March 26, 2024

JF3491: Buying Cash, Killing Deals by Overnegotiating, and Falling in Love with the Numbers vs. the Asset ft. Rob Powell




Rob Powell, CEO and Principal of RESOLUT Real Estate, joins host Slocomb Reed on the Best Ever Show. In this episode, Rob discusses how he missed out on building a mobile home park portfolio by having unrealistic expectations and overnegotiating. He also shares his strategy behind buying cash, residential vs. non-residential commercial real estate, and why you should fall in love with the numbers, not the asset.

Rob Powell | Real Estate Background

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Slocomb Reed (02:05.07)
Best ever listeners, welcome to the best real estate investing advice ever show. I'm Slocomb Reed and today we are joined by Rob Powell. Rob is joining us from New Mexico. He is the CEO and principal of Resolut Real Estate. He is a commercial real estate investor, commercial real estate broker, and also a coach to commercial real estate brokers.

His current investment portfolio consists of manufactured housing communities, neighborhood strip centers, industrial warehouses, flex spaces, land and big box, single tenant net lease properties in New Mexico, Tennessee and Texas where he has general partnership positions and limited partner positions. Rob, can you tell us a little bit more about your background and what you're currently focused on?

Rob Powell (02:56.747)
Yeah, first of all, Sulkum, thanks for having me on. It's a pleasure and I'm honored, so appreciate that. So right now I operate as the CEO of Resolute RE. Our corporate headquarters is in Austin, Texas. I am remote and I live in the beautiful state of New Mexico and I'm also the principal of the New Mexico office where we have about eight brokers and all we do is commercial real estate.

And we also do investments in New Mexico and Texas as well. I am also a coach with the Massimo Group, and I coach commercial brokers all across the country, a phenomenal opportunity. I'm also a coach with CRE Investor, which basically is an investment program that helps brokers, commercial brokers, take that leap and start investing themselves.

And what else would you like to know? When I got out of grad school, I was in consulting for a long time and did a lot of business consulting. I lived all over the United States. And when that blew up, many people are familiar with the Enron story, if you're old enough, that had a big hit on the consulting field. So I lost my job and I was getting ready to take another job with Ernst & Young in Boston when I knew that it wasn't a good life for me.

I did not enjoy the traveling and it was a lot of stress on my family and on me and I know I needed to do something different. So I picked up a book on investing. I started out in residential homes, built a large portfolio of residential homes. I was recognized by the people that wrote the book for my investment strategies that I went around the world, went around the country touring and getting on stage and talking about how to invest in residential. I took those homes, I traded up, I did the game of Monopoly and bought some strip centers, a mobile home park and so forth. 2008 happened, did everything I could to survive that period of time. And during that time I got into brokerage as well. And here I am.

Rob Powell (05:25.191)
I've been coaching and investing and brokering for the past 10 years and actually 15 years, I think. And now I haven't looked back. Real estate, commercial real estate has given me a lot of freedom, flexibility in my life and has rewarded me very well.

Slocomb Reed (05:48.118)
Nice. So let's, let's dive in here, Rob. You made a transition from residential to non-residential commercial. Our audience will be, uh, they're very savvy, uh, when it comes to a commercial real estate investing podcast audience. There are some, uh, there are a lot of general reasons for making that shift that will already be aware.

Is there anything in particular that led you down that path?

Rob Powell (06:20.799)
Well, obviously, for most people, it's bigger deals, right? Shopping centers, mobile home parks, more complexity. But there's a lot more freedom in commercial than residential. Residential is a very emotional business. You're dealing with a lot of emotion. Most of commercial is all about money, all about the pencil, right? On things penciling out, does it make sense? It's all about business.

That is more enjoyable and I think that allows a lot more freedom because even though you can do stuff in residential, there's a lot of bottlenecks in residential that I want to avoid. Commercial everything's a little bit more streamlined, a lot more processes, you can hire a lot of people to do a lot of things and commercial allows the investor to build margin. In other words, it allows the investor to have more time to do what they love to do while the business is still running.

And I think there's not too many things that allow you to do that, where you can streamline a lot of things, continue to invest, continue to build your portfolio. Residential, of course, offers that, and there's some people that make a lot of money in residential and have the processes. But man, residential is a pain in the ass to me. And I'm glad I'm not in it. And even though I own a mobile home park, and we do deal with some residential stuff.

There's a property management company in place that takes care of all that. And so all I do is look at the books.

Slocomb Reed (07:59.31)
That makes sense, Rob. Looking at 2024, I want to ask a couple of questions here. First, what are your specialties within commercial real estate investing? I imagine with your experience as a broker, does that mean that you tend to focus on acquisitions or is there something else that you really dig deep into when it comes to commercial real estate?

Rob Powell (08:27.299)
So I think the answer is easier in how I do deals, right? Being a broker, even though a lot of people, when I was an investor and I became a broker, hoping that I would get more deals, that is absolutely the wrong mindset. If people feel like by becoming a broker, you have more opportunities, absolute bullshit. I thought that, I was absolutely wrong. And...

But the thing is that being a broker, you have tenants, right? And sometimes you're able to find solutions to those tenants by you yourself buying those assets and putting the tenants in there and so forth. So it does come together in somewhat of a, it does fall into place, but that's not always the case. But I do focus a lot on cashflow.

There are partners of mine that don't focus on cash flow. They look at IRR and so forth. One of my partners, Brad Aarons with Investor CRE, that's his spick, that's not mine. But also I like to buy things in cash. I don't like to go to the bank. And I do raise funds with friends and family. Kind of a syndication. I used to do syndications. I haven't lately, let's just put it that way.

And so I like industrial, I like industrial tenants, I like shopping centers with small shop space, neighborhood shopping centers. I like mobile home parks and I made a big mistake, if you don't mind me sharing this experience, is that it's kind of like that guiding principle of success breeds failure kind of thing where a mobile home park landed in my lap, took very little money, it was 100 and something units lots.

You know, I still have it today, it's a cash cow. But it was such a great deal that I used all the other mobile home parks at the time. You can imagine, you know, mobile home parks are very sought after now, but at that time they weren't. And I had several opportunities to buy more mobile home parks, but they weren't as good as the one I had, the deal wasn't as good, so.

Rob Powell (10:49.431)
When I saw these other mobile parks, I said, well, you know, I negotiated really hard, I lost the deal. When the reality is, is that I had a false expectation of what it was gonna be like. And I had such a good deal that I thought I could get more good deals. I was wrong. And that was probably the biggest regret that I have is always trying to get the best deal possible and so much so that killing the deal. Because of my experience, I thought I could repeat it and I couldn't.

And maybe it'll come again, but I lost an opportunity to build a large mobile home park portfolio. But as you can see, I do it all. I even do land. I don't do development. And reason being is that there's a lot of risks there and there's a lot of sleepless nights and I do like to sleep. And hence why I don't have a lot of debt.

Slocomb Reed (11:42.59)
You've, yeah, when it comes to commercial real estate asset classes, you've got your fingers in a lot of cookie jars, for sure, Rob. That's part of the reason why I'm asking what components of the investing that you specialize in. It doesn't sound like you're a boots on the ground operator as much. Where is it that you really stake your claim at being a master of commercial real estate investing? Which aspects of, you know, acquisitions, operations, finance, where is it that you're one of the best?

Rob Powell (12:19.587)
So I would never say that about myself. I do lose sleep because I'm always thinking about possible mistakes. But it's really identifying the asset and doing some financial analysis on the asset itself, really understanding the numbers. One of the things I learned early on is to fall in love with the numbers first. Younger investors or immature investors, what happens is they start to, they're looking at buying something, they drive by it, they start, you know, they do a lot of walkthroughs and they start to fall in love with the assets.

So when they get to the analysis part, when the numbers don't work, they start to fudge the numbers a little bit. You know, I don't need so much in reserve, maybe I can manage it myself and they take out the property management fee and so forth. I, on the other hand, look at the, I hate the deal when it comes in, right? I look at what is wrong.

And so I'm not a master of anything, but I definitely dive into the numbers to see why this deal doesn't make sense. I am looking for a reason not to do the deal. And to me, that is a big plus, not only to my own portfolio, but the other people that invest with me, as I need to fall in love with numbers first. Once I fall in love with the numbers first, it makes a lot of sense. And I've got this under the under contract at the right price.

Then I do all that other stuff. Then I ask for all the information, I go tour it, I go walk it, I talk to inspectors. I start to spend the money. And a lot of people will ask for a lot of this information before they even have it under contract. So they have no control of the deal. The things that I do is I fall in love with the numbers, I have it under control, and then I go all out to make sure this is a good investment.

And yeah, I lose sleep the day before I close. It's probably, it's normal for me to do that but I, cause I, you know, I don't want to make a mistake. And at least I want to have enough margin in the deal that if I do, that my investors, my portfolio is protected.

Rob Powell (14:35.479)
So I wouldn't say I'm a master of anything, but there's a lot at stake at the beginning of the deal. And then I do have a lot of professionals that I work with. I do work with a real estate attorney. I do work with the CPA. A great real estate attorney and a great CPA are worth their weight in gold. And great partners too, right? When I did a lot of syndication, it was always the-

It was always the investor that, the guy that invested the smallest is the one that bitched the most. And so I have a close knit group of people that I invest with. And because of the lessons I learned about all, about investors that invest the bare minimum, that there's gonna be a lot of problems. And I've learned through those experiences to make sure the the deal, to do what I can to make sure the deal is successful.

Slocomb Reed (15:36.274)
I asked you before we started the interview, Rob, about your ownership stake and the properties you listed in your bio.

Are all of the deals you're involved in currently syndicated?

Rob Powell (15:53.399)
No, some are. And the ones that I have syndicated or friends and family, so when I talk about a syndication, right, we're talking about SEC guidelines and so forth. Those, I'm still involved in a few of those where I am the GP, but then I also have friends and family where it's just a simple people that I known for a long time and a simple LLC.

To go buy stuff putting a few hundred thousand dollars together and going buying a building or so forth Well a few hundred thousand from everyone to buy a couple million dollars in assets But I am also you know and just to kind of elaborate like in many of the deals in my portfolio I'm a GP and some of the deals I'm an LP the deals where I'm an LP are the deals that the people that are running it have a really good reputation and they understand it really well.

For instance, I'm a partner in a couple of hotels. I don't understand the hotel business, but I know these guys do and they have a successful track record. So I do invest as an LP in assets like those where I don't quite understand all the nuances versus a shopping center or an industrial building or so forth.

Does that make sense? I know I kind of answered the question with a lot more, but.

Slocomb Reed (17:21.674)
Yeah, no, it does make sense. Do you primarily target like a value-add business plan where you have a defined hold period with a planned exit after an expected certain number of years or are you more of a long-term hold investor?

Rob Powell (17:43.883)
That is a great question. And I used to beat myself up because everyone would always talk, you know, especially advanced investors would talk about the exit strategy. And although I do spend time thinking about an exit strategy on all the assets, my intention is to not sell. That doesn't mean I don't sell it, but it is rare that I do sell. And so when I buy an asset, I'm thinking for the long term.

I have caught myself in not sure if that's the right move. I'm not sure it's the right move. I used to, and there's a lot of reasons being like, usually that asset gets, it should be getting better. So I'm not looking for a value add as much as I'm looking for a really consistent cash flow for a long period of time.

If I can add value to it and increase the rents, of course I do, and that's a lot in the shopping center area. Not so much in the industrial, right? But if I'm buying something today, I'm looking more at the square foot price, I'm looking at the lease. Because you see these brokers, they market things as, under, 
the value of the property, what's being sold at, is much less than it is to build it, right?

Well, everything in the world right now is cheaper to own it right now than build, right? I've heard some rates from four to $500 to build a retail center, right? But if there's a market, now everything's under rent, or I have a tenant in tow or something like that, I gotta have some type of advantage going in. I'm not a...

I don't buy STNLs just because I get a 4% return. That's not what I do. I do find something where it does make sense, where I can make more than what the market is giving, right? But in all the deals depend on the leases, the tenants, and what is that value piece in there that makes this a great investment for not only me, but my investors?

Slocomb Reed (20:27.606)
Rob, for most investors, we're recording in the first quarter of 2024. For the most investors for the past couple of years, it's been a lot harder to find the deals that give them that edge, in part because of the combination of the compressed cap rates of 2021 and early 2022 and the rapidly expanding interest rates, making for much smaller margins on deals.

Within your own investing, and I know you've been investing for quite a while, so I'm interested to hear your insight on this. What has happened to your acquisitions the last couple of years that we've been experiencing? Interest rates being double what they were previously, elevated expenses that are not necessarily reflected in increased revenue, depending on several micro as well as macro factors.

Have your acquisitions slowed down the last couple of years? Have they kept pace with the, you know, 3% interest rate times of 2020 and 2021?

Rob Powell (21:41.239)
Um, so I think there's a lot of components to answer that question. So the overall question is things have slowed down and the deals have slowed down for me. Um, I am not as active as I was say even last year. Um, but it hasn't been because of, let's say the interest rates.

Like I said earlier, I like to buy my deals cash. And so interest rates don't impact me as much. But what's happened is, and I've been on both sides of this where, buyers, when they use lending, all of a sudden their buying power comes down is not as high as it once was. But the problem is sellers are still thinking that their properties are still worth what they were a year or two ago.

And so there is this, there's this, it just, there's no compromise there. Buyers are kind of handcuffed right now when it comes to interest rates and cap rates, and sellers are still thinking that the value is still here or it's gonna come back. I am starting to see a little bit of loosening there and I'm starting to see cap rates rise. I'm starting to see sellers lower their prices. But I do think that...

I haven't had a whole lot of opportunities that I once did, but I still managed to close a couple of things in the last quarter of last year. And so I'm still looking, but the deals are just a little bit harder, but not enough to keep me silent. It's just the flow is a little bit slower, but I'm still investing even though we don't know what the hell's going on out there. We don't know about inflation and interest rates.

Everyone's kind of freaked out a little bit. I've always invested in good times and bad. As long as my foundation stays the same, is my inquiries are pretty solid, I'm just looking at fewer deals.

Slocomb Reed (24:06.25)
A lot of our listeners are going to resonate with that. Rob, tell us a little bit about what attracted you to your purchases in the fourth quarter of 2023. What was your special edge there? And did you pay cash for those as well?

Rob Powell (24:20.375)
So the deals where I'm a GP, they're all cash. The deals where I'm an LP, since I'm not signing on a loan and all I'm risking is my money, that's fine. I will invest in deals where there's lending as long as I am not a signatoria. So I can tell you more about the GP deals that I did. And that's a great example, right? 

One of the deals that came by that we did close on was probably an easy six and a half cap, right? And mixed tenant, industrial flex, nothing to get excited about. When I first saw it, I hated the deal, but then I realized the length of the leases, and then I realized how under market the rents were. These are the kind of things where I say, okay, this makes sense. I might be buying it at a six and a half cap, but I can get the return rather, get it up quickly in a matter of time.

And plus I'm paying cash, right? And so the deal made sense for a lot of reasons. But that was one deal where I was looking up why I hated it. And it checked a lot of boxes. So industrial flex, multi-tenant, under market rents, being sold at a market rate. So a lot of people probably pass this by, but once you start digging into it and seeing where you can win.

And that's where I'm really looking to is where are the opportunities for me in a deal where I can win? Right. And because I buy cash, what happens is it limits me on a lot of risk. And I know that's obvious. But what happens is what if the market changes? Well, guess what? I can be the I can be the guy in the market with the lowest rents and not have been being worried of covering a note, so I can compete and keep my properties filled.

A lot of people disagree with that strategy, but it's worked for several years. I learned that from my father-in-law, was be able to compete with whoever's on the street and always be able to do things at a lower rent. And you're not strapped, you're not worried, and you're not gonna struggle with vacancy, right?

Slocomb Reed (26:40.51)
Rob, I've got to ask you. You, you, you came around to the point I already wanted to hone in on. So you buy all cash. I, uh, I'm going to, I'm a, I'm still doing some residential investing. I'm more of a residential and apartments guy. Um, so I'm also a fan of buying distressed assets, um, because I'm the operator. I'm the property manager, general contractor.

Everyone who's touching that property reports to me or reports to someone who reports to me. So, uh, I'll, I'm coming when I hear you say that you pay cash, I'm coming from the perspective of an investor who's looking to force a lot of appreciation quickly and likely cash out refi. Are you saying that you don't ever finance the properties when you're a general partner? Or are you saying that you acquire cash because it gives you some other advantages and you'll go back and refile later.

Rob Powell (27:44.567)
I have not gone back to ReFi. I keep the cash in the deal. And I know there's a lot of background to this deal. And I'm gonna give you that background. I got involved in a deal in Denver, Colorado, and it was a thousand acre land deal. And it was millions and millions of dollars.

Me and investment group, I bought it. I was one of the GPs signed personally on a note, right? We had a tenant, it was going great, 2008 hit. And it was a miserable two years of dealing with lawyers. We ran out of money, the bank came after us. It was a tough time. And.

That has scarred me a lot where I'd never want to deal with that again. And so I'm not against leverage at all. And I just when I don't have to do it, I'm not going to do it. Rarely will you see my name on a loan. You know, but that is a personal preference. I know some really great investors that leverage to the hilt. I have taken where where there have been a requirement for me to sign on the loan, I have taken a less of an ownership percentage in order to be in the deal but not sign on the loan. But I am averse to banks. Now if someone's going to owner finance, which I did a deal last year where it was a $12 million deal and it was an owner financing deal, all over it.

Where the real estate's the collateral makes a lot of sense to me. So to answer your question, rarely do I refinance. Yeah, I do leave the cash in there. If I was to ever do that, I'd probably go to a 50% LTV at most. And I'm less and less about 1031s now. I just feel you're kind of handcuffed when you sell something and now you're in a position where you have to do something. I'm okay with paying the taxes and so forth.

Rob Powell (30:09.099)
But that's been a slow change over time. But I'm not a fan of 1031s unless it just works out perfectly and that's probably why I don't sell very often. I can't even remember the last time I sold.

But I, debt is what it is, man. It is, people can use it really well and have no fear of it. I also know that if I make a mistake, it puts my family and me at risk. But by all means, there's a lot of people that use it and make a whole lot more money than I do. But I do have a lot of equity sitting there and I'm okay with that.

Slocomb Reed (30:51.95)
All right, Rob, not gonna lie. I wish you guys at this point in the conversation 20 minutes ago, because I'd love to spend the next 20 minutes talking about specifically this. And I'll tell you, I've already sent a message to my producers to make sure we find a time to reschedule you with one of our hosts. I think actually Ash Patel would be the best fit for having a follow-up conversation with you on the use of debt in non-residential commercial investing.

So I want to see that happen. I'm calling it out right now that our producers need to get you rebooked. Um, Ash is much more experienced in your asset classes. Um, and so I think that would be a great conversation to have for our listeners between the two of you specific to the use of, uh, the use of debt, when, when to pay cash, things like that. Uh, I will thoroughly enjoy listening to that conversation between the two of you for sure, but let me paint a picture for you because I'm struggling with your perspective. Now I haven't perhaps I haven't been in the game long enough. I started investing in 2014 and I also locked in as much long-term fixed rate debt as I possibly could back in 2021. And so my portfolio has not experienced the volatility of the last couple of years of interest rates as much.

Slocomb Reed (32:24.054)
So it's 2021. I'm looking to do a cash out refinance on a 24 unit apartment building, residential. I know very different from your asset classes in a lot of ways. One of them being that my property has 24 revenue streams in the 24 tenants, but also has, you know, 24 toilets and kitchens and showers. So I get the headaches there because I live those.

I was offered a cash out refinance of 80% loan to value on an 8.5 cap for a 4% interest rate on a 15-year fixed rate mortgage.

Slocomb Reed (33:15.17)
So if we take out 80% of our equity there, our interest is fixed at 4% for 15 years. And our return on equity spikes drastically. Our total cashflow goes down, of course, but our return on equity spikes drastically. And we're hedged against interest rate risk because it's not even a variable lump. It's fixed at 4% for 15 years until it's paid off. I gotta ask, Rob.

Are you telling me that if on one of your properties you were offered that loan, you would not take it?

Rob Powell (33:52.103)
I probably would not take it. Now, and you know, believe me, I know I'm in the minority. I know I am. There's very few people that think like me. And I'm not sure it's a good thing. I mean, I'm not sure it's, I'm right. But you have to understand, like, if I was presented that situation, and I had an asset that was worth, like I could take that money and buy an asset that made a whole lot of sense. It's, I might do it. 

And I'm not saying I'd never do that, but if I can raise the money and buy something, and buy it cash and not put any risk on it, because the reason you would do something is because you need the money to do something else, right? Or, you know, and I know it's tax free and all, there's so many benefits to that.

But if I can go get another property, raise the money, make a good return and not have to borrow it, then to me that makes sense. Now, if I can't raise the money and it's a good deal, then I might do that. But I've never had, in the last few years, I've never had to go get a loan. I know I'm in the minority, I understand that, but there is some really, really good comfort in not owing money on something. You know, and that's kind of like, you know, I'm not a huge Dave Ramsey fan, and I know he kind of promotes that kind of stuff, but like, I don't, I could pull cash out of my house, I don't have a mortgage, I don't own debt on my cars. And, um...

There's just some, there's a real nice margin built into that, right? If I can tap in, you know, if I go back and tap into all the equity that I have, yeah, I just, I just rather not do it if I don't have to. But I know I'm in the minority, Slocum, and I see why people do it, and I would never judge you for doing it. I think that's a very, very normal thing to do. I am very adept.

Slocomb Reed (36:16.77)
Rob, I wish we could spend the next 30 minutes unpacking this conversation. I hope we can get you back on to have this conversation again with one of our hosts. For now though, are you ready for the best of our lightning round?

Rob Powell (36:31.331)
Yes, let's do it.

Slocomb Reed (36:33.366)
What is the best ever book that you recently read?

Rob Powell (36:36.739)
Okay, recently, so there's a lot of books, but 10X is greater than 2X. I'm trying to remember who it's written by. Yes, and that was the most recent book. One of the books I read every year, once a year, How to Win Friends and Influence People, best book ever.

Slocomb Reed (36:44.866)
Dan Sullivan and Benjamin Hardy, I believe.

Slocomb Reed (36:55.758)
Dale Carnegie. Those are both great, yeah. What is your best ever way to give back?

Rob Powell (37:02.307)
LinkedIn. You can find me on LinkedIn at Rob Powell. Best way to contact me. I'm not on Facebook or Instagram, but I am on LinkedIn and I'm pretty active on there.

Slocomb Reed (37:13.986)
That link is in the show notes. Quick question, will you be at the Best Ever Conference this year in April?

Rob Powell (37:22.915)
I should be, shouldn't I? Yes.

Slocomb Reed (37:25.834)
It'll be in Salt Lake City. It's April 9th to the 12th. You can go to best to register. For all of our listeners, there is a discount code of CONNECT, C-O-N-N-E-C-T, to save 15% on tickets. I will say we have a better discount code for podcast guests. I'll give that to you after the interview.

But I think you'll find that there are even and all cash buyer who never finances will be able to find kindred spirits at the conference. The projection is for about a thousand, give or take a thousand commercial real estate investors to attend the conference over the course of three days. You'd have the opportunity to meet the host, including Ashwathel, who I think should have you back on to interview you on your choice not to use debt and what our listeners can learn from that.

But, there are quite a few people I think you would find that you resonate with at that conference and possibly learn something. Another thing about the conference, we're getting into the point of this just being a shameless plug on the podcast, but one of the things that I find really helpful is that I am, I live in Cincinnati, I invest in Cincinnati, I advise investors in Cincinnati.

I don't really pick my head up much to look at other markets because I'm so ingrained here and all of my expertise is here. I really don't know that much about what's happening in New Mexico. We interview plenty of Texas investors and Arizona investors on this podcast. We don't have time to get in to dive into the intricacies of the markets in New Mexico, but it's an opportunity for me to meet people like you and learn what's happening in other parts of the country as well. Best April 9th to the 12th in Salt Lake City.

Next question of the, oh and yes, Rob Powell's LinkedIn link will be in the show notes. Rob, on the properties that you have acquired, what is the biggest mistake you've made and the best-ever lesson that resulted from it?

Rob Powell (39:48.131)
Okay, so I think the biggest mistake I ever made, and I'm gonna touch on it. There's so many mistakes. But I think the biggest one I made, and I touched on earlier, was building up so much expertise about an asset class and not doing it over and over again. When I talk about the mobile home, there was, you know, buying a mobile home park is not kind of like, it's not buying a shopping center or an industrial building. There are a lot of things in a mobile home park that requires a lot of expertise. You know.

And I can go and I did that. I built this huge knowledge base of how to manage a mobile home park, how to buy them and so much so that when I was on the speaking circuit on investing group, that was my case model of how I bought this and so forth. I built so much expertise and I did not leverage it. And I think, you know, it's one reason why I encourage brokers to specialize in, and that wasn't always what I said, but you build up so much expertise, you leverage that expertise as, you know, it's amazing how many commercial brokers don't invest in real estate.

It's almost like talking to an insurance broker that doesn't buy insurance or a stock broker that doesn't buy stock. I think 80% of all commercial brokers do not buy commercial real estate. And you have all this knowledge and information about this on a certain asset class and you don't take advantage of that.

So my biggest mistake is not leveraging the experience that I've built within my investments to buy more of that asset. And obviously I'm very bitter about that. What lessons have you learned? Go ahead.

Slocomb Reed (41:31.142)
What about a mistake and a lesson learned specific to a property in your portfolio after you acquired it?

Rob Powell (41:40.099)
I'm not understanding the asset well. When I talk about the Denver deal and it was, you know, it was 100,000 square feet of industrial space. And it used to be a airbag manufacturer. At that time, everything I touched turned to gold. And so I started to lose my due diligence hat and not really understanding an asset because everything was turning into gold.

That was my biggest mistake and I don't let up now on the due diligence. I need to answer all the questions, I need to check all the boxes. And even if I'm having success, not let success breed failure and find myself in an asset that I can't get out of.

Slocomb Reed (42:32.266)
On that note, Rob, what is your best ever advice?

Rob Powell (42:36.995)
So my best ever advice is to surround yourself with people that are doing things that you want to do. You know, I know there's the adage of you are who you hang out with, but you know, when you hang out with a bunch of people that aren't, you know, aren't at a higher level than you, you start to justify stupid decisions, right? You know, if you know, and, you know, I always use the analogy of a of a truck that's lifted really high and has the big ass tires and you know, it makes no sense at all.

And they're traveling down the road and you know, and the reason that guy thinks he's cool is because he's got two or three other idiots that think that's cool. That's who he surrounds himself with. And so that lifted, um, car that is obnoxious, that in his mind he thinks is cool because of the people he hangs out with think it's cool. But the reality is it's the stupidest thing in the world, always elevate who you're hanging out with.

And as investors, that's one of the reasons I love to talk to investors, and I'm very interested in that conference you've got going in Utah, is that the more people you hang out with that are doing crazy and awesome things, that's where I wanna be. So I always tell my kids, elevate who you hang out with. Find the people that are, you know, go mentorship, do a mentorship, go do an internship with something, someone that 
is doing things that you want to be doing. And commercial real estate is the same way. And the more people that you hang out with that are doing amazing things, the better your life is going to be in all cases.

Slocomb Reed (44:19.518)
I can't agree more Rob, and I have to say, one of my favorite things about my truck is that the bed is at loading dock height, so you can just roll equipment right into it. Anything you would ever do to a truck that takes the bed away from loading dock height, in my opinion, absolutely absurd and a waste of a truck. 

Rob, thank you. Best ever listeners, thank you as well for tuning in. If you have gained value from this conversation. Please do subscribe to our show, leave us a five star review and share this episode with a friend you know we can add value to through our conversation today. Thank you and have a best ever day.

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