move our time more and more into the bucket of being creative, not the execution. And what's the difference between the two on the long-term effect? We can spend so much time into the bucket and be creative, and we still feel energized. If we spend more and more time into the execution after eight hours, out of five hours, guys will be exhausted. We will spend more and more time into the creative part. Hey, Paul, let's come up with one more good KPI next week to track our business. Creative, right? We're not the one who's tracking it. Our team is. Hey, Paul and Jeff, hey, let's, um, whatchamacallit, let's think about one or two key hires that we can hire. What does that look like? Creative, right? So that's the bucket. Not a hundred percent yet. We actually know someone, Paul and I talked to someone. who's literally told me he's spending 100% of his time into creative bucket, which is absolutely awesome. We're not quite there yet, but that's the mindset we have. And those are, in my opinion, the more higher input level activity that we do in our business is to spend time into a creative bucket.

Deana Berg : I love that. It also, I mean, the thing that you're not mentioning is the work that it takes, like, let's say you're training for a marathon. You can't just run 24 miles overnight. You've got to take time to build up what those executioners are doing for you in training and in all of that stuff. So I'm mindful of that. There's a cost to just doing that. You can't just. Roll up one morning and be like, I'm just going to focus on the creative. It's like a road or a pathway to building those systems. Love to hear your thoughts, Paul, and some of the operational. magic tricks that you guys have up your sleeves.

Paul Larson: Yeah, so I mean what Jeff just said so powerful. I kind of related to a muscle. It was a muscle that I had to build because I was very much a roll your sleeves up entrepreneur and get it done. So Jeff being wise above his years and having amazing mentors, I've been a sponge for the past several years to learn from Jeff, quite honestly. So yeah, I think it's a muscle that I had to build, and most people need to build, is to spend more time on the creative side. And it's so much more fun that way, right? So I think that kind of translates into having a great team. Um, and we don't really try to, we like to run lean. We don't necessarily like to have multiple employees all over the place. So we like to hire off of our culture, you know, because one person that believes in the vision. that is very capable and maybe even more than us to run that side of the business, right, can take off with it. And that's their creative side. So we actually look for high quality people to come into our circle to help us accomplish these things. So for instance, in our operations, Bruce is our general manager. Bruce was with us two years before we promoted him to GM. And since then, it's made our life even better. So we constantly look for those opportunities to put people in place to give them an opportunity to be in their genius zone, right? And then we can stay in our genius zone, and then that becomes rocket fuel, for lack of a better term. So from an operations standpoint, we have Bruce, our general manager. From that point, we have managers at each location. We have maintenance guys at each location. And then Jeff and I both have very high quality executive assistants that can quite honestly be COOs of companies, as good as they are, right? And my executive assistant is actually being transformed into the role of operations manager. And so we kind of look at, hey, listen, and bring very high quality people in that are really good at their genius on and then just cut them loose, let them live in that moment and give them full responsibility. Because I had such the toughest time and Jeff corrected me so many times we would he holds the best property management meetings you've ever seen in your life. I literally say nothing. Okay. And when what we do is is is and this is all Jeff, we built these roles for these employees that are are phenomenal in their genius zone, and we let them take full responsibility. For instance, right, you can't have a problem with us without a solution. You have to bring a solution with a problem. The other thing is, is, hey, listen.

Deana Berg : I like that. We got to highlight that. Okay, keep going.

Paul Larson: Yeah, so you can't bring a problem without a solution. And then if you do bring a problem, we want three solutions, and we want you to tell us which one it should be. And then that takes a lot of the guesswork and hard work out of our side, and we can say yes, no, or we can do a hybrid of something in between, right? So now what's happened is that muscle is being built by them through us to be able to make those hard, tough decisions without Jeff and I.

Deana Berg : And you're pushing them into their creative zone, you know? They're having to come up with these ideas instead of just kind of putting head down and executing. This is amazing.

Paul Larson: It's organic, you know?

Jeff Guo : If I can add one thing, sorry, Paul, as you can hear, sometimes Paul and I will play, you know, a little challenge to Paul. On this call, For the next hour, we're talking about some projects are pretty sizable. Let's see if we can see the least amount of words, or just yes or no. Sometimes we'll be on a call for an hour, and we'll say hello, we'll say goodbye. And those are some of the best calls. People need to be empowered to be able to, because they love to make a decision, come up with a solution. It's up to us to empower them to do that. And that's what we do. And they love it, and we love it. We'll say hello, we'll say goodbye. Good meeting. Thank you, guys. So anyway, I just want to share that. Paul, go ahead.

Paul Larson: See this right here?

Deana Berg : Yes, I love that book.

Paul Larson: Who do you think bought this for me? That guy right there. Yeah. He's the best when it comes to buying books.

Deana Berg : If you're listening, it's who not how. Paul, just raise it up to the camera. Who not how.

Paul Larson: Yep. Who not how, guys. Buy this book now.

Deana Berg : Yeah, Dan Sullivan and Ben. Benjamin Hardy.

Paul Larson: All of their books are great. The Gap in the Game, Who, Not How, and then 10X is Better than 2X, I believe. Yeah, which is a new one. Yeah, I mean, and that's what it kind of boils down to. And what happens organically with our team, Leaders are being built. They're rising above. And then they replace themselves with other leaders, right? And it just goes on and on. So we're not forcing positions. We're not going out looking for, hey, let's hire 10 people and run through them and keep two. We don't operate like that. Yeah, so we have people that are organic in their position, and then they rise from that, and then they replace themselves. And it just happens so freely. A lot of times, you know, Jeff, I, you know, quite honestly, what Bruce will, you know, handle pretty much everything. And then we'll talk on Tuesday. And it's like, wow, you got that done in a week. So we're not even making these decisions anymore. Now it's just happening organically. And I say the word organically a lot, because that's what we prefer. And we love that.

Deana Berg : You know, as you're talking, I love the, it's kind of like, I love the long leash that you're all, you're kind of training up other entrepreneurs in. How do you balance just saying yes or no a few times in a meeting with providing helpful leadership to these folks who are growing up under you? Where does that leadership come in? If you're watching them problem solve, how do you give them rails to grow?

Jeff Guo : Yeah, I think there's a balance right between the super long leash to us not talking to them for 12 years and see what happened to the property kind of thing. Right. I'm just using two very extreme examples. So we still have kind of talk about a system procedure in place. You know, we are utilizing KPI and one of the danger that I've seen of KPIs that there can be 28 KPIs for one properties way too much. So again, kind of talk about a creative part of brain, you know, point out like what are the one or two KPIs that we can pick. for one property, for that property, what's that key? It's not an easy question to answer, right? So something else we learned from our mentor is that the better question that you can come up with, the better answer will arrive on its own. So it becomes a matter of not what the right answer is, but how can we come up with good question, a high quality question, or who can teach us to come up with that good question using the book that I was mentioning. So for us, have one or two, maybe three super, super good KPIs is something that we keep track to make sure, hey, guess what? We'll give our management a lot of room for them to make decision, but those KPIs need to be on par. So that's sort of how we balance between letting go a lot of decision-making to making sure that, you know, things are still pretty, you know, progressing, you know, accordingly.

Deana Berg : Hmm. I I've heard you guys mention that acquisition sounds a little sexier than operations. Um, talk a little bit about where you think money is made in a deal. Um, when we're thinking about KPIs, what is something that you track regularly? If you had to like narrow it down, you know, you said if there's a top two or three, talk a little bit about one or two of those.

Jeff Guo : Yeah. I mean, once they talk to top two or three, well, actually even some deals will only come down to one number. Oh, let's look at this one number every week. That's it. So for us, um, you know, one of the things again, gosh, I mean, you know, I mean, 99% of stuff out of my mouth literally did not come from me from others. So I need to give credit to our credit. Stu, one of my mentor who, you know, sat down with me one day, Hey, Jack, open a Bible. Here's the Harvard says, look after the flock. You buy stuff. That's your flock. Look after them and say, OK, tell me more about it. All right. Entrepreneurs would like to acquire, which we do. It's exciting to acquire. But guess what? One percent of the work. You know, the effort is, you know, is spent on the acquisition. The real work starts the day the statement is signed, the deal is closed. That's where the 99 percent of the effort comes into play. So for us, you know, we say, you know what, how much Potential revenue are we leaving on the table? Hey, let's see if that can be a good KPI. So we'll start tracking that last year when we start tracking as a whole. Wow. We're leaving roughly close to a hundred thousand, not quite 94, $95,000 a month of uncollected rent across all of our rental portfolios. I say, Hey, let's try to look at this one number each week, every Tuesday at 9am CST, we'll know that number exactly and see how over time this number would evolve. And whatever will focus expense. A week later, $94,000 down to $93,000, $92,000, $90,000, $85,000, $80,000. I mean, this past week, we're at $60,000, $61,000. So basically, here's the translation, right? Without acquiring anything, we have effectively increased our monthly collection by $35,000 or annual collection by $400,000. Most of it is NOI. At a, I don't know, 8% cap rate, looking at a $5, $6 million value creation without buying anything, And we still have an additional, I don't know, $400,000 to go. So like, why are we buying, you know, a bunch when we have so much, you know, meats on the bone. So that's, that is one of the key KPIs that we track is what is the revenue, revenue loss, you know, on a weekly basis, which has been pretty powerful since we started doing that.

Deana Berg : So powerful. I love that. You just made a bunch of money with something you already had.

Jeff Guo : Yeah, exactly. And that kind of is kind of a gamification, right? Like, you know, the people call it is that asset management is not as glamorous, as exciting as acquisition. Oh, I just closed this deal, that deal. But by looking at that number, right, it kind of makes it more fun. Oh, yeah. Let's see what that number looks like. We're at $55,000 this month. Yeah, great. You know, it's kind of make the process much, much more exciting than, you know, how we perceive it. Paul, are you going to say something?

Paul Larson: Yeah, I was going to say, Jeff is one of the only guys that knows how to make working numbers fun. I mean, it's a game. Every single week, we're looking at it, right? We're keeping up with the data. And again, someone else is providing those numbers and giving it to us, right? So we have the who, not how. And every Tuesday, we receive those numbers before our portfolio meeting, which we are on the phone for a few hours every Tuesday, just going over every deal that we have. Um, you know, cause it's easy to take your eye off the price. We keep our finger on the heartbeat and we look forward to doing that. So, uh, you know, it's just fun because, you know, Jeff and I, you know, compliment each other so well. And I think when someone looks for a business partner, you can't really be looking for a business partner that will happen naturally. And, uh, You know, I think meeting each other at the event several years ago, almost four years ago now, you kind of trim the fat. You know, it's kind of like being in the group that you guys are in. Right. I mean, you know, people in there, they're good people. They're in there for the same thing. They have the same type of vision. They want the same outcome in life. So it's not like, hey, I'm just taking a meeting at a coffee shop and I don't really know who this person is. They reached out to me and you'll get that a lot. You know, hey, can I pick your brain? But when you're in that room, you really feel like, okay, I'm in a room with good people, people that see the world the way I do. I think that when somebody finds that business partner, they should really compliment each other in an amazing way so that, again, the genius zone, we can both be in that role and have fun. That's just something I like to point out to people because I find that people have a lot more bad stories about partnerships than they do good. And I'm sitting on the other side of that. And I think everyone can share that if they have that business partner one they find in that room. So, you know, masterminds joining groups like we're all in is something that people should invest in themselves, right? If you're going to cut a check to be an LP in a deal, cut a check and invest in yourself. Get in a room, learn, grow, be a sponge. And I think Jeff and I I really believe in multiple reasons why we've been able to grow as people and business owners. But I think one is because we like to stay as a sponge. We want to be a student in our business and our game forever, right? We never want to feel like we've learned it all. So we're constantly getting in rooms and raising that bar and getting around. It helps you become a better person, a better business owner. And I think that's where partnerships are really formed, in those rooms.

Deana Berg : Mm hmm. So I'm imagining that you all raise capital for your deals and I'd love to hear a little bit about how you uniquely structured deals and how you essentially project how, what the returns are going to look like. What does that look like with your business model specifically?

Jeff Guo : Yeah. Yeah. I'll say just coming from an institution side, I think the, one of the more commonly structure is, you know, As we call it traditional syndication, that's how the institution structure it. But one thing that we learned from talking with our investors, most of which are high net worth individual who are family friends of ours, is people tend to focus a lot more on the safety of the capital, the velocity of the capital, rather than is this deal 18% IRR or 22% IRR, right? People don't care too much about that. So we're like, huh, what can we do to structure the deal in such a way that we can do our best? We cannot eliminate risk, but we can reduce the risk to the best that we can to preserve people's capital, but also to increase the velocity. So how we do it is, you know, kind of like the burr, like bigger pockets kind of, you know, popular many years ago, right? buy a deal on a discount through off market. And then we do a refinance, return people's money back with a target of 36 months, even though usually do it sooner than that, give people's money back and also keep their ownership structure percentage exactly the same. So it becomes infinite return. But also one thing that I think sets us separate because we don't know yet, other groups have done that yet, is We have in our operating agreement that if for any reason, we cannot give people's money back in three years, guess what? Owen Jack, we're going to sweep a hundred percent of the cashflow to the investors until when they're made whole. We have not yet need to use that clause ever, thankfully, but the investor, Oh, wow. Those guys are being pretty serious. They're going to be basically working for free. We don't get 100 percent of our money back for any reason after three years. So we love that. Our investors love that. And that's why we push our extra hard. Hey, guys, let's do whatever we can to give our investors money back. You know, so that's that's how we start our deals.

Deana Berg : Wow. I love that. Um, there is that tension. I love that you have a 36 month runway because I think so often in the syndicator space, especially coming off of the most recent real estate cycle where interest rates were so low and it was like, dang, there is a Delta between the interest rate and what the NOI is. And so it's easier to kind of get that cashflow rolling. Uh, and it's just all about creating expectations. Right. And then following through. But i don't think that that cycle has done us any favors in this cycle in terms of no things are different now than they were and what you said about lowering risk i mean in my opinion i've seen investor sentiment shift in terms of we want preservation of capital like you said we want to look for ways to lower the risk to slow it down in the sense of we're not just kind of. trying to hit the benchmarks in order to get to cashflow. You're really trying to do it right. So do you guys buy and hold, or do you have a hold period that you aim for to exit by?

Jeff Guo : We're buying hold. Ideally, I'd like to hold it for 20, 30 years. And the only way for us to do that is by giving people the money back, right? Investors invest 50K with us, they get their 50K back. That's what they don't care if we're holding it for five years or 10 years, because we don't need a disposition event in order to calculate the final IRR. The IR can be calculated the moment that we give their cap, give them their capital back through the refinance. So to answer your question, Dean, our, our thing is. You know, buy and hold, we'd like to hold our project long-term unless it's become so small, the first four units we bought together, that's what becomes a bit too small. So we sell it. But apart from that, we buy and hold.

Deana Berg : Gotcha. So as you mentioned, internet returns, the investors are in for the long run with you guys when they get their original capital back and then it's just cashflow from there. That's great. Well, we've got about a couple of minutes left. I'd love to wrap up and just see if there's anything you guys would like to share as we wrap up any kind of practical. I mean, you've given us so many practical application tips, but great books you've read or something that's burning on your heart and mind. Love to just give you a moment to share what those are before we wrap up.

Jeff Guo : Yeah. I'll say books are we love reading books. We keep sending each other books, you know, who, not how guys, if you have not read it, have a hundred percent recommended the same author is called gap and gain. You'll be so much happier after you read that book gap and gain. But I think one thing I just want to share quickly, you know, is as entrepreneurs, right. We always thinking about what can we do? What can we accomplish? But one thing point I like to talk about is before we think about what we can accomplish, what can we do to let us become that person who deserve whatever need to be accomplished. So it kind of become of accomplish something external to transform ourself internal every day. We'll work on ourself to let us be that person that will be a good fit for whatever that we want to accomplish. And that in itself, because who we become is within control, right? What we can accomplish, that's what is out of control out of our country, a lot of ways. So continue to work on yourself, right? And let you become that person who will deserve whatever dreams and goals that you have in life. I think that's pretty big for us. And we talk about this often as well.

Deana Berg : It's beautiful. Transferable to anybody. I love that. You don't just have to be in real estate. What about you, Paul?

Paul Larson: Yeah, I mean, you know, not to piggyback off Jeff, but you know, I, I try to recommend books and different things for people. But the first thing I say is, look, guys, you know, mindset is everything, right? I can teach you how to, we can teach you how to analyze a deal, we can teach you how to, you know, you know, raise capital, how to sign on a loan, how to operate a deal, how to asset manage, we can teach you all that. What we can't teach you is mindset. to be able to get up early in the morning and get after it, to have that tenacity to take notes, be okay with it, be okay losing a deal, be okay making a mistake. Having a mind shift of it's not a loss, it's a learning lesson, right? You can accomplish anything you want in life. And I think when that mindset shift happens and the top blows off and you realize, wow, you know, I'm way more capable than I ever thought I was, then you become a force to be reckoned with. So mindset shift is everything. That's number one. Invest in yourself.

Deana Berg : Brilliant. Preach, I wish we had more time. I know you guys have one of your weekly calls coming up, so I'm going to let you go. But thank you both so much for making the effort halfway across the world here in Alabama for being on the show and for sharing your wisdom. Really appreciate it.

Jeff Guo : Yeah. Thank you for having us on, Deana. Like I said, we're living the dream by spending such nice 40 minutes with you. And anything else we can do to help, please don't hesitate to reach out, OK?

Paul Larson: Yeah. Thank you so much. It was a pleasure. It was a pleasure.

Deana Berg : Hey, thanks so much for joining us today. On your daily real estate syndication show, I'm Deana Berg. If you wouldn't mind taking a moment to like and subscribe, that'll help us out. In the meantime, I hope you have a blessed day and we'll see you tomorrow.