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May 31, 2022

How To Invest in Commercial Real Estate (Pt 1) w/ Jake Harris

How To Invest in Commercial Real Estate (Pt 1) w/ Jake Harris

Jake Harris is the founder and managing partner of a private equity real estate firm that has managed, developed, and acquired more than $200 million in assets under management in the last five years alone.

With nearly two decades of experience in real estate, construction, and investment management, Jake is a licensed California broker and a recognized expert in opportunity zones, infill development, construction cost-control systems, and the scaling of distressed investing business.

Today's show is PART 1 of our conversation on all things commercial REI, stay tuned for Thursday!

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Transcript
brian:

All right. Every buddy, we have got a treat for you. Live at the Apollo. We have got Jake Harrison, the soundboard Jake hit it.

jake:

No, it was actually, I liked the fans cheering better than the other one. I actually don't even know some of the things that this thing can do. But my kids love pressing those buttons and come in and they be like

brian:

kids, man, I would be distracted by that. I, part of me wants to get one for this year. And the other part of me knows that every single person that's listening to this may shoot me metaphorically and physically I do live in Atlanta. So it's a possibility at any given moment. So everyone welcome to the show. Jake, why w why are we not best friends yet? I feel like

jake:

we need to be, yeah. I feel like you haven't texted me enough or we don't, we're not even connected from text. I think. We're connected via Facebook messenger. And it's I check there like once every other month. So I just feel like we haven't connected up with sinked up with the right communication platform.

brian:

So all those messenger pigeons that I've been sending, you have been

jake:

just this, the smoke signals. I can see them. It's just on my response rate is.

brian:

All right, everyone. We're gonna, we're gonna try, we're going to try to make it serious. Cause in all seriousness, Jake has a lot of value here. I'm going to read his bio, Jake Harris, the founder managing partner of a private equity real estate firm that has managed, developed and acquired more. Then $200 million in assets under management, the last five years alone with nearly two decades of experience in real estate construction and investment management. Jake is a licensed California broker and a recognized expert in opportunity zones, info development, construction, cost control systems, and the scaling of distressed investing business. Whoo. Hello, Mr. Harris,

jake:

how are you? I'm fantastic. Thank you.

brian:

I am excited to begin our conversation today because we are going to talk distressed assets. We're going to talk commercial real estate, triple net. Lease investing. It is what I'm probably going to be moving into next. So everyone's going to be able to hear a lot of excitement of my voice talking to you because you are the guy for that. And I know your track record, man. You're killing it. And I know that you're getting a new hotel development. My boy Maddie San Antonio hit us with that real quick. What's going on with that?

jake:

So it's an opportunity zone, investment I bought it in 2019 before there's a pandemic. And actually I didn't model into any pen, any epidemics, let alone a pandemic. So very black Swan event came out of nowhere and, we put a pause button on that. And it was very interesting because I went in and we just bought this land and we're going to build this hotel on the Riverwalk and then. Oh, no hospitality went from this to nothing, literally nothing and for a year and a half. And so I use that time just to beat up the hotel management. And when I say beat up is just the negotiating, the hotel management contract or the agreement, and about every two, three weeks, I would reach out with the attorneys and Change provisioned in this 60, 70 page document and really being that. I'd never done that before. I was able to get a lot of concessions to protect investors, given crazy things like pandemics would happen. So it is, and now obviously we've seen inflation, move on the other end of things. Hospitality is recovering quite a bit. From a revenue standpoint and actually 2021 in San Antonio was above 2019 revenue numbers and this kind of lifestyle boutique space at less than 50% occupancy. So you're like, what the heck? How does that even make sense? In 2021, we were still doing, dealing with Alma and a lot of COVID things and half the country wasn't traveling, how did they surpass revenue numbers? And the reality was. Inflation roommates used to be 200 a night. Now they're two 70 a night, on this particular thing. So even though there's a discount on the amount of people or the occupancy numbers, because the overall room rates have gone up and that's where hotels are unbelievable and inflation hedges, every billionaire. And because casinos exactly. It's because not only do you get massive write-ups, but you have mash of cashflow off of them. Life insurance companies used to own all the hotels before REITs were a thing. All the hotels were owned by life insurance companies. And so I was just able to reverse engineer, like, why do all these billionaires own hotels? What am I missing? And so it goes back to even like minimal. And stop dicking around with the greenhouses and get to the hotels. And I'd flipped the use of me in bio, like 1200 houses. And so I was like, so I should probably have 300 hotels right now. So this was launching into that. And specifically I do a lot of data research to say, why luxury boutique, why hotels? There's a lot of things that we can go into, but I want to leave space for. Other conversations related to where I'm very bullish on hospitality now and in the next decade moving forward.

brian:

For sure. And that was going to be one of my questions. Is that a vertical that you're specifically focusing on in the commercial space or are you still dabbling kind of dipping your pen and some other inks or is hospitality where you want to put your flat.

jake:

So as a, I have the benefit of being as a private equity real estate company. We do have some different strategies of how we invest. And so we're not siloed into individually and only this asset type So we do heavy value. Add, we do some development projects. We do some land assemblage. We do stuff for cashflow and it creates really different legs of a stool that make up our company. Part of that has to do with, I'm not trying to enforce. My investment thesis on other people, it just happens to line up with what other people actually need. So we create opportunities for people that line up with what they need. They want 20% plus returns. We'll those are development type projects. Those aren't necessarily a value add multifamily. That's buying at a forecast and we're going to sell it a three cap and hope everything works out. Okay. Those have lowered. Returns, but there are some investors, high net worth people. And, we know from GoBundance people as a whole that want that particular asset type and want a lower return because they think it's safer. And so to me, it's not just a cool, I'm not saying this is my. If someone wants something pink with purple polka dots, we'll offer and say, we're going to facilitate that within a fund that hits and scratches their niche. So hospitality is an untapped and really it's in demand for what I'm seeing as a lot of high net worth individuals. Especially that are trading out of apartments is they're not wanting to reinvest into these low returns is they want cashflow. They want some, higher returns, but then also as there's an unlocking. And so w there's a methodology behind that. So I'm leaning significantly into hospitality because I think it is the. Untapped market for right now, when you're competing against multiple buyers, it's, whoever's just willing to make the least amount of money versus on the other end of it, I can structure better deals in a hospitality space because there's not a whole lot of people that are chasing down these deals and you make all your money in real estate on the buy.

brian:

That's

jake:

it. And so when I go, so you go back to, it is you have to buy it, right. and so I'm not smart enough. Or to buy things and, and just pay a lower price. I don't have the right systems or cost of capital. And I'll give you an example of this. I worked within big institutional kind of groups. I was doing selling off some stuff to some acquisitions. Tricon is a big private equity group or institutional investor out of Dallas. Blackstone has now recently partnered with them, but they had a $500 million line of credit from Deutsche. 4.2, 5% interest. That's fine. $500 million line of credit at 0.2, 5% interest. I can't compete with that. Ah, that's not. My system is I can't go compete with someone that has their cost of capitals. I have X cost of capital. And so what I do is do I go try to beat them at their own game? No, that's a losing proposition. So when I look at it as okay, where is there opportunity that lies that taps into what investors need or want is they want cash flow is this is, and I believe in hospitality as an untapped. Potential of this market to lean forward. In 2020, I wrote the book that catching knives, investing into distress, commercial real estate, and then all real estate value triple. So I was like, so I'm not necessarily the crystal ball guru that says, Hey, I know what's going to happen in 2, 3, 5 years down the road. I believe some of the things that fundamentally are going to come. Do at some time period, and maybe with some recession, we're going to experience some of those. It just took a little bit longer when the fed printed out $20 trillion, they kick the can down the road.

brian:

Absolutely. And I think that, what's, your rope was timely, right? Because you, you put that in, you positioned it to where yeah. You don't have a crystal ball, but the reason I love with that example specifically is a personal reason. And then also a tactical reason. So tactical reason is in this world now of syndicators and syndications. We, and I know you're critical of this. So this is another point that I want to talk to you. Yeah, he's smiling. This is the point I want to talk about on the show is, what do we, what is the consumer? What is the show audience? What is the person listening to this lookout for a good syndicator versus a bad syndicator? The reason I love with this example was I remembered specifically you guys buying this hotel and getting this whole brand new development project and it's beautiful. For people listening, like this is going to be like the cornerstone it's on the Riverwalk. It's beautiful. It's sexy. It's brand new. It's sleek. It's boutique. And I remember looking at that. You still held onto that thing throughout the pandemic throughout hospitality, bucking and riding you like a bull. And then now you're still moving forward with it. So that says something to me about you as an operator, right? And it says something about the deal and the deal structure, because you rode the wave and you made it through. So a that was cool. B personally, it was just the first time in my life that I had a mindset shift. People buying Airbnbs, which has now become sexier and sexier too. Then I was like, holy shit. I've got buddies buying hotels, and it was a mindset shift because in your mind, and for a lot of us listening is you think, oh yeah, people do that somewhere, but we don't know those people, but now we do. And I feel more recreational buyers and more people like. Are coming in under the massive Blackstone's and all those guys, and you're coming in to operate. And I love watching that and watching you go there. So I've got a couple of different hooks for you to pick up on there. I'll let you pick whichever one you want to hit on and we can go down that rabbit hole.

jake:

So one of the things that I'm, eh, all first high-level one of the things you talked about, sponsors you've obviously seen some of the content that I've put out there about due diligence and researching not just a deal, but also the structure of the deal. And so rule number one of Warren Buffett is don't lose money. Rule. Number two is see rule number one. And I, however am Very special that I have to go make a mistakes myself to learn lessons sometimes, or maybe that was the younger version of myself. And so I was, and I remember a time where I had a goal of being a millionaire before 30, and I achieved that later. Of being a millionaire before 30. And I was like, look at this, look at me. I am special. I am awesome. And I remember Robert Kiyosaki, giving me advice and saying, be wary young, man. The easy come is also easy go. And I was like, you just don't understand. I'm super clever. Like I'm smart. Like the real estate market would have to go down like. More than like 20% to touch where I bought this because I bought it at a discount. I just and yeah, even though I borrowed a hundred percent of that or a hundred, 5% or whatever, I bought it at a discount, so it should be fine. It's good. Nothing in my life had experienced that. And subsequently a few years later, I'm sitting on the street corner and I remember this so vividly. In Tucson, I'm sitting outside of this Adobe house that I was doing construction work on and I was broken emotionally. I was crying, like sobbing, crying. The world was spinning. I sat down on there in the dirt, on the sidewalk kind of thing, and just prayed, dear Lord, can I be worth nothing? Nothing like if zero would be so awesome. And I went from becoming in wanting to be a millionaire before 32, praying to be worth nothing. And and really, and to even make matters, even worse is that house I was working on that Adobe house. Was in the reason I was praying to be worth nothing was because I had, property, I had a negative net worth. I had more debt than the properties were worth. I had been coming to closing table bringing 20,030, then 50 then a hundred. And I ran out of money before I ran out of properties. And so as I'm trying to unwind the portfolio of these negative cash flowing or. Just carrying properties, they were going down in value so fast. I couldn't unwind the portfolio. I couldn't even service the debt. And so now I was just wanting to be worth nothing. So I had the experience of being a contractor, the girl that I thought I was going to be. That we had a very kind of long relationship during that time period, she broke up with me, three months, six months. And it was like the first real heartbreak of my life. And it was like an absolute crush, heartbreaking element. She felt bad for me seeing this pit of despair that I was going down. She told her new boyfriend. You should hire Jake to do the remodel on this project. He can do it as a contractor. I know he doesn't know our previous relationship, so I'm every day they would come by the house and look and do a walkthrough and he's, smacking her on the ass and giving her kisses and doing those other things. And it's the girl that I thought I was going to marry. There was breaking my heart every single day. And I am having emotional breakdowns. I have. People, my friends, my family, banks, I have negative net worth and I'm sitting there and I broken on that street corner and I'm sobbing and I'm crying and I want to be worth nothing. And so to me, that is so vivid to me that is what I recall. And that's when I'm telling people to look into due diligence into net lease and do things, other things that's that point in which I remember, I subsequently. Restarted and really built my foundation of my systems and my experiences from that standpoint, and I had to bounce around the bottom. I was 75, 80 pounds overweight. I was a terrible human because I was so myopically focused on money and gaining and becoming a millionaire. My brothers were like, I was an asshole. The reason that girl broke up with me was because of those elements of, I was. Bankrupt in every other aspect of my life already, and least importantly was the money aspect. And so when I give you that, and I give you that as an evidence to say, this is the way that I started systematically, having, making those mistakes rebuilding, there's a new. At the time that came out, that caused me to have a paradigm shift, to think about things differently. And that was Tim Ferriss's four hour work week. That was not just how to work four hours in a work week, but how to 10 X everything, how do you expand? And so then it created this element of I'm going to start building systems. And I say that, and I say systems, and I've said it multiple times because goals are fantastic for people that want one-time success. Systems are for those that want repeatable and predictable success. And so what happened is you default to the level of your system, your goal, you can white knuckle and you see this happen all the time. People want to lose 20 pounds, they go lose 20 pounds, and then they default back to their system and they put on 25 pounds. And so you, what you need to do is you need to retool the system in which your results of that system. And this is now added later. Of atomic habits from James clear was the by-product of the machine that you're building in the system that you're building results in what your goal is. The goal helps give you the definition of what you're aiming at, but you now have to develop a system around what you want your success. So I said, Hey, I want to be a millionaire. 30, but that was, I didn't build out any system that maintain that millionaire status and then was replicable and spit and scalable. And so I had to go learn some of those mistakes. Now from that don't lose money. That principle number one is I see some of the deals that people are doing because they have only experienced the last 10 years. And the market went down in oh nine and 10 and 11 and 12. And actually some of the best deals that I ever did. We're post this falling down and losing money. As I picked myself back up and I said, Hey, I'm going to put my big boy pants on. I'm going to get back in. And the quote that I put on the back of the book is the best time to buy is when there's blood in the streets. Even if the blood is your own. So meaning what it is that, that my own blood was the guts. The tears on the streets was I got back in and started buying real estate. I didn't know how I had to build new systems. I had to figure out, cause now I have no credit. I have shit for credit. I owe more money and some of them, and I had subsequently two properties go to foreclosure. So how do I buy properties? When I have a foreclosure on my record, how do I buy things with no money? How do I do these things? And. Created and the necessity was I had to develop systems to go through that allows me to scale my organization. And so when I see that. Oh, 9, 10, 11, 12. Those were the best deals because I had no competition. So when I think in lean to like in leaning into investing in a ho hospitality is I'm going to where there's not competition because really where the competition lies is just, who's willing to take a lower profit margin. And then your margin of safety has reduced and re you know, trimmed down to nothing. So then when I see the people that have made wealth in the last. 10 years they've only stand a market. That's gone up and up and up and up and up and subsequently. So I'm like, I feel a little bit like Robert Kiyosaki saying, be where a young man. And here's some of the things that I'm seeing. If you're signing on personal guaranteed debt for a net lease deal that could wipe out 100% of everything you've built up to this point. It's not. Understanding, what is the downside risk? What is risk to you? You may be like, I'm putting all my chips in I'm. Okay. Going bankrupt. And I'm okay. Trying to two X this, but the alternative is or 10 X or whatever your number is. I'm okay. Losing. If that's fine with you, you understand it, then go, do you. And there's some things that I can give you advice on through things like a net lease checklist that helps you protect your downside. So that's what I wanted to take off of. There's. There's a whole lot of other things that I can spew on for quite a while. Especially related to real estate

brian:

hit that soundboard. Jake hit that soundboard. Whew, man. What a story? What a story? Let's take a pause. Let's take a pause there, man, because there's a lot of value there. There's a lot of grit. There's a lot of, there's a lot of forced appreciation there, to use a real estate term and. We can talk here in a second about triple net leases. We can talk here and about thinking about what to look for, what markets look for, why we even do anything that we do here, but more importantly, let's talk about the two different men here. Let's talk about the Jake Harris that got his ass kicked was on the pavement, was watching. Guy worked at night. God, man, that what a story. Cause I just instantly thought about that and I was just like, I couldn't fathom that. So talk about the transition from that guy at the bottom of the world and pulling yourself back up brick by brick. Let's talk about the mental process here, because I think that's more valuable and you have more to offer there or just as much as you do with the investment.

jake:

Even to the name of your podcast action I sat down there and I just needed to create action. And first I had a very introspective time cause obviously, I lost this money and, as sick and tired and, stressed out money, stress is real stress, but also

brian:

like you can feel it everywhere.

jake:

You can feel it. It's a real thing. Heartbreak is real, loneliness is real. And I actually remember, so my brothers had lived with me, helped me work, did construction. We're fixing up these houses, doing the things. They moved back to California. I was living in Arizona. The, we broke up, I was reading Tim Ferriss's book and in actually I was so hard up for money. I wasn't even buying the book. I would just walk over to the bookstore young guys. Like you may not know, but there was actually bookstores. I don't even know how to read Jake. I was like, they used to have books and I would walk to the bookstore and I'd read the book and the law. Close it, put it back, walk home, come back, walk the next. And so really what it was is figuring out some of the things that I do. What did I like? What did I do? And looking back at those things, then what did I not do? Why where'd the wheels come off? And, really, I attributed it to being lazy is the vast majority of 80, 90% of my, failures was being lazy. And so I translate that as you need to go do the work you need to do hard things. Oftentimes they're, you're going to be. Suffering at the beginning or suffering at the end, so you can suffer the, working out in the gym and doing the pushups and lifting the weights, or you can suffer the consequences of being overweight, unhealthy and experiencing life. Eating too much food. So each one's hard. And so some of that, and it's been a journey and it's been a many year journey and I have not perfected this and I'm still on this path and I'm still trying to discover and learning lessons. And I think transitioning to a learner's mindset, that growth mindset of understanding is that I can figure out how to do anything. And so then it was systematic and where. Focusing on. Okay. Like how do I start losing weight? And then I, and I struggled, I dropped down some weight, then I got back up and then struggled and up and down until I had developed a system that worked well for me. And so for me, I work out every single day and I have for two and a half years. Every single day David Goggins and that stuff, I tore a calf muscle. I was sick. I got COVID did it doesn't matter. I work out every day. So to me and who I am is I'm very stubborn. I am very persistent. And so then it's like, how do I design a system for who I am while I can use my own stubbornness, my emo modus operandi to create a system that I will work out every day, come hell or high.

Flight at 3:

00 AM.

Get up at 2:

00 AM. Whatever it is. Like I can just figure out how I can work because that's who I am. And so then what happens is understanding who you are, how you operate, what fires you up, what excites you is using. Usually the first step of that process is so that you can start defining and start layering and building the machine and the system that is going to then enhance. More of what your are. And so again, I don't think it's about doing more of the things that you suck at, but enhancing more of the things that you're good at and then create systems or people or system and your employees and then that, and then you layer in leverage. And so now you have an understanding of who you are. You have a machine of what you're trying to get from an output from your goals and what you think, and then you use. And I say leverage and most people think of a mortgage or I'm leveraging this, but I go leverage in every single aspect of life, leverage of other people's wisdom. For instance, my book, somebody's book is I think one of the greatest ways in which people can leverage 10 or 20 years worth of someone's experiences, they're condensing it down into a three, four hour version a. Their knowledge. And sometimes a biography is on lifetime of knowledge, into experiences into a book. And a few hours of time, this podcast is fantastic, but this is still also high level videos are high level. And we've gone to a society where we want tweets and snippets and little. Yeah. And so it's no, go to the things that actually have the highest return on leverage. And I think. Building the system of like health and obviously the pillars of GoBundance and, having all of these other aspects, money is important, but it's only maybe one fifth of your life. It is the fuel in which allows your machine to run. And so what happens is men in general because they go in the workforce and they get into corporate America and they get on this hedonic treadmill of making more money and like, when's enough money enough. There is no money. That is enough because there's an endless pursuit and there's vapid newness. And because. Nothing. It doesn't mean it's fake. It is, and so as long as you focus on that, but when you look at this as the fuel that drives the machine, that allows me time to be healthy. That allows me to be a good husband. That allows me to be a good father that allows me to spend and do bucket list, adventures that, to give back to other people. And I really look at this as those Maslow's hierarchy of needs is you have to start evolving up to beyond getting fed. Paying the light bills, getting your, necessity. And it came up to in the top level of Maslow's as a self-actualization is you start pinging into this level of self-actualization we, or at least I, or others that are associated, oftentimes need to validate ourselves. That millionaire status or New York times bestseller or something else like that gives us permission to get up to that top little element, because then you're not playing other people's game. You're now starting to play your own game. And then I actually believe that there should be a, another level above Maslow's hierarchy of needs because there, and really when you get to that, self-actualization, there's oftentimes these are people that are successful in. But they're unfulfilled or they're unhappy. And I know lots of rich people that are unhappy, they think they're going to make money is they're going to be happy. This is a little bit of stoicism and other things is life is an uphill journey, but there is a way to be happy. And there is a way that has unlimited amounts of happiness and what it is your. Purpose, your reason that you are put on this planet, I believe in the higher power and that God has individually selected and put us into a special gifts and talents and purpose when you're using your purpose in the service of others is an unlimited amount of happiness. And. And so instead of just self-actualization it's you understand now what your purpose is on life, and it's not about making more money within your purpose, but it's about serving other people. And when you can take that and you are pouring in and you can see it on people giving back money and you can see it when they're serving and helping others. And if it is in building things and you're doing habitat for humanity or helping, and you're paying it out to people that can't ever pay you back. You feel more excited, more energized, more powerful, and really like it is. Is it a transference of energy? Is that you had to get past some of those levels of self actualization. Getting fed, paying the bills, getting to those other things that then you understand what is your purpose and your self-actualization now serving other people. And when you do that, you've unlocked the next level. And so when I look at that, as I'm aspiring to get to those things, because, and I don't think once you become there, you're immediately and always up in that space. It is because life wants to pull you back down that wants to pull you back down. And I think there is. An element for me is Napoleon hill wrote a book called outwitting. The devil was another one of those books that dislike unlocked. Some of the things was everything is both positive and negative. You can look at Dan Sullivan and Ben Hardy's the gap in the gap, the same kind of these elements that everything in life is both positive. And now. It co-exists there's duality of life that gone on in devil. It just depends on the lens and the frame in which you're looking into it, that gap and the gain you look, I tried to get 20. I actually only got 18 shit. I suck. I'm missing two. If you look at it the other way, I got 18 and I started at zero. So again, everything has both positive and negative, and I've been accused of being annoyingly optimistic. And I go, I would rather be annoyingly optimistic than, pessimistic and looking at the negative ever, everything in society. And so I also believe that I'm a little bit unreasonable and I also do the George Bernard Shaw quote. All you know, the reasonable man adapts to the world, the unreasonable man expects the world to adapt to him. Therefore, all progress is given by the unreasonable man. So I like, I just expect that this is how things are going to work out because I'm being unreasonable from those aspirations. And then the reality is that everything. Is a construct of imagination, everything, the physical environment that we're sitting in right now, the building that you're sitting in, someone imagined it, it came out of their imagination and it might've been five years ago, 10 years ago, a hundred years ago, but somebody stood there and they looked at that and they say, do you know what? That needs to be a building? That needs to be, and it should be like this and it should be like that. And then they got other people involved and then there was an architect and a builder and an engineer and some bankers and some other people, and they vibed in on that vision and that energy together. And then they created it and manifest it into a physical reality. And so what happens is everything in the construct of this world is a construct of imagining. And I went through a lot of things. And what does that journey? And so to peel it back is number one, figuring out who your. What you want, what you, what fires you up? What energizes, then there's an exercise that I do or ask people. What are the things that you do that you wouldn't get paid for, or just energize you after you're done? You're like, I'm amped. I'm ready. You need to lean into more of those things, the business around that. Then secondarily as you start building a business or systems around that, that, Hey, I want to be able to produce more of this, to do more of those things, then start layering in and putting level. Into that, because what you're going to do is you're gonna need to do it bigger. You're going to need to do it so that you can pay the bills and you can get and free up your time. And then once you do that and you understand what your purpose is, and you have layered in leverage. Now you have this permission to do in the purpose, and then you graduate beyond. That validation of yourself to then serving others and a greater purpose. And so that's a little bit of my journey of how I've started systematically working towards that. Again, this is an ongoing journey of a process. There's many things that I've looked at and pulled out and strings and people that are wiser and smarter than me books that I've read. And I. Read books consume them because what they're going to do is they're going to change the way that you see the world. And then what happens is the frame and the lens and the vision of the world. You can then create and manifest your own reality to what is to your benefit,

brian:

Jake, I forgot to press record, man. Can we start over again?

jake:

Sure. Let's do it fired up. Whew,

brian:

dear God drink some water, man. You deserve it.

jake:

Good. Marty. I'm heavily caffeinated at all times. Don't worry. God,

brian:

man. So many things to piggyback off of there and For everyone, listen to it. And that's why you invest triple net leases. Now we are going to have a completely, we're going to have a completely separate podcast. Now you and I have to get on a, either later this week or next week and just do a part one part two, I'm all for it. I don't think anybody's going to have any hesitation there. And I love this man, because I hear you on so many shows and it's you're talking. And I love whenever I can get y'all on here and just get you to open up the kimono and just really that car man. That's the value. That's the juice and a couple of things you said there that I really liked in your framework that you provided at the end, that's the same phrasing that I have. So I have the framework that I came up with personally, which this helps me reinforce what what I was thinking and help. Put some teeth to it is you have your foundation, your frame, and then your freedom tower is what I call it. So it's you're building a skyscraper. Your foundation is going to be all of the grunt work. You're getting your cash flow. You're doing the unsexy stuff. You're buying the single family homes. You're getting some baseline financial houses in order. Then you have your frame. Your frame is operating in your zone of genius. You're going from passive income to passionate income and you're operating and building a business around what you really fricking the joy. And then bring people in there and then the people and the leverage all serves the frame. And then the tower is built off the foundation and the frame together, because now you have this rock solid base, and now you can just shoot up into the sky with all your people, you and I talk to Jason, Drees a lot within GoBundance and our mindset micro tribe. And we talk about frame and it's very interesting that all of this happened to you. So you. Your original goal, and I get so much value from what you're saying, because it's I'm there too. So it's cool. And this is the value of GoBundance right? Is you get to in this podcast, you get to forecast out into the future and be like, okay, cool. It's like a climbing Mount Everest, and you're just doing it blind and you're getting up close to the top and there's a death zone. The guys coming back down from the top and he's like, yo, do not go there. Don't do it. Watch out. So that's so cool. But he talks about frame a lot, and you hit your goal of hidden million before 30, but your frame wasn't that of a millionaire yet. You didn't have your systems in place. I feel like you accomplished a goal, but you didn't become the person that you needed to become for that to be sustainable. Is that what you were getting.

jake:

Yeah. A little bit as far as, so it was, I stopped. I took your foot, my goal. Yeah. I hit my goal and I didn't expand. I didn't go for more. And and that's another big thing that I see. And so many people is, and really it's what I experienced and maybe that's why I can see it in so many other people now is a disillusioned. That there's a finish line. A and so really when you hear about this is people think that there's a downhill side, you climb Mount Everest, and then you get to come down and it's the easy you get to 65 and then you retire and life was easy. You hit a millionaire status and then it's easy. So the reality is it's all uphill your entire life. There is no peak. There is no top. There is no, and for me, what I established and I thought being a millionaire and the reality was. That was nothing it's insignificant. It means nothing because money is fake and obviously in an inflationary environment right now, you might need to be a millionaire to buy a mic, big Mac in a couple of months. But the reality is that was just some arbitrarily selected number that created look I've made it significant. Yeah. And so what it was is I was not in the understanding of. The framework of this is an all uphill journey. There is no easy path. There is no easy way. And so when I look at this and when I say, Hey, I plan on, doing real estate for the next hundred years. With an option to renew and actually mark Victor Hansen called me out on that recently that I said, I plan on doing this for another hundred years. And he said you need, he's oh, just a hundred more years. Like what if you decide you want more beyond that? Now I was like, fair enough. I rarely have people tell me to think bigger, but that makes a lot of sense and let's think bigger with an option to renew. And I see so many people arbitrarily assign what they believe it will be easy, then it will never be easy. And really your problems just get bigger or different. Your problem of managing millions of dollars is different than when you're trying to figure out how to eat food and what you're going to pay for your rent or your mortgage payment. It's a different problem. Money problems are real problems. They're bigger problems and you graduate. And I think about this as like a video game, a Ryan holiday's books on stoicism obstacle is the way, as so much that he is you're going up a level you're on level one. And then you go to level two and level three and level five. And you're stuck on level five until you get. Experience and understanding to go to level six sometimes and say that there's an endless mountain and people go up to halfway up the mountain and then they stay on level and then they go live the same year. And stay at level 35, cause they're 35 years old for the next 10 years. And so they go, look, I have 10 years experience and be like, no, you have 10 years at level 35. You didn't graduate to go 36 or 37 or 38. They thought when I got to that, I was going to just be good at that. And the understanding of, to, to me, that framework. I've just understanding was, oh, this is actually different. And it took me a little bit of, there is no peak. There is no fault. And so really it's like wins. When you learn. Yeah. And so it's like, when do you learn that when you give enough, when do you, and so really what it is. And I love that what add my lat said, at one point he's like, when I, go get to heaven and Saint Peter at the pearly gate is, and he has a an analogy he uses is, or a metaphor of I think there's going to be the version that I could have been had. I lived up to my full. Done all the things that I knew I could do. And he's what happens is when I get to heaven, I want that to be my mirror image. I want to be living to my full capacity of what I was capable and the gifts and the talents that I was given that I played full out. And really what it is that when I look at that into me, I had this. And I know we're running close on time, but I want to tell you this one thing, when I found out that my wife had told me that she was pregnant and I sat down and I'll, I've seen the movie limitless we're he takes, so yeah, it takes the NZD pill and sees like it fires off all the brains and all the possibilities of the scenario. And, all the probabilities I had, one of those modes. And really part of this is that the why I believe there's this other energy realm or spirituality or something that's above and beyond us is I sat there and I saw my life played out and I was disappointed in myself because now this is what I was going to show to my future kid as a father. This is what I. Going to show to them. I can go make half a million bucks a year, flipping some houses, doing some things, pretty cushy existence, but it was like, no, I know I have something bigger in me. I was given some other things that I have to go pursue. And so to me, it was that it's time to get real. It's time to go put the big boy pants on it's time to go, because guess what? It's not about. It's about these kids. It's about the ripple effects of. Or at the time kid, I have multiple kids now, but it was like, this is beyond myself. And so it is not about trying to live a comfortable life. It is about the magnitude in which, and so those limitations are that limitless kind of moment where I sat down was like, I just need to do more. Do more of everything. I need to love more. I need to work more. I need to learn more. I need to work harder. I need to do, I need to sleep more. I need to do everything. Everything more because of the effects of what this is going to do is I'm going to give them permission to live to their full potential. And then I add, my lat says is, what's in you. What is it that your talents are again, back to the, who are you? Who you are, you. Sits down and you're laying in bed. And even though your wife is right next to your kids over there, it's still you between the six inches between your ears. You're the one, having those conversations, you know who you are now, just be bold enough to put that out there and start creating those systems, creating those things to live full out. And really, I don't believe it is evil for a. No, don't be Hitler. Don't be like your full out not as Germany, let's not do those things, but honestly, I think it is in alignment with the service of. Not the downfall of, the, she was in, in in Germany. I would just

brian:

make that the intro to the podcast. It's just going to be out of all the sound. So we have, I'm just going to make it. Hey don't be Hitler. Do not be hill. Welcome to the action academy podcast, everyone. Oh, it

jake:

was terrible, but he took.

brian:

Oh, my God. Okay. So for everyone listening, Jake, we'll be back on and we will go over the business side, but we just delivered 30,000 times more value, I think, than the business side. And thank you. Being vulnerable. And thank you for allowing us to have that journey with you and go down that rabbit hole with you, man. That was greatly appreciated. And my last question first is where can people find you,

jake:

Catch knives.com knives, plural Or at Jake dot real estate on Instagram, that's where I'm most active. My team post out stuff on LinkedIn and YouTube, just Jake Harris real estate is where you can typically find that if you just Google that in or YouTube, it pulls up a lot of those video contents. But catch knives is where you can get access to newsletter or courses that we teach on some of the net lease things. And then obviously that gets into kind of our mailing list. So if we have deals that we're sharing out to other people that's select and limited, but that's the way you can ultimately connect up through there.

brian:

And for people listening I know a lot of you are accredited, obviously hop onto the list. The deals are created through the operator, not the deal. You always go for the company, you invest in the company because of the leader, not the process. Go do it. And we will go into catching knives and we will go into all the triple net lease and the hospitality industry here in the next episode. But last question, as I'm ignoring this call right now, and I know that you're about to hop on, but I really want to ask you this question is what is one thing in your life or business that you are very proud of that most people don't know about? You.

jake:

That I'm most proud of that most people don't know about me. I feel like a lot of people don't know very much about me. So because that's part of what I put out there, I'm selective with how much I share out in media. And that's, this is a recent new phenomenon in the last six months, a year, sharing more of these things and stories out there. So that's a fantastic question. What I'm probably most proud of is actually, so do you know Jim shields? So the 18 summers as I started putting together the family board meetings. And so what we do is we have meetings with each one of the kids and my wife, and we have their day that they get to spend time. And as from a system, it sounds clunky or cliche that I have to put on a calendar to spend the day with my kids or spend it with my wife, but it gets done and it creates the. Memories and these milestone kind of keystones of us doing stuff together. And so I love the, those time periods and they excite me and I look forward to them. And then, we do that with an international trip every year with my family. It's difficult when you have a nine month old or young kids, but reality is doing those hard things and traveling, it creates such amazing memories that when I look back of what. You made money and had success and had money and lost money. The memories still exist through all of that time. And the seeing the world and traveling or creating those memories of those family board meetings together is what I'm most proud of. That time.

brian:

Love it, brother. I love it. So I will go ahead and send you another link and we will get on for talking business, but I we'll have a part one part two. So I don't know what to, I don't know what to label this. But it's going to be something good and it's going to be something that we have to send to everybody. So brother preciate, you muddy. Thank you. Thank you for being you, man. This has been Brian Lubin and Jake catching knives, catching feelings, catching philosophies, Harris signing off.