#168 - How Smart Investors Vet Real Estate Deals Together with Larry Lemer and Mark Goldstein

[00:00:00] You know, the one thing that pilots talk to us most about is paying too much in taxes. And as income's gone up, taxes have gone up. And so we talk about this on the show all the time. But we're actually going to dive deep into how pilots can execute tax mitigation strategies and investment tactics alike at our Passive Income Pilots Conference. Tait, when are we going to have it this year?

[00:00:24] It's in Las Vegas, Nevada on October 8th and 9th. Everybody's going to fly in on the 7th. It's going to be a jam packed two days of sessions with expert panels and over 250 of your colleagues who are like minded professionals who are looking for those exact same tax mitigation strategies. Join us in Las Vegas. It's going to be an absolute blast. So if you want tickets go to PassiveIncomePilots.com or you can go to the link in the show notes. But with that, let's get to the show.

[00:00:52] Hello, everyone. Welcome back to Passive Income Pilots, a very special episode this week with an investor group that we're excited to feature. Ryan, how are you doing? I'm doing great. I'm excited about education. Speaking of education, we have a big conference coming up in just a few weeks in Las Vegas, Nevada, October 8th and 9th. If you haven't signed up yet, now's the time to do that before ticket prices go up. They do go up as we get closer to the event.

[00:01:18] We have over 200 people registered and we're maxing it out at 250. Yes. And speaking of education, we're going to bring on two guys today. Larry Lemer and Mark Goldstein, two very good friends of mine who actually have their own education group that they don't make any money off of.

[00:01:38] They put together with a couple of friends. It's exploded into over 50 people. They're going to cap it at 100. And they bring in people from all over the country to be members with varying degrees of background. And just they do a great job bringing together a community to evaluate different investments, specifically mostly in real estate. And I think this is so important because I think it tells a tale of two lessons, which is you don't have to do this alone.

[00:02:04] You can surround yourself with great people that can help your education and knowledge of what you're doing. And if you go to things like conferences, you're going to run into guys like this who have groups who are well networked. And you're going to grow your bench of people. You want to know how to grow your bench of people. You don't sit behind a computer or just listen to a podcast or put it in AI. You go find great people to be around. And I think that's why going to shows and going to conferences and going to meetups can be so important.

[00:02:31] Your network is your net worth. This is the next phase for anybody that's been listening to this podcast for a couple of years and really wants to take it to the next level. Come to Vegas, come to our conference, check out groups like this and meet other people who are in the same situation as you and looking to implement the same strategies.

[00:02:50] So we're going to jump in today. Both of these individuals are retired executives from major publicly traded corporations, and they're going to share with you how they put together a little fun educational group. They have a lot of pilots in their group, doctors, lawyers, professionals, people that sold companies, bought companies, buy real estate. But without further ado, let's get into the show.

[00:03:17] Welcome to Passive Income Pilots, where pilots upgrade their money. This is the definitive source for personal finance and investment tactics for aviators. We interview world-renowned experts and share these lessons with the blind community. So if you're ready for practical knowledge and insights, let's roll. Mark, Larry, welcome to the show. Thanks for having us. Thanks for having us, Ryan.

[00:03:42] Yeah, so one of the things I think is so important in investor education, experience, investing, is having others to sort of help you through the process, right? So I think finding people that are like-minded but also have different perspectives is really important. I know we were talking before the show about that, but Larry, would you mind kind of walking us through what you guys do in Foliage and in your investor group?

[00:04:10] Sure. Thanks again, Ryan. So Foliage is basically a club. It started off as a group of friends and family that had a common interest of investing in commercial real estate. Personally, I've been doing it for about 20 years. Mark came to me when we both retired and we had a conversation. He said, what are you investing in? And I believe that you have to have a broad-based portfolio, stocks, bonds, cash, and real estate.

[00:04:40] And when he talked to me and he said, I told him what I was doing. He said, that's interesting. I'd like to get involved. So it started off as a group of friends just kind of making decisions together. We're all making independent decisions. We don't control money. We don't give recommendations, but we all like to have a community here that we can bounce things off of each other. And that's how we started. And it's blossomed from there to a large group where now it's an official club.

[00:05:10] And we have our syndicators that we are partners with. And we have a process that we go through with them. Mark, would you mind sharing? Larry mentioned that you guys have syndicators that you sort of evaluate and work together as a team. But can you kind of talk about your due diligence process in that and how you kind of vet those syndicators? Sure. A couple of things. Let me wind it back to what you were just talking to Larry about.

[00:05:39] I needed the perspective of many people when I got into this because I'm a newbie in commercial real estate. So this has been extremely helpful for me just to get different perspectives, different experiences around the table. And it's been great. Relative to the syndicators, the way we look at it as follows.

[00:06:00] First of all, we begin the process with having one of our investors who's had an experience with a syndicator, had a positive experience, recommend somebody that we talk to. And at that point, we will give them a call and get introduced to them and have a discussion. Larry and I have about 80 questions that we go through and we do that on the phone.

[00:06:25] And then we get our other two co-founders together and we speak to them about it. And if they all agree, then we go and make a visit on site and we talk to them about their track record. We talk to them about the types of asset classes that they're working with. We talk to them about, give us an example of what's gone wrong over the past number of years and what have you learned from it. We meet their staff. We meet their operations team.

[00:06:53] We talk about succession planning. So we've got a litany of things that we go through. And it's really the objective, Ryan, is to build trust. I mean, to Larry and I, that is the paramount attribute in dealing with a syndicator. You're giving them your family money. You're giving them their savings. And it's very important to build that trust.

[00:07:17] And so that's a high level discussion of what we go through with the syndicators. I appreciate that, Mark. And I love that you said the word trust, right? Because I think that is one of the biggest things in this business is you really got to get to know and trust somebody. And I love that the 80 questions and the visit on site. And then it's like you guys have really taken the time. And I think it's kind of nice when you're in a group, right?

[00:07:44] Because now like one person can go visit the site and then kind of report back or, you know, Larry can ask all the questions. Actually, the story about how I met Larry was Larry, I think, fired off the 80 questions to a member of my team. And somebody forwarded it to me and said, hey, Ryan, you might want to just check this out. You might want to just call this guy. And I think Larry and I spent, you know, two or three hours on the phone, which is a common occurrence now. But every other week we talk quite a bit now.

[00:08:13] But, you know, Larry, go back to the beginning. Let's talk about like because you guys aren't in this to make money, right? You're not you're not. This isn't like a mastermind group where you guys are making hundreds of thousands of dollars per year. I think it's very fascinating that you're literally just put it. You put this group together to help your friends, right? And help yourself in a way. But Larry, can you can you go back in time and just talk about like how did this what was the spark that really started this?

[00:08:43] And who were the first few inaugural members of this of this group? Well, there was really about 15 of us initially. Probably, you know, half of them were my friends and half of them were, you know, Mark and I have known each other from 1982. We worked together at Stanley Black and Decker in marketing. And, you know, we just kept that relationship going.

[00:09:03] Personally, you know, I moved down to Atlanta with the company and personally, I started developing interest in real estate and I looked at it as an alternative asset. So, you know, basically I had my W-2 position, but there's the risk in leaving a W-2 position with your family and things like that. Where can I invest in my money and where can I can I grow my equity?

[00:09:30] And that's when I discovered real estate started off with most people like single family moved into, you know, commercial real estate and been doing that for about 20 years. So as a limited partner, I could have other individuals be the general partner and work for. So it started off with that area. We sold our business, my business partner and I, who's one of the co-founders, sold our business to a Silicon Valley to a public company.

[00:09:57] And we both started investing with a young group of guys at the time. And we helped them grow and we learned. We made our mistakes and we learned from those mistakes. And what we do at Foliage is we take those mistakes that we've made over 20 years and we share them with everybody else. You're right. Mark and I, you know, do not make any money off of this. We all lived in one city.

[00:10:23] We'd probably once a month get together and have a burger and a beer and talk about business investment opportunities. So that's kind of how we evolved to the point where Mark just said we now have a sophisticated process. I didn't have a sophisticated process of my business partner at the time. We just trusted people and invested money. Now, as a pilot, you know, as you guys being pilots, you know, have a checklist before you take off.

[00:10:49] You know, we have a 10 point checklist that Mark started talking about that we go through before we're going to make an investment with any individual. So that's kind of how we got the whole started. Well, and Larry, you mentioned in the before we were talking on the show that there's about 10 to 15 percent of the group now is airline pilots. Is that right? Yes. Interesting side story here, Ryan.

[00:11:14] You know, you talked about us initially for two hours, but the second or third deal that we that our group is we were still 15 individuals with no name or anything like that. It was just a bunch of buddies investing. I was talking to you, you know, about a half an hour before this occurred. My next door neighbor, who's a Delta pilot, who I'm friends with, calls me up. He goes, Larry, can you come outside and talk for a minute? And I said, I said, sure. So I come down there. I didn't know what he wanted. And he says, I was listening to this passive income pilot.

[00:11:44] He said, you know anything about this? And I just got up there. So I said, yeah, I know, Ryan. I just got the phone with them and I told him to call you and I gave him your number. You called it. So, I mean, there's it's that's kind of where we started the community, because we realized from that point that there's other people that are interested in doing what we're doing and we could help and share and all of us make better decisions as a community.

[00:12:08] And, you know, yeah, we do benefit because we, you know, we'll benefit in the relationships we're building and the community that we're building and the trust that we're building with other people. Mark, I want to ask you, how are people from your perspective really benefited from this group? I mean, maybe think of like the top thing that somebody's taken away or the top three things or maybe even an aha moment that you had that like the group getting together really helped serve. I'll give you a couple a couple examples.

[00:12:39] When the tariffs first came about, we were listening to a syndicator pitch a new build and we were talking through we're taking a look at the business plan and and it was a ground up. So there was a lot of construction involved. And the contractor said to us, hey, what's going on with the price of steel? You know, I I buy steel. It's up about 30, 35 percent. And he walked through that.

[00:13:08] That's an area that I never would have brought up, never would have thought about. Right. From that perspective, we've got attorneys that are part of our group. And so when we're looking at a an operating agreement, any kind of legal document, although we don't give legal advice or financial advice, but he can weigh in and give us some feedback on that.

[00:13:35] One of the reasons, you know, we love to have pilots. This will be very self-serving. We love to have pilots in the group is their attention to detail, their willingness to speak up and have a dialogue when there are other people on the phone. They're confident in being able to do that and their willingness to dig deep and do research in certain areas.

[00:13:58] And so those characteristics are extremely important to bring to the party. And essentially what we do, Ryan and Tate, is when we when we have a syndicator present to us, we then break off into a roundtable discussion and have everybody weigh in. We talk a little bit about what we liked, where our concerns were, any issues that people have come up in many of the discussions.

[00:14:26] We have an instant survey where people can talk about what they liked, what they didn't like, if they're going to invest or not. And so we get sort of live feedback and can talk through that. But the different perspectives, different experiences of our folks give us a much better 360 degree analysis to enable all of us to make our own decision whether we're going to invest or not in the deal. And just for the listeners to like, how often do you meet?

[00:14:55] How do you meet? Where where is everybody located? You know, how do people kind of get together? Because, you know, I've been to your annual meeting, right? You guys have had two annual meetings so far, which has been a blast. It's I believe it was a couple of days jam packed. I think we were there like seven in the morning to like six o'clock at night and we heard a bunch of really good speakers. But can you kind of go through the kind of the agenda of the year and how often you guys meet in the format? Yeah, sure.

[00:15:25] So we meet rough. We meet when we have one of our partners brings us a deal. And that is once generally once every five or six weeks, maybe once a month, you know, sometimes more frequently. We have a newsletter that goes out to our members every month. And so that kind of is our format for conversation. Now, we get we get emails going back and forth all the time. We have subgroups that are formed like oil and gas and things like that, that we're you know, we're not involved in.

[00:15:54] We refer to people that are interested because we're strictly a real estate group. So that's the the frequency of our of our meetings. We're located throughout the United States. We actually have some members internationally. So, you know, we do have a broad range of individuals. For instance, the people in Houston do get together occasionally, you know, amongst themselves, just, you know, friends, friends getting together. So we have a broad range of individuals with a lot of varying backgrounds.

[00:16:23] And I think that's what's the secret sauce. Like Mark had mentioned with the steel studs, you know, it was that's the secret sauce that allows all of us to kind of have a different perspective on things. The other thing that's that's interesting is relationships have built up over time, over the couple of years that we've done this. And so there are a lot of discussions that are one off with one of our members touching base with another one.

[00:16:48] Larry or myself will give a lead if we know that somebody is interested in a certain type of asset class or a certain type of investment that we're not versed in. We'll we'll connect them and they will have discussions. So it's also an opportunity for each one of our members to expand their personal network. And that's been great to see because we're both from the corporate backgrounds. And the one thing you miss when you're retired, when you're part of a big corporation is, you know, nobody calls you.

[00:17:18] Nobody answers your emails anymore. You know, you're you're you're you're a lonely person. And this is this really takes care of that makes us feel better. One thing I wanted to say, I know, Tate, you just you're dying to get in here and I and I want to give you the floor. This is not a fund, right? These guys, I just want I just wanted to kind of clarify, you know, listening. I know that Turbine Capital is is puts together a fund to do deals.

[00:17:45] And, you know, Spartan, it puts together its own, you know, funds to do deals. Right. You know, we're the operator and the and the fund manager. But this is not a fund, right? You're not going to foliage and investing in a pool like you're doing this individually, which makes it completely different. Right. And you're not you know, I think you guys said it a few times, like you're not giving any financial tax or legal advice. You're not someone's fiduciary. You're not making an investment for them. You're not a financial advisor.

[00:18:14] You're not even getting paid. Right. So I so I would say, can you guys kind of just, you know, hammer that home a little bit more, because I do think it's really important for people to know that they're still big boys making big boy decisions on their own investments. Is that right? Absolutely. You know, we a little bit more about drilling down on the process. We mentioned, you know, we go we we will meet with this with the syndicator, walk their sites and other individuals.

[00:18:40] The next level down is when the syndicator would do a presentation on a deal to our group after they we've decided that they fit our, you know, our portfolio. That presentation might be done on whatever the deal is. We then ask them to leave. We have a roundtable discussion. And those those discussions is where everybody brings out their different points that they like and dislike about the deal. But the next level is individuals make their own decisions.

[00:19:08] Like I said, you know, and you said that we're not managing their money. We're not giving any recommendation or we're not making any money any more than the person next to me investing that in that deal. They then will make their decision. They do tell us what they're going to invest in the deal. And we pass that along to the partner. And then they deal directly with that partner. It's all operating agreements and are assigned individuals, not by foliage.

[00:19:36] You know, all we are, like you just said, and we want to emphasize, we're just a club of guys and gals that just want to help each other and want to share information. And most importantly, it can be a very lonely island out there when you look at things like what alternative assets like this. You know, your stockbroker is not going to talk to you about it, not going to give you advice because he can't make commission. So you're making these decisions as an individual looking at a deal. And then you're wondering, am I making all the right decisions here?

[00:20:06] Well, now you have a team and the teams are your friends. You know, and I think on the other side from our partners, you'll get a person that might be interested in calling and, you know, say, hey, I might be interested in investing with you. You know, okay, you know, talk to an individual 2,000 miles away for 20 minutes. And then at the end of that conversation, our partner's saying, okay, it's $200,000 minimum investment. And they're saying, whoa, I just talked to the guy for 20 minutes and I'm going to send him $100,000.

[00:20:35] What we go through and what we do feels it makes individuals feel a lot more comfortable with the debt decision they made. Could be wrong, you know, but my tracking record has been pretty good. I have one more question. I know, Tate, sorry. Go ahead. What is your rule about people being accepted into this group? And you can, for children listening, you can cover ears. But what is the rule? You can speak freely here about joining. What rules do you guys have?

[00:21:05] We have a no-ass-hole rule. Mark and I spend the time because we enjoy doing it, but we don't want a bunch of, if it's not working out, you talk directly to the syndicator. You know, you've made that decision yourself. So we have a no-ass-hole rule. We tell everybody that we talk. And it's our definition of asshole. All right. Exactly. Yeah. Common sense and definitions are in the eye of the beholder these days. So definitely I can appreciate that.

[00:21:34] One more thing is education is a key part of what we're talking about here. You know, people get into alternative assets like this. You know, many of them don't have any idea what it is. I didn't have any idea. I just trusted somebody. But, you know, we go as far as, you know, Mark and I have written, you know, the investor syndication playbook. You know, and that was really a result of our meeting so that the individuals in our group who they just trusted the partners, you know,

[00:22:01] can learn and understand how we evaluate it and how they should be looking at things. So education is a big part of what we believe in as the group. I love it. Guys, I'd love to jump in here and ask, you know, why alternative assets? What attracted you to the alternative space in the beginning? Well, for me in the beginning, the very beginning, it was, you know, I always wanted to be in my own business. And I looked at buying businesses.

[00:22:31] And I decided, and I said a little bit earlier, that the risk of going out on your own and not, you know, just dropping a high-paying job was pretty risky. And I had a family. I have a family. So I started looking around and I realized that I could meet some of my financial goals by investing in real estate. So that was what was kind of driving me initially.

[00:22:59] Once I got more and more involved in it, I realized that the returns are attractive and they could complement very nicely my stock portfolio and bond portfolio and just become broad-based and spread my risk. So that's kind of what drove me with the alternative assets. Makes sense. Yeah. Yeah.

[00:23:24] And from my perspective, you know, I worked in big corporations for my entire career, Tate. So, you know, I had a W-2 and I really, I didn't get involved in alternative assets until really after I retired. And I should have done it a lot earlier. And what I did was I started working for a private equity firm.

[00:23:47] I was an operating partner and I began to see in a private equity firm the number of funds that we were raising, the types of businesses we were buying. And that sort of started me on looking at alternative assets. And then when I retired from that, I called up Larry, who is a guy that I trust implicitly and talked to him about what he was doing.

[00:24:14] And the fact that I did want to add commercial real estate to our family's portfolio. And that's how I got involved initially. I love that because I think that alternative assets, it's funny that they're still called alternative assets, right? It's like that real estate is still an alternative when you look at the way that pension funds and institutions are investing. And it's really not, it's not an alternative anymore.

[00:24:38] But like you said, you know, when you make the jump from public markets to private markets, sometimes there's significantly less institution around the investment, right? It's going to be a group of individuals who are putting a deal together and that team can make all the difference. What are the lessons learned? You know, you're leading this group, which is fantastic, by the way.

[00:25:06] I always think that, you know, getting information from podcast or multiple podcasts, YouTube University and everything is fantastic, but you really need to build that network around you. So something that we have struggled with that we're hoping to fix a little bit with the conference coming up is that instead of the one-to-many approach, it's the many-to-many approach, right?

[00:25:31] We want to build more of a community around passive income pilots and have more friends and relationships being built. What are some of your lessons learned having invested significantly in the alternative space? What are some mistakes that you've made? What wisdom can you peel off for other people? I mean, I can answer that, Tate.

[00:25:52] I think one of the mistakes I've made is, and this was early on before we had any type of format, and one of the reasons I think we formed Foliage, was investing with individuals that come to us with ideas. And I say that because there's a lot of people out there that are trying to put a deal together for a multifamily or, you know, or flex warehouses. And there are one or two individuals.

[00:26:20] They will present, they'll call you up, they'll present it. And, you know, and I did a couple of investments like that, and I'm still waiting for my returns. Right. Right. I think one of the other things, the other things I, you know, I learned was, you know, you, you know, being the sales and marketing in my whole career, you know, you can make beautiful brochures, but you really need to understand the deal. Yes.

[00:26:42] And once I started to spend the time, go through that process, dissect the deal, and also I spent time getting educated outside of my, you know, formal education on it, I became much more aware of which deals were good and which deals are not. The third thing I would say that I've learned through the years is cycling of real estate.

[00:27:11] And I say that because, you know, we were in multifamily, probably 2010 through 2018, made a lot of money at it. But fortunately, my partner decided that multifamily was going crazy and got out and switched and transferred to a new asset. Right. Which was, we would have been in trouble right now if we would have been buying a multifamily as I always know.

[00:27:37] So those are the things that I learned over the 20 or so years that I've been, you know, involved in, in invested in real estate. Um, I think it's important also that when you talk, you mentioned alternative assets. I put a cap on, let's call it a governor on my alternative assets. Actually, you know, I put it on all of my assets.

[00:28:00] When I look at my portfolio, which I measure quarterly, I have, I don't want 30% of my total net worth to be in real estate. And that includes not my personal home, but that includes my rental properties that I own, includes my, my limited partner investments with any, any of that. So I, I put a cap on it because I think you need to, you need to be broad based and spread that risk. So. Right. You said something there. You have to understand the investment. If I, if I may, I don't think I've ever talked about this on the show.

[00:28:30] So I invested 50 K into a utility grade solar power deal years and years ago, I didn't understand the deal. And it was actually put together by a group of doctors of all things. And I'm still waiting for my return. So I think that really, you know, we, we do as much education as we possibly can, both at passive income pilots and at turbine to, to really educate our investor base on what it is you're investing in.

[00:28:59] But at the end of the day, if you get to the end of a investor presentation and you don't understand the investment, you don't know how it works. You probably shouldn't invest in it. My two cents. Can I offer a contrarian thought to that? Or maybe just an additional thing. I think you can, you can understand the deal, but if the person isn't trustworthy, they'll end up in jail. Like my first indication that I invested. There we go. So, so, so I, I, I did a deal with a guy who I completely understood the deal.

[00:29:28] He was taking four lots and subdividing them and selling off some lots and building houses and others. And I understood that because that's what I did. I was a land development guy and I did lot splits and, you know, sub sub lots out and sold them. Right. And I, and I've done that a couple of times. So I understood this deal quite well, but the guy wasn't trustworthy. And I think that there were signs for sure. And, um, I kind of ignored those signs. And I think that's where a group kind of, I mean, I think Larry, one of the early on things that you said, you know, one plus one has to equal two.

[00:29:57] And when you have this group of people and somebody just in the group says, you know, there's just something off about this guy. He's not, you know, I noticed this or, you know, what, you know, this or that. But I think having that trust is, is definitely a big part of it too, but you should understand the deal, but you should also trust and be able to trust the operator. I think too often than not, people don't have either of those things. And then it's really bad. And then when they get into a group like this, they're just, everyone's just like looking at them, like, how did you do that deal? Right.

[00:30:25] And so I think that's, you know, as we say in the flight deck, like that's why there's two of us. And that's why we expand our team when we have a problem. Right. Because like, there's, there's a lot to think about and bounce each other, you know, ideas off of. I think understanding the deal is one thing, and we certainly spend a lot of time on that. But does a syndicator have the ability to execute the business plan?

[00:30:46] And we spend an awful lot of time on that because you can have, as you, you know, you know, you can have the best plan in the world, but if it doesn't get executed, it's the worst. So we spend a lot of time on understanding capabilities, understanding past experience of the syndicators, understanding the business plan, and also the capability that the syndicator has to achieve that. And that's really important. Yeah. Yeah.

[00:31:15] Sun Tzu says tactics without strategy is just noise before the defeat. But he also says, uh, strategy without tactics takes a really long time. There we go. So you got, you got to have both, right? You got to have the, you got to have the vision and you also have to have the ability to execute said vision. So very good, good point on that. Well, if I can translate this into airline pilot. So I think of investing passively as buying a ticket on an airline from point A to point B.

[00:31:43] And you can think of the syndicators or the operating partner as your flight crew, right? The market is the weather and the, um, you know, you've got dispatch and maintenance and all these other departments, right? So you got to think about how complicated of a flight is this?

[00:31:58] Are you flying, you know, a CRJ from point A to point B in perfect, beautiful conditions, or are you flying a wide body jet internationally through the intertropical convergence zone with thunderstorms, with a bunch of, of, uh, maintenance items on the airplane and a brand new first officer. It's like, there's going to be more risk in the latter versus the former. Anybody, you know, we as pilots know anybody can fly an airplane from point A to point B on a beautiful day.

[00:32:28] It's when things go wrong with weather and maintenance and air traffic control. How are they going to be able to roll with the punches? And when you look at a business plan, that's the flight plan, right? How complicated is the flight plan? If the flight plan is more complex, you need a more experienced flight crew to take you through that, that flight. Uh, or you would hope that you have more experienced flight crew because, uh, they're going to be able to deal with adversity and, and potential.

[00:32:55] Hardships during that five-year hold period, much better than, than someone who's new. That's a great point. Dave, we find out an awful lot about our partner syndicators when things go wrong, right? And how they react, how they respond, how they communicate. And, uh, we've been really lucky. We have, we have four, we currently have four partner syndicators that, you know, we vetted and spent a lot of time with over the past couple of years.

[00:33:20] And, uh, on the rare occasion that something doesn't go to plan, uh, Larry or I, or both of us will get a phone call. And, uh, you know, it's an early phone call. It's before anything goes out and just FYI, here's what's going on. And that means the world to us. And, uh, you know, we don't get upset. We want bad news to travel as fast as good news. Yeah. Bad news doesn't get better with age, as they say. That's right.

[00:33:47] Um, what have you guys, so you guys have probably had a lot of syndicators come to you and say, Hey, I want to be part of your, your tribe. I want to be vetted. Talk to us about some people that you've said no to, or some operators that you said no to. What were the kind of the signs and what, what, what were things that you said? Ooh, that just doesn't look good.

[00:34:08] You know, I think we're gonna not elect to maybe, or just for you into, and I know you don't speak for a group, but you know, as individuals, you know, what kind of turned you away? Sure. I'll just give you one, one quick example, uh, because we talked to, you know, we talked to more syndicators than, than the four partners that, uh, that we have.

[00:34:28] And Larry speaks to a lot more than I do, but I'll give an example of one that we, we actually, uh, went through the process, spoke on the phone, visited with, with them. Um, and really what it came back, we really liked what they were doing. We liked the asset class, but it was a one man band and there was not a strong team. There was not a succession plan that we felt comfortable with. And when you're talking about a five to 10 year window, right.

[00:34:58] It's really important to make sure that there's a succession plan in place. Cause you know, we've got, we've got members money that's going to be tied up over a period of time. And we want to make sure that, uh, that these, uh, these sponsors and syndicators have, have a team in place to keep it going. And so we have, you know, we made that decision, uh, talked to our other co-founders and, and decided that, you know, this wasn't the right time to, to work with that particular syndicator.

[00:35:25] And to add to that, you know, typically, uh, at least one of our founders, the four of us will, will say, yeah, I'm going to invest in this particular syndicator. So at least one person in the group has to be comfortable with that, with that individual. Um, and say, yeah, I'm gonna put my money. And then also typically many of these deals, uh, we're going to invest first. The four of us will invest first. We'll test the waters.

[00:35:54] We'll see whether, is there the communication, you know, is that, you know, after we've done the visit, of course, you know, is there the communication and the follow-up and everything else that we, um, you know, we would expect from a partner. So generally speaking, you know, the four of us are going to invest in a, in a deal first and then move forward. You know, I've, whenever I'm part of a group, right. A volunteer organization, you know, what makes the group special is that you have commitments from people in the group, right?

[00:36:21] You have people who volunteer for things, plan to set up things and they participate. You know, they, they vote, they show up, they invest, whatever it might be. What is a great level of commitment look like in foliage? That's a hard one. Um, you know, in a typical deal, you know, uh, showing up, we'll have 20 to 25, about half of our members.

[00:36:44] Uh, but we understand that if we're doing a presentation and it's, you know, nine 30 in the morning, we've doctors and lawyers that are still working, not all retired like us. So we do record every presentation and, and the round table. So our gross participation, you know, might be two thirds of the group. Ideally, we'd like to get others involved in the, you know, newsletters and things like that. But, but be honest with you, Ryan, it's tough with people all over the country.

[00:37:14] We have a lot of people that are, that, that have said they'll help, but it's just a, it's, it's a challenge. Um, you know, the one, I've got a half a dozen people here in Atlanta that, you know, will help, but it is a challenge. Yeah, that's great. But, but generally we have, generally our, our, uh, our members are very willing to help in any way they can. Uh, you have to, you have to recognize, you know, the range of ages about 40 to 82 of our members.

[00:37:42] And a lot of people are still working. A lot of people are, are, are still, uh, you know, buying real estate on the side. They're doing different things, making different investments. Uh, so we, we get, you know, we, we get a fair amount of assistance. Now, what we've done more recently is we've, we've gotten involved with AI a little bit to help us.

[00:38:03] And that's been, um, from a productivity standpoint, it's really helped Larry and I in a number of areas, uh, that have been extremely beneficial. That's great. And beneficial to our partners. I mean, the information we can, we share with them, you know, after the research, uh, our AI, AI assistant has, has done, um, on deals. So it helps them kind of refine their presentations for us. Yeah.

[00:38:30] And so the thing I was going to ask is you guys have talked a lot about like doctors, lawyers, active real estate investors, uh, airline pilots with deep, you know, sophistication. So what is the requirement to join? Is there any level of experience required to join or can you be a complete novice? You can be a complete novice as long as you're not an asshole. I like it. I like it. So you can be a beginner.

[00:38:53] You have to be an accredited investor, um, you know, because that's our partners, you know, guidelines with SEC guidelines. And the other, the other point about that is, is you got to remember that all of our, all the references to, for members are friends of friends and family or friends of friends and family.

[00:39:15] And so, you know, we've got our own built in, uh, filtration system to make sure that we have people that are interested in investing. If they haven't already interested in learning can add value to the discussion can add value to the process. And so, uh, I, I think we've been very lucky around that, but that's sort of a built in, uh, filter that has helped us get very strong people as part of the group. Yeah. I'll, I'll attest to that.

[00:39:44] I've hung out with your members quite a bit and I feel like they all pass what I call the airport test, which is, you know, you get stuck in a terminal with somebody for four hours. You know, you're not about to gouge your eyes out. You're actually like having a good time and having a good conversation. Um, I'll also say, as we kind of wrap up here, you know, some of the events you guys have put on have been fantastic. The last one I went to, we went to an industrial flex space that was converted into like a, like a man cave car garage thing.

[00:40:11] And we had like cocktails, happy hour dinner. We all sat around and talked about real estate. Then we had a whole fun day of education and learning. I actually took a lot away from the presentations that you guys had assembled. I think you guys had like a, a broker come in from a major, uh, commercial real estate shop, like CBRE. You guys had someone come in, speak about like different risk levels and different operators come present deals. Just, just a really nice, uh, presentation.

[00:40:37] But I want to conclude with, you know, what is next for your group? Like what, what goals, vision, what can people expect out of the group, you know, going forward? Well, I guess going forward, I mean, we need to want to expand the, the group and get more individuals involved. We don't do that. Like Mark said, through Facebook or anything like that. There's no ads. It's just all word of mouth. And we want to keep it that way. Uh, but we also want to get more individuals in there that can help challenge us.

[00:41:06] And we have a lot of people, you know, sold businesses to private equity, sold businesses to public companies, executives in different channels of distribution, doctors, lawyers, and as we said in pilots. So we want to expand that horizon.

[00:41:21] Uh, and, and I, we see ourselves doing continuing education, um, maybe expanding the conference where it becomes more of an educate, even more of an educational pro, uh, similar to what you're, you're putting on in, um, in, in Las Vegas. Uh, so that's where kind of where we see ourselves going, but we want to keep it intimate.

[00:41:42] It's very important that the culture of the individuals that are in the group are, are close knit and want to help each other. And it's not just, I'm in there for a one time investment and I'm, and I'm moving on. Yeah. It makes sense. Yeah. We're, we're actually, we're, we're actually capping, uh, the number at a hundred. That's, that's the max we want to have in this, in this group. Uh, it'll enable us to get to know everybody, uh, very closely.

[00:42:12] It'll, uh, get people comfortable and having constructive dialogue around deals. And, uh, we'll be able to raise enough money to attract all the right syndicators that, that we, we would like into, uh, into being partners with us. You know, it kind of reminds me of years ago, there was a group called left field investors that kind of like, they really blew up.

[00:42:35] And eventually they huge, they got really big and they sold to, um, bigger pockets and they became, um, passive. And I think it was, it's called, uh, passive pockets, pat passive pockets. And there's nothing wrong with it. It just, it kind of feels like the, the more honeymoon phase. It just feels like a forum. Yeah. Like the honeymoon phase was, I remember left field investors and people loved it when it was small, intimate, um, a lot of, uh, good dialogue and conversation.

[00:43:02] So it's kind of neat to be in part, a part of those first hundred members, because I think that's where, where, where a lot of really deep relationships kind of came from. And I'm not saying passive pockets isn't that, but I just think it's, it's matured into more of a mainstream, um, group, uh, versus being a lot more intimate. Um, and, and really kind of going deep with people versus kind of going far and wide and having, you know, a massive, a massive following. Um, so good for you guys.

[00:43:29] Well, I just wanted to thank you guys for coming on and, uh, always great to see you, Mark and Larry. Of course. Uh, I kind of view you guys as both kind of mentors of mine personally and, and, uh, in great partners in, in business. So, um, always great and appreciative to, to have the time with you guys. Um, before we get on. Yeah, you're welcome. Before, before we leave, how do, how do, uh, people find out about your group? Where do they go to, to learn more?

[00:43:53] Well, you can go to www.foliag.com or you can just email me at Larry at foliageig.com. Well, thanks so much guys. And we'll make sure that gets into the show notes and for thanks to those who are listening. Uh, we'll catch you on the next one. See you guys. Thanks. Thanks so much. Well, thanks again, everybody for listening to the show.

[00:44:21] Before you leave, don't forget we're meeting for the PIP live events in October 8th and 9th in Las Vegas, Nevada. If you enjoy our content, what you're hearing, what we're talking about, and you want to network with other pilots or doing what you're doing, tax and legal and investment professionals. See you in Las Vegas. Go to passiveincomepilots.com to get your tickets. Ticket prices do go up in August. So jump on that as soon as you can. Thanks everybody.