June 1, 2023

JF3192: 3 Things That Kill the Real Estate Industry ft. Luis Belmonte



Luis Belmonte is the owner of Seven Hills Properties, a group of small-time developers who have built a portfolio of $150 million over the last 20 years. In this episode, Luis discusses why he has invested so heavily in affordable multifamily housing in the Bay Area, what his secrets are for getting retail tenants, and some of the key factors that negatively affect the real estate market.


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Luis Belmonte | Real Estate Background

  • Owner of Seven Hills Properties
  • Portfolio:
    • Retail 
    • Industrial
    • Multifamily — owns and manages six apartment buildings
  • Based in: San Francisco, CA
  • Say hi to him at: 
  • Best Ever Book: The Power Broker by Robert A. Caro
  • Greatest Lesson: Be wary of the herd. When everyone is going in one direction, it might be time to try another.


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Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Luis Belmonte. Luis is joining us from San Francisco, California. He is a founding partner of Seven Hills Properties. They are developers who have built a portfolio of $150 million in assets over the last 20 years. Luis' portfolio consists of retail, industrial and multifamily. Luis, thank you so much for joining us, and how are you today?

Luis Belmonte: Couldn't be better.

Ash Patel: We're glad to have you. Luis, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?

Luis Belmonte: Well, I've spent 40 years working for various development organizations, building, managing, buying, selling, leasing, warehouse buildings. So I did warehouse buildings all over the United States, Mexico, Singapore, Japan... And my last job was with the predecessor of Prologis, the industrial REIT, that now owns 1.2 billion square feet worldwide. I was one of the founding partners of the predecessor company. And in 2004, I retired from corporate life, because I was getting too old to be an international road warrior, and that's when we founded Seven Hills, which does low-income multifamily, neighborhood retail, and we have one little industrial deal.

Ash Patel: Luis, did you ever think that industrial would be as hot as it is today?

Luis Belmonte: I did my first industrial lease in 1970, and the rent was six cents per square foot per month net. It's now probably six cents per square foot per minute, not per month. The rents stun me. The cost of buildings stung me. The employer I worked for in 1970 was building buildings all-in land and building for $5 a foot. The last warehouse transaction I participated in, I managed one of those buildings for many, many years for a family - they sold the building, which was not in the best of shape, for $225 a foot. When they asked me what to do, I said "I have no idea where these prices come from. Just take the money and run."

Ash Patel: Yeah, you know what's crazy, is some of our retail buildings - if we can't fill vacancies, we'll lease it out as industrial space, because it's so hot and so in demand.

Luis Belmonte: And there'll be more of them. I think the average Kmart or Sears may turn into a fulfillment center for e-commerce before it's over; returned merchandise... We're going to have some kind of hybrid stuff, especially since cities are now trying to outlaw warehouse construction. A whole lot of things are going to be converted to industrial that used to be something else. It's gonna be a little hard with office space, but most everything else is subject to conversion.

Ash Patel: Luis, I've got to ask ,you with all of this knowledge and experience in industrial, why not go back into it? Why pivot into multifamily?

Luis Belmonte: Well, among other things, I have a lot of stock in PLD, so in terms of my own personal portfolio, I've got plenty of exposure to industrial space. And I'm an investor in their Europe fund. So in terms of building a retirement plan, I'm overmatched in industrial. So that's number one.

Number two, industrial and office are assets that are not appropriately owned by individuals, because when they're vacant, they're vacant, and there's nothing you can do about it. Mostly, my personal stuff is multifamily, because low-leverage multifamily in my view is the safest kind of investment for an individual, because the worst that can happen is you lower the rents. There's always enough demand there, except maybe in Houston in 1980, where they were bulldozing buildings... But there's almost always enough demand that you can fill your space up at some price, make your debt service, pay your operating expenses.

On the other hand, if you've got an empty warehouse, you're up against it. And in soft markets, there's nobody to talk to. And the same thing with office space - you can stand there and stare at it for a long time and get eaten alive. So I think both of those asset classes are best built and owned by institutional investors who are not against it timewise, who can wait to sell into good markets, who can wait out a soft tenant market... And that's why I personally am not doing warehouse buildings at the moment.

Ash Patel: Luis, if you saw a flex space, or a smaller industrial building for sale, would the cowboy, that old road warrior inside of you want to take that down?

Luis Belmonte: Absolutely. Multi-tenant industrial - my partners and I have made offers on numerous properties, and we've just never gotten one at the right price. But if one came along at the right price, I'd buy it in a heartbeat. They don't call me Lowball Luis for nothing... Although when I worked for Prologis, just they asked me not to say that. But if the price is right, I'm a buyer. And if the price is obscene, I'm a seller.

Ash Patel: Alright, good. So you haven't really hung up your hat permanently on industrial.

Luis Belmonte: No. It's just a matter of finding a deal that makes good economic sense in a soft market. Real estate is not about making money in a rising market; a gorilla can make money in a rising market. The question is what do you do in a falling market? If you've got multi-tenant industrial catering to subcontractors, and title companies, and people like that, and your leverage isn't too high, you can live through a soft market because it's not all gonna come vacant at the same time.

Ash Patel: Yeah, what was your pivot into multifamily? When was that?

Luis Belmonte: Well, I started my career in multifamily in 1967, when I got out of Vietnam. I went to work at a corporate job, which I didn't like, and the work was boring, and the pay was piss-poor... And I was living with a friend of mine from high school that was upside down in a little multifamily rehab... And I said, "If you'll pay me $3 an hour, I will strap on my tool belt and help you get this job finished so you don't lose your investment." And subsequently, he and I formed a little company and did a few rehab deals, and some of those I still own. And I've always owned multifamily. My father was the son of an Italian peasant; we believe in real estate. He owned rentals. It just something that's in my DNA to own residential rentals, because I think it's a steady market, and unless you're in an area that's declining in population, it's pretty hard to go wrong. And if you're a person who likes fewer moving parts, it's a pretty straightforward business.

Ash Patel: Luis, with all of your development experience, have you developed multifamily? Or has it always been buying existing properties?

Luis Belmonte: I've done lots of rehabs. My partner and I have built 502 units of low-income multifamily in the Bay Area. I've participated in a few other development deals, but those are two big development deals. We have looked at numerous others, but once again, we can't find numbers that work, and I refuse to build with an exit anticipation of a four cap or a three and a half cap or some number that makes my nose bleed. So I think that development into those kinds of numbers is highly risky. So if I could get a 7% or 8% return reasonably projected on a multifamily development deal, I'd do it in a heartbeat.

Ash Patel: The next time I ask you a question that starts with "Have you done...", just cut me off and say yes.

Luis Belmonte: The answer is I've worked on everything except regional malls and hotels. So if it's planted in the ground, I've probably managed it or financed it or built it or leased it, or at least spit on it.

Ash Patel: Luis, we have an army of newer investors out there who've only seen a rising tide. Anybody under the age of 33 has never really seen hard times, or even a downward cycle. What are your thoughts on the current market, and for all of those investors that have not seen hard times?

Luis Belmonte: Well, the things to look for are this - the three things that kill real estate are excess supply, excess leverage, and a liquidity crunch. And right now, one way or another, we've got all of those things going on, so it's time to watch your ass. And attempting to catch a falling knife is really tough. So anytime you're doing real estate, you need to say "What happens if...?" and go back through and look at the history of the performance of the asset and the location in a recession, and see "How bad it can get?" and say, "I need to structure my deal so that I can live through that experience." In the immortal words of my ex-boss at Prologis, Hamid Moghadam, "Big money in real estate is made by those who have cash when nobody else does." So if you're thinking about investing in real estate, get your cash together, get your investors together, and wait till cap rates readjust, and then do a proforma that says "What happens if I go 20% vacant, or interest rates go up 200 basis points, or x tenants default?" and say "If I can live through that, then this is a good deal on I should get into it."

Ash Patel: Great advice, and I think that's been lost over the last decade, is stress-testing deals. Because the numbers have always gone up.

Luis Belmonte: People aren't stress-testing deals, and they think that 2% or zero inflation adjusted interest rates are the norm. And in about 1988, I was working for a company and I was doing business with Principal Financial Group, and they had a deal where we were partners together, and we were on a floating loan doing the deals, and we could fix into one of their funds anytime. And I fixed $100 million of debt at 10%, because we were fully convinced we'd never see single-digit interest rates again. And I wasn't hanging out on a limb. My bosses, my partners were badgering me to make sure that we had the fix-in at 10% on $100 million. And we truly believed we'd never see single digit interest rates again. And what happened was that the world's central banks started stepping on rates, and they did so in concert, because their biggest customers are governments, and governments are the biggest borrowers, so obviously, they're interested in low interest rates. So am I, but I've never been in a position as a borrower to set my own interest rates. I wish I had been. But now that's coming apart, because once inflation sets in, you can't hold it. So that strategy works until it stops. And it has now stopped. And I stood behind podiums for a good 10 years, waving my arms, saying "Inflation-adjusted interest rates are artificially low, money's on sale, borrow now before it's too late. Go fixed, go long", and I turned out to be wrong every time until now. But I'm right eventually. And the ticking time bomb in our marketplace is loan rollover, because leverage that made sense at three or four makes no sense at six or seven. And when rates move 300 basis points and when all the lenders are being told by the regulators to cut down their exposure to commercial real estate, you're going to have lower valuations, lower loan-to-value, higher debt service coverage, higher interest rates, and you're going to get 50 cents on the dollar of your existing loan when you roll it over. It is a loudly ticking time bomb, and people who are new to the business have just never seen anything like this, and it's going to be really ugly in my view, especially in the office sector.

Ash Patel: Luis, are you positioning yourself to be cash-rich, and have a lot of dry powder to deploy when that happens?

Luis Belmonte: The last 36 months we rolled over every loan in our system to get it out as far as we could, and we had excess proceeds on some of the loans; we [unintelligible 00:14:25.14] that money, we renewed our lines of credit, we cultivated some investors, because we have a few deals with outside investors, a small circle of people... So we're sitting here, we have one deal that we've just agreed on, a little deal in Bend, Oregon, and we're waiting for cap rates to readjust, and we are ready to spring like cheetahs on the market if prices become rational. Because as Hamid said, big money in real estate is made by those who have cash when nobody else does. So [unintelligible 00:15:00.23] as fast as I can, because I think that there is a possibility that deals will be there that make good economic sense.

Ash Patel: Are you going to try to catch a falling knife? Or are you just waiting for numbers to make sense?

Luis Belmonte: I'm all about a number that makes sense. Can I flow cash at a risk-adjusted rate? So I'm looking at a deal and saying, what rate of return makes sense based on leasing risk, the rehab risk, the financing risk, whatever? How much risk can I eliminate from a situation in terms of building permit, fixing a loan, all that stuff? And then we get down to leasing risk< and I say, "Okay, what's the leasing risk I have here in terms of the supply and demand dynamics?" And if the resulting number meets my yield threshold for a deal of that risk level, which is the tough number to come up with, then you do the deal. And don't worry about the falling knife; the market can get worse, but if I'm still making money at my target yield, I don't give a rat's ass.

Ash Patel: Do you have a preference on what asset class you would look for when deals start to make sense?

Luis Belmonte: No.

Ash Patel: So you'll take down anything. The only consideration is if I'm dealing in an asset class with which I'm unfamiliar, the rate of return has to go up, because I'm going to pay a stupid tax. So if I buy a trailer park, which we've tried to do once or twice, then I need to have a higher rate of return, because I know that I don't know everything about trailer parks, and we'll screw something up, so we got to have more room in the deal to pay the stupid tax.

Ash Patel: If you buy an asset class that you're not familiar with - we've interviewed people from every single asset class - email me, call me, I will put you in touch with somebody to reduce your stupid tax. [laughs]

Luis Belmonte: Thank you. Well, I also have cultivated a couple of people who own a lot of trailer parks that I can talk to, because I'm a great believer in finding an expert in areas where I don't know anything. And I will say, when I was working for the predecessor of Prologis, we were doing deals all over the country and all over the world, and in every case we went into the market with a local partner, because we never figured that we were smart enough to handle the local politics, or the local customs, or deal with the local contractors. So I'm a great believer in reaching out to someone who's an expert in whatever market I'm trying to get into.

Ash Patel: And for the record, Prologis is the number one and number two developer in the world. And one of the biggest


Luis Belmonte: Prologis was doing 4 billion a year of new deals, which is one of the reasons that I'm not there. When I was there, I was doing 400 million, and they wanted to really ramp it up, and I was getting old... So they cut back based on the way things are going now, but that was the run rate. They own 1.2 billion square feet. They are the 68th largest company in the S&P 500, and we started out with zero. When I was there, we were an advisor to institutions, and we were running about 50 million feet. So their growth has been absolutely phenomenal. Stunning.

Ash Patel: Yeah, we've done a deal with them. They are phenomenal to work with. Luis, when did you start raising money for your own deals?

Luis Belmonte: Well, when I first started in the business, it was just the money I saved up from combat pay in Vietnam. I knew nothing about raising money. Then I went to work for [unintelligible 00:18:30.07] who was a New York developer, and he basically was bamboozling insurance companies to lending him more money than he was spending, and he had a set of plans to build buildings; he only had one set of plans, and he cut every corner imaginable. He was on the cutting edge of the building code everywhere. And then he went broke in '73. Then I went to work for Lincoln Property Company, and we were in the tax evasion business. So we had Wall Street firms, tax lawyers, people syndicating deals... And basically, we were selling tax write-offs. And it was my job to make the real estate work that produced the tax write-offs and to try and make sure the investor didn't lose their investment. But we were in the inflation business and the tax write-off business, so that's what we were selling. And that was the money raising.

In 1983 they passed the Tax Reform Act, which Donald Trump, in the only genuinely 100% true statement he ever made, described it as going through the windshield. Every developer in America was broke, because we were all highly leveraged, because interest created write-off, so the whole world changed. And then the institution's took over the business. The developers were all put out of business, and we all became lackeys for the money - private equity, insurance companies, Blackstone, whoever. So little developers like me, who can raise their own money and money from individuals are still in the development business. Everybody else is simply a service provider for money. And we used to call things [unintelligible 00:20:07.00] that destroyed the borrower, but left the property intact.

So I've seen money move completely over the course of my career, and how its raised, and I was once at a ULI meeting where a big-time insurance guy who ran their real estate division pointed at me and he said, "You see Belmonte sitting down there in the first row? He spent his entire career trying to get in front of the big wave of money appropriately dressed." And I was about to scream an insult at him, but I decided he was right. That's what I'd done.

So you watch how the money moves... And once I went to work on the institutional side, it kind of changed my view of the whole fundraising endeavor, and I decided that money-raising and investment management was a completely separate business from actual real estate operations. And the reason that we have a small company that does one deal at a time is I don't particularly enjoy the institutional side of the business. It's not my wheelhouse, and I like doing deals. So if I'm doing little deals, then they're my deals. If I'm doing big deals, I'm a lackey for the money. And that's what it gets down to. I like to say every deal is a million dollar deal. If I do a million dollar deal, it's my deal. If I do $100 million deal, I own 1% of it. So it's all a million dollar deal.

Break: [00:21:38.05]

Ash Patel: It's become a sport to raise money for deals today, and here you are--

Luis Belmonte: Well, it's all about portfolio management. It's all about understanding the investors' mentality, their investment philosophy, their investment plan, their personalities... And that's just not me. I'm a street dog. And my last book is called "Street Dog MBA" because that's where I am - I'm out in the gutter, which is where I belong and where I feel comfortable. And my partners and I like to be the low-cost producer. We're in the low-income housing business in San Francisco. Our building is 100% occupied, and [unintelligible 00:24:10.14] people are having a hard time and giving away free rent, because we provide clean, safe, affordable housing. So we're getting business when everybody else is getting a lot less business. I'm the same way with retail. I want to be able to have the lowest rent in town and still make money.

Ash Patel: Luis, is that a book that you've written, "Street Dog MBA?"

Luis Belmonte: Street Dog MBA. Well, the two that are fairly current are "Real Estate 101" and "Street Dog MBA." Both available on Amazon, very reasonably priced.

Ash Patel: I'm buying that after this call. I want to circle back to something we started talking about earlier... You mentioned how governments and central banks - it behooves them to keep interest rates lower. And one thing that nobody's really talking about is sovereign debt, and the payment on those sovereign debts. What's gonna happen with that? I mean, the interest that we're paying...

Luis Belmonte: Well, for every 100 basis point increase in rates flowing through the system, the government of the United States is going to owe an extra $310 billion a year. For every 100 basis points. And rates have gone up 300 basis points. And the doofuses in Washington, in order to minimize debt service, went as short as they possibly could the last few years; when they could have issued 30-year money at one and a half percent, they were offering 90-day money and one-year money at a little less in order to make the numbers look better. And they should have been going 30 every time for the last few years or more. And instead, they went it short, and now it's going to bite them in the ass. And it's happening all over the world. We have way too much government debt, and government debt is growing faster than the economies are growing, which is a death loop. And we're going to lose our status as the reserve currency, which is a massive advantage if we don't watch our step. And the only reason it hasn't already happened is that the almighty dollar is the tallest midget.

Ash Patel: [laughs] I love it. Here's a question for my own personal interest. Historically, during these recessions, as the pain traveled across the entire population - because right now there's still so much money on the sidelines... And is the recession not really going to hit until even those people feel pain?

Luis Belmonte: Well, I think the real estate markets are going to have a problem, but it's probably not going to affect anybody else. If the office building at the corner of Main and Main is owned by the lender, instead of the institution that paid too much money for it, or the private equity player that paid too much money for it, the person on the street isn't going to see much going on.

Now, in San Francisco, where the financial district is empty, it hurt a lot of small businesses that were in the financial district servicing the office workers. But for the most part rents for ownership to lenders is not going to make that much difference. And the government now is of course backstopping everything, so that it's probably not going to crater, but they're just fueling inflation by doing so, and creating moral hazard by doing so, which is storing up problems for the future. But I'm not sure we're even gonna have a recession, because the labor force is starting to shrink, so there's still more job openings than applicants right now. So at least in the immediate future, I don't see a recession. I think there will be a lot of pain in the real estate sector. What that means is somebody who worked for the developer, then goes to work as a workout specialist for the lender, there's still a job there, because there's still a building. So yes, there's a ton of money sitting on the sidelines, but I think it's going to hesitate to come into real estate, because we've got supply pipeline issues, except in industrial, where there's a little bit of an issue that will quickly cure itself. There's a little bit of sublet developing; there's a whole lot of space in the pipeline. But by 12 months from now, that pipeline will have dried up and righted itself. But there's a big apartment pipeline, there's already too much retail, office space is obviously -- the demand has dropped by 20% or so... So we're going to have some turmoil, but I don't think it necessarily communicates to the rest of the world, like the bankruptcy of Lehman, and the subprime, and all that stuff.

Ash Patel: Thank you for sharing that perspective. You mentioned low-income housing that you've developed in San Francisco, one of the most expensive areas to build. How does low-income housing make sense? Is it subsidized by the government?

Luis Belmonte: Oh, absolutely. Layers and layers of subsidies. So one way or another, you've got to have 50% or 60% or 70% of the costs covered by you, the taxpayer, and my partners and I deeply appreciate your help; we really do.

Ash Patel: [laughs] Is it as profitable as doing value-add multifamily?

Luis Belmonte: Probably not, but it's less risky and requires less capital. So if you're a small-time developer trying to operate with your own capital, you can get into it for less money. So we have a 257-unit SRO in San Francisco; it took about a million dollars upfront money to do the deal, all of which we got back when we were able to close and get the tax credits to fund, and all of that stuff. So we have, in effect, zero investment in the deal. Just a lot of sweat. And we're now in the 25th or 26th year of ownership of that project, and it's now quite profitable. But the first few years we struggled and grinded and groaned and made the debt service, and got it done.

Same thing in San Jose, we've got 245 units there. Our front money was less than that project because we got better at pulling the levers, and our partner is the Housing Department of the city of San Jose, and we've got tax credit investors, and all kinds of layers. And again, in the beginning we made some fees, but it wasn't particularly profitable. But we're now 10-12 years into it, and it throws off good cash flow. So you've got to be more patient, but if you're a small-time operator and you are able to navigate the politics, which are horrendous - so in San Francisco, we actually had to get a law passed to alter the zoning code in order to build our building. We had more bureaucratic input, and we went through a competition at the state level to get awarded the tax credits... It's a political minefield. But if you're prepared to learn how to do it, it's an OK business. But you better not be in a hurry; you ain't getting rich -- well, the first book I wrote, which I don't recommend reading, because I got better at writing after a while, is "Get Rich Slowly. Invest in real estate." And that's especially true with low-income housing.

Ash Patel: Interesting. I've never heard this before, so thank you for sharing that. What's your last multifamily deal that you've done?

Luis Belmonte: The San Jose deal. We haven't done anything since then. We've basically been working on small-scale retail in Oregon since then. We were a merchant builder for Walgreens, and we ended up with a lot of land associated with our Walgreens deals we've gradually built out, and we've done a few more retail deals since then. So out of our focus today is retail in Oregon.

Ash Patel: So you mentioned retail's over-built, but there's still spots where it's profitable.

Luis Belmonte: Yes. Again, you've got to buy it right. We built a deal that we just completed, that should have been a good deal, in Eugene, Oregon, and we had it pre-leased, but the construction costs went up so badly that it turned out to be a breakeven deal. But it gets back to my other point - we had enough space in the deal to come out whole. It's not a deal that I'm going to brag about, because it has a little cash flow, but not much, and not nearly enough to compensate for the risk... But it had enough room that we got through the experience, even though we had a 50% overrun on the costs, because the construction costs went through the roof.

Ash Patel: Luis, after all these years in real estate and business and development, what's one of the hardest lessons that you've learned?

Luis Belmonte: One of the hardest lessons I've learned is to be wary of the herd. When everybody's going in one direction, you've got to scratch your head and say, "Something's going on here." The tendency of developers is they want to get bigger, they want to get flashier... When I worked for Lincoln Property Company, we started out doing industrial and suburban office space, and by the time it all came unglued, we were building high rises. And I never was in that part of the business, but there's a tendency to want to be a big dog, and take yourself seriously, and get your picture in the paper with your arm around your architect, and all that crap... And the important thing is to avoid all of that, to stay humble, to keep your head down, to keep your visibility low... The only reason I want visibility is as a leaser of space. I want to be known as the guy to bring your deal to, because it'll get done. I want to be famous in the part of the brokerage community that actually gets deals done. That's the only place I want to be famous. Other than that, I want to be invisible.

Ash Patel: You just want to stay a street dog.

Luis Belmonte: Yeah. Well, in the high rise condo of life, I don't want to be in the penthouse; I want to be three floors down, with a decent view, and no mortgage.

Ash Patel: And no one knows your name.

Luis Belmonte: And I don't have to put my name on the plaque in front at all. Just on unit 1023.

Ash Patel: Luis, you mentioned lease-ups. Are you a broker today?

Luis Belmonte: I have a broker's license, but I've never collected a commission... Because a long time ago, when I had a corporate position, the lawyers told me I had to get a license, so I got one. And now in California if you're old enough, and you've been a broker long enough, you don't have to take continuing education courses. You just have to send money. So I'm still a broker.

Ash Patel: You mentioned "I want to be known as a guy that provides the lease-ups. What are you leasing up, your own buildings or other people's?"

Luis Belmonte: Our own buildings.

Ash Patel: Got it.

Luis Belmonte: We don't do leases for other people, no.

Ash Patel: What's your secret to getting retail tenants?

Luis Belmonte: Well, your secret always is to be the path of least resistance in any situation. So when I was doing industrial space, as an example, if you wanted a lease under two years, I had a one-page document, that was all in the English language. You could read it and sign it on the spot if your truck was on the road. I want the space in pristine condition, so you don't have to do anything to move in. I want a lawyer that's a deal-maker, and not a deal killer. I want to have a complete grip on where the market rents are, so that my rent is slightly less than the competing space, unless I decide that the competing space needs to go off the market, because it's so cheap that I want you to go there, and I'll take the next tenant. I want to be in the minds of the brokers, the shortest distance between them and the next house payment, so they know where to come to get the deal done, and I want them to know that the minute the deal is signed, they're going to get a commission check. So just generally speaking, being the easiest person to do business with.

Ash Patel: Yeah. Best Ever listeners, you should rewind that last 30 seconds. That is incredible advice, so thank you so much for that, Luis. Luis, are you ready for the Best Ever Lightning Round?

Luis Belmonte: Absolutely.

Ash Patel: Alright, Luis, what's the Best Ever book you've recently read?

Luis Belmonte: The Best Ever book I've recently read is The Power Broker by Carol Leifer and Robert Moses.

Ash Patel: What was your big takeaway from that?

Luis Belmonte: It's a dissection of the nature of political and bureaucratic power. And if you're a developer on the Coast, it's all about the politics.

Ash Patel: Interesting. Luis, what's the Best Ever way you like to give back?

Luis Belmonte: I work for a recovery facility where we help people who are addicted to alcohol and drugs if they decide that they want to stop doing that. I've been doing it for quite a few years, and I'm deeply interested in that and find it very rewarding. And I've been on the board of directors for years, and I'm the designated hard-ass when there's a legal problem, or an insurance fight, or something like that. That's where I try to help out.

Ash Patel: Luis, how can the Best Ever listeners reach out to you?

Luis Belmonte: LBelmonte [at] sevenhp.com.

Ash Patel: Luis, this was an amazing conversation. First, thank you for your service and sacrifice in the military. Thank you for sharing all of your knowledge with us today; years of experience... I'm going to listen to this a number of times, because I know you dropped so many good nuggets of advice. I can't wait to read "Street Dog MBA." Thank you for your time.

Luis Belmonte: You're more than welcome. Best wishes to you.

Ash Patel: I'll tell you what - we touched on the surface of a lot of different topics... If you ever want to come back and deep-dive maybe into a development, or a lesson learned, or whatever it is, use the same link that you have. I'd love to deep-dive into something with you.

Luis Belmonte: Well, I'll give you a thought. I'm doing a course for a professor at Stanford in a couple of months, and he asked me to talk about our response to COVID. So I've been doing a lot of thinking about what we did to try and survive during COVID in terms of making accommodations for unexpected events... So that might be an interesting topic, and I've given it enough thought, and I'm gonna be doing notes on that, so I could do something with you that I think might be of interest.

Ash Patel: Let's brainstorm. I am a commercial retail industrial investor as well, active landlord, so we could share war stories... It'll be mostly you teaching and me learning, but I'd love to do it.

Luis Belmonte: Well, one aspect of that is bankruptcy, because we had some tenants go bankrupt... And I've got quite a bit of experience in the bankruptcy court over the years dealing with deadbeat tenants, and I've worked as an expert in a bankruptcy court... So that's something where I can communicate some knowledge to your listeners that might be useful, how to prepare yourself in the event you have a tenant goes bankrupt, and how to operate in the whole tribal bankruptcy scene.

Ash Patel: I think that can be incredibly valuable. I will take you up on that. Thank you so much for offering that.

Luis Belmonte: You got it. Alright, good luck to you.

Ash Patel: Thank you. Best Ever listeners, thank you for joining us. If you enjoyed this episode, please leave us a five star review, share this podcast with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.

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