REI184: Beauty in Broken Things w/ John Marsh

23:46And then he calls it the halo effect, where you create a space, somebody that wants to go to. And then the real estate all around there is, you know, the boat's going to, yeah, it's going to rise. So is that a little bit of what your idea is in every project that you're doing? You know, we harmonize on that. And what first got me there is I realized I could watch people go to the worst neighborhoods in our town for good barbecue. And I thought, oh, there's a lot of Mercedes around that barbecue place. And I started thinking about this. I started thinking, food moves the needle. It's incarnate.

24:20There's something about food that there's very few things that have that kind of impact on us. And also, what can you put in 2 ,000 square foot that'll do 2 million bucks, but a meth lab and they're against them all. So I was like, these things are needle louvers. We did a deal downtown Opelika to create the Irish Bread Pub, which was our first hit restaurant there. And here's what a restaurant will do for you. It'll take you from your downtown ever having a great business, it being impossible to it being possible to it being probable. I invested, me and Ash and our design, we did everything we could and even built out more than they paid for.

24:57We spent a million dollars downtown Opelika when there wasn't anything doing a hundred grand on the street. And we launched this restaurant. The owner said, we may do 750. That's our hopes, maybe 800. I said, I'll tell you what, one of my mentors out in Park City said, John, you got to get them on a percentage base lease and align yourself. Give them a low breakeven. Our breakeven on that, and we told them their base rents was$2 ,500. Ain't no way you can make a million dollar payment if you do the math on that. So I'm praying for their success, of course, and we're aligned with it. But the first year, they did like a million two.

25:33Second year, did a million seven. Third year, did two seven, almost$3 million, and the business sold for a million dollars business only. We kept the real estate. But what we did with that lease is, see, banks don't want to loan money on percentage-based leases. So we had the least gross amount ratchet to a new base. So 80 % of the previous year's total sales would set the new base rent amount, and it would ratchet up. And so once that was successful, within a few years, we had three more restaurants doing a couple million dollars a year because no longer now is it impossible. It's possible. When it's possible, people start going, well, they can do it.

26:13We can do it. So the next, we did an Italian restaurant and it did close to 2 million. And then somebody else put in this and that. And so it was catalytic. And I said, oh, note to self, this is a catalytic thing. Now, this is also the location of one of my biggest belly flops. How we belly flopped is this. We build this restaurant with the guys. and they sell it for a million dollars, just the business, right? Is this all in Opelika? All of this is in Opelika, right? Right there on Railroad Avenue. This is all right on that first story. This is early in, I mean, this was 12 years ago or something.

26:48Not that long ago. And no, and we've done a lot of work since then, but what ended up happening was they sold it to a guy and this guy, my wife had met when she worked at Red Lobster. He had grown up in Red Lobster, been there for 17 years, went over and started working for Outback, and it was acquired by Darden, and he was there 13 years. So he's got 30 years in the food business. He buys this thing, and in two years, he drives it in the ground. It's doing less than a million dollars in the original owners. I beg them to take it back. And the mistake was this. There's people who can fly a 747 but can't build one, and there's a difference.

27:25And he was good at operating Darden's system, but when he came to this new thing, the system didn't come. And this was a tremendous learning for us about, I mean, you want something to work, you better have a good system. And what we ended up having to do is solve the restaurant problem. How do we build sophisticated systems to manage accounting, all the inventory to manage the complexity of being able to not see a P &L once a month, which is way too late to make a decision. you only get 12 chances to change. You need minute by minute, hour by hour data to make decisions based on. And so we built a little system for that.

28:04A piece of software was working it. It got so complex. We found a system out in the world called Restaurant 365, which is a big behemoth of a system and got trained on it. Now it's part of our implementation process of every restaurant we launch. Let's take a quick break and hear from today's sponsors. Even Einstein had blind spots. That's why modern science is built on the idea of peer review. Investing may be more art than science, but that doesn't make peer feedback any less valuable. The tricky thing is finding qualified people who are interested and willing to help vet your investment ideas.

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31:11And for a limited time, you can use code stocks15 for a 15 % discount at checkout. All right, back to the show. It sounded like you are really good now at developing and finding the right people for these businesses, for these projects. You had some belly flops, as you said, early on by not getting the right people in there, maybe hiring a good cook, but they can't run a restaurant. Talk to us about how you are finding the right people for the projects that you're doing. Because you put them through a couple day intensive or something like that. I want to hear you speak to that. And it's really the key.

31:45We pick people, not just projects. A project doesn't work without a person. Everything's got to have a leader. And that leader has to either have the gifts or have the gifts on the team. So the first thing we do when people come, like a lot of our patrons who we call it are real estate investors, they want to grow their portfolio. And like, I'll give you Midland, Texas, we launched a fabulous restaurant there years back, filled up a downtown building. It's called Opal's Table. It's amazing. 80-seat restaurant doing $3.5 million a year. Incredible. But what we had to do is we bring the operators that they're hoping would be the partners in Topolica.

32:25And we take them through a series of personality and other tests that we've kind of created and curated over time that helps us know where are their giftings and where are they lacking? Like, can they do back office? Can they do marketing? Do they understand true hospitality? If they tell me that IHOP is their hospitality model, I know where they are, right? And can they make the food? And then, And there's some intangibles that are a little harder, which is these understanding of creating leadership environments and curating. Restaurants are wholesale, retail, entertainment, and daycare all under one roof.

33:01I mean, some of our restaurants in 3 ,000 square foot will have 60 employees. The complexity of dealing with this, you've got to have a certain set of skills. And so what patrons will do, they'll send the potential tenants here or owner operators and we'll evaluate them and give them a go, no go. And if we give them a go, then we go up to a plan and get all the documents together for correct alignment. Because most tenant and landlord relationships are adversarial. They're not seen as their number one partner or collaborator saying, well, I got to pay the rent. Well, what we do is we build the model for the restaurant and inform the investor and the landlord what these people should pay, not just what they could pay.

33:45And we started at breakeven and then we aligned the upside win so that like one restaurant that we have in one of our biggest clients, they had a restaurant there that was doing about a million seven a year. We went to them and said, hey, I think this thing can do two and a half. And said, if you'll go to the operator and say, how about I put$150 ,000 in improvements in your space and you give us 8 % of everything you do above the most you've ever done. They said, man, that'd be great. Well, that percentage base rent has exceeded the base rents they were getting before. Now, it's their highest, paying$35 a foot.

34:22And the restaurants tickle because they're doing more than they ever done because the first million has a very little profit in it for most restaurants. The second has a lot more. The third has a lot more. And so you want to line that up. And that's kind of how we do it. And we do these personality testings. And really, there's like four things we test. Number one, if you don't do anything else, is the five voices. That's five, the number five voices.com created by one of our friends, Steve Cochran. And what it does is it takes the Myers Briggs crazy letters that nobody can hardly remember what they're for, and it makes them the Enneagram, which is more complex, but it gives us what they look like, healthy, average, and unhealthy.

35:10We use two other tools. Positive Intelligence, which is free online, is called the PQ, and it's their positivity quotient, how positive are they in their life. If they're above like 65, we know they're beginning to flourish. If they're below, we know they're perishing. You want positive people. And then the last one is DNA, and it's not really a system. We do it this way, and I'll just describe it to you. Desires, needs, and affirmations. So your desire is for production or connection. Your need is for variety or stability. And your desire for an affirmation is publicly or privately. And that formula gets people motivated.

35:51So it's the motivation formula is if you get their desire, their need, and their affirmations aligned. So like for me, my desire is for connection over production. My need is for variety over stability. And my affirmation is for public. If you want to give me a praise, put it on a billboard. Don't tell me in private. Now, other people, if I did that to my partner, he would be upset with me. So those are the ways we look at people's personalities. Yeah, that's interesting. For our company, TIP, we had to do Myers-Briggs too. And I know you're a ENFP. I'm an INF. I forget the letters still, but it's...

36:28See, the five voices will help you with that because in the five voices, I'm a connector creative. And so those two give me a lens. That means I'm a future voice. I love visioning. My heart's tied to people and I'm a feeler, not a thinker. And so as a thinker, you put ideas on the wall and if you shoot them and they aren't good, it just hits the whiteboard. I put my ideas over my heart and if you shoot them, you shoot me. So if you've got people on your team, getting taken, when you critique their ideas personally, they're probably not a thinker. This is fun stuff. I want to jump into mentorship.

37:04We started talking about it a little bit before the show started, but you do, you've had amazing mentors in your own life. You mentor people now, some of the guys we mentioned earlier. Talk to us about your mentors, some of the guys that first have influenced you. And then I want to step into how somebody can find the kind of people that you have found in your life? Great. Well, mentorship is, I don't know where I would be without it. Honestly, my longest mentor is 28 years. He's 83 years old and he's loved me and added value to me for so long. His name is Paul Estes. But then my second mentor, Don Martin, really taught me about money.

37:44He grew up in a mill village with a high school education, Cottondale, Georgia, right outside Augusta, and ended up helping build Century 21, one of the largest real estate companies in the world. And I met him. And so how do you know when you find a mentor? For me, I say my heart hums like a tuning fork. I said, if they speak to my heart, not my head, I know they're one of them. Now, I don't know. One thing you got to know about mentoring, I think some people are mentors in our life and we mentor them for a season, some for a reason, but some for a lifetime. And so you got to know, I'm a lifetime guy, so I want everybody to be a lifetime, but I know now some are for a season and some are for a reason.

38:22But these guys, Mr. Martin, he was so powerful because what he did is he came to me and he began to speak to me in a way that touched my heart and it was humming. He believed in me when I was an idiot. Can you share the three questions that he asked you first before he agreed to work with you? He asked you three questions that I thought were interesting. Man, and that, I thought they were, so first thing I said, he said, man, I'm going to treat you like my son. I said, wow, that's awesome. He said, I'm not giving you any money. He said, but I'm going to teach you everything I know. And he still has to this day.

38:56So he said, there's three questions. When you answer these and work them, that'll start our mentoring process. He said, how much is enough money? What are you going to do when you get enough money? And now that you got a living plan, what's your giving plan? And he was so wise. And so when Ash and I didn't have$500 to pay our power bill, we put a line in the sand and said, this is enough money, net worth, and income. And had you thought about that before he asked you those questions at all? No way. I was like, dude, just more than I got. You got all this money. Stop being cheap and get me some and help me.

39:31But he loved me enough not to help me. And those of us that are fathers now know that, right? I mean, I watch my sons struggle some and I want, I mean, I could change their life in a moment. And for love's sake, I don't. I say sometimes it's like watching a car wreck in slow motion the decisions they're making. But I love them enough to know they got to do their own work. And one of my mentors says, John, how much money does it take to ruin your kids? About a lot. Or grandkids. And so we worked through that. And it took about, honestly, about four or five months, close to six months to get the answer to that question because I didn't know.

40:06And that number, we said a net worth number and an income number that we believed we could live and give at the level we thought we were called to. I want to know if that's changed over the years. Has that changed that number? Is it? Because that's what I find is like when you say, this is my X number, it's easy to move that hurdle. Like it keep moving it out a little bit more. Well, I love what another mentor told me. He said, John, a luxury once tasted becomes a necessity. And so, yes, I mean, in the beginning, you know, you think, and it has moved some, But it's interesting how much it anchored in me, this idea of what abundance would be.

40:46And so, yes, as we've grown, but we still have a number in the background. And it's really, honestly, not changed a lot. We call this. So I think you can easily figure out how much it takes to survive. I think people have a vision for what it takes to thrive, which is that one we just talked about. But the one we figure most folks can't find is, wow. now. Like, I'll stop. I won't work for inked up paper after this number. And most people think it's a lot more than it really is. What he helped me do, he said, John, I want you to envision the best day of your life. When you wake up and look at the ceiling, what's on the ceiling?

41:24When you look to your side, who's laying beside you? What kind of sheets? When you pull your feet out and drop them on the floor? He took me through this whole day, and then we built a budget that Max had, and it was a lot less than I dreamed of. And so that's what I would encourage you. Do the work of knowing how much is enough and get aligned with your spouse. What will you do when you get enough? And I just said, I want to leave a legacy on the hearts of men and not sticks and bricks. I want to make a difference. And then the last thing, we set giving goals right with our income goals. And we try to beat them every dang year.

41:55Because if you're not giving, you're going to get constipated. You're taking it in, not putting it out, you're going to be sick. Greed, the only antidote I've found for greed is giving, generosity. And do you focus your giving in the community of Opelika or do you look to the larger world in your giving program? It's an interesting question. I love it. Actually, we used to give more globally and regionally, and now we give locally. I really think those are three tiers, but for us right now, we're giving relationally. We want to know. We want to be giving while we're living so we're knowing where it's going.

42:33And I want to know that person can deploy that and do something good with that better than we could. And for us now, our big goal and what we're starting doing is giving away houses, which is my, it makes my heart leap because I believe homeownership changed our life and I think it can change others' lives. So we play a lot. How do you, when you give a home away, my concern, how do you have people have skin in the game? How do you make sure that they take care of the property that you've fixed up? And you know what I'm getting at? Like, how do you find the right person to give a home? How do you know if it's a need or a won't or if they're going to steward it well or not?

43:11Exactly. Exactly that. I just look at how they're stewarding what they already have. If they're not faithful in a few things, they're not going to be faithful in many things. If their car looks like somebody turned a dumpster over it and it's all banged up and they don't take care of the potted plants on their porch, they're not going to take care of this stuff. And so you've got to come alongside them and be willing to walk with them and show them because some people never grew up knowing what it's like to take care of something. But if you're going to do life on life, it gets real easy. If you're very distant from your giving, it's not easy to know at all.

43:43Somebody better have their life on it. And that's one thing people always say, well, they call us to invest in their things. And I said, these people make a critical mistake. They think I have more money than I have vision. and I've never had more money than I've had vision. Until I run out of vision, I got all the investment opportunities I need. And until Opelika's flourishing from corner to corner, I got a lot of work to do. Me and our team, me and Ash, love is expensive. It's the most expensive four-letter word on earth. It's going to cost you a bass boat, everything that means something to you.

44:17You got to put it on the table. And when I got saved, one thing I realized, I said love got past the fence. and I started, God's definition of love is a high jump bar that's unachievable. Patient, kind, long suffering, no records of wrongs, hopes all things, believes all things, trusts all things, does not behave rudely. I said, God, if this is what you expect of me, I'm screwed. There's no way I can do this. And I felt him just show me, no, no, no, no, that's not what I expect of you. That's how I'm going to be to you. And if I give it to you, you can give it away. And so that's where it really started.

44:48So what we say we do is sophisticated real estate development with love. And that's the key. And this mentorship, what Mr. Martin taught me is stewardship is it. And I steward and keep up with every single penny I touch. I always have since my life transformed. But I've got mentors, I've got coaches, I've got counselors, and I got therapists. I say, it's like I'm an F1 car and I need a big pit crew. And so mentoring shares their experiences with you and gives you an opportunity to borrow their glasses. Coaching asks great questions and holds the tension of that question, believing the answers will percolate up out of you.

45:28It's not advice. It's holding the tension and asking great questions. Where counseling and therapy help you deal with previous what we call nuclear waste in the basement or traumas so often work through things. And so even when I'm mentoring some of the men I mentor, I try to acknowledge when I move from mentoring to coaching or from coaching to mentoring or counseling because it's a different lens. And I think we all need all of them. I mean, people say, well, I don't need that. It's like, can you fix an automatic transmission? They're like, no. I said, this is more complicated, right? I mean, your life and your marriage and your relationships are way more complicated than automatic transmission.

46:06If you take one apart, that thing seriously, you better be an expert. So there's a lot of directions I could go right now, but I wanted to hear about your five F's. I think you kind of touched on it a little bit here, but you've got five areas of your life that you use coaches and counselors and mentors. Talk to us about the five F's. So we realize that if we're going to steward things, we ought to have a framework for them. And so it's faith, family, fun, fitness, and finance. So I need a sophisticated plan for my faith, for my family, for my fun, for my fitness, and for my finance. And what we realized, if one of those is off, your total peace in life goes down dramatically.

46:49I mean, imagine you've got this great faith, you're having great fun, and your wife leaves you. I mean, you know, remember factor one zero in your test score, you had all A's, now you got 80 or 75. And that's how our life is. And I watch people who build great real estate portfolios and their marriages suck, or they have a great marriage and have great fit bodies and then their fun or their families messed up. And so what we said is we want the plan for each one of these to be as sophisticated as the other. And so that's what we work hard to do. We built some tools around that that allow us to do what we say.

47:26When my life was crashing, you say, how do you dig out of a million and a half dollars in debt, $99 ,000 overdrawn when you're done? It's a great question. I was doing a rock repair on houses for $150 a day. It's like squirting a squirt bottle in a forest fire trying to make. I take my payment up there like$15 ,000 a month, principal and interest. I take them$75. They're just like, you are an idiot. I said, nobody gets into shape I'm in without being an idiot. That's for sure. And believe me, I know who I am without God. I tell people, I say, you want to know how dumb I was? I said, I financed a Laserdisc player at 19 % and they stopped making Laserdisc before I I got the bank paid off.

48:06I know we've accomplished a lot and a lot of great things have happened, but God has been good to us and sent us a lot of help and mentors and wisdom. But what you end up realizing is most people don't have a sophisticated plan and not having a plan is a plan. It's just a bad one. And so I'd encourage each person to even take that and ask yourself, rate one to 10, how well are you doing at each one of those? And I'm killing my business. I'm a nine. And then in my phone, I'm like, hey, then my family is like. four. And my fitness is like a three and a half. It's like, work on the things that's low, guys.

48:40Don't work on it. If you're not eight in some of them, work on the other ones. And build a plan for husbands and wives just to get in unity. But how it got me out of the hole was this story about fishes and loaves. I love that story because Jesus is like, hey, I got a little happy meal here with a little fish and some bread. He's like, okay, sit down in groups of 50. He blessed it, broke it and multiplied it. And so I said, oh, so measure, manage, multiply. And I started using that in all five Fs. And that's to me, the miracle framework of multiplication. I measure, I manage, God multiplies. And wherever God shows up, you're going to see multiplication, like go ahead and plant a little kernel of corn.

49:24You don't get a kernel back. And people say, well, I don't like what I'm getting. I said, well, then who's handling the plant? them. You don't plant corn and get apples. And so what I learned is in my, like give you an example, in money, I track every penny I touch. It seems complex. It's not that complex, but I haven't got since my life was transformed, not one penny that wasn't tracked. So back then it was harder. I had a little notebook I kept in my pocket and I'd write everything I spent in cash. We'd sit down with our checking account and look at every penny we spent and categorize it. We had our credit card that was the three things.

49:57We spent cash, credit card, or check. Now today, it's so much easier because I've got apps, right? So my whole life is either credit card check or I use the Mint app to keep up with my cash. And so I just believe the idea of measuring something changes it. So for example, if I track all my food and I do this with my fitness pal, just enter it in, it's real simple. That's not perfect, but it's simple. And then I get on the scale every day. I'm telling you, I'm not deceived. The key to being deceived is you don't know it. When that thing starts pushing up, it's too much cheesecake. You know, so it's just simple things that we have to measure them and manage them.

50:37You can't manage what you don't measure and God won't multiply what you don't manage. How do you measure and manage? How do you measure, I guess, things like faith and family and fun? I get fitness and finances. Those are straight. You're a good question asker. I love it. Well, to give you an example, family was a tough one for us. All right. So we've created this tool we're trying to develop. We use it internally as a team. It's a whole suite of tools that help us manage the five Fs from an integrated team level. And what we ended up doing is we do a piece score every year, like what's our piece index for each of the five Fs?

51:13A peace index? Yeah, a peace index. So for example, think like if we go through this survey we have and you create a peace index. So my peace index last year for finances may have been a 90 and my full and may have been a 80. And it's just answer these questions. Once you have to put numbers to things, they get clear. Think about it like going, hey, where do you want to go eat dinner? And your wife said, I don't care. You don't care. No problem. All right. How about tacos? Well, I guess you don't care then. Well, what about, and so we go through these things. Finally, I was like, okay, tacos, one to 10.

51:48Two, how about we go to, you know, Chick-fil-A? Seven. Okay, six or better, we're going. So when you put numbers on stuff, I mean, if you talk about your sex life, you say, how's our sex life, one to 10? Three gives you an indication, okay? So this codifying of numbers helps. So what I would do with Ash is she gave a bad score on family two years ago, and I was like, what's wrong? And she's like, our parents are elderly and we're distracted, not spend enough time with them. I said, okay, what are we going to do to move the score? She said, well, I want to spend time with them. I said, tell you what, let's do.

52:19Let's either cook food or buy food for them, welcome them in one time a month, and we'll call them a family celebration. And our score went up. So we budgeted 12 family celebrations last year and moved the score. So it's the same thing. fun would be how many times have we sat down and tried to find new friends in our community and had dinner with them. So you have to codify what you want to move, and it's putting a number on it. So we do that with all five Fs. That's how we do it. We turn it into numbers, even faith. Okay, how many times am I going to believe I have something that God put in my heart and step out and do it when I don't want to do it?

52:58Or how many times am I going to notice people and give? Like, I'll try to load my pockets, put a couple of hundred dollar bills in there and say, I got to give these babies away this week. That's a faith act for me to stop and hand it to somebody courageously or try to get it to them without them knowing and saying, this is something that encourages my faith to be a giver. And so that's what we do. We codify them, put them into numbers and it helps us go forward. Let's take a quick break and hear from today's sponsors. Hey, it's Sean O'Malley, just popping in with a quick message. If you like this podcast, Well, I've got great news for you.

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56:42That's theinvestorspodcast.com slash tip-finance. All right, back to the show. There's so much I could get into here, but I want to hear, I mean, there's so much, but I want to hear a little bit more about kind of changing gears here and talk about what you mean when I heard you talk to Chris about irreplaceable real estate. Tell us a little bit about what you mean when you talk about irreplaceable real estate that you're involved with. Well, the thing about - This is a real estate show, by the way. Oh, gosh. Sorry. I tell people about high energy, low IQ is a powerful combination. But here's what we realized about irreplaceable real estate.

57:23See, we believe real estate, when we measure how we do real estate, it's three capitals, social, spiritual, and economic capital. Like if we ask ourselves, how can we make our Sunday school teacher and our economics teacher happy? How do we work at the intersection of purpose and profits? Because people don't even believe that's possible. But what we began to realize is why do we love these historic buildings and why are they so valuable and why are they sitting vacant? Okay. And it's because there's no potential. They don't see the potential for them to give the return of their investment and return on their investment.

57:58And this is a minimum criteria. I mean, if you look at Parable of Talents, God's like, well, bring me back the money plus some interest, but I prefer multiples. And so what we looked at these old buildings and said, but what's the value? So they're irreplaceable. We say irreplaceable real estate is built by people who don't live anymore with methods we don't do anymore and materials we can't get anymore and entitlements we can't get them to approve anymore. That's irreplaceable. And we layer our giftings and programming over it, it's unbelievable. And think about this. Even the insurance companies prove to us it's irreplaceable.

58:32Try to get something insured for actual replacement of what you have and you can't do it. Oh, we can't get the materials. We don't get any of the methods anymore. So you're telling me this is more valuable than a sheetrock box would drive it on it. And of course it is, but the appraisers and the banks have convinced us that if you've got a sheep rock box with drive it on it, that has a monthly income of$20 a square foot or whatever for the rents, and you've got a historic building that's got the same, that they're the same value. But the bankers are tricking us. I used to call them banksters. They're convincing us that that's only for the amortization period.

59:09But when you look at it the way we look at it, we ask ourselves, well, what is it going to look like in 50 years? I'm in a full masonry structure, masonry built walls. I keep a fabulous roof on it. It'll be here till Jesus comes back. And so we're looking longer. And so with a longer timeframe, it's not a little better. It's exceptionally better investment. And so we're going to continue to work on this and it's powerful. So that's what we're doing. Let's talk a little bit about diffused hospitality. You were just in Italy, weren't you? Weren't you like there a couple months ago or? Our oldest son just got married there and we spent the month of January there.

59:46It was incredible. Yeah. So I want to hear more about that. Talk about diffused hospitality and how Italy does that well. It is incredible. Italy is so smart about. So I love what my wife said is she said, John, Italy forces you to see what it takes to do things. And she said, everything that they make, you get to see how they make it in front of you. And so we started looking at hospitality. We ask ourselves, what's the best hospitality experience in our life and what they look like? And what we convince is that diffused hospitality is the answer, honestly, for us saving small towns and doing all the work we do.

1:00:25And the reason it's the answer, Italy does it well, is they'll take a little community, a village, and they'll take and put all different kinds of structures or rooms and restaurants. And it's kind of a taking a hotel and exploding in a park. Some, they call it scattered hotel or horizontal hotel or diffused hospitality. And what we believe small towns can do is have a, if you want to make a small town grow overnight stay, celebratory events and iconic food and beverage will do it. We can get people to go, you know, two, three, four, five, six hours to do that. You see Blackberry Farms and places like this, we're going to the middle of nowhere.

1:01:04but they're not a tower. It's not this huge cylinder of rooms they stack on top of each other like the Days Inn or the Holiday Express. What people want is to feel like they're a part of a community and not just a tourist. And so we believe this is the future where we're going is diffused hospitality because we believe it's one of the few things where operational income can roll up into real estate value. And the banks understand it. They understand resorts. And so there's models there in place that help us get to the capital we need. And the banks understand that when we view historic downtowns and places with diffuse hospitality.

1:01:45Talk to us a little bit about your view of historic small towns becoming their own asset class. Absolutely. And I didn't, again, all this is like, oh, after a while. I mean, it takes a while. What I began to see is we saw commercial real estate as an asset class. Then we saw people buying residential homes and collecting them together, 10 ,000 homes or a few thousand homes and it's an asset class. I started going, how many small towns across America have tremendous embedded value? I mean, one of the towns we're working in, our clients just spent like four and a half million dollars in bought 40 buildings.

1:02:24Four and a half million? Yeah. About 150 something thousand square foot. And we can turn this thing into a rocket ship. And people say, well, how will we put amazing food and beverage overnight stay and celebratory events? And they're within an hour or two of a larger population. We've got a small town in Kentucky, a town of 3 ,500. Marshall. It's a restaurant. Or no, what's it called? Stanford. Stanford, that's right. Stanford. Stanford, Kentucky. And one of our first clients, Jess Carrillo, that restaurant sees 8 ,800 people a month in a small town of 3 ,500. So it tells you how much these things draw when you're excellent.

1:03:01And they close at three o 'clock, right? That's right. They don't have dinner, but two nights a week and they'd closed on Sunday. And so what we realized is if we could do this, it could be incredible. So So imagine this, imagine us going in and people start seeing a platform for saving small towns. And these real estate portfolios are not something that in the beginning, they don't look exciting, but over time, it's exponential, the amount of growth you see in these platforms and the amount of revenue they can create. I mean, we've got one model, we're working on a small town that'll put $4 million in profits a year on the bottom line for this one project.

1:03:42And that'll put its value, you know, 40, 50 million bucks. And so that's no joke. And our biggest town, which is really amazing, we'll talk about that in a minute, I guess we lay on the plane, but it's Winterhaven, Florida. It's about 150 million plus dollar portfolio. And it is incredible. And it's making tremendous value for those investors and for that community. And they are all, you call them patrons. Are they mostly local people that want to see Winter Haven thrive? In fact, we helped them raise$80 million from 60 locals. And they bought almost 80 blocks of their downtown. So, yes. And that's sophisticated with the way the portfolio and platform, like how do we do handle people who want to get out and have redemptions?

1:04:29How do we handle all those things? There's a lot of complexity. But we know now with stewarding about$2 billion worth of this stuff around America, we can see it at scale now. So we believe there is a new asset class coming forward of irreplaceable real estate because they're not making any more downtowns in your town or ours. And if we can steward them well and bring sophisticated real estate tools and development over it with sensitivity and love, I think they're going to be incredible. So when Winter Haven approaches you to consult, to help with this development, where do you start? What's the first thing you do when you go to Winter Haven and check the place out?

1:05:10You know, we usually start with what we call an intensive, which is a two-day either in our city or their city. And we work on looking at what we've designed called the momentum method. We think having no momentum makes you look worse than you are, and having momentum makes you look better than you are. And so you got to get the mo, you got to get it moving. But we say it's these things. This vision is number one, clarity of vision, a clear strategy. Then you've got to have to know who's on the team and what are the roles. And then after that, you've got to get them in alignment, execution. And the last one is my favorite, success and succession.

1:05:48And so we align this momentum method up. And most people have a vision, but it's fuzzy. And so if the prize is fuzzy, no price is cheap enough. You get the prize real clear, the price gets easy. And so we help them clarify their vision and then move through the other pieces to like, what is a minimum viable team? How does this fit together? How do you build this? And then how do you make it where the capital work, which most people think it's the money and it's never been the money for us. There's plenty of money to follow. Money always follows great vision. You never see people get a bunch of money and get a clear vision.

1:06:26Say more about what your view of success is. You had an interesting comment that I heard about that I wanted you to go into, like when, how you view success of these small towns. Well, a lot of it's human flourishing. I mean, we actually try to look at a flourishing score. I mean, how do we know if the place is flourishing? We say flourishing is when the people have the least or experiencing the most. That's flourishing. And so we work hard with all that. And to think about that, we also create social, spiritual, and economic capital. It's got to be all three. And so that for us is when a place is healthy.

1:07:02I think one of my big friends, Eddie Morton down in Florida, Orlando says this at Lift. He says, you can mix age, you can mix race, you can mix economics. The only thing you can't mix is values. And we agree with that. We've had no trouble getting people to understand a clear vision and come together as long as the values are similar. And so that's the question is, what's the values? And so I see one index I really like called the Popsicle Index is how far a kid needs to walk to get a Popsicle. And so we just say for each community, we customize it, but usually it's like a community impact number that we do.

1:07:44And we do that right along with economic numbers. And then we know you measure economic capital from what comes out of it, but you measure social and spiritual by what you put in it. And you need long-term patient capital in these projects, right? You're not looking for people that don't have patient capital to sit with you during this process of? It's about a seven year to get to where people can understand, but I say it needs to be patient, properly aligned, and productive. Those three things. But it should be, over time, it's not an average investment. It's an exceptional investment. In fact, as it gets out more years, this thing goes like crazy, like a hockey stick.

1:08:28But it takes some patience. And here's the thing. We call it the velocity of money. The cost of redeployment is expensive. And a lot of people want to do wham and bam, hit and run, get it, get out, get it, get out. That's activity, not accomplishment. And we just don't, I mean, that's just not our model. We're not IRR driven. We're driven by overall return over decades. And if you look at Warren Buffett's network, it's the same kind of thing. It goes like this and it does like this. And so that's how we build real estate portfolios. I mean, we want to build machines. Who wants a fig tree that don't make figs?

1:09:05Jesus hated that fig tree that didn't make figs. He started to call it a bush. And that's why we don't build these things through benevolence, because if you got it, we want something that people will want to fight over at your death. It's such a valuable asset. that. It's so irreplaceable and iconic that everybody won't stand in line for it. This is great stuff. I absolutely love talking with you here. I want to hear more about your podcast. We talked a little bit about it at the beginning before we started recording, but it's called Redemptification. Tell us about that word and tell us a little bit about the podcast.

1:09:39I want to hear about some of the guests that you've had on that have just, I don't know, you've blown my mind today. Some of the guests that have just been influential and impactful to you? Well, I've had some of my mentors on, which I love that because I don't know where they stop and I start, my heart is woven into them and them into me. One of my guests that I just love I had recently was a guy named John Rivers. It hadn't been published yet, but it's coming out here soon. But he created the Four Rivers Smoke House, the barbecue restaurants, 20 of them. And he's just a super cool guy that has the same vision as me, and it's coming out real soon.

1:10:18And he just walks through, how did the man go from running a billion and a half dollar healthcare company to love smoking meat and making barbecue? And then how are they building an organic farm, 40 acres in downtown Orlando? And how did they feed over 1.2 million families last year? And so he's just an amazing guy. I love the one on there with Steve Cochran, the Five Voices founder, me and my wife and him talk about what it's like to, you know, Ash and I built companies together side by side for our whole marriage. And that's dynamic and interesting. And so the reason - Say his name again, Steve Cochran?

1:10:56Cochran. C-O-C-K-R-A-M. Yeah. And he's just one of the most insightful, amazing guys. You know how he created the Five Voices? He asked himself, if you're familiar with the screw tape letters, the books, what he said is, what if I was going to use personality types to take out leaders? How would I do it? And so he created this model and then he reversed that, figured out how to make them flourish. And that's what created the five voices, which is incredible. So he'll tell you what's your five voices type and then what's the weapon system you use when you're unhealthy or stressed. And it's incredible.

1:11:31So I love that. And the word redemptification kept saying, you're gentrifying, you're gentrifying. I said, we're not gentrification, we're redemptification. They said, what is that? I said, we're redeeming people and places to their intended beauty and glory. And I said, you'll see the difference from what we do. I love that. I'm going to start using that because the word gentrification just has so many negative connotations. In many ways, it's unfair. It's what you're doing. I love it. It's totally. They don't have any other models, so we don't have mental models to understand. And I just said, man, when we're coming, not many people are going, here comes the developers.

1:12:08We're glad to see them. They feel like they're in pickpockets. They're going to come take everybody's pocket and mess up, build a bunch of ugly stuff. And I said, no, no, no. We're going to come and add value and not extract it. We're going to show up. You're going to be wanting to cheer and see us. We're going to do stuff you're going to love. We're going to do the stuff you're going to protect in the future because love looks different. It sure does. It sure does. I'm going to steal something that you do on the podcast to wrap up here. I want to know, you ask like, one of your questions is who should I know that I don't know?

1:12:41And then what should I be reading? So I want to go into that. Who should I know that you've had on? Or I don't know, anybody. I'd love to be introduced to Brett Kaufman. He's a Columbus guy. I'll plug you in with him, my friend. You know, I love relationships. And that's, If I ask the same 10 questions to everybody when I talk to them personally trying to learn, and one thing I can encourage people, get you 10 great questions and ask them, because what that'll do is let you borrow the same perspective from different people. And this experience that is reflected on can take it and turn it into insight.

1:13:17And so we want to evaluate our experiences so we can make insight out of it. And like if I asked you those same 10 questions I asked everybody else, I'm borrowing your lens on like how has failure shaped your life? Tell me three things to always do and three things to never do. And these questions I asked, but one of them, the biggest pulling one is who do you know that I should know? And will you introduce me? And that thing's taken me all over the world. So that's where this question came from. I tell you, check out 610, S-I-X-10 in Winter Haven, Florida, Bud Strang and that organization. They're the city that's doing this the most at scale of anybody in America.

1:13:55And there, the work is incredible. 610 LLC in Winter Haven, Florida. And if you get a chance, go there. That's where Legoland is, the former Cypress Gardens. And it's the city of a hundred lakes. But the courageous vision of Bud and his family from the citrus business to love of places, it's inspiring. I'll check it out for sure. And then what about what should I be reading? I tell you, this is like you ask it. I feel like a mosquito in a nudist colony with all the great books. They're everywhere. I want to read them all. My team says, I know every book you read is the best word you just read.

1:14:31But one I read recently that has shaped our whole business and the way we do things is Unreasonable Hospitality. I'm not familiar with that one. Yeah, Unreasonable Hospitality by Will Gadara. And he built the restaurant that won the best restaurant in the world in New York, 11 Madison. And that book, plus a few others, shape the way that we see hospitality. And my wife's definition of hospitality is the guiding force of our company. And now she runs all of our companies. And it's hospitality is I thought of you before you got here. That's her definition of hospitality. She said, that's what God did with us.

1:15:06That's what we do with others. That's great. Hospitality is I thought of you before you even got here. That's right. Very cool. John, this is awesome. I have loved talking with you here. I feel like I could go on for another hour or two, but we're going to put a pin in it here. Tell our listeners how they can get in touch with you, how they can find out more about you. What's the best way for them to do that? Marshcollective.com is a good place to land, and you can see us on the normal social media things. And check us out at redemptification.com. That's R-E-D-E-M-P-T-I-F-I-C-A-T-I-O-N. it's a mouthful, but it's worth it.

1:15:46And it's some of the cool people we're around. So those are the ways you can catch up with us and hopefully we can add value. Well, you have. You have completely added value to my life. I know that. So I just really want to thank you for your time, John. Thank you, my friend. Okay, folks, that's all I had for today's episode. I hope you enjoyed the show and I'll see you back here real soon.

1:16:14Network. Every Wednesday, we teach you about Bitcoin. And every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor's Podcast Network. Written permission must be granted before syndication or rebroadcasting.