Today, my guest is Frank Furman. Frank is the co founder and chief growth officer at Pad Split, a real estate technology company headquartered in Atlanta, Georgia. Landlords list their properties on pad splits marketplace and are connected with workforce renters. In a shared housing room rental model. Landlords earn 120 229%, higher net operating income on average, versus traditional single family rental model, while working members of our community have a more affordable place to live.
J. Darrin Gross
Frank Furman. What is the biggest risk?
Yeah, I feel like I've been talking about risk the whole time. Maybe I shouldn't put on a sunnier face to start. But yeah, it's a great question. It's, it's funny ask because I oftentimes get asked about insurance, that tends to be a smaller challenge for passport houses, because ultimately, it's a rental property, the big risks and insurance that, you know, your kind of homeowner's policy or, you know, kind of landlord policy would cover are the same, you know, risk of a tornado is the same risk of tornado, you know, we, we can be blamed for many things, but typically not for controlling weather. So, you know, that tends to be relatively straightforward. To me, the biggest risk to our business kind of gets to your point, certainly about zoning, but it's, I'd say less is a distinct zoning question and more. But certainly one around like kind of government involvement and prohibition. I mean, it's it's, I guess, you could broadly call it the the NIMBY movement, being weaponized and certainly you've seen it with, with other startups, certainly in the space and an Airbnb is a great example, where, you know, Airbnb, their core offering of letting people rent out their properties was essentially legal everywhere in the United States 10 years ago, you know, there there may be some small exceptions and you know, we can have the debate about you know, whether or not they should have been paying hotel tax in this map, but generally, it was just kind of off the books. No one even thought it was that strange If in 2005, you said, Hey, I'm going to run out, you know, I'm going to leave my house for a week, and I'm going to have someone pay me for the, you know, to live there for a week, no one would say do you would have no issue at all. Now, obviously, they, you know, they grew, they got a ton of coverage. And, you know, they're they're issues that people use party houses and you know, a bunch of guys come into a residential neighborhood to go to a, you know, for a big football game, and they are throwing a kegger and neighbors are mad. You know, I get it. I also live in a quiet neighborhood. I have kids, you know, I like I, we all have a little bit of the the nimbyism in us, right, especially on, you know, work nights and that kind of thing. So, so I get it. They also, of course, have a very powerful competitor and kind of hotel companies and so on let's consolidate and well resorts. So there's, there's a little bit of that, too. So, you know, fast forward to 2021, and many municipalities have either straight prohibitions that are new, you know, they've been legislated into existence, or pretty onerous requirements on Airbnb, and in some cases aren't actually been easy for them to answer, right. Because one of the unfortunate things about our kind of the way the politicians think about these things is like, they think Airbnb is operating all these units when clearly they're not, you know, they're, it's a marketplace house or operating a unit. So Airbnb doesn't know what's going on, or doesn't check the maintenance or, you know, whatever. That would be almost impossible for them to do. So. Okay, fine. But they've, they've obviously faced a lot of headwinds, but they were able to get big enough and secure enough that they could kind of attack them head on for us. You know, I anticipate some of the same sort of challenges. We, you know, we're in the workforce housing business. And, you know, everyone loves workforce housing, except in their street, you know, except in their neighborhood, except in their town, you know, they want they want it to be somewhere, you know, they want to get their Starbucks coffee at the you know, for cheap, but, you know, they don't they don't want to house the barista, so, okay, fine, we're gonna face some of the same headwinds, but can we get to a size and scale quickly enough, fast enough, become accepted enough to where you're, you know, not necessarily too big to fail, but where you can face those challenges head on, and where the, you know, the disruption of blocking things as at least as much as, you know, the disruption that you're causing, because, you know, real estate and renting, you know, that's it's not always an easy business, you know, we have challenges, you know, as I like to say, our, our residents are cut from the crooked timber, that is humanity, you know, and they, they sometimes fall short of what they'd like to do, you know, predominant good people, but sometimes they can only Park like jerks, you know, sometimes they, you know, cause trouble. You know, that's, that's just the reality of it. When you have a couple 1000 these people, it's inevitable. So can we get big enough, fast enough and really create enough value in the marketplace that, look, the hadn't there, headwinds are coming. You know, that's, that's inevitable, but we can face them with kind of a worthy challenge. And when communities say, Hey, you know, we don't actually like workforce housing in this town, we'd say, Okay, well, we're already here. So, you know, what's next? Do we need to tell you where they are? Do we need to, you know, this or that? How do we conform and meet it? But have it not be such an onerous? You know, have it have to have the scale to where we can meet it?
Today, my guest is Anton Mattli. Anton is the CEO at Peak Financing, where he brings his decades of experience in commercial and investment banking, private equity and commercial real estate. And in just a minute, we're gonna speak with Anton about commercial debt financing, the changes terms and the challenges we're currently facing in this market.
J. Darrin Gross:
I'd like to ask you, Anton, Maddy, what is the biggest risk?
Yeah. Obviously, as you mentioned, risk is everywhere. A lot of risks that can be mitigated at least right and Insurance obviously is a is a is a perfect tool for that some risks cannot be mitigated and they it brings me back to the financing side and forever on investments, as well as for our our clients. I would say the biggest risk is really that when you own a property, that you potentially lose that property, even though it cash flows. And this is we have seen it in 2008 and 2009. And oh, we get back to that time period. But doing market disruptions, you will have a situation potentially, there you may not get financing, as it will be available today. And if you get financing, it might be at at terms that your noi and cash flow cannot support. And this is my view is really the biggest risks that one is, is owning a property and one is in a in a financing situation, and is not ready for for that black swan event, during which one potentially would have to refinance or sell the property. So my solutions recommendation really is for that is is make sure that you have lower leverage, or a longer term of the loan, so that you're not caught off needing to sell the property, or refi the property the loan that is in place doing such a black swan event, which essentially means is that one should always have at least one year, ideally two years of a remaining term on the long left. To avoid such a black swan event, right, when we look back to 2000 de 2009, if you had to refinance a property right during diverse period of time, it was not available for for for a lot of the borrowers. However, if one was able to wait it out for another year to two years financing came back and didn't lose the property. And that is I would say is probably my my biggest fear of from a risk perspective, but also something that can be resolved by just keeping the term of the loan locked out for long enough, so that won't get snow caught in the middle of such a black swan event.
Today my guest is Barry Greenfield. Barry Greenfields local works since 2011, has a new take on co working spaces, which means a win win for those with empty offices and leases on their hands, or for small businesses leaving big leases, or for empty law firms. And in just a minute, we're gonna speak with Barry about local works and how that works.
J. Darrin Gross
I'd like to ask you very Greenfield, what is the biggest
For Local Works, the biggest risk we have going forward is not growing quickly enough, there's a huge market out there that we've already proven, exists and can be profitable. And in order to scale at the pace, we need to scale add, probably require some form of investment, you know, we're adding, we're trying to add three or four locations every two months. But in reality, to get to where we want to be in terms of a real hyper growth company, we probably need to be adding five or six locations a month. And part of the problem is, we spend so much time making sure each location is successful. And that requires a lot of manpower and a lot of focus. So we've turned down opportunities that we probably should be taken. And if local works is going to grow to compete with these other large companies that are in the press all the time. We need to start taking not turning away that business and find a way to fund a larger team that can handle you know, growing to 250 to 500 locations. So it's nicely a risk to the company failing, it's just a risk to the company being even more successful.
Today, my guest is Chris Craddock. Chris is the nationally certified life coach in leadership and one of the top real estate professionals in the world, closing in 30 to 65 deals a month. Chris is the host of the uncommon real estate podcast, a real honor and an entrepreneur. And in just a minute, we're going to speak with Chris about how to turn dead leads into explosive into an explosive revenue stream without increasing marketing cost, and completely eliminate the need for expensive marketing channels.
J. Darrin Gross
I'd like to ask you, Chris Craddock, what is the biggest risk?
Yeah, I think the biggest risk is not having a great partner, and therefore, Sending on deals that you shouldn't have sent over, they get cannibalized where you could have gotten a deal on it. And the partner, is it somebody that's a trustworthy person of integrity that will send that that deal back to you. If, if you're off, you know, if you've sent it over to them. So that's, that's the deal. The second, you know, the second risk is very much like it, which is being so afraid to send over deals, because you're afraid of being cannibalized that you make no money on that front, too. So that to me, those are the two, the two biggest risks that you're gonna, you're gonna see.
Today, my guest is Mark Meyers. Mark is a former Marine Corps Sergeant brings over 20 years of successful business operation ownership and high level consulting experience to the table for his clients and financial advisors that he works with his company peak profit solutions and its affiliate partners have helped 1000s of individuals increase profit and permanently reduce their annual tax bill to help them grow or better grow their business and accelerate their wealth. And in just a few minutes, we're going to speak with Mark about how to reduce your active income tax bill without replacing your CPA or investment strategies. Also, we might talk a little bit about how to eliminate long term capital gains on the sale of appreciated assets.