Episode Transcript
[00:00:30] Speaker A: Welcome to Power. The truth behind the Business. I'm Jen Goday, your fearless host, entrepreneur, investor and business strategist. Why are we here? Because iron sharpens iron. And when we bring industry leaders, executives and entrepreneurs to share what's working in business and maybe even some of what's not, we all learn and grow. As a result. The ripple effect impacts not only ourselves, our teams and their families, but also our communities and our world. You're in for a treat. Today we are going to talk about building a four purpose business, making an impact while scaling. How can entrepreneurs drive profit and impact? With our special guest, Kathy DeMarcos. She is a force of nature, proving that business and social impact don't have to be separate. As founder of Solutions2U, she's built a certified social enterprise that reinvests 50, 50% of its earnings into global initiatives. She's a complete rock star. Welcome to the show, Kathy.
[00:01:30] Speaker B: Hi, Jen. Lovely to actually be here. Thank you.
[00:01:34] Speaker A: Kathy, I'm so excited to have you here because we in the past have talked about adding social initiatives, adding charitable giving into our products and services, but you've structured your business as a social enterprise. It's a model that a lot of entrepreneurs are hesitant to adopt because of the perceived risk. What inspired you to take this approach and what would you say to business owners who fear integrating this social component will limit their profitability?
[00:02:03] Speaker B: Oh, gosh. Do you know, I think when I actually started this particular company, because I've been setting up businesses since 1997, there was a particular incident that actually occurred and it was around ethics and integrity and I was actually scaling a business, a multinational.
And I sat back and thought, what is business really about? And for me it was the realization of it's about people, it's about making a difference in the world. And so it was ensuring that how could I actually do this and show people that it's possible, say if I start from scratch and actually have that intention in mind, what will happen? And I'm very much a believer of you need to actually do things first before you start talking about.
Right. Whereas lots of people say I'm going to.
So when you actually set out with that sort of intention, you are really specific about what is it that I'm going to do, what does it look like, how will it actually impact those around me? And it's about that communication piece. So everybody that's involved with you understands that that's what we're actually working towards. Which then means that who you start to do business with shifts because Their mind shifts to actually align with yours.
So as you are starting up a business, of course the priority is actually survival.
But for me, it wasn't just survival. For me, it was actually survival for whom I'm actually there to serve. And again, that shift actually changes everything.
So you have to understand your finances first. There is no, you know, way around that.
Financial literacy has got to be at the core of what you do, but it doesn't drive what you do, right?
[00:04:07] Speaker A: Yep. But, you know, most entrepreneurs struggle with knowing their finances anyway. Like, for some reason, entrepreneurs love everything about the vision, the purpose, the products, the services, and they want to kind of ignore the financials. Like, it's like the little thing in the corner that I don't want to pay attention to. So I love that you said that. But talk to me especially about the practical steps. Once we know our finances, whether we're a startup or we're scaling to embed that social responsibility into ops, you know.
[00:04:39] Speaker B: It comes back to transparency. The minute you actually make a decision to actually be transparent about what it is that you're doing, you know, that then means that you are accountable and that you actually become that showpiece for others.
It's when you actually hide, you know, just like what you just shared. Most people actually avoid the finance part. You know, if I don't know, then it's okay. But that's actually the worst thing that you could possibly do for yourself. So saying what it is that you're going to do, then actually finding the means to do it, you know, that's the important piece. If you do not understand your finances, you can't possibly then actually create an environment, a space, a vision that actually aligns with your purpose, that then actually allows you to facilitate the outcome. Right. So it's bringing it all together.
I always look at, you know, what is the bare minimum If I actually am starting up a business, of course I actually need to do, you know, that replacement piece. So if I was an employee, what was I actually earning? You've got to at least aim for that. Right?
[00:05:49] Speaker A: Right.
[00:05:50] Speaker B: So, again, being really clear about what do I need, what am I working towards? So if, say, for example, you need to be earning, let's say, 5,000amonth, that then means that you have to allow for 5,000 plus your taxes and then double it, which then gives you a really different purpose in the way that you're actually operating and what you think you need to be earning and doing.
But then the clarity comes from, what are you going to do with that additional 5,000 that you're going to pay forward. How is that then going to make a greater impact in the world? Understanding that piece and what you need to facilitate then enables you to bring everything together. And once you start down that trip, there's no coming back because you change lives of people, thousands, just by actually understanding that pace. Right?
[00:06:47] Speaker A: Yep, yep. You know, and, and I think about like this shift, at least here, the younger and workforce, if you want an engaged workforce, you want your team to be engaged, you want to attract the best talents, especially the younger generation wants to know that they have a greater purpose that they're working for. So as entrepreneurs, whether we're starting up or we're looking at scale, we have to consider what is the social impact or environmental impact. We have to have some sort of an impact thought process because that's how we attract top talent. Right now what we're seeing, at least here in the States, is that, you know, people will take a lower salary to work for a company that they believe in the same values. And you know, I'm going to, I'm going to use an example like my daughter's in her late 20s and so she thinks about, well, what is the impact here? Like how are we helping other people before she thinks about even the profitability? And so how are we going to have that impact both from our business products and services and from our social impact? And it just is something that we can't ignore anymore if we're looking at being successful in business. Can you share a real world example of a business that you worked with successfully, that integrated this purpose into its model and maybe share kind of what that looked like from a scalability? Because a lot of times when we have giving initiatives, people will opt in that maybe were not going to shop with us before or our products. But talk about like the successful integration of purpose and the impact that it created.
[00:08:27] Speaker B: I'll give an example of a couple of situations. One is that I actually work with a business that particularly works with taking youth off the streets. Now most businesses in that line of work, they think about it purely from I have a job to do. And that's all that they do when I first started working with them.
You know, first of all, it's a difficult job because most of those kids that are actually on the street are troubled because they've lived some challenging experiences. And so they're not necessarily going to be open to strangers actually, you know, attempting to work with them.
So the traditional model is let me just do what I need to do. Get them off the streets, tick a box, and I facilitate what I need to do.
But what they have actually done is they will actually take them off the streets and create an entire ecosystem around them so they have people with them 24, 7 in an environment that is like an actual home. The homes are set up like you and I would actually have a home. The actual modeling of perhaps what parents actually do are created as part of it. Everything is thought through with the premise of I'm not thinking about my bottom line, but I'm actually thinking about how much I can actually invest to create that environment for those youth that perhaps have not actually had the family life that other kids have experienced. So they take their profit and actually put it back in to create the ecosystem by putting in more people to actually have, you know, the, the aunt, the uncle, the cousin, you know, in that environment and actually build all of those things that, you know, families have, which is boundaries, you know, respect, you need to contribute. So they have to contribute as well.
That model actually has not only people wanting to work for them, you know, they're prepared to actually go through some of the most challenging situations to still actually work for them. Governments are now recognizing that, oh, this is a model that actually works because we are having less of the, you know, the youth go back to reoffend or repeat the patterns and go back on the street.
That business has grown exponentially, you know, so from a six staff business to turning over a couple of hundred thousand, to turning over millions of dollars within two years and over 200 staff, that growth is because it's driven from the heart.
[00:11:32] Speaker A: Absolutely. You know, for purpose business is definitely a trend that is moving forward and it's engaging the younger population, especially from a workforce standpoint. And not only that, we want to, we want to have an impact. Most of us especially. What I find is a lot of people, it's once they find their financial security, then they start looking at this. But really for, for many, and especially the younger generation, it's how can I find my financial security while I'm having this impact? So for the entrepreneurs watching, if you want to start aligning your business with impact today, you just got a roadmap. Find what that purpose is, find how you're going to incorporate that and reach out. You can reach out to Kathy. We will be back after these messages with a little bit more. And Kathy, I'd love to dive in. So be thinking about it. What's the first action that people can take to really create that for purpose business? We'll be right back after these messages.
For purpose business, that is the topic of today. How can we engage our businesses and add that social impact aspect to it? We are here with Kathy DeMarcos talking about exactly that. Kathy, for those who are watching, I know the question what is the first action to take? If I have a for profit business and I want to add this level of social impact, what is the first thing that I should be doing today?
[00:13:32] Speaker B: Well, I think the first thing is actually really having a distilled, you know, clarity around what is it that you're going to actually do, what is it that you stand for? You know, for me at the end of it is enabling people to be self reliant and then actually understanding what that means and every level, you know, what that means for people in remote areas, what that means for our future generation, what that means in how I will specifically actually bridge the gap, you know, on the ground within my own community. All of those things need to be really clear. And I'll tell you why I have people actually reach out to me that don't know me but actually understand the reason why I do what I do as in the business say to me, how can I work with you? And that means they are not actually wanting to work with me to be paid, they actually want to work with me to contribute. Now this is the future that we actually talked about earlier. Sometimes people are prepared to take a pay cut to actually work for a company that genuinely is doing something for good. So I have people say to me, how can I work for you for free? I want to understand, I want to be part of that bigger picture. I want to know that I'm contributing. So when people know what you stand for, when people can see that you are genuinely doing what you say that you're doing, they want to be part of it. That creates an enormous ripple effect.
[00:15:11] Speaker A: Absolutely. And you know, let's talk a little bit about that.
The ripple effect is huge. The global impact is huge. The one life that we changes touches so many others. But let's talk about leadership, but beyond the bottom line because as we take these initiatives, as we bring this social impact in, we can't look at the traditional metrics. The traditional metrics are all financial in bottom line focused. But if we're now going to lead a company that has that social impact, we have to have metrics along with that. So what does this look like for us as entrepreneurs and as executives? How do we lead a business that creates real change?
[00:15:55] Speaker B: When people are actually working in any environment and they're enjoying it. Their productivity actually level increases. And there's a lot of statistics around. Right. That within itself then allows us to understand that we can actually allow the time that we anticipated would take, you know, to do a particular thing to paying it forward when you were doing something with your hands, grassroots, that actual impact multiplies exponentially.
I was actually just recently running a project in Tanzania. I run leadership programs in fact for youth that actually embed social impact, that actually embeds entrepreneurship, you know, in amongst negotiating and all these other things. But the one thing that I said to them was the time that I have spent with you, what I want you to commit to is actually doing that for 10 other people. What you have actually learned has been enormous. I have seen you share, I have seen who you have become.
Will you give me that undertaking that you will do that for at least 10 other people? And these youth, honestly, they got up and actually spoke to, you know, their other peers. That was another 400 students that turned up. And all of them actually spoke with such confidence. And yet they were, you know, these kids had actually come from impoverished communities.
So that's what ultimately happens.
You know, our voice becomes our commitment, becomes our action.
That's what happens in business.
[00:17:35] Speaker A: And how as leaders, do we have metrics for that? We have teams that want to be a part of this. We have teams that are getting on board with this. But do we set our metrics for the impact and trust that the bottom line will follow. How do we balance what we've learned traditionally in business with how we're shifting to this four purpose concept?
[00:17:56] Speaker B: You know, I think you're right in respect to it has always actually been the metrics on numbers.
Well, I'm going to say that numbers actually come as a result. But that aside, it is actually about your retention of staff. Think about how many more people stay, you know, because they are more engaged, because they feel that they are actually contributing. So you're actually reducing your training, you know, re and retraining of people because you're having to re employ people because they're not actually sticking. So all of those things are not usually measured. It always comes down to just the net profit. But when we actually bring all of that back into alignment to have a look, you know, why is it that people are actually now staying within the business but not just staying and being, you know, non engaging and non productive? Because that can happen too, but they are actually maintaining their level of engagement, you know, and we're actually still seeing the numbers Grow, then there's a lot to be said about that.
You have people turning up to work because they want to work, not because they have to work.
[00:19:08] Speaker A: Yeah, that's, it's a fantastic shift. And so now talk to me about the other side, because when we shift how we are approaching things and we shift to maybe a for purpose business and we have other employees or other team members that maybe have a little bit of resistance to this, how do you navigate the challenges of that resistance? What does that look like?
[00:19:35] Speaker B: It won't often be because we're actually, you know, focused on paying it forward. The resistance isn't because of that usually it's because they don't perhaps feel how they know that they can contribute. It might also be because they don't feel that they belong.
So taking the time to actually talk that through is usually going to enable them to find their place. You know, I am a big believer that as human beings we're actually about belonging to something that's bigger than us. And we don't often find what that is in life because we're stuck on that treadmill of the chase, you know, I'm chasing to actually survive. But when we find the small things that bring us joy, that then is how we can align ourselves to how do we actually bring that joy into a bigger purpose and actually bring other people on the journey with us.
I think that that's, it's the conversation piece, it's actually looking within.
[00:20:40] Speaker A: That's fantastic. So talk to me about one mindset shift. Every entrepreneur, every person watching this can make today to move from this.
If they're maybe in survival or their paycheck to paycheck day or they're in that space move from just making money to making a difference. What is that mindset shift?
[00:21:03] Speaker B: I think all of us at some stage have been affected by something.
So if we actually look at that within itself and say, what do I want to contribute to because I don't want somebody else to experience the same thing. That becomes the focal point of how you then become involved in being a contributor and paying things forward.
So you then find like minded people that then all of a sudden brings you into a new network, a new sense of belonging that shifts how you can just have a conversation with people.
That actual shift in dialogue in how I can actually contribute to something that has affected me, perhaps to make it different for somebody else takes away that thought of I need to survive and actually play that chase game of paycheck to paycheck.
[00:21:56] Speaker A: That's fantastic. Kathy. Your journey is proof that business success and impact go hand in hand. How can people learn more about your work and how to implement some of the principles that we've talked about today into their own businesses?
[00:22:09] Speaker B: My website, solutionstoyou.com au or through social media under my personal name or under the business name.
[00:22:18] Speaker A: And I'm going to ask you, because we're running towards the end of our segment, but what is the one thing, based off everything we've talked about for the past 30 minutes, what is the one thing that you would encourage the action you would encourage people watching to take today?
[00:22:38] Speaker B: Be comfortable in actually sharing what you're thinking you want to do. The second you actually put it out into the universe, it becomes your reality and you end up with a smile on your face like I do every single day.
[00:22:54] Speaker A: It's fantastic. It has been such a pleasure having you. Thank you so much for joining us today. I appreciate you.
[00:23:00] Speaker B: Oh, thanks, Jen. It's been real joy.
[00:23:03] Speaker A: And you, if you're here watching, I hope that you got some amazing gems from Kathy. Because when we give, it just opens the door for us to receive in greater ways. As entrepreneurs, we are uniquely positioned to solve very big problems. It's what we do, why we're entrepreneurs. It's why we invest with purpose. So take the opportunity today to put something into action and to really take heed what Kathy has shared. Reach out to her. We will be right back after these messages.
[00:23:46] Speaker C: Foreign.
[00:24:06] Speaker A: Welcome Back to power CEOs the truth behind the business. If you're just tuning in, you're going to want to go to NowMedia TV, click on shows and catch the first half of today's episode because it was pure, pure gold. We talked about becoming a for profit organization and what does that mean for your scalability? But now we're going to switch gears. Buckle up, folks. You have asked, I am answering. What do we do once we have had our scale, our success, our exit in business and we want to start investing in multifamily real estate. Well, I have your answers today. I have with me today in studio Robert Martinez and Jason Whaley and they are going to give us all the details on multifamily real estate. Welcome to the show.
[00:24:48] Speaker C: Hey, thanks so much for having us.
[00:24:49] Speaker D: Thank you so much, Jen.
[00:24:50] Speaker A: So, guys, multifamily, I know it's been a wild ride the last couple of years with everything that's happened in real estate. But you are on top of your game. You are successful. You have not, it hasn't even caused you any sort of Ruckus, like a lot of things we've heard about on the news. So talk to us about, what is it that we want to be looking for as investors getting into the real estate game?
[00:25:13] Speaker C: Well, you know, you're looking for something that's an alternative to your everyday investment strategy. You know, in high school and in professors in college, what do they teach you? They teach you to invest in your 401k Roth IRA, and that's the traditional web. And no one ever talked to me about multifamily investing. Nobody ever explained to me that I could actually own a piece of an apartment building or a potential office complex. And I think these are just alternative strategies that a lot of everyday investors never thought that they had the experience or the, not the understanding, but the access to investing. They just thought, whatever is in my 401k is what I can invest in.
[00:25:46] Speaker A: Yeah, you know, I had that experience too, and I was in medicine for 20 years. And you know, you're taught, you're not taught business in medical school, by the way, just in case you were wondering. You have to learn the hard way, but you know, you're not taught what to do with your income or how to take your income and turn it into wealth. And then they do, they tell you put it in a 401k and it's going to be great. Well, you can only put so much money into a 401k. And you're absolutely right. Our financial advisors don't chat to us about alternative investments. Jason, I know you're a big fan of this. I saw you on stage. Actually, we shared a stage last year. Talk to me about what you're seeing and how you guys are able to ease the mind of, you know, the other entrepreneurs, the professionals who are looking to invest with. With you guys.
[00:26:30] Speaker D: Yeah. So I think one of the biggest things about multifamily real estate that we love is that it's a tangible asset.
[00:26:36] Speaker C: Right.
[00:26:36] Speaker D: It's something that you can actually drive up to see the improvements that are being made, all the value add opportunities that we're creating for our residents. And ultimately it's going to benefit for investors versus something that, you know, might be a paper investment that's much more volatile or fluctuating. And so of course, we always recommend our investors focus first on educating themselves as to what they're investing in and just really understanding the valuation aspect of how multifamily is much more different than single family real estate. I know that.
[00:27:05] Speaker C: Yeah.
[00:27:05] Speaker D: A lot of people, when they want to get into real Estate, they focus on buying, you know, just some single family homes. Fix and flips. But the true power with multifamily investing is that we are able to value our properties based off the income that it generates versus just the comps. Sort of like how a single family home would be valued.
[00:27:21] Speaker A: And your firm, correct me if I'm wrong, You've raised over 191 million and returned over 130 million to invest investors through distributions, refinances and exits.
That's huge. And that's a really good thing for those of us who are the money giving our money to people such as yourselves for us to sort of look at and mitigate our risk and have an understanding of what your track record is. Your track record is phenomenal. What are some of the things that you guys would recommend our professionals out there looking to invest in this asset class to do from, from a due diligence standpoint, what kind of questions should they be asking, for example, Rockstar Capital.
[00:27:57] Speaker C: Right. You know, so again, we're taught to invest in the stock market and we're told that the average return is somewhere in that 6 to 8% range. But they also tell you that if you don't leave your money in the market, then if you miss those specific days where he was having the best day, your returns will fall to 2 or 3%. You know, is that enough for you? Number one, are you willing to work 30, 40 years at 6, 6 to 8% and see, is that going to get you your, is that going to hit the goals of your investment strategy and multifamily? Our goal is to do extra money in a five to six year time frame. And so if that fits more, then that's number one. Number two, you get a lot of depreciation. It's not about what you make and about what you keep. In the multifamily world, we have what's called a cost segregation study, which is in advance, where you're just saying lots of depreciation. And so it can really offset a lot of the gains that you have in multifamily, where you don't have that aspect in traditional stock investing. So being able to have that cash flow. Right. Because we're also thinking that in a long term we want to invest in a growth stock. Well, most growth stocks don't have a dividend. In a multifamily, you're investing in an asset right now that as part of that 2x strategy, you're going to get in the five year horizon, you're going to Get a piece of it in a monthly or quarterly distribution schedule and then also a big nut at the end, right, where you sell and you get this huge, you know, windfall at the end.
[00:29:16] Speaker A: And, and so talk to us a little bit more about what do we need to qualify? Do we need to be accredited investors? And if so, what does that mean? Because a lot of times we're invest, we're entrepreneurs, we're great at making money, we understand cash flow. You're speaking our language. It's about how much you keep, not, not about your top line revenue. That's what our income is based upon. So you're, you're speaking our language. But some of the other terms that we hear are sophisticated versus accredited investor. And how do we know whether we are in one of those categories and whether this is an asset class open to us?
[00:29:47] Speaker D: Right. So the accredited investor definition is something set by the sec. And one of the most, you know, the two easiest ways to qualify is either through income or through net worth. Through income it would be if you're making $200,000 a year or more and have so consistently for the past two years and expect to do the same, or if you and your spouse file taxes jointly, it'd be 300,000. The other way would be through net worth. If you have a million dollars in net worth excluding your primary residence, you're automatically considered an accredited investor. There are a few other ways to qualify, but those are the two main ways. And the differentiation between being an accredited versus non accredited investor is the type of deal opportunities that become available to you. Some certain multifamily deals are only available for accredited investors. A lot of times that is when we're setting up a, what's called a 506C syndication offering where we are advertising that investment to the general public, we're soliciting. And so the SEC requires us to only work with accredited investors. But that doesn't mean you're doomed if you're not quite accredited just yet, because there are certain opportunities that do allow for non accredited investors. And so the first thing is becoming what we call a sophisticated investor, meaning that you are educating yourself about multifamily investing, you're educating yourself about business finances in general and can make that informed decision.
[00:31:04] Speaker A: And so I'm going to ask questions. So let's assume that, that we're ready. We have, we have the opportunity to invest. I'm an accredited investor. This is open to me. I've never invested in multifamily before. Okay. So if, if that person that person watching, they're making good revenue. Why should I give you my money at Rockstar Capital?
[00:31:23] Speaker C: Well, I mean, first of all, it's supposed to be passive for you. In any other investment, whether you're going to do a flip house where you're going to start, you're going to have to be involved, you're going to be an active investor. Does that fit your lifestyle? Are you a six figure earner? Are you a seven figure earner? Do you have the time to do this on an everyday basis? If you don't, then you want to find people that can take care of your money. As you mentioned before, we've raised $190 million. That wasn't in one time, that was over a lifetime or practically eight. Feels like a lifetime. 18 years of real estate experience where you're doing one deal a year, couple deals there, then you start ramping it up. So you only get to do that if you're returning capital back. We returned over $130 million of our investors capital and we still own a 600 million dollar portfolio with those investors. So you just got to start qualifying who it is. What is your track record? What have your wins been? Hey, what are your losses? You got to talk about the losses. Everybody has losses. Just because they don't talk about doesn't mean they don't exist. So what are your losses? Do I understand what happened there? What did you learn from that? And then what is your ability to return my money back to me? Right. I think it's Roy Rogers, as once said, you know, is it Roy Rogers? Maybe Will Rogers, I think it was Will Rogers that once said, don't talk to me about the return on my investment, talking about the return of my investment. So how many times have you gone from cradle to grave and been able to purchase an asset, return it back to them, hit your, hit all your goals and everybody's happy. That's an important thing. You know, a lot of people in the last three, four years, they, this became a very hot sector. And you have a lot of people that came out of the woodwork to do this, guys that were off my back, right. The success that we had taken advantage of that. And then what happened? The first crash, the first, the first correction, the first reset of things, they were upside down, they were gone. They didn't know what to do. They put their head in the, you know, they put their head in the sand like an ostrich not knowing, hey, where do I go for help? How do I handle this? Having done this since 2007, I've seen a few markets, I've seen a few corrections and it's been outside the last 24 months a pretty good ride. But now, you know, the strong survive the cream of the crop rise and you're able to overcome the pitfalls that happen in everyday life. And then where are you at today? Are you positioned now to get back on the saddle position, to get back into your business plan and still hit those returns?
[00:33:34] Speaker A: Well, you know, just like any business, every business has cycles. We all have cycles. No matter what business we are in, we have to be able to be fundamentally sound. And why I brought you guys on is because I saw that you are fundamentally sound. You operate your investment portfolio as a business and not all do in this industry. So talk to me about how did you get that savvy and that financially sound foundation so that you can operate as a true, all inclusive business for, for yourself and also for your investors?
[00:34:07] Speaker C: Yeah, it's a great, great question. I think there's an expression I like to use. Before you invest in anything, invest in yourself, invest in education. I was very fortunate. I live in Houston, Texas. There was a real estate club here that I was able to purchase education and time. It was $10,000 and it was the best $10,000 I ever spent in my life in 07 because it completely changed my family tree. But I was introduced to how multifamily works and then it's own your own personal background. I have a sales background. I was a sales manager over a series of sales guys. So there's organizational skills, there's training skills, and then it comes with somebody just comes with natural, you know, organic growth. I think I need this person. Hey, I'm missing this person. You know, in the beginning you wear all hats and as you grow and you start to grow, you start, okay, what can make my life easy? Well, I'm going to bring this person in that's going to bring 40 hours back to me. What am I going to do with those 40 hours? And then I learned social media, then you learn marketing, then. Okay, you know what, now I've learned those. I need to focus more on operations. Let me bring in a social media guy or let me bring in a sales trainer. Let me bring in another ops person. So you just start to grow organically. Next thing you know, we got a 130 person management company and then you got to learn how to handle people. You know, we don't talk about HR a lot, but real estate's easy. People are difficult. How do you handle people? And, you know, I am HR for my company. I don't have an hr. I had that once, and it was practically creator of my business. I bring two people in, I go, you guys got a problem? Let's figure this out. Sue said, hey, you're doing this. Sally, what do you think? You know, how can we figure this out and then can we work together? Let's shake hands and go to work. You know, just like being a coach, you just got to just listen, everybody, hear the issues. Okay? Now, once I've heard your issues, now you're going to hear what our business goals are. This right here is a waste of my time. Right? We are not growing by trying to solve why you're upset here. Let's figure this out and let's move forward and let's grow our business together.
[00:35:51] Speaker A: That's fantastic. We do have to take a brief break, but folks, stick around because we'll dive deeper into this after these messages.
Foreign welcome Back to Power CEOs, the truth behind the business. I am here with experts in multifamily investing. And before the break, we were talking about how do we get involved, whether we're a professional, an executive, or an entrepreneur, whether we just had an exit, how can we start this process of investing in multifamily? I'm going to take it in an entirely different direction, though, because you know as well as I that we are in the middle of a technological revolution. AI is in everybody's conversation. If you're not doing this in your business, you're missing the boat. It is time. It is beyond time. Figure that out. You know, you hear that all the time, but these guys have integrated some of the AI technology already into their business to make it more fundamentally sound and really operationally efficient. Talk to me a little bit about what does technology look like in your business today?
What are some of the ways that you've been able to improve your margins with technology? And where do you think it's going?
[00:37:28] Speaker C: That's a great question. AI is very important if you use it in the right way and it can be an important tool. But it's going to be the everlasting balancing act between the efficiency, what the AI is going to give me, and. And what does it cost. And for a long time, there's been tech that's there, but are you willing to pay for it? We have found, through trial and error, we found ways that we now can bring AI into our business. As a sales guy, I understand that every business in America needs one Thing, and they got to have leads. The moment you run out of leads is when you go out of business, when you run out of a pipeline. So that means if we're a world where people call us information, they have to find a way to get that information. They have to get it lightning fast. Traditionally, it's been making sure that we answer the phone, and sometimes that's hit or miss. Right? Because, again, real estate's easy, but people are difficult. They don't always want to do simple stuff like answer the phone or maybe they're busy in the office. So we've introduced AI, where we have a service now that will see your calling immediately, send you back a text message and say, hey, I know you're calling ABC apartment complex, how can I help you? And there's a series of prompts. And in today's world, where it's fast food, society, microwave, I need it. You know, I need the information. In a moment's notice, that AI shoots out that information back to you, and people can go on, and you can get into our portal, you get into our CRM, our teams call you back, and we get the process going.
[00:38:48] Speaker A: Yeah. And it's, you know, it's speed of implementation, it's speed of lead conversion, and that's really incredible. And I had the opportunity to sit in a little part of one of your masterminds. So, folks, these guys don't just do this and live it. They also teach other people how to do this in a fundamentally sound way. And they are integrated in a lot of different ways technologically. And so you're uniquely positioned, and you're actually a little ahead of the curve in the industry. But what do you think is coming next? How do you choose what your next technology is? What's your next initiative that's gonna help save you margins?
[00:39:23] Speaker D: Yeah, I think it's just really identifying where we are in. In terms of the seasons of growth. And so right now, what we're doing is just really getting our operational efficiencies much more streamlined and utilizing these things like the AI to handle leasing. We've actually had leases that were purely just booked through AI all the way to the closing of the signed lease with no, you know, technical, like a leasing agent involved. It was purely just through. Through AI, where the lead was captured, went through the CRM, they found the leasing application and materials and signed a lease. Right. So that's. That's very impactful. And then I think as we enter our next phase, where we're starting to take advantage of upcoming Deals that are coming up, distressed opportunities. I think we'll. We'll see how we can find ways to integrate AI to analyze deals. And I think that's something that you mentioned you've already built into your business that we'd love to learn.
[00:40:15] Speaker A: Yeah, we do. We do it when we're looking at acquiring businesses. I mean, it's something that you can do. And the reality, folks, is if you're listening to this, yes, we're talking about AI in real estate, but it applies to every industry. Think about every task that happens repetitively. That you can write an SOP and you can hand a book or have it digitally and someone can take that and do that process for you.
If that is the case, you can automate that process. And now it's not just the simple tasks, it's the complex tasks like due diligence. I have a due diligence checklist for my screening. I trained an AI on it, so I don't even do that anymore. It's literally saved me 15, 30 hours a week. And it allows me to do more deals in the business world. So start thinking about where in your business can you automate? What is it that you can take over and make simpler leveraging the technology that out there? Because the reality is, is your competition is going to do it it. And ask yourself the question, can you afford if your competition now has a 40 to 70% less cost basis or expense structure, their opex goes down by that, can you remain competitive? And the answer for most companies is no. So as you think about this, and you guys have had tremendous success in real estate over the years. I know you're continually raising funds, you're growing your portfolio, you're taking care of your investors, you're taking care of your people. What do you see as the future, future of multifamily housing?
[00:41:37] Speaker C: I mean, it's going to be automation, it's going to be actually making the offices virtual. And this trend started before COVID This was at 17, 18. We started getting virtual leasing where people, we have a little camera and the camera goes throughout everything. And so anybody, whether you're in Houston, Texas or you're in New York, New York, you know, can you take a tour of our property when we're not there? Because the website's always open. It's 24 7. What does it say about you? And what can they access? So when Covid occurred, we were one of the earliest property management companies to adopt that. We had virtual leasing so people didn't have to come to the office, they didn't have to get exposed, right? They didn't have to get exposed to anything. And so they felt comfortable leasing these apartments. Next thing is going to be self guided tours where you don't need the leasing agent. In our business I feel the leasing agent is the weakest component in there. They're the least trained or the the greenest, they're the least with a piece of the business. You know, they're just here for a commission and sometimes they want to work, sometimes they don't want to work. So being able to have sub guided tours where people can go through the tour on their own, they like it. Okay, good. Then they come back and they start the application process that every, as Jason mentioned without ever needing any kind of assistance from anybody.
[00:42:47] Speaker A: So let me ask you, what about the older generation that is a little bit more resistant to these technologies? Are you, are you seeing any resistance to this as you've integrated more technology? And how are you guys addressing that?
[00:42:58] Speaker C: You know what, I thought that in the beginning too but my mom's 73 years old and she's a master of her iPhone.
I think the older generation will become when they got to be first introduced to it, shown how to do it and then they will fly with it. I consider myself part of that older generation. Somebody taught me Chad Chipping the other day maybe about a year ago and now it's like my best friend and anybody that I go and I meet or works with me, I want them using it too because it can streamline your business. So I think the older generation, when they're shown something, they want to grow, I don't think they want to fall behind. I don't think it's that, you know, it's not that 80 year old grandma that we're listening to anyway. Our medium range is between 30 and 50 and they all have phones, they all have social media, they all have access to the Internet and I think they're all going to be able to move with the times.
[00:43:49] Speaker A: And you know the really good thing about the automations and everything that you're doing is we want it now. Yeah, I mean I'm in the older part of that. I'm generation X but you know, I didn't grow up with a computer but I still have that. I want to now if I want to know, I want to know it now. I want to be able to make that decision right now and we're seeing that more and more with the younger generation. So I think that it's going to be Essential to have those automations as you continue. So thank you for all of this education and information. How can people reach out to you guys if they'd like to learn more about investing? Because I know you guys train others if they want to be hands on in the investment and also that you raise money in case they're interested in that.
[00:44:26] Speaker B: Yeah.
[00:44:26] Speaker D: So if you're interested in learning more about Rockstar Capital, how you can invest with us, you can just go to rockstar capital.com R, O C K S, T A R little dash and then C A P I, T A and then if you are interested in coming out to one of our more education related events, seeing how we operate behind the scenes, we actually take you on site to visit our properties. Typically on that third day you can go to rockstar mastermind.com and you'll find all the information there as well.
[00:44:53] Speaker A: So I love to leave everybody with an action step that they can take today no matter where they are in the spectrum. So if somebody's thinking about real estate investing and they haven't pressed go yet, what, what is the one thing that you would have them do today, the action that they could take right now?
[00:45:08] Speaker C: I mean, look, I think you gotta hit the free resources that are in front of you and that's YouTube and Instagram. And if you really were about to put $100,000, a million dollars, I think you want to educate yourself on this. I would go out there, find my name, find Robert Martinez, find Rockstar Capital. You go to YouTube, watch my videos, see if my personality relates to you, see if what I'm saying makes sense to, to you. And then with the, with the magic of YouTube and Instagram, there'll be others like me that you can also hit and compare and contrast and see. Okay, I like this guy's style. I don't like that guy's style. I like what he's saying. He sounds like an operator. This guy just sounds like he's a fundraiser. And you make your own decision like who do you want to work with? So I think there's plenty of free resources that you don't have to spend a dime to get educated in 2025.
[00:45:50] Speaker A: I love it. Educate, educate, educate. You are speaking my language. Jason, any, any action step from you or are you echoing?
[00:45:57] Speaker D: No, I'm totally echoing what Robert says. Everything starts with just finding that free resource and then also taking a step further, connecting with someone who might already be doing what you want to be doing. I actually saw Robert for the first time at a conference back in 2021 and look at where we are today. So anything can happen. You just gotta take that first step.
[00:46:18] Speaker A: Fantastic. Thank you so much for your expertise, guys. I really enjoyed having you on here. It was very valuable for everyone.
[00:46:23] Speaker C: Thanks for having me.
[00:46:24] Speaker D: Thank you, Jen.
[00:46:24] Speaker A: And you. Yes, you. Unfortunately, all good things come to an end, including this show. But you have action steps. Today is the day to take action. Not tomorrow, not next week. Because if you wait, then this just becomes another show that you watched and you don't change. The change happens when we take action. So go and educate yourself. If you're looking into real estate, check out the free resources as as these gentlemen shared. Check out their website. Reach out to them, because they are a wealth of information for you. But today is the day to take that action. I encourage you to do so. And without further ado, we will see you again, same time, same station, next week. Until then, win today, win this week, and I'll see you next time.
[00:47:07] Speaker B: This has been a NOW Media Networks feature presentation. All rights reserved.
