Episode 37: From Roofing to Multimillionaire: A Journey of Financial Control

Fascinated by the seemingly unpredictable world of interest rates, housing market trends, and their complex interplay? Together with our guest, a seasoned businessman from the roofing industry, we bring you an episode filled with insights that will help you navigate these murky waters. Particularly, we dive into the unique dynamics of the Miami real estate market, where despite a slowdown in sales, stability prevails. 

This episode isn't just about interest rates and housing markets, though. We tackle the rising concern over retail sales, and take a glimpse into the potential impact of the upcoming holiday season. The discussion also branches out to touch on the intriguing world of predictive index and its profound relevance to the construction industry. And if you've ever been perplexed by the concept of DSO, you'll definitely want to stick around for this enlightening conversation.

Lastly, we shift gears from finance to politics, taking a critical look at the relationship between left-leaning ideologies and risk aversion, government protection, and the implications of these on our society. Our guest, Michael Gowl, shares his journey from a small roofing company owner to an entrepreneur, underscoring the importance of financial control and harnessing technology in business. So, join us for this comprehensive and thought-provoking discussion that promises to stir your mind and stimulate your thinking.

Real Estate Talk Podcast with Jesus Castanon - @retalkpodcast: The Ultimate Real Estate Unveiling! Raw, Real & Revealing insights from industry experts

Dive headfirst into real estate's most electrifying depths with industry legends - Jesus Castanon, Josh Cadillac, and Richard L. Barbara. Why legends? With billion-dollar deals, groundbreaking innovations, and wisdom that's transformed the landscape, they've not just witnessed the game; they've been the game-changers. And if that's not enough, they're joined by a parade of industry-expert guests, spilling secrets and dishing advice that you won't hear anywhere else.

Expect RAW, REAL strategies that shook the market, REVEALING insights, and timely takes on today's market, coupled with actionable advice.

This isn't your typical real estate chitchat. This is RETalkPodcast - where the titans and top minds of the industry unite. Dive in, and prepare to have your real estate perceptions rocked!

Meet The Legends:

Jesus Castanon: Visionary CEO of Real Estate EMPIRE Group, transforming property transactions into success stories.

Josh Cadillac: Renowned real estate coach, national speaker, and author; revolutionizing the art of 'closing for life.'

Richard L. Barbara, Esq.: Florida's legal luminary, pioneering change and setting the gold standard in real estate advocacy.

Transcript

Interest Rates & Real Estate in Miami

Speaker 1 0:00

If I'm in a plane, okay, and the guy next to me is praying, okay, and just so happens to use to verbalize Allah Akbar, listen, and it just so happens, whatever.

Speaker 1 0:16

whatever. We won't need an air of worship, no, whatever. Listen, if I am sitting there and all of a sudden my neighbor starts verbalizing Allah Akbar, that guy's getting his fucking ass kicked. Episode 37. What's up? Guys Haven't been. Uh, it's been about a month. Yeah, a little bit, yeah. So today we have an interviewer, we're interviewing somebody. He's missing right now. He's finishing up a meeting in our conference room, so he'll walk in when he gets done, but we'll get the party started. What has changed since last time we spoke? Interest rates, Down Interest rates.

Speaker 3 1:08

Quite a bit.

Speaker 1 1:12

Which nobody was predicting. You know what I was realizing, this whole shit? Let me tell you something that I've absolutely I am positive of Nobody knows shit. Nobody knows shit. Let me tell you what happens. Let me tell you what happens every time. Everybody makes predictions. Right, stick it, they throw it on the wall. Right, then somebody's gonna be right. Yeah right, somebody's gonna be right. So when that happens, the guy who actually predicted it, he's the one that's right.

Speaker 3 1:41

That's what it doesn't mean that he knows shit.

Speaker 1 1:44

It just means that that's just the way it landed. Everybody was predicting rates were gonna go down next year. Everybody, all the fucking experts that are shut up right now I'm not gonna name them all, but I mean, like guys that know, supposedly next year second quarter, third quarter, rates are gonna go down. Rates are already going down, right, nobody knows shit.

Speaker 4 2:02

Well, but the thing is that when you say rates are going down, the Fed hasn't reduced rates. So what happens is that, as usual, the information that people get is incomplete. It doesn't even matter if it's accurate or not, but they're definitely not raising. Well, they haven't raised rates. There's a meeting coming up now on the first couple of weeks of December and it is widely expected that the Fed will not raise the prime rate again, but what happens is that what nobody understands is how it actually works.

Speaker 4 2:41

So, that's why, when you say, that's why we sit here and we're like yeah, rates have gone down, you know like mortgage.

Speaker 1 2:45

I care about it, I get it, but I get it but nobody understands what that means.

Speaker 4 2:50

People are listening to us and like what the fuck are you guys talking about? The Fed hasn't reduced rates and it's like no man. But what the Fed does is just one piece of this much larger machinery. That is what results in the rate that you're quoted when you go buy a house. So what Jesus is saying and he's correct is that two months ago, let's say, if you went to buy a house, the rate you were being quoted is higher.

Speaker 1 3:13

People are getting stuff in the sixth Israel.

Speaker 4 3:15

Right Is higher than the rate you're going to be quoted if you try to buy a house with financing today. But for most of the world the United States, the people that hear about rates they're like no. Rates aren't dropping. Rates are insanely high right now and it's incomplete. Forget about right or wrong, it's incomplete. Everything is fucking incomplete. You just can't give people enough information because, number one, they don't want to hear it and, number two, they don't get it.

Speaker 3 3:44

Well, I think that it's that the information is not easily attained either. I mean, like I teach the state agents on a regular basis, right? It's not that they don't want to know, it's that nobody even tells them because they just assume that they can't figure it out. Just like on most commercial mortgages, they're index based rates. The residential mortgages is an index based rate and the index is based upon, at least in the major government.

Speaker 3 4:06

The one's is the yield in the 10 year treasury, which is set by the bond market right, the rate at which people are buying and selling these bonds and what they're paying for them. So when the anticipation of rate increases changes, people change what their decisions are as far as investing in these bonds go. The anticipation is that the Fed has maybe done raising rates, so the outlook for these rates continue to go up has changed and people now are making different investment decisions than bond market, and this is allowing the rate on the 10 year treasury bond to come down, which is resulting in our mortgage interest rates being in a lower number. It's not that crazy complex, but here's the thing if the Fed does raise rates at the next meeting, watch them go higher. Watch the rates go higher than they were.

Speaker 1 4:54

It's all connected. It's all connected. And yeah, the gentlemen, the guys that I was talking about that, were quoting stuff. We're just talking about like our market, right? Sure, our market. And again, it's weird I always have in my mind, whenever I talk about something, I always got to like almost exclude Miami from it. Right, because let me tell you, man, I have people from other parts of the country and we're in a nice little bubble here. I mean we're in a nice place, we're in a nice bubble right now. I mean I'm not seeing, I'm seeing slowdown, but I'm not seeing price decreases.

Speaker 4 5:31

No, in fact, there was an article the other day that home sales in like Miami-Dade slowed and were less than, like you know, last year at this time year before at this time definitely, but prices were continuing to rise and I was just talking about it this morning at a meeting I was in before this that it's like Jeff Bezos moving to Miami and he's bringing 40,000 employees with 50,000 or 50,000 FIFA it just took 40,000 square feet of office space in Coral Gables. They're bringing, like, their legal team over. We are getting some World Cup games in Miami in 2026. We're going to get 10 games, but it's not a temporary office.

Speaker 4 6:14

So you know, ken Griffin, with Citadel, these guys that come here now, think about it. If you do business with Citadel a lot of business you need to be close to Citadel. So, like you know, it's like the planets come and then all the moves come, and then the little satellites come right, and so it's like listen, it's not going to get cheaper in South Florida Now. You may pay a little less in interest if you wait, but you're going to pay a little more in price.

Speaker 1 6:37

So, you know, it's just what do you want to pay? I got two people now that are moving in from out of state. I got two friends of mine that are moving in, ones from Maryland and ones from Ohio. Right, dude, like it's interesting to see, interesting to see what, how they see Miami. Right, it's interesting to see what you know like and and and again. And when I tell them, when they ask me, well, what do you think is going to happen with Miami, I'm like why are you? Why are you here? Yeah, exactly, well, imagine that there's other, a lot of other people just like you. And then add Columbia, add Chile, add, you know, whatever country is having a fucking issue at that particular moment, right, coming in here, and that's the issue that's my hand, Although we are welcome from a yeah, right, but but it's, it's, it's man, it's a weird place.

Speaker 1 7:32

We're in a weird situation right now. That's hard to understand to somebody that's not from here you know well, I think, the point you bring up.

Speaker 3 7:40

We are always one revolution away from a real estate boom in Florida. But the other piece of this is because people always really want to know where is this going right. We are right now experiencing the market that is driven by the rates having peaked where they were. Article just came out, maybe two days ago, that mortgage applications have spiked way, way up because rates have dropped a little bit. And so this is the thing, because I fly all over the country so I talked to those agents all over the US. They're all in the same place where there's insufficient inventory to match the current ready, willing, able buyers that we have. So if you just see right now where we are, you say, hey, this is the market, based upon interest rates being close to eight, that people are paying, and now rates have fallen, so the prices were being supported with rates at eight.

Inventory Issues and High Prices

Speaker 1 8:32

If rates fall, what are you going to anticipate is going to happen? Well, that's what I'm telling these guys. I'm like, I'm like you know one particular friend of mine that's moving in from, from Ohio. They mentioned well, you know our rates, rates are going to drop. And then I'm like do you know what happens in Miami when rates drop? Do you have any idea what happens in Miami? You'll be paying $50,000, $100,000 over a praise value for the same fucking house. Sure, same fucking house.

Speaker 1 8:58

You know so it's, it's, it's. I don't know if that happens everywhere else. I mean, I'm sure it's, it's, it's, it's part of you know, the whole not being enough inventory in the whole situation. But at the end of the day, we're having serious inventory issues right here. And, by the way, like when, when you know so these people are like, oh well, do I go? You know they have the ability to go. You know all the way to 1. Something million, this and that. Or you know we they talked about starter like, hey, what's the low in this area here? What's the lowest? We can go? 700. Yep, you know for, for, and, by the way, these particular people are coming from a hundred acre farm.

Speaker 4 9:33

We're going to get some shit in the comments about that. They're like you hear these fucking assholes. A million dollar house, a $700,000 house that's I came in, but it's, it's the fuck.

Speaker 3 9:42

It's my amy, it's my amy.

Speaker 1 9:45

What do you?

Speaker 4 9:46

want me to tell you.

Speaker 1 9:47

Yeah, it's my amy.

Speaker 4 9:48

We'll get to work. I mean, look the price. The prices are based upon. No, all listen, all desirable markets are expensive.

Speaker 3 9:55

Undescribable, I mean it's like San Francisco, believe.

Speaker 4 9:58

I know. I know you think it's a disaster and there's piss everywhere and, fucking, there's a dude. There's a lot of, still a lot, of nice places in San Francisco. I mean like let's be real, bro, you don't get off the plane and you're at the war zone, but I mean come on, I mean listen.

Speaker 1 10:10

Okay, neither one of us have been there recently, but I've had several people that I know they were from there, including Uncle Leon Right. Well, listen you got your computer checked for some prices and houses right now. No, absolutely, but let's not, let's not come on. Well, what I'm saying is we're trying not to get political, and I get it. I mean, we're even trying not to argue.

Speaker 2 10:27

But when?

Speaker 1 10:27

you start fucking saying that there's not shit in the streets in San Francisco. What I've seen, what I'm saying is.

Speaker 4 10:32

I said it's not like you get out of the fucking plane and it's a war zone, bro, like it's just not quite as bad as it's as it's made out to be. It's always been weird and yet what I'm saying is the price. It's expensive. So it's like every place that people want to be is expensive. You want to know why? Because people want to be there. I mean, it's not a complicated concept, Exactly.

Speaker 2 10:51

So you know, it's the same thing, it's like what people tell me.

Speaker 4 10:53

New York is a fucking piece of shit. I get it. Try to buy a fucking place in Manhattan. Okay, you think it's pricey here?

Speaker 3 10:59

Try to buy in Manhattan. I mean, it's like people say to me can you see what I can get in a pokey Florida? And I'm like yeah, but you're in a pokey Florida, right, but you got to live in a pokey, yeah, exactly, so I get it, I get it, but that's what you know.

Speaker 4 11:10

Again, that's what people don't understand. It's it's a market decision.

Speaker 3 11:15

So let me tell you what buyer so why I demand baby the prices are where the prices are because someone has been willing to pay it. I always love these people. I get it all the time that act like oh, rents are unaffordable. I'm like well, how the hell do you think the rents got there? Somebody agreed to pay that. Yeah, like if nobody agrees to pay the rent, the price can't go up. It's funny.

Speaker 4 11:35

Our conversation is kind of always lead us back to the same place, like the people that complain about rent prices, but they think they like capitalism. They're like somebody's got to stop this.

Speaker 3 11:44

Somebody's got to do something.

Speaker 4 11:45

Somebody's got to, somebody's got to just control these. These landlords are out of control. I'm like, hmm, that sounds good. Yeah, that sounds very capitalistic.

Speaker 1 11:53

Let me tell you, man, crush is my soul. Let me tell you, crush is my soul. So I was talking to them, talking to our lenders, yesterday. Right, we're in an interesting situation, right? So credit card debt is the highest it's ever been recorded in the history of our country. Late payments on cars are the highest, which, by the way, I saw the number the highest. It was 9.1% of the amount, which I saw. Pretty fucking. Well, I thought of that one. They said the highest ever was like 30%, I mean less than 10% of people are paying their part.

Speaker 4 12:28

Remember the source, bro, I got it.

Speaker 1 12:29

You know what, what, what source?

Speaker 4 12:31

Whatever source is giving you the statistic and what their objective? Oh, you mean like that they want to make it seem like it's the end of the fucking video.

Speaker 1 12:38

But, it still is the highest.

Retail Sales Concerns and Impact of Helocs

Speaker 1 12:39

Number wise it is still the highest, right, but also okay. So again, just talking, you know, talking to bankers and lenders yesterday was I had several of these conversations yesterday right? So if debt is up late, payments are up considerably and equity in homes is the highest it's ever been in the history of our country, what's going to happen? Coming up and, by the way, spending right, thanksgiving spending was up. They're there, they're all the. You said that article, that retailers are expecting it to be off the fucking charts, right? So people are continuing to rack up their credit cards, right, it could be the highest ever and they're going to continue to do it, right?

Speaker 3 13:22

I'm hesitant. I'm hesitant to go there with retail sales. I because October was such a bad retail month. I think that what people were doing was waiting for this the Black Friday type sales and they're predicating what their anticipated sales are on what they saw in the early part of the Christmas season. I think that would be one to kind of wait and see. You know like I'm not normally a big wait and see guy, but but on this, because of all the reasons that you're saying, it seems like there's gotta be fallout, and I don't think the fallout is gonna be people listing their homes. I don't know. That's what I was gonna. It's gonna be.

Speaker 1 13:56

Helox. Yeah, it's gonna be Helox, I think Helox are going to and that's what I'm prepping myself for for a fuck load of Helox coming up next. And, as yesterday I was talking about it, I had meetings based on it and everything I get here.

Speaker 4 14:10

I get here this morning, Can we translate that, for like every Call my Goating Lines of Credits. Yeah.

Speaker 1 14:15

So let me get this point across. I'm here today and at 8.30 in the morning, whatever I go to Janelle's desk and she's like, oh, look, so-and-so, his agent of ours is getting a Helox and buying an investment property with their equity. Like first conversation, I had right. So yeah, Helox are. It's basically a second mortgage, that's like a credit card. I mean, that's the best way, the simplest way I could explain First or second mortgage, depending on what.

Speaker 3 14:44

Well, yeah, but in this market, it's gonna be second mortgage With the caveat that the bank is usually gonna make you take out the principal balance right away up front and keep the money out for a period of time and charge you interest on it. But once you pay that money back, you can take and then use it. I wish.

Speaker 4 14:59

One of our lenders was here, who shall remain nameless. Remember the other day he tried to bust my balls with. You're not supposed to use your Helox till I go on vacation and I'm like he's like, well, you can put on the application that you're gonna use it for vacation. I'm like, yeah, how many Helox applications have you submitted with that as the fucking use of funds, bro? God bless man.

Speaker 1 15:21

So, but the reason why I'm calling it a second mortgage right is because in this market, so again it operates as a second mortgage it is, but no, no, but let's add another factor to this.

Speaker 1 15:31

You don't have to be a fucking brain surgeon or a genius to figure out what's gonna happen this coming year. Right, people are not gonna want to refi out of their 3% 2.5% they're not gonna want to. So what's gonna happen now is that this is gonna give us people are gonna start getting these Helox. It's gonna give us a little bit of breathing room and people are gonna continue to do what they fucking do, which is continue to rack up their credit cards. They're gonna max out that line of credit real quick. Okay, the next shoe to drop, I think it's gonna be when, I don't know what's these Helox gonna buy us? Time wise, probably a year, and then they're gonna have to sell. Then they're gonna have to either refi or sell, right, no?

Speaker 4 16:16

there'll be a bunch of foreclosures. People don't fucking understand. I mean, it's like, first of all, there's no foresight. Okay, like very few people look ahead, okay, and and and listening. You can't blame them because they're living, fucking check to check. So you know, that's not, you're just trying to figure out, bro, how to go from here to there. You know, it's like, so nobody's thinking about the next shoe and this, and that it's just. And I agree with your initial point, first of all, I'm not, no, no, no, no, no, I'm fucking a robber.

Speaker 4 16:45

Specifically, though, about the predictions, and people make predictions and nobody really knows what the fuck they're talking about anymore. So I've been saying for a couple years now that with things like macroeconomics, like these big outlooks okay, and it's the same in politics okay, and political polling and things like that, it's like the old tried and true data points are just less and less reliable because of how fast the world is changing. So it's like you just can't sit there and it's like no, the inverted yield curve. Remember like two years ago somebody was like the yield curve is inverted, the you know the end of the world is near and it's like, first of all, no one has any fucking clue what the inverted yield curve.

Speaker 4 17:32

Okay, so you're saying that and it's like most people are like what the fuck is this guy talking about, Bro? I don't even know. They go out the same day. They buy their fucking chicken. But I'm very worried, but I'm very worried about it.

Speaker 1 17:41

I don't know what to say Because the headline tells me to be worried. So they don't get it.

Speaker 4 17:46

And then, if you notice, the yield curve was inverted and nothing happened. The economy got stronger for like then, and that was during Trump. Okay, the economy got stronger like 16 times over. So it's like they just what happens is that there was a time when change in all aspects of life was far slower, so the established knowledge like the science, if you will was better for longer. Okay, better for longer. So it's like. And what happens is that you can you see this frustration with people and with talking heads on every single point. So it's like now, if you're a scientist or an expert, you're not allowed to be wrong, like even for a second. Like revising your position is evidence that you have no fucking idea what you're talking about.

Speaker 4 18:37

It's not about science. It's like, think about it. They used to operate on people and the surgeon didn't wash their hands and fucking people died in fucking droves. Were all those surgeons morons, Because they didn't know that. Like now you're thinking, bro, they tell you there's a sign everywhere you go, wash your hands, wash your hands, wash your hands. So right. So it's like you know back in the day how many people died because the fucking surgeon didn't wash his hands. The surgery was a success, except for the infection that the guy fucking put in the body. They just wiped his ass Right.

Speaker 1 19:05

So you know, 30 seconds ago, with no toilet paper, by the way, because there was no toilet paper.

Speaker 4 19:09

Right. But what's incredible is that at that time, like nobody was ever like oh, these fucking doctors don't know what the fuck they're doing, they didn't you know. Now they wash their hands and say you see that they were idiots. So it's the same with every single thing now. So I'm not a fan of the alienation of expertise which is what we're seeing. Okay, like, nobody likes experts anymore. You're elite and you're a fucking asshole and you went to school. It's like that meme I send you guys all the time, where it's like the inside of a plane. It's a little photo of like the fuselage of the airplane and like everyone's sitting there and this guy stands up and he's like I'm tired of these smug pilots telling me what to do. Who thinks I should fly the plane? And everyone's like, yeah, you should fly the plane. And it's like dude, you know. So there has to be a balance. But I agree with what you're saying about the predictions, because the problem is that the experts rely on 2008 crash.

Speaker 1 20:01

You go back and oh, this guy predicted that this was gonna happen, brother, you know what I'm saying? Like well, again, it's no and it's Everybody was playing around, you know.

Speaker 3 20:09

I think there's two pieces to this right Cause I agree with what you're saying and that's kind of the pushback. I think the arrogance level of the experts has moved up to 11, which makes yeah, like when you're wrong. It's like, you see, I hate that guy, he's wrong and so you know, and I think you, in our society, everybody is putting themselves forward as an expert. So to stand out, you have to be uber confident that what you're saying is, you know, handed down from on high on you know on stone tablets.

Speaker 4 20:38

This is how it is. No, not just that, but the also the exaggerate. Like the people's exaggerated notion of their own cleverness is also at an all time high. Like everyone's a fucking researcher now. I love that. Like we got a guy.

Speaker 2 20:51

We deal with them every few days like no, I did my research on this. It's like oh, my God, this guy did his fucking research. Can you imagine, bro, you press?

Speaker 4 20:58

Google. You go to school for three fucking years, bro, to learn the law, but like you're gonna research it, you know what I?

Speaker 3 21:04

mean it's like, it's like it was all legal soon for a good solid 15 minutes.

Speaker 4 21:07

Fucking eight man. You know what I mean. So it's like again, again. But listen, lawyers get it wrong all the time. Doctors get it wrong all the time. No, they do. Remember the shitty NAR lawyers, according to you. So you know. I mean it's like look, it's tough. It's a balance, but, as a general premise, things change so fast now that it's very difficult to make solid predictions or to use, like the you know, tried and true metrics to make predictions. You have to.

Speaker 3 21:42

If you're not adding in new variables, you're gonna be wrong more often than not Okay, but and especially in an environment where we're in right now, we have a global recovery economic recovery from a pandemic that's going on and economy that has largely switched from a national economy to a global economy. You know, a butterfly farts in Taiwan.

Speaker 4 22:05

And it affects everything it affects everything.

Speaker 3 22:08

now and you have this ripple effect, I mean you have a Chinese real estate market that's absolutely collapsing.

Politics, Israel, Stereotypes, and Violence

Speaker 4 22:13

What is that? You got people fucking tweeting America first on their Chinese mid-phone. It's fucking amazing man. It's again. It's a weird time, you know. I know we don't like to get into the politics a lot, but it's-.

Speaker 1 22:27

You know, I kind of feel like getting into politics a little bit too.

Speaker 4 22:31

I mean it's just listen. It's unfortunately, it's on everybody's mind and when I was a kid I used to. When I was a kid, in college, I remember studying political science and I realized that in other countries, particularly like South Central American countries, the politics in terms of like their involvement, like their voter turnout, are usually far higher than ours, like in the United States, you know it's almost like for death over there. People weren't Right. But it's funny you say that because people like again in college it wasn't such a thing Like that. You liked politics was like a rare character.

Speaker 1 23:09

I actually got it all the time and I'm like, dude, are we just more? Are we the older guys now? Or is this really impacting us more? It's a combination of that we're older.

Speaker 4 23:17

But now if you look at kids, I mean like kids are much more like into politics now.

Speaker 3 23:21

And so like they're more into causes. I think, yeah, yeah, yeah, that's driving the politics.

Speaker 4 23:26

Well, but causes now are politics, because I mean culture war is like the number one political thing in the United States, I mean, and, by the way, other countries love that, like that part. I agree with all you guys, like the Russians, the Chinese, all these people. They are absolutely lapping it up that we just cannot get our shit together here on anything.

Speaker 1 23:45

Have you seen that?

Speaker 2 23:46

We're fucking worried about fucking the girl's video, or boys wearing fucking playing golf.

Speaker 4 23:50

Have you seen that video?

Speaker 1 23:52

Have you seen that video of a crow? You know crows are like the smartest animals, period. Did you know that, Like it's a regular black crow?

Speaker 4 23:58

I mean, they pass it crazy. I've heard they're smart.

Speaker 1 24:00

No, no like they're off the charts smartest. So there's a video of two cats on a roof right and then the bird. The cats are like kind of far away from each other, they're like there, whatever, but they're not even in a fighting stance or anything, they're just fucking there and the bird comes and pokes one of them right Cat, gets pissed off, pokes the other cat right, dude, and like literally, you got it. This video is just an amazing thing. Like he starts poking these cats till they start fighting each other, and then you can see it Let. The bird is the fucking crow's happy. He's flying around and he's looking. He stands and he's looking at them fighting and then they stop fighting and he starts poking them again, so they fight again. I think that's what these guys are doing.

Speaker 3 24:39

I mean they're looking at us they're poking.

Speaker 1 24:41

They're like, oh shit, this is what's triggering it right now. And they're fucking with us through social media.

Speaker 4 24:46

No, not just that. I tell you what part of the problem and I was just talking to my boss about it the other day is freedom is a large contributor to chaos and disarray here, because it's like so you say these things, people are like well, we were watching TV and it was like this massive pro-Palestinian protest at one of these college campuses and it's like down with Israel. You see these signs and the signs are very aggressive and there's a lot of anxiety about that issue right now and so, but then and the people often make these comments like they shouldn't allow that, they shouldn't allow that on these campuses. They should stop that. That's tricky.

Speaker 1 25:36

But it incites violence. But if you stop it, it's here, right and it's like, okay, so I get it.

Speaker 4 25:41

So we don't like that. But I mean remember the First Amendment I thought we were into, like the freedom to have assembly and to put, you know, it's like you know, of speech. So it's like, what do you want to do? You can't. You know, it's like you're upset, that. And let me tell you something it's very problematic for the Democrats right now because there are a lot of Democrat voters that are anti-Israel and it just gets to the point that these guys are politicians. They got to stay in office First. You got to get in office and then you have to stay in office and listen. A large segment of your constituency, you know, wants you to put some breaks on your support for Israel. So what do you do at that point if you're a politician.

Speaker 3 26:21

Figure out which group you don't mind pissing off the most.

Speaker 4 26:24

Right and figure out which group you can piss off and survive and stay in office. That's really the thing.

Speaker 1 26:30

But let me tell you something. So you guys know, my friends, you guys know I'm like as pro-Jew as can possibly imagine, right, Like I have my fascination and admiration. You should use the word Israel. No, no, I'm gonna go to that. I'm gonna go to that. So, just Jews as a whole, just what they've been able to accomplish, I mean I think that nobody's gotten their asses kicked more than the Jews. I mean it's arguably, you know, I mean there's no sector in society that's gotten their ass kicked and those guys are the most successful by far. Okay, that's the way I feel about that.

Speaker 3 26:58

And I also administer maintain their culture while having no no and a culture of hard work. Frugal they're frugal.

Speaker 1 27:06

They get made fun of that all the time, you know, but just education and together. I think that's stereotyping. I think that's 100% of this.

Speaker 4 27:13

You gotta be careful, because you start stereotyping, you get in trouble less.

Speaker 1 27:16

But that's the truth, though, now that we don't give a fuck but yes or no, you gotta toe that line. Sometimes you can't say you know. You can't say Chinese people are good at math, right. You can't say that, right.

Speaker 3 27:26

Great gamblers.

Speaker 1 27:28

Are they really? They love to gamble.

Speaker 3 27:30

They love to gamble in China, cause they're good at math.

Speaker 1 27:32

So my point is but I also have-, I also have-.

Speaker 4 27:34

The word. They is bad.

Speaker 1 27:36

Yeah, yeah, yeah Right.

Speaker 4 27:36

Like sometimes if saying they, them, you're like the best.

Speaker 1 27:39

Yeah, yeah, they are the best.

Speaker 4 27:40

Hey, you're so sensible. Thank you for using my pronouns and when you're, like they referring to a group of people are like oh my God, this guy's a fucking rey.

Speaker 3 27:47

What do you mean? They let's clean it up then and say, statistically, a greater share of their population spends the favor games of chance. So here's that.

Speaker 1 27:56

So I don't know if you guys have seen the videos, okay of these Hamas guys. Have you guys seen the raw, unedited videos of these guys going into the houses and killing shared people and everything? Well, you should. I mean it's I've seen a few. It's pretty horrific. I mean it's. They're going in there and they're just straight up just randomly shooting people with machine guns. Just I mean like if they were not human, I mean that's the best way I could describe it. They're just going through it Like I would have a hard time shooting a stuffed teddy bear.

Speaker 4 28:27

How about the one where they shot the dog? You saw that. Yeah, I sent you that one.

Speaker 1 28:30

I fucking pissed me off. I mean, I know that humans matter more than dogs. But I don't know. To me, you know, I have a, for whatever reason. I don't know if this makes me a psycho or whatever, but I see a human getting shot and I see a dog getting shot. A dog getting shot will fuck my day out. Yeah, like it will change my mood permanently for the entire day Depends on the human A kid getting shot.

Speaker 1 28:51

Okay, well, okay, yes, yes, yes, yes, okay, yes. So the An adult, I'm an adult, an adult Dog.

Speaker 3 28:57

Dogs tend to be innocent and you know that's what it is, so maybe that's what it is. The innocence is the part that triggers it right.

Speaker 1 29:03

So, again, dude saw that and it's crazy. But I have a couple very good like decent Muslim Palestinian type friends and everything like that, you know, through sport. You know that they kind of told me their side of the story right and I'm very, you know, I try man. You know it's almost like if you hear their side of the story right, like this has been going on. I mean, one of them has told me, you know, I had a funny conversation with one of them, you know cause. He's like yeah, you know, it's just a real sector of the population. There's really really small sector of bad Jews and a really really small sector of bad Muslims and those crazy, basically those crazy motherfuckers, are the ones that caused the issues for everybody else. You know, we talked about like he's like, we talked about the like Allah Akbar, right. When you guys hear Allah-hu Akbar, whatever. When you hear that right, Like what do you think?

Speaker 4 29:59

Yeah, that's to America. It really means praise God or something like that. God is great at that.

Speaker 1 30:03

Yeah, god is great Right and I'm like and again, this is a super good guy. I mean, we went you know it's a friend of mine, like I have, you know, and I've had a lot of actually Muslim friends and they're generally really good people. Yeah, you know, you got, but I told them I go, yeah, buddy, but here's the fucking problem. You're crazy. People are really crazy, right, Like okay, so, like Cubans, have our crazy people. Just they commit Medicare fraud.

Speaker 1 30:30

I mean they were funny, they were funny, fucking pants right, you know, and I mean, they were way too much jewelry. They were way too much jewelry. Funny ass haircuts okay, and they commit their genies as a Medicare fraud.

Speaker 4 30:41

Yeah, fraud in general.

Speaker 1 30:42

They're not blowing fraud in general. They're not blowing up, you know, innocent people in a fucking build and I go listen. You know, let's talk about the term.

Speaker 2 30:51

Allah.

Speaker 1 30:51

Akbar, right, if I'm gonna play, Okay and the guy next to me is praying Okay, and just so happens to use to verbalize a la. Akbar Dun dun dun Listen and just so happens.

Speaker 1 31:09

Whatever, whatever, we won't need an air of worship, no, whatever. Listen, if I am sitting there and all of a sudden my neighbor starts verbalizing a la Akbar, that guy's getting his fucking ass kicked. Okay, because I am going to think you know what my buddy said. He goes yeah, me too. He's like because, yeah, because what are you used to seeing? You're used to seeing somebody getting their head chopped off. A la Akbar, things blow it up. You know what I mean. So it's like one of those things that like. So back to the Israel and Palestine thing. Dude, that shit's been going on so long.

Speaker 4 31:43

No, listen, I'll tell you what great movie so great movie Kingdom of Heaven.

Speaker 1 31:47

Yeah.

Speaker 4 31:48

Great movie man Ed Norton is, you know, the king of Jerusalem. He plays the king of Jerusalem at the time, during this period, right after one of the Crusades, where Jerusalem was actually open to everyone, to all faiths. And you know, obviously there was some battles because a new king came he was actually a leper king, okay, so the guy had leprosy and he had like a mask and he died young Mission. And the next king wasn't so friendly you know, christianity was in charge at that time and he wasn't so friendly to everybody else. And then there was a major war and the city was lost again and that prompted yet another Crusade. And so you know, this goes back thousands of years, it's true. But what this whole point reminds me of, and if you guys might have seen it recently, you saw how, like three weeks ago or something like that I forget what the name of the publication was, but it's a well-known publication and they published again Osama bin Laden's Letter to America.

Speaker 4 32:51

Okay, which came out like shortly after 9-11 and this and that, and it was like why we attacked and the whole thing and so. And then all these kids in the country, like hundreds of thousands of Americans, read the letter and then they come out on TikTok and they're doing these videos and they were like, you know, there's one girl I remember the video was like her. She's like the caption is me. You know, 15 years ago or whenever, when Obama announced that we killed Osama bin Laden, you see her, she's jumping up and down. And then she's like me, after reading you know, osama bin Laden's Letter to America, and she's like oh my God, we deserved it. And blah, blah, blah, blah. And I understand why. And, by the way, hundreds of thousands of Americans had the sentiment, to the point that the publication took the letter down, and then you couldn't find it anymore and the whole thing. And here's what happens. Okay, if you sit here as an American and you suggest that America has never done anything bad to the rest of the world, you are a fucking liar.

Military Actions

Speaker 4 33:55

Okay, now if you have the balls to be here in America enjoying what America has provided for Americans, then listen, it's really hard to fucking criticize, Like again, like you know, you're in your SUV while you bitch about fucking global warming. I mean, these things just don't make sense. And there's a movie that conceptualizes this concept, encapsulated in one sentence, and it's a few good men, with Tom Cruise and oh fuck, what's his name now? The general Colonel Jessup and Jack. Nicholson, and when Jack Nicholson is on the stand, you know they finally get him.

Speaker 4 34:37

Yeah, and they get him to, they get him to say something he's not supposed to say and I remember that he looks around the courtroom and he says you fucking people.

Speaker 4 34:47

Yeah, you don't have no idea what it takes to defend a nation. Okay, and as a kid, I remember I watched that movie. I was like 13 or 14 years old when it came out. I saw it in the movie theater and I never forget I was with my parents and we went to Mollie America's. Okay, and I saw it. Yes, bro, and I saw that movie and I always wanted to be a lawyer. After seeing that movie, I was certain that's what I was gonna be. Okay, and I remember that, that line, and I've never, ever forgotten it because it's like you know what, for us to live the way we live, we have to fucking kick ass and take names all over the world. We have to fucking trample on people all over the world. We have to do the things we do. And it's like listen.

Speaker 1 35:31

What the fuck do you want me to tell you?

Speaker 4 35:32

And by the way, if we stop, someone else is gonna start doing it.

Speaker 1 35:35

We're not dealing with normal people either. We're dealing with crazy people.

Speaker 4 35:39

We gotta out crazy, the crazy to keep what we have, yeah, and it's like people fucking, they don't understand. It's like you hear these kids now and they're like, no, because the US. And this is like listen, let me explain something to you. Okay, if you show up to one of these countries that you think we oppress and you show up with your bullshit, you are the first one on the fucking chopping block.

Speaker 1 36:02

Well, how about the LBGQ? Whatever?

Speaker 4 36:06

Yeah, they're at a palace night.

Speaker 1 36:08

Yeah, you would be thrown from a building. You know what they do to gay people they blindfold you because they think it's funny. They blindfold you before they throw you off a building. Why do you need to add the blindfold?

Speaker 4 36:22

Yeah, just to be an ex-dick. I mean another reason, so that you go from like the.

Speaker 3 36:27

G-Force butterflies to sudden impact without knowing what it's coming. I mean it's only yeah.

Speaker 4 36:31

Listen, it's fucking crazy. I'm telling you.

Speaker 3 36:33

I'm gonna toss this one, kik. I kind of alluded to it, but I really think it's important One. By the way, I saw that movie with my father as well. Colonel Jessup was his favorite character and he hates the non-fans.

Speaker 4 36:41

Yeah, he's the man.

Speaker 3 36:42

He's the freaking man.

Speaker 4 36:43

The man.

Speaker 3 36:44

That Jessup was this evil guy. My father went to military school the bag of oranges in the middle of the night that happens, yeah, you don't screw up, because then everybody they take care of it amongst themselves, right. Right, that's the thing. But this is the question. My brother always said that a lot of the ivory tower thinking is good, first order thinking, we should redistribute all the wealth, okay. What happens the day after that? Nobody has a reason to go to work, everything stops, nobody owns anything Like. It all comes toppling down. But it sounds great on paper. Okay, so the US is not the one. Who else do you trust to take and be Like? I mean, I would say looking globally at what we've done as a country, I don't think anybody else after World War II gives everything back.

Speaker 4 37:32

I mean a God knows, but nothing's with them. It's like, by the way, I was joking about the whole thing picking you know the same thing, the conversation with the protest and this, and that we were driving back from Bokeh and we're talking about Gaza and we're like, yeah, and somebody was asking in the car, what's it meant by this concept of the open air prison? Like when you hear that Israel keeps all these people in an open air prison, what's that mean? And I was like, well, what it means is that it's a very small little fucking area that's complete fucking trash. It's like the poorest.

Anti-American Sentiment in Left-Leaning Universities

Speaker 4 38:07

I think it's like the poorest place for capita in the world, many times over. Imagine, it's five miles wide by like 20 miles long and there's two million people in there, okay, and so they control the water coming in, they control the power, they control the fuel, the food, the fuel, everything, and you can't leave. So that's what's meant by this open air prison. And then this other guy in the car who's very smart and he's a cynic and he's like, well, we should probably start looking at real estate there, because we're about to spend billions of dollars to rebuild it.

Speaker 4 38:42

So it's gonna be fucking great now it's like now it's gonna be high rises and fucking, because that's what the United States does. We fucking bomb shit and then we go in there and rebuild it and it's like so it's like the Americans are attacking you. It's like I got good news and I got bad news. The bad news is, americans are attacking.

Speaker 1 39:01

That's the bad news. You go weather the storm.

Speaker 4 39:03

The good news is, if you make it, you're gonna get all new shit. And so it's again. But this notion and it really bothers me, man, like the kids, the youth, this anti-American sentiment that people have while they're in America drives me fucking bananas. And there's a difference between wanting your country to be better and improvement for the country and like, of course, that's all good. But man, this shit that you were like actively anti-American, you know, and like you know people, like there was a petition recently to change the American flag, literally like there was a famous artist.

Speaker 1 39:38

What sector was that?

Speaker 4 39:41

It's a wide variety of, I would say, left leaning, it's the left leaning, it's the left leaning sector.

Speaker 3 39:47

I mean it just, and this is the piece that always troubles me the thing that used to unite us was our love of this thing that we had here, like hey look, we might politically disagree, but this thing we got going on here is so much better than what we could do any place else. Let's figure out how to bridge the gap. The position that, especially in college, that I was exposed to was kind of this we're a morally wretched country. That is completely irredeemable and I think when you start from that place it breaks down any hope of a narrative between the other side, because the people that appreciate what we have here they don't wanna hear that crap. I mean, I don't wanna hear that my relatives died, did not come back from wars and you think that everything that we did, I mean exactly who would you which pick the country? That's the moral superior?

Speaker 4 40:42

No, no, and not just that. But how about? It's like also the obvious things that people don't ever take note of, which is? It's like you're here and you complain about how it is in the United States and yet I don't see. And maybe it's our media, okay, Maybe it's the media, the control, and they only show us what they want. All this bullshit that you hear, but it's like. Are there any other countries with like millions of people trying to like cross the border constantly, like are there.

Speaker 1 41:08

I mean, I'm sorry, that's what I tell your lefty boy.

Speaker 4 41:11

I'm like hey why is it so good? It's like I just don't understand. Why are people fucking dying, risking their lives, bro, hey, alligator, infested waters paying these people called coyotes that rape them and get their ass on the way here? Why are they doing that? Is there any other country that has the fucking waiting list and the fence jumping that we do?

Speaker 3 41:32

I mean I don't get it. My brother put it perfectly. He said to me one time my explanation to people that want to talk about socialism. He said there's a raft halfway between Cuba and Florida. Which way are they paddling?

Speaker 4 41:45

Right, right, it's just fucking crazy, by the way, your brother's the only right leaning professor that I think I know.

Speaker 3 41:52

Well, there is a small cadre that exists, but they have been cowed into science.

Speaker 1 41:57

He's a professor in what Theology?

Speaker 4 41:58

Philosophy, philosophy, but, by the way. So let's talk about that, because that's another thing. So the other. Now let me do my best to chastise the other side as well. The problem is all these new conservatives that we have, all these new super right wingers. They're also very short on history, so it's like people have no fucking clue how much of this we've seen before, and there's even a cliche for it. It's like if you don't know history, you're doomed to repeat it. Okay, and it's like. So there's a great book. The book is called the Dante Club. By the way, the book is not about politics. I haven't. It's a great book, the Dante Club. The author is a guy named Matthew Pearl, and what this guy, matthew Pearl, does is he'll take historical events that are somehow unresolved and then he'll write a book that's based largely on the historical events and then he'll weave in his fiction Like he'll tie off the story.

Speaker 3 42:58

Also like Robert Gaines, like Guy Cloddy, yeah, yeah, yeah.

Speaker 4 43:00

So very cool writing style, and this book is called the Dante Club and it's, by the way, the book is not at all political, but there's this undertone in the book that's fascinating, which is that what happens in the Dante Club is that in real life, in history, dante's Inferno, the book was written in Italian, okay, so now you have all these publishing houses, you all this shit, and you have Google translate, right, and you can bring it up in whatever language you want, but at the time that's not the way it worked. At the time, you needed scholars, and this is like in the 1800s, when this is happening, when the Dante Club takes place. You needed these scholars to translate. Translate all the books, these books into English, for example. Okay, and the United States being largely Protestant and controlled by Protestants, like there's only been one Catholic president right.

Speaker 4 43:51

They translated one of the trans, John F Kennedy well, they didn't want to translate Dante's Inferno because it was too Catholic. Okay, so there were these group of famous American poets and scholars, one of them being Henry Wadsworth Longfellow that was part of the small group of university professors and it was in, like Massachusetts area Harvard, cambridge, yale, these places that translated Dante's Inferno and they called themselves the Dante Club. Okay, and so they would meet once a week to go through the translation. Now here's the fascinating part about the book. They were catching a lot of heat in real life for doing that because, again, the Protestant authorities didn't really want Dante's Inferno to be translated into English.

Speaker 4 44:40

So in the book, all of a sudden, what starts happening is that there start to be these murders in Boston and the bodies would be positioned so that they would be found. And in these horrible, horrible depictions okay, and the first murder is of a judge, okay, and this judge gets murdered and the way his body is placed and the whole thing, the investigating authorities, the police and the detectives they were horrified. They didn't know what to make of it. They knew it was a serial killer. So the book's about a serial killer, but all of a sudden, longfellow and the guys in the Dante Club, they realize what's going on. These bodies are being set up in a way that represents each one of Dante's circles of hell, so what it meant is that the killer has read Dante's Inferno. Now, why were they interested in that?

Speaker 4 45:36

Because they felt they were going to be accused Because they were among the very few people that had read Dante's Inferno and in fact they were actively translating it, so they launched their own hunt for the serial killer. So like there's a detective and the cop, so the book shifts between the detectives and the way the law enforcement is trying to find the killer, and versus how these professors were trying to find the killer. Okay, these poets, based on their knowledge of the book. Fascinating book. But the reason why I bring it up is because universities have long, long been a place that is left leaning. Universities and professors historically going back thousands, you know as long as universities have been around.

Speaker 3 46:26

It's a fairly risk averse type of occupation. It tends to attract people that are smart but don't necessarily have the risk profile to go out into the so is that having the balls to be an attorney, you're going to teach attorney?

Speaker 4 46:38

But he's asking why they're typically left leaning.

Speaker 1 46:41

Yeah, he doesn't, I would say that the smart person and you're kind of risk averse.

Speaker 3 46:46

So, richard, for example, your case.

Speaker 1 46:48

You're an attorney. Yeah, right, you had the balls to go out and actually be an attorney. Right, the attorney professor, the law professor that never went onto the field. Right, there's a bunch of those. Right, there is so much money. Right, that's the risk, that's what he's entering.

Speaker 4 47:01

That's the risk averse, yeah, but I don't see why that in and of itself would make those risk averse people more left leaning. I think what happens is.

Speaker 3 47:10

The left leaning politics typically is very protective. We've got to look after. We need social security, all of these things that are kind of like I'm like, hey, don't give me fucking social security there are based in more nice cities.

Speaker 4 47:24

They're the government workers.

Speaker 3 47:25

They're the government workers. It's a more risk averse view of life. Like I want greater certainty and I'd like the government to provide that for me, as opposed to kind of the. I'll provide my own certainty. Thank you very much.

Speaker 4 47:36

I think that's where the break and I'll tell you what most trial lawyers believe it or not, it's like known fact. Most litigators are also left leaning, really.

Speaker 1 47:46

Yes, and here's why because that fucks your theory up. No, yeah, it doesn't, and it does.

Speaker 4 47:51

Well, that's what I'm saying. I think it's part of what Cadillac's saying, and then I think part of it also is like the amount of education, because again, here's a good example of it, and I was explaining the same thing in the car when we were coming back and talking about the problem with rights. Okay, the problem with rights, the responsibility yeah.

Speaker 4 48:08

Which you don't often hear, is that. Look. So the Constitution, the Fourth Amendment of the Constitution, protects the American citizens from what Unlawful searches and seizure and, like you know, the torture and things of that nature. Okay, what does that mean? Okay, if you're driving down the road and you have 10 pounds of cocaine in your trunk and you get pulled over, cocaine is usually measured in kilos. Okay, in kilos, as soon as his knowledge of cocaine is superior to mine. So you got 10 kilos of cocaine in the trunk. Officer pulls you over If the cop has. And, by the way, then there's a bunch of rules in criminal procedure and in criminal law. It's called a Terry stop is the case, it was the case, called Terry. And there's a Terry stop and there's all this criteria that the officer has to go through to first detect a problem, ask certain questions, et cetera, to then be able to lawfully prefer perform a search of the vehicle. Okay, and what do I mean by lawfully? I mean he's can't just decide get out of the fucking car.

Speaker 4 49:22

I'm searching just because he's looking at you, yeah.

Speaker 3 49:24

Yeah.

Speaker 4 49:24

Okay so, the profiling concept that we often talk about. You can't do that. Okay so. So you can't just look at the guy and say, oh.

Speaker 2 49:32

I think you're probably a drug dealer.

Speaker 4 49:34

So I'm going to search you, okay, and what happens is that if you, if you violate these, these rules, okay, such that you then performed an unreasonable search and seizure. When you find the 10 kilos of cocaine, okay, the guy gets arrested. What's the famous police officer phrase? You can beat the rap, but you can't beat the ride. Okay, so you're getting arrested. When you're a criminal defense lawyer gets hired and you take that case. He's going to file a motion to suppress the presentation of the evidence of the cocaine. And guess what? He is going to win that motion to suppress.

Speaker 4 50:14

In our example, we've assumed that the search was unlawful and this concept that you don't get to present the, that the prosecution is now barred from coming into court and saying, hey, we're charging this guy with possession of cocaine and here's the cocaine we found on him. Okay, you're inability to present that. That doctrine is called, even if there is cocaine, 100%. In fact, especially and here's my point, it's especially because there's cocaine this concept, this doctrine is called fruit of the poisonous tree, okay, just like the religious thing. Or you ate the fucking apple, okay, and so. But here's what people don't understand, people that don't go to law school. They're upset with this shit. Okay, they hear that and they're like criminals get off on technicalities, you know, because it's like they want. They people don't understand. Until you go through the training in school, you're like but they found the cocaine. Like what the fuck do you mean? We don't get to prosecute like the guy, like this, does he even?

Speaker 1 51:13

have it. So if I had it, I'm right, right.

Speaker 4 51:15

Like does he get the cocaine back? And it's like no, he doesn't get the cocaine back. But so there is that. But right, but, but he's not going to jail for possession of cocaine, because guess what? The prosecution is presented from presenting the cocaine Now. Now, why does this matter? Now, again, let's go back to the average, the layman citizen, who's upset that criminals get off on these technicalities. And here's what I tell people all the time Justice Scalia, antonin Scalia, one of the most conservative justices ever. Okay, he's got a very famous opinion out there where, where he says something to the extent of it is only by preserving the rights of these people that commit these crimes that law-abiding citizens rights are protected. Because here's what happens If you are driving now let's take the same example You're driving down the street and you look like a drug dealer, whatever the fuck that means, I don't know what it means, but you look like a drug dealer and the cop pulls you over and guess what?

Speaker 4 52:19

You're not a drug dealer, you're a fucking saint. And the cop takes you out of the car, slams you on the hood, it turns all your cars up, bring the fucking dog, all your shits, on the side of the road. You're embarrassed. This happens in your neighborhood. Your neighbor Susan's like this. She's driving by and she's like oh my.

Speaker 1 52:36

God look at.

Speaker 3 52:36

Richard, right right, so holding right now you got a cell phone, this and that Guess what, guess what?

Speaker 4 52:43

Because you have no nothing to to be arrested for. You have no remedy. Like you have no remedy, like what are you going to do? You're going to go to the police for unreasonable search and seizure. You can't do that. They have sovereign immunity. You can't sue a cop for searching you like that.

Speaker 1 52:58

By the way, people say that all the time to the police, right and so and so, yeah, and so what happens is.

Speaker 4 53:04

What happens is we have to. If we don't, like make sure that rights are protected, even in a case where, like, the cocaine is there, then you don't have rights, bro, you get it. So it's like so. So when you go to law school, all of a sudden, if you walked into law school thinking, man, if I find you with cocaine, you should be, you know, like, obviously you got to go to jail. Then you go through criminal procedure and you go through evidence and you realize why it is and you're like, oh, the constitutional protection, Fuck, that's pretty important. And it's especially important for people that are not driving around with cocaine, because this is what incentivizes police officers to do the right thing. They're incentivized to do the right thing because they know that if they do the wrong thing, then criminals get away. You follow, you know. That's why I think in general, why do education? Why does the? Why does more education coincide with more liberalism or left leaning thinking is because, man, you're given like again, you're given the understanding of why things are the way they are.

Speaker 4 54:09

Like, if you're not educated, you know, you, just out there bro, I have a.

Speaker 1 54:12

what did that make it where? That okay. So if the more educated person leans that way because they are more educated, wouldn't that almost make it the right way? Like the more educated way make it the right way? So, and that's not the case, because socialism has been proven to fail time and time again.

Speaker 4 54:30

So let's, let's, that's tricky so let's talk about that for a minute, because this is where I think Cadillac makes the great point. Which is the problem is that there is a difference between in in life. Okay, it's part of, in my view, god's irony. There's a difference between theory and practice, okay, and so what happens is that in theory, a lot of these things are sound great. They're great concepts that everybody should have enough and listen, a full-time job should pay for your enough shit, and all these things. In practice, it becomes a little bit more complicated, okay, now, now what I think most, let's call it, you know, super educated socialists would say Wait, gal tried everything possible to get out of this interview thing and show it up 45 minutes later.

Speaker 1 55:14

I'm going to get you out. Go in here. We're. We're. We started already, but how? You doing Rich Barba. Good to meet you, josh, the other white guy in Miami. All right, go ahead.

Universities' Influence on Left-Leaning Thinking

Speaker 4 55:26

Finish, um well we were just talking about why. Why universities tend to be left leaning and why they crank out more more left leaning thinkers than than otherwise, and so these um.

Speaker 3 55:44

I love. I love what you're saying, Rich, and I think that the the one thing and this is where history is so important the founders had such a tremendous fear of government oppression, of being oppressed by government, that everything was set up Like, if we got to go one way or the other, let's, let's set things up so maybe a criminal gets away, so that the government can't overreach, can't oppress the individuals by taking rights away. But that that that makes that makes great sense. I I'll never forget when I went to get my my concealed weapon permit years and years ago was my favorite classes. You should give these classes, man. It was great, the guy.

Speaker 3 56:18

The whole first part of it was about castle law and the Magna Carta and the idea that you know, when people were trying to get this idea of like having rights themselves and saying, well, like the king, they're going to the king. Like, well, the king's like all right. Well, fine, what kind of rights do you want? Well, look, you know, nobody would ever come in your house and like grab you and take you out, right, well, my house is kind of my castle I mean, it's not as big as yours but like, I'd like to have it.

Speaker 3 56:41

Yeah, like I'd like to have it, like that's a place that they can't just come and grab me, like they got to get, they got to go through a process right, and this, this slow movement from you know, people were just basically chattel almost, and that served as the whim of the divine appointed ruler to the place where people had this idea of individual rights has been a long time coming, but with anything there's a point of diminishing return Absolutely, and I think that's the place where people are trying to continue, trying to have a relevance in life, to continue these great battles for equality, and all that has now maybe gone too far. There's, there's, there's no longer any, any juice left to squeeze there, or what juice is left isn't going to be good juice when we do squeeze it Kind of yeah, no, I don't disagree.

Speaker 4 57:29

And like, and when you say, Jesus, you know, socialism has never worked anywhere and all that this is. These are indisputable facts, but I think what I think these people would say okay is like, for example, Marx, okay, but who's, you know, widely believed to be the father of socialism. Right when, when Marx was, which was your old dog's name, Mark C yeah, so when, when, yeah, had a Y, though it was very important distinction. So so when you, when, when he was writing, there was already the notion of socialism already existed, he didn't invent it. Okay, Now, he actually hated existing here, their two for existing socialist, because he felt that they were what's called utopian socialists, meaning that they had this bullshit view of you know this, this paradise where you wake up in the morning and you fucking paint and then in the afternoon you want to fucking play the flute, and you know, and everyone has all these things.

Speaker 4 58:27

And then and he had, and he had this what he felt was this concept called son Scientific socialism, okay, which he felt that it was inevitable. Okay, that what happens is that you capitalism could not sustain itself for a variety of reasons. And, by the way, what kind of capitalism was he referring to? He was referring to Adam Smith's capitalism, pure capitalism, which, by the way, we do not have, sure, okay, so the notion that we have pure capitalism is can people are like no, we're, we're strictly capitalist? It's like, meanwhile, you got social security and you got public school and you got, like, the United States, post office, and these things are not present in Adam Smith's capitalism. And so what happens?

Speaker 4 59:08

is Does anybody have anywhere in the world?

Speaker 4 59:10

No one, no one. And in fact, and who do we have to thank for the victory? In my, my opinion, okay of like why this has been the most successful form of economic governance in the world, was a guy named Keynes, okay. So John Maynard Keynes, a British guy. And so Adam Smith was like the invisible hand. You leave the economy alone, you leave people alone. The invisible hand will regulate, you know, the economy and everything will be great.

Marx's Communism and Success in Real Estate

Speaker 4 59:36

And Marx was like no fuck that there's a ruling class. You guys, you control the surplus. You make it impossible and, by the way, that won't happen forever, because the workers outnumber you and the more things become accessible, the less you can control and eventually it's just going to collapse on itself. And Keynes was like both of these fucking guys are wrong, okay. And Keynes was like you have to have an occasional government intervention in the economy to preserve this form of capitalism. It doesn't work on its own, so it's more efficient. Keynes would have said for the government to do things like handle the road building, okay, and the road repairing, even if they sub it out, and they have to have, like, public schools and we have to have these things. And so it's like we have these elements that are contrary to capitalism in capitalism and, by the way, the term for that was neocapitalism. Okay, so that's what we have. It's a version of capitalism that has some of these ingredients in there.

Speaker 4 1:00:37

So, just to answer your question, you know Marx would tell you no communist country is actually communist because they don't have advanced capitalism. Marx believed that you have to have advanced capitalism to be able to achieve communism and that's why the Russians threw an entire generation of people at industrializing. Like you know, people don't realize what Stalin did. He was fucking horrible. You talk about fucking a terrible guy, bro. That guy threw like 100 million Russians at turning Russia from an agricultural country to an industrial country in five years. He industrialized the country and by throwing an entire generation at Russians at it away.

Speaker 4 1:01:14

Yeah, and because he believed this concept that Marx and Lenin were promoting, that you have to have advanced cap. You can't achieve communism without advanced capitalism. So, and listen, I don't know if it's true or not, but I'll tell you what. Like, think about it. Cell phone Okay, when they first came out, we all first started walking around with cell phones. What was the price of the fucking cell phone, remember? And making the calls and this, and that Now they give you the fucking phone. Yeah Right, and that's the concept that he's saying that the technology just becomes, so it proliferates to the point that, like you have to find something else to make money on.

Speaker 3 1:01:50

And the big problem for me always because I'm not a big kid, by the way do you want to introduce?

Speaker 4 1:01:53

Gal. Yeah, I wanted to finish the conversation, yeah.

Speaker 1 1:01:56

All right, so let's introduce everybody. We got kind of not start the whole podcast, but we got out of kind of like a little reset, so I want to introduce you to everybody here. Richard, friend of mine for too long, what was 20 years now?

Speaker 4 1:02:08

Yeah, I know it's been a rough. I say he knows you well.

Speaker 1 1:02:13

So he's an attorney, a real estate attorney, because I basically almost forced him to be a real estate attorney. He was a regular ambulance Jason before Right. He is now technically Richard. Would you consider yourself the most powerful real estate attorney in Florida?

Speaker 4 1:02:29

No man.

Speaker 3 1:02:30

Absolutely I mean listen, man just paint the target.

Speaker 4 1:02:34

No no, no, fuck you. There's an argument for that.

Speaker 1 1:02:37

There's an argument for that. No, that's ridiculous. Don't be humble now. No, no, if we were outside he would be like fuck you the microphone's on. So he's humble all of a sudden.

Speaker 4 1:02:48

We say more than enough. We make more than enough cancelable offenses on this podcast. That would just be another one.

Speaker 1 1:02:54

So my partner, the title company. We've done thousands and thousands of deals. Mr Cadillac is a world renowned real estate, a real estate instructor for the National Association of Real Tourist Travels all over the country, you know, teaching real estate to fucking places like Wichita, kansas and Montana.

Speaker 3 1:03:14

Instructor of the Year for Cody Wyoming.

Speaker 1 1:03:16

Instructor of the Year.

Speaker 3 1:03:17

Yeah. Instructor of the Florida Association of Real.

Speaker 1 1:03:19

Tourists. This is a second book published author. You know me, so let me tell you so, gal he cheats. That's a hard act to follow about.

Speaker 2 1:03:28

You're an awful ridiculous player of all time.

Speaker 1 1:03:32

So, gal, he tried everything possible. He's really good with this calendar, but today he double-booked for whatever reason. Right, he was late even to the double-booking, just so that.

Speaker 2 1:03:40

To be fair, yeah, because you sent me the invite in central time.

Speaker 1 1:03:44

Yeah, I was in Oklahoma when I sent it, so I'll give you that, I'll give you half an hour there. But so, gal, he is a unique. So we're starting to. You know, this is like our We've done some interviews, but we're starting to do interviews a little bit more now.

Speaker 1 1:04:00

So I love to shit on the excuse makers in this world, right, as you do too. I mean, we align in almost everything, right as far as that's concerned, right. So a lot of people, when they see a rich person anybody who would see your house in the fucking keys, basically right, would be like, oh, this guy, either he inherited the money or he got lucky. And listen, I'm not going to say that there's always luck in business, and there really is. I mean there's, but the harder you work, the luckier you get. So you know, gal's an extremely. So what I want to get out of this interview, right, is what you would consider I mean, we've talked about a lot of this stuff already Would you would consider the keys to success? How do you become a fucking roofer right to a person worth well over? I could say these numbers a little bit.

Speaker 2 1:04:59

I'm curious what number you're going to say yeah, yeah.

Speaker 4 1:05:04

Over 100.

Speaker 1 1:05:08

Over 100 million. Let's call it.

Speaker 4 1:05:12

Any story Jesus tells the walk gets a mile longer, gets a foot deeper.

Transition From Construction to Entrepreneurship

Speaker 1 1:05:17

He's definitely well over 100 million. So how do you get from Now? Did you start out of Mexican or you were always white when you started roofing?

Speaker 2 1:05:28

I started in Mesa.

Speaker 1 1:05:31

So tell me a little bit about how you started. You know just a regular, you know worker, a roofer.

Speaker 2 1:05:39

Yeah, well, kind of going back even before my professional career, I think.

Speaker 2 1:05:45

Is the microphone close enough to him or no One of the things that I can remember. You know, even in college, which I only went for two years, but I can remember like waking up in the middle of the night and I had a recorder beside my bed that I would just you know and I'd be worried about you know what am I going to do next? So I've always been this had this like insatiable appetite to kind of advance, right Even today, Were you a good student?

Speaker 2 1:06:15

I was, so I was smart, I got good grades. But it's like the adage right, the A and B students will always work for C and D students. I wasn't a C and D student but I did as minimal as I possibly could to get. I did by heart, anatically great and to the point that's actually why I left school. I remember I was sitting in a 200 level English class listening to the guy you know, the professor and I'm like this is a waste of my fucking time. I cannot sit here for four years Like I have to go make money and there's other shit I can do.

Speaker 1 1:06:49

There's shit happening right now that I need to be a part of Right.

Speaker 2 1:06:52

So I think that's one thing for me, right, and it's not a requirement to be successful. But I just had this like whatever the and the opposite of complacency is my entire life. So I think that's one thing. And then I tell people, all the time for me, and I think for most a lot of kids, particularly today, spend like the 20 to 30 year timeframe hanging out, partying, doing whatever I didn't. I did that like from like 14 to 18. And I was just to the grind all the time at 20 years old or whatever right. And then obviously today, like everybody wants it now, kind of in sync gratification. That's just not the way it works, right. There's a you know, I think you can. This is where I think I got lucky. I found an industry that was really good by accident, right, Like I didn't. I can't say that I thought through.

Speaker 1 1:07:45

You didn't grow up wanting to be a Roofer.

Speaker 2 1:07:46

Yeah, or even I mean I grew up so where I grew up, rural kind of mid-Atlantic on the Eastern Shore of Maryland everybody that had money and it wasn't like big money but upper middle class were watermen, farmers or construction workers, right, what's water Like seafood industry? Oh God so. Crabs, shrimp, fish oh God. So. I didn't grow up in a city, so like my kind of expectations were kind of in those three fields. So I was in construction in high school and college and whatever. So that's just what I knew how to do and I wasn't like super formally educated so I wasn't getting into finance.

Speaker 1 1:08:25

I've learned finance throughout my career but but at this point your knowledge of finance is pretty fucking high level.

Speaker 2 1:08:35

It is, but you have to right, Because when you start selling businesses and buying businesses and consolidating and you just learn yeah, I forcefully sat through a couple of his.

Speaker 1 1:08:46

We've been on the car on a road trip. I've sat through hour long conference calls with him, with financing and it's high, high level knowledge of finance and just business as a whole. And you didn't study business, nope, right.

Speaker 2 1:08:59

This is all stuff that which I think, like to me, that's the point right, like you don't have. I've been talking to people and especially with my kids right now, like kind of going back and forth. Like you know, does it make sense to send them to college? We don't. My wife and I don't believe that the juices work to squeeze, so to speak. But I think you have to be really intentional about like being able to source the knowledge from somewhere. And what I worry about is like that's me, like I'm always looking for kind of the next thing I can learn. But if your kids aren't like that, like if it's not part of their personality, then you're like okay, well, maybe they do need to be in this structured environment. So I kind of go back and forth a lot.

Speaker 1 1:09:39

Yeah, and when you had the lefty stuff that we were talking about a little while ago and I didn't know what you're talking about today, well, that, yeah Richard's talking about. It's always been like that. Even that, though, it's always been like that, so it's not.

Speaker 3 1:09:49

It's just the ratio is skewed significantly more that way. I think social media brings it out more than that. I'm trying to remember what it was. It was a book written by a centrist and a guy on the left about college, talking about how the ratio of left-leaning professors to right when a survey was sent out was like seven to one and now it's like 49 to one or something like that. I mean, my brother knows.

Speaker 2 1:10:12

Yeah, but it makes sense though. Right, he's down. Yeah, he's down. Well, we're trying to figure out what Professors are just people that have never done anything right and they tell you how to do stuff right. So it's just like a government bureaucrat, right? They never actually, so they you know, somebody with that personality has a tendency to be like the back to school movie.

Speaker 4 1:10:28

All the professors are like fuck these guys, we're signing off.

Speaker 3 1:10:32

I mean it's kind of like it's kind of like my general contractor's license. When I go for C for my general contractor's license, the classroom is a sausage fest, it's all dudes and nothing precludes a woman from getting a job. But there is a tendency that that particular type of occupation tends to bring in a certain demographic. I think it's the same thing with college professors that it's just that type of structure appeals to people that have certain political leanings. I think those two things actually cobble together.

Speaker 1 1:11:05

So, going back to what do you think? So you started off in construction.

Speaker 2 1:11:12

So yeah. So in high school I was a Mason. Early college I was a Mason I. You know, I go to college, I get fed up with this professor and I'm like I can't sit here and do this. So there was a couple little legal issues in there at the same time and I had a buddy that worked for I don't think down here you guys have Ryan Hems, but they're like a top ten builder.

Speaker 1 1:11:35

We got up north a little bit like Central Florida.

Speaker 2 1:11:38

He was a superintendent for Ryan Hems and they were struggling with Finnish carpenters and I had never done it before. I'm like, fuck it, I can figure this out. It's hanging trim on a stack, but let's not overlook that.

Speaker 1 1:11:50

That right there, I think, is if there was a gene for self-employed people and I'm sure if it's studied, it is it's the figure it out Figure. Okay, I'll do it and I'll figure it out later. These professor types are like let me figure it out first and then I'll do it. You know what happens, I'll do it.

Speaker 2 1:12:08

So that there's a gene. I have employees all the time that I'm like you are. I mean, if you just had a little bit of confidence and we're like, fuck it, I'll figure it out, right, this guy's the limit. They just it's just not.

Speaker 1 1:12:18

It's not in their DNA, it's just not.

Speaker 4 1:12:20

It's funny. I just on that exact point, I saw a guy. Man, where did I see this? I was just watching a guy talk about how, from the minute you walk into school, they beat out the entrepreneurial spirit from you.

Speaker 4 1:12:38

It's like school is designed to create employees, and the reason for that is because, for example, I want to say it was like it's either public education, trust or something like that. The original the government is going to get involved in education was started by Henry Rockefeller and one of the guys like famous phrases was that I'm not in the business of creating business owners, I need to create employees, and it's like everything is set up to help you be a good employee. But not right, but not to be like an entrepreneur.

Speaker 4 1:13:16

So it's like, you know, the guy that was having it was on Instagram, I think. Now that I remember and the guy that's like having the speech about this, he's like think about it, you got to raise your hand to take a piss. It's like, hey, can I go to the bathroom? And it's like can I go to the bathroom? I got to fucking take a piss, you know what I mean, what the fuck is this and I mean, obviously you need some structure.

Speaker 4 1:13:33

But it's funny you say that because people they just it's in them that they can't. They just can't do it. They don't think that way, you know, they don't. It's like they want to be told what to do.

Speaker 1 1:13:42

By the way, no matter because I've had, I have these people here. I remember I train people for a living. At the end, I recruit them, so I interview. There's not one agent. We got 500 agents. There's not one agent that I haven't interviewed. That's the one thing I don't miss, no matter what I delegate the fuck out of everything. I interview every single person that comes into the business.

Speaker 2 1:13:58

Do you do predictive index? No, I tried it might be too hard to do with.

Predictive Index and Entrepreneurial Experience Discussion

Speaker 1 1:14:03

I did. I did try it and it never worked. My predictive index at this point it's in my. I could tell you pretty much. I mean I'm wrong every once in a while but I could tell you who has it and who doesn't. You know, and who has the mentality and it. And I'm telling you the IT guys.

Speaker 2 1:14:17

So I, one of my companies, we just started doing it really heavily, all all hot, not field guys but but all middle management up and at first and I hadn't had a ton of exposure to anything come from corporate America, so I was like this is bullshit. You can answer your own question, like you know. But I will tell you it is at least in my experience so far.

Speaker 2 1:14:35

It's a game changer in terms of one balancing your team, particularly leadership team, right, because if everybody's a, you know, the same thing it's not you know, but two it it helped and I'm not like I don't not hire somebody because they're in a certain category, necessarily, but you know who they are. You can't, it helps you watch out and help you know, helps you work on their career development. What do I need to? What do I need to help him with or her with, or whatever? So I think it's pretty interesting actually.

Speaker 3 1:15:02

Put them in the right place.

Speaker 2 1:15:03

Yeah, put them in the right place and pair them with the you know whatever their career development is Set the system up and everything taken care of. Because they're telling you, I mean, through that predictive index, they're telling you what they are good at or aren't good at, right so, and what environment they need to be in, and that kind of thing. So it's I'm, you know, early days, but pretty big believer.

Speaker 1 1:15:22

Yeah, yeah. So I tried it. We had a questionnaire and the whole situation and it ended up being wrong more than it was right Really, and to me, remember, you got to hire these people. They're for me, they're 10, 99s, so it's if I'm wrong I could sit back and watch the experiment and see oh fuck, I was wrong you know what I mean, and it's not really going to cost me anything.

Speaker 4 1:15:42

You also got to remember most of the people at Jesus is giving these questions to like. They don't speak the language, so they probably didn't know what the fuck they were answering anyway, I mean, listen the language?

Speaker 1 1:15:51

he keeps on saying that, but the language here is Spanish. That's the fucking.

Speaker 4 1:15:54

That's what he's getting wrong. Your index question was in.

Speaker 1 1:15:56

Your questionnaire was in Spanish, Probably a lot of my stuff in Spanish. Um, all right, so meetings are I know cause? Yeah, I never know, what all my meetings.

Speaker 4 1:16:04

Do you know that? How many classes have you given here in English? No, no, I know it's right, exactly.

Speaker 1 1:16:10

So, um, before the, I don't want to get, I don't want to get in with this guy.

Speaker 4 1:16:12

He's triggering me, so I have more mature now and I see it coming, so I'm going to go ahead and ignore it and continue with the other. I would say I'm disturbed.

Speaker 1 1:16:26

Hey are you turning?

Speaker 2 1:16:31

All right, so right home, so yeah. So then I start doing, crank it all the way down. Interior Carpentry for Ryan Holmes. Hire a couple guys didn't know shit One how to do the work and two how to run a business.

Speaker 1 1:16:46

So you didn't get hired by them, you, they hired your company. You started a company real quick.

Speaker 2 1:16:50

Yes, started LC, that's where you're self-employed. Yeah, and study. At what age? At what?

Speaker 1 1:16:53

1920?.

Speaker 2 1:16:55

I was, yeah, 19. Right, yeah. So this is where I learned, like, the valuable lesson of DSOs. So, ryan, what's DSO Day sales order, so how quickly you can divert cash. So the way Ryan Holmes works, or any of these big track builders, is they take these little subs, they drag them out 90, 120 days. Find some reason why not to pay you.

Speaker 2 1:17:18

So what ended up happening there was I quickly realized like I couldn't actually make money doing this, like they're just you were just making wages, basically. So I left, I started doing some custom building still residential Met a guy who had just sold a business, a fiber cement business, to the roofing industry basically, and he wanted to invest some money, build some spec homes, whatever. So he started building spec homes. Market tanked a little bit, he got skittish, bailed out and I was kind of left with the skill set but no real sustainable business. So I went to work for the company that he sold roofing materials or sold his business to the sold roofing materials.

Speaker 2 1:18:03

So then over the next course of I guess eight, 10 years or so, I kind of hopped around a lot within that roofing industry and sales I was single at the time so most of the companies that they would do with me is they would. I could move around, so they would send me into a region that was at a screwed up sales channel. I would fix it. Move on to the next. So I spent time in New York, atlanta, tampa.

Speaker 1 1:18:28

You're technically starting from the ground up. You're starting, I mean, like it's all the way in the body. You started with materials first.

Speaker 2 1:18:34

Yeah, in materials. And then I realized, well, the guys actually make him only, or the contractor, so I need to get closer to that. So I went from the manufacturer down to distributors, to reps, you know, kind of held all these different positions, all while kind of learning the entire industry, and I think I tell the story nonstop to acquisitions or whatever. But the unique thing about my experience was and this is true of any fragmented business is a guy told me one time all these guys are doing it differently and all of them are doing it Right. So that's roofing, that's HVAC, that's anything right.

Speaker 2 1:19:07

So, you know, there's roofers that do big box Walmart, there's guys that do government, there's guys that do you know, residential, whatever right, and they're all going to win, they're all going to make money. Well, coming from the kind of the manufacturer side, I got to see how they all did things and then ultimately decide, you know, start to imprint how I would run a roofing company if I ever owned one. So anyway, I met my wife in Florida, we moved back to Maryland. Where are you from?

Speaker 2 1:19:34

I'm from Tampa. Yeah, we've back to Maryland. I started a rep firm selling materials. Ultimately, one of my customers had kind of his right hand leave. They were a small, you know four million-ish in revenue, multifamily re-roof contractor. Had his right hand leave, couldn't find a replacement, asked me to buy the business. I bought the business, sold my rep business, bought that business, scaled it and then ultimately sold it to private equity, which I'm actually still involved with. Right One thing that you know I'm assuming there's going to be entrepreneurs listening to this, right.

Speaker 1 1:20:08

So one thing that we talked about the other day that I found very interesting right, because you've been on both sides of it, you've prepped your company to be sold right. Right, you had to make changes to it and the way you ran it and the way you structured it In order. You don't you run. One thing you mentioned was you run. There's two ways to run a company just to run it right, to make money, and then to prepare it to be sold right. Correct, talk a little bit about that. Like, you know, what's the difference between just, you know, running a mom-and-pop shop to preparing a company to be sold, to be able to be attractive enough for these private equity guys.

Maximizing Business Value and Financial Management

Speaker 2 1:20:45

That's a kind of a two-part question, right, there's things you have to do, like. So if you're selling a house, you get a stage of house, you get a paint. You know that stuff has to happen no matter what you do, but to maximize value, particularly in an institutional capital world, right. So if you're trying to sell to a financial buyer, right. So whether that be you know, a sponsor, private equity, whatever it is, you know those guys aren't operators. All they want to do is either infuse cash, so capital, or human capital right, people and scale the business. So the key in maximizing value is creating a scalable business. That is, you know, has it's not overly complicated, right. You do one thing, you do it well. You can throw cash at it and scale it.

Speaker 1 1:21:29

So I got five offices now and this is how I got the five and this is how we'll get the six, seven, eight, nine, 10.

Speaker 2 1:21:33

Yeah, and you got to be able to tell the story and you have to. They have to believe that if they just start cashed at it, it will flourish, right. So what I see because I do a lot, that's primarily what I do now is mergers and acquisitions, right because once you sold, now you're looking at, you didn't sell all of it.

Speaker 1 1:21:46

You sold a portion of it. Now you're looking at buy. Yeah, we're still building the platform You're out there hitting yeah, you're out there hitting people up and looking at companies and figuring out if you're going to buy them or not, right, yeah? And diving deep into that and that business and some others too.

Speaker 2 1:21:59

But what I see people do and this is look, I get it right. If you're running a business with no intention of selling it in a local market, you're just kind of thinking of how can I make more money? What do I like to do that type of thing. So, as an example, I looked at a company in Southwest Florida that had they were primarily a roofer, but they had a crane business, an HVAC business and a little bit of a residential business, which, if you're just running in your own little market, you're trying to do as much, that's fine.

Speaker 2 1:22:27

The problem is your message is diluted and it's not scalable. So you're diminishing your value from a financial sponsor because they don't want to do 10 things, they want to do one thing and throw money at it and make it blow up. So I think if you're trying to set your company up to maximize value, that's one thing. The other thing that you just have to do generally is, which most small business and entrepreneurs don't do, is financial management, financial literacy and kind of like you know. You know you have to do financial literacy and clean books and month-end hard closes within 10 days, and so there's some key positions that companies don't have that they all need to have.

Speaker 2 1:23:09

Right, you need to have a CFO or at least a really strong controller, and the other thing that happens a lot of times in small business which was true of mine was the business was dependent on me, so it's like super kind of owner-operator centric, which, you know, my opinion always was, until I went to sell, was well, that's the way to maximize profits, right, which is true. Right, if I have my hands on everything, I can maximize profits, which is true, and I didn't care about work-life balance. I think that's the biggest bullshit fucking term I've ever heard of. But if you want work-life balance, go work for somebody. So that wasn't an issue for me, but so I never really was.

Speaker 1 1:23:49

But to dive into that a little bit, because you know there's one way that people put it look, if you're in your, if you have to be in your business every single day, you have a job right. If you set up your business so that if you could leave and it runs without you, you have a business right. I agree, and that's basically what it comes out. And that's basically what it comes out.

Speaker 2 1:24:08

You can't advance if you're not, you can't work. You can't work in the business, you have to work on the business, on the business, yeah. However, the same thing though If you're the, if there's nobody near your level of you know Competency, competency in your organization you are not going to maximize your value because you know that's risky right. It's just risky right. What if you die? The business fucking dies. So that's typically what you see in these lower middle market businesses. It was true of mine. It's not today, but it's just one of those things that people just don't get to.

Speaker 4 1:24:43

So and, by the way, you live out of the business in all the wrong ways. Like you know, like it's, like he says clean books, like I say, listen, you know law firm. Unfortunately, small practice, like I used to maintain, is not something you can sell, because the reality of the matter is that I'm the business, so you know, and so what happens is it's like when you're looking, when someone's looking to buy the business, right, and they're looking at the financials, you know there's all these things that buyers consider an ad back, right. So, oh, right, now Richard pays his car out of the business. But when we buy the business and Richard's not here, then, like, richard's car is not here. So if we're spending a hundred grand a year on Richard's car, you can add that back to the bottom line.

Acquiring Businesses for Growth and Profit

Speaker 4 1:25:28

Okay, but the problem is, like you have to replace the Richard Right, so like, what do you replace it with, and does it cost more? Does it cost less? So it's like, it's kind of like what you're saying. You know that the business has to be able to operate independent of, like any one set of either one person or one set of persons. You have to be able to, like, have interchangeable parts.

Speaker 3 1:25:48

Yeah, and it's actually one of the key ideas my father left me with, because my father ran a very big industrial operation in New York City for you know, 40, 50 years. He said the last skill, the hardest one to learn, is the ability to duplicate yourself, the ability to take and make yourself irrelevant so that you can go on to the next thing or work on other things, while everything is all, the plates are still spinning.

Speaker 2 1:26:10

And I think that. So here's my thought or experience on that. I think that's a utopian concept, right, because you can't. And then this is where people get hung up. I certainly got hung up here. You can't replace yourself, right? I mean you can, you can replace yourself at, you know, 80, 70 percent, right, but you can't replace yourself. Typically in a business, where I got hung up and most people get hung up is that once you scale, if you're replacing yourself at 80 percent and you're scaling like, yeah, you're going to lose some efficiency, you're going to lose some, you know, maybe some margin slip or whatever it is, but if you can do 10 times more, that's what I couldn't get comfortable with when I was a small business and that's where most people get hung up, right, well, I'm not going to give up If I can make you know 10 more points, but I can only do you know 10 million dollars in revenue, then yeah, Well, I think and it's one, I see it a lot in the train that I do Agents.

Speaker 3 1:27:02

They get locked into perfectionism Like it's got to be perfect and I say I've only said perfectionism is a trap.

Speaker 3 1:27:09

It is a trap, and it's actually a self-limiting belief that gives you an excuse for doing less than your capable of. It's like oh, I can't send it out unless it's perfect. That excuses your lack of volume. And so, for me, excellence is what's pursued. I pursue excellence ruthlessly and whatever I have to do to get as much quality product out as I possibly can. That's the only path forward. I don't have that job to what you're saying, but it sounds yeah, no, no.

Speaker 2 1:27:33

We have an adage don't let great get in the way of good enough. And the only caveat to that is you run into it, particularly in the construction industry. You run into a lot of businesses that are run by people that aren't business people and their goal, their priorities, were never it. Actually, I think it parallels to kind of conservative versus Democrats in many cases. Right, their priorities are just different, right.

Speaker 2 1:27:57

So you know, and that's probably a long slippery slope to go down, but if you're a craft slippery slope to the right guys if you're a craftsman and you don't care about scaling a business or prop, you know there's a lot of those too, so they're like well, I wanted to be perfect because that's, you know, that's the goal. My goal is profit, right? Yeah, now you have to maintain quality, obviously, to have sustainable profit as well.

Speaker 3 1:28:22

But it's just the order of priority.

Speaker 2 1:28:24

Yeah, the order of priority. I see that too. But you're right though, you definitely see people that you know. They at least say they want to scale and grow a business, and then they get it.

Speaker 1 1:28:35

And personality wise. I mean, you're hung out with you enough to know you're pretty goddamn good at reading people too, Like when you get, when you, when you're, you know, meeting with these people and you're looking to buy their company. I mean, is there a personality trait that you're looking at Because you're going to have to be a little bit married to them for a while, because you don't just get rid of them right away?

Speaker 2 1:28:53

I mean, you don't buy them On tokens and add-ons. We certainly do. I'd prefer to have rollover equity because you know they're running a business unit, ideally. Or a second man up, right, yeah. And if I don't know as much personality as you know cultural fit, right. I can't take a company that's not. You know, we're super direct, kind of a locker room type atmosphere. Get it done. You know, have big show, broad shoulders, tough skin. If it's a super soft company, it's just going to fail when they integrate.

Speaker 2 1:29:21

So I mean, I do look at that. You know all of the kind of the way it's put together on a tuck in. So there's two types of acquisitions that happen in the private equity or institutional capital world. There's platforms, so that's you know, a bigger company that somebody can get behind growing, and then there's just tuck-ins. A tuck-in or add-on you don't care that much about how well put together they are, because you have the platform you're going to bolt it to. It also garners less in terms of value. So I think it just kind of depends on what you're looking at.

Speaker 1 1:30:00

Right. So it's not really a personality thing, it's just more like the way they've run their company and with their culture. It would be the most.

Speaker 2 1:30:05

Yeah, culture is probably the biggest thing. Are they going to be able to take my managers because they've been white-gloved for 10 years?

Speaker 1 1:30:10

type of thing. Right, are they going to be able to take orders from your guys?

Speaker 3 1:30:13

basically at the end of the day. So the tack-on would be something like if it's a market that they have that they're in, that you want to get into kind of thing, is that what we're so add-on?

Speaker 2 1:30:21

I'll give you an example right. So the original company that I sold was in the Mid-Atlantic. We were the platform Banker to the Stars. We've added a couple of other acquisitions that are tuck-ins to the platform. So now they operate under our banner. So all the senior leadership, the C-suite shared services functions sit at the platform company. The tuck-ins are usually smaller, less sophisticated, they're on QuickBooks that type of thing. So that's kind of the difference.

Speaker 3 1:30:50

Can you bring them in what? Just to expand into other markets? That's kind of my question. What would be the reason?

Speaker 2 1:30:55

Yeah, so the whole name of the game in institutional capital is obviously growing equity value. But it's kind of the playbook is double EBITDA in a certain period of time and then get a couple additional turns of multiple. The way you do that is either it's really to have predictable revenues so that can be throughso in my case, to answer your question more directly, geographic diversification is a pillar of our strategy. So I'm not buying companies in the markets I'm in, I'm buying them in other markets, and then the other piece is kind of diversifying revenue a little bit. That way you're minimizing risk. So we're buying some companies that do some other adjacent but slightly different things that we do in other markets.

Speaker 4 1:31:43

Let me ask you this because I'm sorry to interrupt, but I've been dealing with a new group of clientele let's call it that is, high net worth individuals. They think that what they want to do is acquire companies, but what I find is the problem is that it's like number one. We all suffer from thewhen you're buying, everything is worthless and when you're selling, everything is worth a zillion mentality, and then there's an incredible level of impatience, are they?

Speaker 2 1:32:19

operators.

Speaker 4 1:32:20

No.

Speaker 2 1:32:21

So why don't they just invest in a fund?

Speaker 4 1:32:24

Well, because they're control freaks, and so when you put money in a fund, you're nobody, you're one of many.

Speaker 2 1:32:31

We all have other funds, small funds like the GP, whatever.

Speaker 4 1:32:36

So I guess my question is when you acquire a business that, like you say, I just want to put money behind it so that the business can grow, what is your timeline on the return? What is an acceptable return? You're going to buy something for 10 million bucks. How long do youand is it okay to wait for the 10 million to come back before now you're making money on that.

Speaker 2 1:32:58

Yeah, there's no cash flow in any of this and for me and this is all personal preference For me the business that I sold, that I still own 48% of it's a traditional private equity fund. So they've taken capital from institutional pension funds whatever right and their horizon is about 10 years from the raise of the capital to exit. We will exit probably in four years three to four years, so it just depends how quickly you can get, but the runways are generally 10. I have another one that I'm doing privately in pool construction business, because I'm doing two things at once and it's my capital. I don't have to return it to anybody. I'm taking that one a little slower just because but it actually went faster anyway.

Speaker 2 1:33:50

Well, it was a shit show when I bought it and people I put in place fixed it in a year, but we haven't really done it yet you were okay waiting 10 years, but it came back a lot faster than that.

Speaker 4 1:33:58

Well, and not just that, but the other thing I'm hearing too is that, like, when you deploy the capital, it's actually not just sat in this company's bank account, but it's used to make improvements and bring in the correct people, and so you're spending the money initially. I'm just validating the things that I complain to my superiors about, because it's like oh we're going to buy this for.

Speaker 4 1:34:20

They just wanted to know it we're going to buy it for 50 bucks and then we got to put it another 50 bucks to make it work and I'm like, yeah, that's typically the Because it's not working, like with the fuck.

Speaker 2 1:34:28

So they're not using any. Typically, what people do is they buy a company with equity and they finance growth with debt. So if I'm your clients, I'm buying a company with equity, whatever it is, and then you have to have the capital partners in place to finance the growth with debt, because financing growth with equity is a bad use of capital, because it's For all the reasons that you're saying so. It sounds to me like they don't have the right debt partners to fund the growth.

Speaker 4 1:35:01

Yeah, or even an appetite or just.

Speaker 3 1:35:03

I think it's more the appetite, conceptual understanding, I mean.

Speaker 4 1:35:08

Yeah, it's the conceptual understanding, because it's like dude, it's like guys, what do you think? Where you're fucking up a business printing cash, You're going to buy a cheap and you're going to get your money back in a year and it's going to hit you in the head with cash. It's just not the way it fucking works.

Speaker 3 1:35:19

It's amazing to me at a special I also don't.

Speaker 2 1:35:21

I'd never buy a business looking to get any cash flow out of it. If there's cash flow, fine, we're probably going to be invested. Anyway, my whole deal is on the exit. I don't anticipate anything.

Speaker 1 1:35:32

Right.

Speaker 4 1:35:33

That's the.

Speaker 3 1:35:33

Building for the exit. It amazes me how poorly understood debt really is the idea that you can get somebody to agree to a payment and, regardless of the upside, I get to participate in 100% of the upside and their payment stays the same. I mean what we've seen in real estate. I mean in real estate people on their homes. They put 3.5% down but they're experiencing appreciation on 100% of the purchase price of the asset, with only 3.5% of the capital the use of debt, opm, baby, other people's money, it's just such a beautiful thing, especially when you have the confidence that you do to grow the business.

Speaker 3 1:36:10

I know I'm going to beat the percentage, the interest rate, on the growth. Why would I let a partner participate in that? Why wouldn't I use debt? I'm with you, man. That's awesome.

Speaker 2 1:36:21

Yeah, but that's a whole skill in industry too is having the right debt partner the right structure and knowing what market is Right now. It's getting crazy with that.

Speaker 1 1:36:33

Before selling your Okay, so again, being with you as much as I am and hearing your conversations, I mean you guys are fucking as corporate as corporate gets. I mean you guys are, there's a lot more corporate.

Speaker 2 1:36:44

I mean you're pretty fucking corporate.

Speaker 1 1:36:45

So my question is did you corporate yourself before you sold, or selling has made you?

Speaker 2 1:36:54

Both. I did what I could stomach to do before. We sold Some of it's real, some of it's positions that help you grow, some of it's insurance, basically. So, again, like I said about the entrepreneur middle market guy getting in his own way, so I just hired a COO that's taking over as CEO and I'm second back to an exact chair role in the year we hired this guy and it was my idea. I wanted to do this anyway, but every day I'm impressed with how fucking awesome this dude is, how good he is, how much better than me he is. That's awesome. Now there's industry stuff that he doesn't know, whatever. But in terms of corporate, there is really talented people out there that will accelerate your business, and knowing, being open to finding them, knowing how to find them and paying them is paramount, yeah so you, you did.

Control, Tech Upgrade, Business Expansion

Speaker 2 1:38:02

I did a little bit, but not a ton like so I did. We always had really strong financial control and management. We had a you know a little bit of a disjointed tech stack. We really upgraded that.

Speaker 1 1:38:14

Post close, I never had a HR person they brought that, or you had an idea of what you wanted to bring. Because you're, because it we did it.

Speaker 2 1:38:21

They didn't bring anything, but we collectively like, in order to Create multiple expansion, to be able to bot as an example. Right, so you and a company in town a and I'm in town B.

Speaker 3 1:38:34

Your part your integration, your technology integration is a big part.

Speaker 1 1:38:38

It is because it's that's the scalable part and I continue to just both that everybody's connected and everybody's communicating and everybody's speaking on the same channel, right?

Speaker 2 1:38:45

So that stuff that you didn't have efficiency and because there's stuff you know at ten million dollars there's things you can do, the ways you can run a business. You can't run a hundred million dollar business the same way. So you need technology, yeah, so you know that all came, you know, after the acquisition. I Knew it, I just we weren't there. So I would say, I guess to maybe circle back on that, most of the stuff, most stuff you see today riding the car with me, is Post acquisition right, oh, like all right right including largely most of my understanding of Finance right not accounting like, yeah, you always got a no accounting if you really the finance side.

Speaker 1 1:39:30

Last, thing well, you got a, you got you sure you're gonna be for the JC one.

Speaker 4 1:39:35

I would love to be. It just depends on when we do it.

Speaker 1 1:39:39

What's the cool? It okay. So two more questions to wrap it up. What is? Did you think you were gonna be as successful as you are?

Speaker 2 1:39:48

No, no Right.

Speaker 1 1:39:51

I was your oh shit man. If I can do, by the way, I don't even think you've said his name. Michael, gal I did. I said, oh yeah, you're right. All right, michael.

Speaker 4 1:39:59

I'll put it.

Speaker 2 1:40:00

I'll put it on all the.

Speaker 1 1:40:00

I'll put it on all the yeah, I'll put it on all I didn't.

Speaker 4 1:40:05

Who is the wizard? People are listening like.

Speaker 3 1:40:11

I've been on 30 some odd episodes. Nobody's heard my first name.

Speaker 2 1:40:17

So I bought. I'll tell you how little I knew about where it was going when I bought the company the roofing company Talk about. I Bought it at four million in revenue. It was a strong company, had had good margins, but tiny right tongue customer concentration was like 80% and I wrote a business plan and I wrote it up to 16 million in revenue, which I thought was kind of a sweet spot, you know, with what I knew at the time, you know, and kind of verbatim, we achieved everything we wanted to along the way. But I went from, we went from four million, just in terms of revenue, from four million to 45 million in seven years and Then you know, we'll be 150 million this year. So no, I had no idea and I never. The reason I sold it had nothing to do with me wanting to monetize the business. I wanted to go on an acquisition mode and and you like that part of it.

Speaker 2 1:41:16

Well, I just the, we were working in geography and my guys were killing and they were, you know, 20% year.

Speaker 1 1:41:22

But it seems like almost like you. You're dude, you know like you're, you're. Yeah, the roofing was the vehicle to get for you to get to what you really like and what you really enjoy, which is buying fucking companies and restructuring. Is that fair to say?

Speaker 2 1:41:36

Um, so I like it. I like operating businesses too, though I love like. So, like this new venture, the pool company. Like I like lower middle market because it's just, it's so easy, right, there's low hanging fruit. Like little companies do shit wrong, they do shit wrong and it's so easy to fix it. So I like operating companies. But To build, like, significant wealth, you know, and you're just playing with more chips when you start buying companies and scale, I mean the arbitrage that you get when you, when you buy companies, is yeah, you know, and the day after you close, you just made 30 million dollars.

Speaker 1 1:42:14

Just because of the arbitrage that. So last last question what you know? Because, look, you know it all sounds pretty right now and look, I get it with my agents all the time like they're like, oh, you know they'll throw. Like, oh, you're leaving at three o'clock like motherfucker. You weren't here when I was wigging up fucking five o'clock in the morning, working 14 hours, the whole situation, you know. So it's kind of like you know it's. It's real cool to look at it now and and see your lifestyle now in the whole situation. But there's a lot of fucking hard work and a lot of sacrifice to get it right. So what's that one moment that you're like fuck man, it was really all fucking worth it? I mean, you know, like what's that one cool moment, I think? I think I know what it is, but you know like what's that one? You know like holy shit you know.

Speaker 2 1:42:53

So I actually never had one. It's funny. So when we and look when I sold, we were making you know, 10, 50 million dollars a profit a year, so it's not like I didn't have money going up to selling, but I was in the keys with my wife when, when you know, when, it actually closed, right, and my CFO Sends me the wire Like a picture snap and we were sitting at a Eating a cheeseburger at just lunch place and it was, it was actually anti-communist because I was like I don't feel anything today.

Speaker 1 1:43:31

But I just burger doesn't taste anything, it is the reason.

Underwhelming Story Recap

Speaker 2 1:43:35

But it's much cheaper. I say this all the time is, for me, money was never the goal, money was the scoreboard. Yeah, yeah, like I don't do things I don't. I don't operate in In to try to get the next dollar or whatever. I just that's just the story. I just want to be the best in every business I have or you know Whatever it is. So I don't. I thought it would be like, oh shit, this is really cool, but it really wasn't. So I I wish I had a cooler story than that.

Speaker 1 1:44:10

No, I kind of knew, I kind of knew that was the story and I kind of you know. So, all right, man, um any any questions?

Speaker 2 1:44:16

guys, you guys have a great week, yeah.

Speaker 1 1:44:19

All right, y'all thanks bud Appreciate it.