The Beginner’s Guide to Real Estate Development & Business (ft. Cody Sperber)

Episode Transcript

(00:00) be ripped rich and rare be one of these people that actually you know cuz your people are watching right now your kids are watching right now and you’re setting the worst standard for them maybe you’re making a killing and you got a Rolex on good for you dude like you check one box but are you spiritually connected are you a great friend are you trustworthy are you doing red and yellow light behavior when nobody’s looking we can shift all of that behavior over into healthy things that promote the family and promote your
(00:30) wealth in your health think of the person you want to be and then go and do everything in the day that person would do you know and when I like have this like reality check with myself is like I’m off track on where I want to be I go back to that and I’m like okay the person I want to be what time do they wake up in the morning what did they eat did they work out but then it goes through like all the stuff like how do I interact with people am I accomplishing the things am I staying focus on the things I know matter the most like what
(00:56) type of husband am I what type of Father am I you know all those things it’s an honor to have you here I followed you for a long time I went to an event there was like literally thousands of people at at your event out in Florida was amazing and um but I want to come talk about entrepreneurship real estate all things Cody sperber today yeah thanks for having me on and uh I’m very very impressed with your operation here yeah you got a way bigger operation than I understood yeah yeah you got a lot of stuff going on dude we’re killing it
(01:27) we’re going for it we got some amazing people here making it happen so um but I want to talk about scaling too I know you’re in the middle of it we were just chatting before we started this I didn’t know some stuff about Cody so um and I do follow you on social media we’ve met before so um but I want to talk about real estate development this is where you’ve gone in the real estate side of things where I think is where most people know you you have massive social following and influence but then you’ve also started in this uh I mean real
(01:57) estate entrepreneurship in and of itself but um down this floor daddy business and trying to grow and scale a business which you’re like a year in on that yep so let’s hit both of those if that’s okay yeah let’s get it okay so let me ask about real estate development like why are you doing real estate development on your real estate side of things like that’s a lot of people have gone to like you know they’re single family homes just doing a lot of that or they’re going to like multif family yeah but you’re like doing something totally
(02:23) different well we’re trying to you know we try to go to where we feel like the puck is going more so than where everybody is you know that’s probably been one of my uh skills kind of seeing the you know getting out in front of some of these Cutting Edge things and getting out in front of it uh so you know obviously we we got to start somewhere though so I actually started just you know wholesaling houses just just you know hustle yeah yeah you know limited resources getting in there just trying to control some real estate learn
(02:54) the language of real estate and all that stuff and as you’re wholesaling you start uh flipping you know you’re selling these houses to rehabbers a lot of times and you’re watching them make 50 60 80k and you’re making five or 10 15K real quick and so I just realized I’m on the wrong side of the equation here I need to get into the rehabbing game so I started rehabbing houses and got pretty good at that and then eventually you get to a point where you’re like okay what what’s harder building from the ground up or taking
(03:21) something old ripping it all to pieces every time you open up a wall you’re going to you’re going to find a ton of things that’s that’s wrong with the property lots of unexpected stuff and so we were we got pretty good at rehabbing and then we were like all right let’s try some single family spec development yeah and I did and and the way I did that by the way was just finding good Builder Partners it’s not like I like on day one was like I’m going to go build a house from the ground up I don’t know what I’m doing but I can find the real
(03:46) estate I used my skills to to kind of weasle my way into a good deal and found a good partner and then just watched and studied what they were doing and at a certain point we finally decided you know me and my two best friends at the time uh you know Bryant and so we uh we decided okay let’s form a development company um every company that I start is a for-purpose business yeah um what that means is we always tie it to to some form of a a charitable cause oh right so we called ourselves green elephant development because we wanted to build
(04:20) with Green Building Materials or as much eco-friendly building materials as we could and we also wanted to save elephants and so a portion of all of all of our development proceeds goes towards elephant conservation okay cool um and so uh there’s a there’s a thing out there called the sheldrick trust and they really focus on they’re my favorite with elephant conservation and so um we just kind of built it into the model and whenever we built a house from the ground up we decided we didn’t want to do cheaper houses we wanted to do nicer
(04:50) houses kind of new money Rich so we focused here in Arizona um Arcadia Arcadia light built more Heights like some of the nicer areas where lot of the Young Money was going mhm and uh these are you know between three to $4 million homes and so uh uh every time we built a house we would document the entire process and then give the owner their a book that showed the creation of their new home as well as the elephant that were sponsoring in this and just a little bit of information so they’re kind of it’s kind of fun because they
(05:24) show their friends they’re like hey did you know my house this is the creation all that and so we were doing that for a long time we did that for like five six years and that’s good when the times are good MH when money’s cheap Market’s moving being a developer in the single family space is awesome yeah yeah when it pulls back it sucks when the money dries up it is like literally the death spiral and at the time you know especially during covid um going through that building was very cash intensive because materials were hard to come by
(05:58) and if you understand anything about constru construction loans and construction draws they don’t reimburse you until the item is installed and so we’re you know if we’re doing 20 giant multi-million dollar specs at a time or 10 at a time like we were doing we’re floating millions and millions of dollars in cash because you buy you order the garage doors now but they don’t get installed for six seven months because of the lead time of covid and all that it got really we were like kind of cash flows struggling there for a
(06:31) long time and then when the market started to pull back we were like oh man we can really get in trouble here if we don’t get it and get in front of it and thank God we we never lost an investor money we were we were really smart with how we built yeah um we kind of got out in front of it just in time finished all of our single family projects and we decided about three years ago that we were going to start shifting pretty hard out of single family and over into uh into commercial okay let me ask let me stop there cuz I think was single family
(07:00) you know you’re Building Homes um even flipping houses is that there’s a lot more competition there I feel like and when a market goes down the you’re all competing a lot for the same deals for the same buyer rates go up buyers aren’t there and it’s a there’s a lot I think there’s a the roller coasters much more um exposed I would say yeah and residential um so now you get over to Commercial and it’s just interesting some of the deals I’ve heard you guys do like you’re buying like literally Bank buildings yeah because the banks are
(07:38) like hey we don’t want branches anymore we want less of them we’re going all online we’re putting it in like a cafe or whatever you know we’re going into a grocery store and so um I’ve heard the story and I’ve seen some of the deals you’re like buying physical Bank buildings yeah so the first step when we were shifting towards and I’ve always owned commercial for like my businesses and uh it was like okay where what are let’s identify a couple niches because I truly believe that the riches are in the niches and so it was like let’s Identify
(08:10) some niches that we think are going to be hot over the next 5 to 10 years well um knowing that we were single family developers we loved the affordable housing space we we thought okay affordable housing is going to be really cool but how do we do that at scale and so um we started looking around and thinking like okay what’s the most affordable housing well manufactured housing is the most affordable housing and here in Arizona the growth you know we have a lot of land and it’s growing outwards so we started buying 5 acre
(08:37) Parcels on the outskirts of the of of all the growth places like the town of Maricopa or Queen Creek Santan Valley and we would buy these 5 acre parcels and we would work with the local municipalities to subdivide those up into one one to 1.2 acre pieces M bring in the wells bring in you know uh the septic and all that stuff bring in the roads the electrical and then just um we went Upstream became vendors for all the manufacturer housing course yeah you know like cavco and all that and then we uh we subdivided the land put these
(09:14) houses on them they come in two pieces you slam them together they they they literally go up from the time that I get the the hous the Lots subdivided it takes literally 2 and a half months and all of a sudden there’s a house there yeah so it can be turned really fast so I can rehab a house a normal house in 6 months and make 30 to 80k or I can buy a 5 acre parcel I I pay about 50k an acre and uh put these manufactured housing I’m all in let’s call it 230k and I’m flipping each parcel for 330k a homeowner can come in buy
(09:52) something that has no HOA on over an acre uh that’s a new product 2,000 plus square foot really these Man by the way these manufactured houses aren’t like your it’s not your grandma’s trailer park yeah it’s not the double wide you know it’s not it’s not ugly like it used to be it’s really nice like you would be proud to own that and uh you can get in with FHA financing 3 and a half% down you’re like in for like 15K so this is very affordable but you’re doing four to five of them at a time so now we’re making 4 to 500,000
(10:24) per project mhm versus 30 to 80k in the same amount of time it would take me to rehab so we saw that and we were like okay let’s focus on that that’s one lane and that’s that’s our kind of scratching going deeper though because rather than just like flipping a house which is I don’t want to say lazy but it’s just like well yeah there’s a house there let’s like make it better you’re saying no let me like really try to nail the cost on this we’re going to go outskirts of town we’re going to develop this land we’re going to kind of go from zero to
(10:57) like you’re going from zero to one and instead of like well this was a shitty house you know and is and we’re going to just make it a little bit better you know we’re going to make a little bit better I mean you’re like starting from scratch really which is you’re controlling your cost obviously if you do it right but um and there’s an element of like do you want to own a fourplex or do you want to own a single house yeah you want to own a fourplex because rent’s coming in four waste I want to spread my risk over four pieces
(11:25) of real estate in the same transaction right which is which is I like you know kind of that play and and believe it or not they sell fast but most importantly the world needs it I want to be in a lane where I’m making money and solving a problem more so than just I’m flipping a house and making a bunch of money right you know what I’m saying I I feel good about the money I’m making well it’s a little like resistant to downturns too I I I feel like um because again it’s you got new you got affordable um and that’s the big problem
(12:00) right we don’t have like housing shortage issues we have an affordability issue exactly and if you can solve that you’re going to have people lining up and to buy these things no matter what’s going on in the real estate market yeah um it’s defensible I think um okay so you’ve got the I is that the first thing you did when you were estateel first thing well that was our first pivot as we were thinking about getting out of like just residential like new like luxury SPEC Building it was like okay we’re going to go from
(12:30) all the way to the other end uh because this is where we think the demand is going to be over the next you know 5 10 years then at the same time I love the single tenant triple net lease game I think that you know when you have a buyer that’s a a very high credit rated buyer yeah you know like Chipotle yeah for instance Chipotle is not going to run out of money they’re like one of the most profitable charging extra for guac and all that you know I mean they know how to get you but they provide they provide a great service great food and they’re
(13:01) they’re always expanding and so like let’s say I there’s a parcel of land right now and and we and by the way we learn this uh when you’re when you’re when you’re building Speck houses you have to learn to work with the city yeah right so that was like our first like okay let’s learn how to work with learn how to jump through hoops pretty much yes and then when you’re subdividing now that that land entitlement taking raw land and turning it into something you have to teach yourself the next kind of layer of working with the city when
(13:29) you’re when you’re then we were looking at it and going okay so quick service restaurants there’s this since Co there’s this massive demand for restaurants with drive-throughs yeah right so we knew that and talking to a lot of my friends in that own franchises and Stu like they’re like oh my God I wish I had one with the drive-thru and so um our commercial real estate relationships and in Partners we were like what’s the highest demand that you have and they’re like you know Parcels that we can put a quick service
(13:57) restaurant with a drive-thru that’s out in front of like a really great anchor totally uh like a Whole Foods or something like that so like across the street here is there’s a Starbucks and it used to be in kind of the retail area of Park Central across the street um and they closed it down and I was like what the hell happened to Starbucks so I asked some person that worked there like oh Starbucks isn’t doing restaurants unless they have drive-throughs yep they built one right in the same development that that has a drive-thru in it I guess
(14:27) that’s a thing like Starbucks is not renewing leases unless a location has a freaking drivethru they’ll make three to four times the amount of money as a non- drivethru and so for us we got the information and we’re like okay we love it where it’s just like one one awesome highly rated tenant or buyer and so we started looking around and said well where where can we find Parcels that they would want to go into so as we were networking with all and by the way Starbucks has a rep Chipotle has a rep Home Depot has a rep
(15:00) Dollar General has a rep they all have a commercial rep that that it has the region and so as we were networking with these specific commercial real estate representatives of these awesome businesses uh at the same time we were using the latest and greatest technology to try and outmaneuver our competition we we paid $100,000 for this technology per year that literally has AI built into it I could throw up a screen and I can say show me every Chipotle in the Phoenix Metro mark market and it’ll go ding ding ding ding ding ding ding ding
(15:31) ding with like you know hundreds of chipot I say put a five mile circle around each one color that circle yellow now show me all the Chipotle with uh drive-throughs and the ones with the first round they’re all like overlapping because there’s a billion chipot lace but then when they show you the ones with drive-throughs there’s huge gaps everywhere so now visually I can stare at it and go okay I kind of can see where the demand and the needs are that where there’s no coverage area and they’ll literally like that could be a
(16:00) where the Pu at yeah cotle with no drive-thru right across the street there’s an old bank that’s going out of business and I’m like let’s go try to buy that bank Yeah couple million dollars buy this Bank from Wells Fargo be or whatever because they’re downsizing and moving like you mentioned earlier into like shopping who goes into their bank branch anymore it’s not as common and they don’t have people there now it’s like a a robot teller and a couple of them uh and so we started building relationships with a
(16:33) lot of these Banks because they have the best real estate in the best like the 100 plus thousand cars go by that location because they had all the money they had the best real estate and they have huge parking lots so there’s like an old building that’s way oversiz for their needs and then this massive parking lot and we’re like let’s build a relationship with them and try to bid on some of these banks that but it’s a good old boy Network you can’t just roll up I don’t care if I had $2 million in cash yeah I can’t just roll up be like here’s
(16:59) my money let me buy the bank they’re going to be like no good here they’re going to be like hey dude get in line like we have our group of people we work with and until you become one of the good old boys yeah and so we were bidding those are your partners we well we were bidding even through my partners CU we hadn’t purchased the bank through them yet they made us play the game and so we were bidding losing bidding losing bidding losing for almost like a year we were bidding losing and finally one day they go God you guys are annoying you
(17:27) guys just are Relentless you guys don’t stop I’ll tell you what we have two banks that need to close on the same day can you buy two Banks and we’ll sell them to you so in one day we bought an old Wells Fargo an old BFA one in Tucson one in um uh Gilbert Arizona and we closed on it and we used some of our own money and we raised some some private money to do it and we just wanted to prove the model and so we bought the banks and we started working through the entitlement process with the city to change the usage of the bank and we
(17:58) learned a lot through that process it takes about 12 to 18 months to do the whole entire thing through so this isn’t a quick like the way we think of our investment strategy is the quick stuff is the affordable housing four to six months I’m in and out I’m making a couple hundred grand per project you know 500 Grand a pro I’m in and out can I do five of those at a time 10 of those at a time yes I can the bank things is like you know now that we bought a few of them now there’s giving us a tip hey we have two Banks going for sale next
(18:26) month we have three Banks the month after that two the month you guys are in now we’re kind of in and so it’s like oh I can kind of see we p 2 to 2.2 million for the bank we spend 12 to 18 months working with the city to change its usage while we’re doing that we send out our commercial Partners uh to work with all of the buyers which there’s very little risk in this and I hope by by the way guys anything you’re hearing on this podcast Please Don’t Steal This in Arizona just stay out of my Lane let me do my dang thing go do it in another
(18:57) state cuz I’m giving you the goods uh the demand was insane Circle K Chipotle salad and go all these businesses are like we want that real estate but guess what they don’t do they don’t do entitlements yeah they don’t want to build they don’t want anything to do they want it all done they want it wrapped in a bow on it they’ll pay a premium yeah they’re ready to go they’ll say we’ll do it right now send it sign an Loi you deal with all that crap um so it’s our the expensive is to buy the bank and then the entitlements cost
(19:30) hundreds of thousands of dollars because you’re hiring attorneys and Architects and engineers and all this stuff to to show the city the plan and get them on board uh and it’s a it’s an art it’s a dance and you have to be really good and have good team a good team of people yeah but once they get that approv that Loi get signed you already had two or three buyers that are the highest credit rated buyers out there with insanely Deep Pockets do I really have a lot of risk buying a $2.
(19:58) 1 million Bank when I have three of the biggest names in the game trying to buy this place M yeah your risk is like very low very low I mean very low and so I love that because I don’t want to put my money or my investor money in anything that I’m like you know you know this isn’t you know I’m like doing Bitcoin or something you know I’m not gambling I’m trying to like really like dial this in so that’s but the rewards high too right I mean you went there because the risk low but there’s a high reward too like you can make money and I don’t like saying this
(20:27) because each deal is different but like we flipped one we flipped One bank to a Circle K and we flipped another bank to a credit union um each one by the time they played out would would bring us in about $2 million so we were buying for easy math two fliping for four yeah 18 months later it’s like who does who who doesn’t want to do that deal buy for two sell for four move on to the next one that’s a great that’s a great play so those are our mid-range plays okay our longer term plays they take like 5 years
(21:01) up to 5 years sometimes longer um and those are big development plays where we’re taking raw land and actually subdividing them in these are between five to 100 acres yeah um and it’s kind of the same thing but takes a lot longer um uh I have a five five and a half acre parcel we’re sub subdividing it into four Parcels I already have two of them pre-sold that’s like an example and then the other two I’m going to you I’m going to use the money from the two parcels to pay off the whole entire thing so now my second two Parcels are all profit and
(21:34) we’re going to build uh um we’re trying to build a hotel on one of them and a a a a gas station car wash on the other okay and so like those plays take a really long time we’re fighting with the city it takes you know cuz now we’re we’re developing like a hard Street Corner yeah out they they want all kinds of crazy stuff we need you to uh rip up the roads add a new like deceleration Lane we want you to put a bus stop right here we want you to put a park in the back like there’s all this like pork yeah and things in there that city government by
(22:11) the way like how can we improve this city with our limited resources of Taxation they like sales tax and other stuff you know it’s like how do they do it real estate developers yes yeah and then the bigger one is like we have a 67 acre development that is multiuse so now we’re thinking really big we’re thinking like okay four phases phase one put 400 storage units on this parcel phase two put you know 150 manufactured affordable homes on there phase three build all the luxury cabins cuz this this one happens to be up north
(22:44) on a golf course um a lot of people travel up there to have second homes or um retire up there that kind of thing uh it’s got a creek that goes through it we got to build trails and all that good stuff and then the last phase is going to be 150 unit two story Garden style apartment that’s affordable apartment so we’re not doing fancy stuff pools and all that this is Workforce apartment buildings we build right they they print cash we’re going to keep that those the that big like these bigger projects any of those those properties we’re keeping
(23:17) for the long term we never want to sell those those are going to stay in the portfolio forever but it costs you know that’s $150 million plus project yeah we got to raise a lot of money to do this at this gate and have a great team so so you guys are raising money you have clever Capital fund like you’re raising money all the time right you have these different time Horizons you said the manufactured housing stuff a little bit shorter play you’ve got the um the bank type model trip net basically uh kind of commercial
(23:48) well-known tenant type play and you’ve got this bigger larger scale full real estate development multiple Parcels commercial residential um uh type play where’s Bank financing coming into this you’re raising Capital are you working with banks are they lending on this stuff what’s that like when you’re a real estate developer no they don’t um because it’s I mean what are they going to lean it against the land yeah land yeah so um uh so no we have to be really smart with our capital and um we have you know obviously millions of our own
(24:22) dollars in in these plays in order to get them off the ground but we either use private capital or we set up a fund you know we’ve had three funds in order to to grow our business um the first fund we did was just a debt fund right and I had to learn how to start a fund and raise capital and and we had a debt fund because I just thought well you know it’s like coupons coupon money right just get your money out of here put it in here and and you got a fix rate return fix rate return but we realize like certain people like that
(24:51) and a lot of people don’t yeah so I was like okay that doesn’t work and then we did a um we were a GP uh on a rais to purchase an apartment building and so we were the code GP on that and so we set up a like a fun to fund model and we tried to learn that that game and we raised a bunch of money and we bought $137 million Class B institutional grade 400 did I say 432 unit um apartment complex okay we did that a couple years ago and uh that was a great learning experience on how to raise Capital to buy a single apartment building
(25:26) MH uh this particular particular fund that we have now is um uh I guess for educational purpose it’d be like a blind Equity Fund and it’s basically we’re going to raise money this one’s a $50 million fund we’re going to know the asset necessarily we well we we happen to have a bunch just because we’re coming to the table with a bunch of great real estate but yes there’s going to be over the next 5 years 10 years we’re going to be moving assets in and out of this this fund um and so the way we looked at it is we want to give
(25:59) people a choice because we think have you know an investor having a little bit of flexibility is uh sexy um and we wanted to pay a high pref upfront kind of like how our debt fund was where it’s like no you’re going to get a really high pref but what we learn from running the debt fund is that people want a tax benefit at the same time they don’t just want the high pref they want some other benefits that come with it so this particular fund is uh if you give us your money for one year you get a 10% pref mhm three years you get a 12% pref
(26:30) in five years you get a 14% pref yeah so the longer you give us the money the the higher the pref and then any assets that we put into service meaning that we’re not just flipping them we’re keeping them for the long term like the 67 acre development that we believe is going to be an awesome Cash Cow for us um if it’s in service and we depreciate those assets we pass that depreciation on to our fund Partners okay right does that make sense um and it gives us some flexibility to be real estate investors and developers where we’re not just
(27:00) pigeoned onto one investment if somebody puts their money into our fund they’re not betting it on like this apartment deal better go yeah have you uh put money into any um apartment buildings or anything like that where you you the lp I’ve been in the GP and in the lp did you guys ever were you ever involved in one where they changed the pref or they stopped paying a pref or they did like another call where they needed more Capital no but as awy I’ve certainly dealt with many clients and you know we see us every once in a
(27:33) while direct at Ira you see someone they’ve got to do a capital call right they’ve they’ve ran out of money and you know they you know this is happening quite a bit right now actually right a lot of the multif family value ad syndicators didn’t get their rate locks are falling off right they’re they’re they’re expiring um or insurance is expiring they need to buy new insurance yes particularly if you’re like in Florida you know or other states that have had significant Insurance increases or they just you know it’s a little more
(28:00) competitive to get tenants you know and they’re having vacancy issues we’ve seen that a little bit too and so um but that’s the last thing you want right like you invest in a fund and then they ask you for more money you’re like that’s not how this works you send me more money yeah that’s I already I’m stop I’m gonna stop paying you your prep and we need more money you’re just like what is going on here and that’s part of the game but for us be I’ve done that uh on three different of the last three Investments we made into an apartment
(28:30) complex that we weren’t the GPS of we were just LPS all three of them stopped paying prep and all three of them did a capital call yeah and it’s like you’re kind of like get this feeling of like oh I’m chasing like am I chasing good money after bad or like what’s going on here and uh that’s why I like what we’re doing because you’re spreading your risk over a lot of different types of assets um and we also set up our fund so we don’t have fees that we’re we’re not we’re not like raising money to make money raising money to put the money
(29:00) into that’s very common right a 2% asset under management fee you raise 100 million bucks and you make $2 million no matter what we’re not doing that we have a small fee just when we deploy the capital into just to pay for because there’s some software fee uh well it’s just really to pay for our fund manager and like some of our Personnel that we have and our technology to make sure that all the accounting gets done and uh all the uh legal and everything we got to have some money for some of that and then the way and one of the questions we
(29:26) get at our fund cuz it is a different unique structure is well if you haven’t finished developing these assets yet and they don’t really produce cash flow like how are you paying your investor where’s that money coming from fair question right you know it’s almost like is this a Ponzi scheme like no it’s like no me and my partner front loaded the fund with over a million and a half dollars of our own money in family money like we put our money in and that got us off the ground y right plus we’re coming we’re
(29:55) we’re coming to the fund with some assets that we already paid cash flow and then we’re now supercharging and finishing the deals uh so we have a great great foundation so from an investor perspective I mean they’re getting paid first you don’t really have a profit incentive in the fund until they’re paid first um let’s say though you guys want to be like hey we want to cash everyone out like um and I put my money in um you’re going to pay me based on how long I’m in there but that’s possible um you know what that’s a
(30:27) better question for Brian because that’s now we’re getting into like the the Nuance of like our fun language and I don’t know I believe we can I believe we can yeah and and you know um our you guys are playing the long game I in your structure where it’s like hey in the way you structure the fund you guys are making money last last uh the investors making money first yeah but you’ve got to pay them off because you always got a rate of pref you got to pay them yep 10 12 14 or whatever the the steps were but um and you could be selling assets and
(30:59) still making money at the same time but I think your long-term play with the fund how you structured it is all this value of real estate that can be at the back end of this thing that and you know every time we close out a deal like to take one of those Bank deals if we did flip it and made couple million bucks 25% of that’s going back into the fund for just reserves just to make sure we always have working capital in there to um okay uh you know and that’s our benefit is we’re getting paid at the end of these projects right and so um we’re
(31:30) very motivated to do them right yeah which means you’re for the Long Haul which means you got to make good decisions good for investors like I think you know one of the things is I whenever I just back I don’t advise clients anymore as a lawyer but back when I did I was always nervous of any investment structure where it’s like the person that raising money is making money off of you no matter what like they can lose all your money and they still make money I only want you to make money with me not off of me yeah you
(31:57) know what I mean and so it’s always nice as an investor to be looking at whatever deal and know oh they’re not making money until I make money yeah and and I mean after I make M it helps because you know while we’re developers and we built a phenomenal team this isn’t my only source of income yeah you know I have a lot of other businesses great companies I’ve scaled great companies I have you know but this could be an incredible wealth building thing for you in the long this is my long-term play of like okay you know over the next 30 Years
(32:28) we’re just going to keep building and owning great assets cherry picking out the best leaving them in our portfolio everything else will flip along the way just to make uh lots of money along the way uh and while I’m doing all the development stuff I’m building my floor daddy company I’m running you know and scaling my online education business and all that other stuff and that’s really where I make my my daily income from okay I want to come to that here in a second but I had one last question on this real estate development stuff um do
(32:57) you ever go to City Council or like Planning Commission and like speak cuz I think that’ be pretty cool to see Cody sperber go to like a city council meeting to go argue with the planners about the dumb [ __ ] they make you do you know what I’ve been so lucky my partners have done that yeah it’s probably good probably good I I uh I’m very lucky man I would not do well as just me no I’m too much of a [ __ ] talker I’d be in there just I’d open my mouth and implode the project or something and I’m like God why did I do that even if I felt
(33:27) right or was right um yeah I I leave it up to you got to do a certain amount of kissing ass and like you know respect the process and then it’s like oh you want a park with a park bench with your name on it no problem we got you yeah you want a fancy bus stop all right yeah let’s do it whatever it takes to get the deal across the Finish Line um okay cool well this is this is cool I think it’s interesting because I’ve had a lot of real estate developer clients over the years when I was a lawyer and some of my
(33:56) most wealthiest clients Were Real Estate devel Vel opers and it is a niche it truly is and it’s one that you’ve got to learn the process you got to learn the players but if you can stay in it and get that reputation you benefit from that and and now you’re on the other side of this uneven playing field of everyone else who can’t get in the the party you know what I mean it’s like oh I’m known I get deals brought to me don’t get it twisted it is a good old boy Network yeah you it you got to fight like hell to get in yeah and um and in
(34:26) the beginning if you’re if you’re hearing this and you’re like God I want to do that how do I get going go find a rich person and have them be your credibility yeah and that’s what you know when we needed to fund these Bank buildings we went there was a guy that um exited his business for I don’t know something like $700 million out of Texas and we cut a deal with him to for to purchase those Bank buildings or other assets like we’ll give you 50% you know like sometimes you got to give away a lot for your first deals and their
(34:59) credibility and it’s the same thing with multi family I can’t just go build multif family from the ground up and go to a bank and get a loan I need a sponsor I need somebody to walk me in the front door and say we’re doing this together yeah you’re going to use my credibility to get it done and on the next one when I come back now the bank’s like we love you come on in but if until you get that sponsor yeah you’re not you’re not getting money I have a real estate developer client he’s worth over a billion dollars um built self-made um
(35:29) lot in his Roth IRA actually which is pretty cool too which is how he found me but um what he does one thing on on his deals where he is I forget the term it’s not qualified purchaser I’m blanking on the term but he’ll go in with other real estate developers that themselves know what the hell they’re doing yeah they can’t go get a deal done he is like their credibility Factor on the deal and he’s their bank because all the major institutions that lend on those whether it’s Fanny Freddy type stuff or it’s the
(35:54) big institutional life insurance lenders they know him and they’re like like oh seeing him on the and and he makes money just for being on there he doesn’t put his money in yeah yeah it’s a game changer he just but he’s signing on the debt I want to be that guy yeah so he’s and I mean we were doing the the last deal I did with him was like the LaGuardia Marriott the airport Marriott you know those are those a huge project you know um and it’s I want to be I want to get to a point where we have so much capital I want to be the guy they call
(36:24) like when a developer is on the final like % of their project and they’re running out of money I want to be that guy that kind of get a little Sharky that comes in at the end is like all right you’re going to give up a lot of your future profits in order to push this to the finish line but I got you yeah yeah I have some friends that do that and they do well awesome okay let’s go over entrepreneurship um we were talking about floor daddy which I’d seen I’d heard about a little bit I came over to your office you got a lot of the
(36:50) floor daddy stuff going on there um and I got an incredible partner in that business too tell me about floor Daddy yeah well first um how do you do all these things like I like real estate development you got your real estate education train I can say that about you it’s like on floor seven you get this on floor four you got this on floor three you got this it Ain easy It Ain’t Easy uh so any time I build a business you know like I always try to think of the brand and the marketing around the brand you know um clever investor it’s catchy
(37:22) name you know it it kind of plays on itself um floor daddy uh uh you know I I wanted to be in the Home Services space I wanted to be in a business where everybody is my customer commercial residential uh uh apartment buildings doesn’t matter every single person that has a floor is my customer and I love that because when I when I was in real estate education it’s like I teach people real estate uh in residential flipping yeah you know it’s like this little narrow Niche so my customer even for everybody I could be
(37:58) best marketer in the world but I’m talking to a small audience flooring I take those same marketing skills I’m talking to everybody and so um uh uh and I’ve seen a bunch of people exit their home services businesses to private equity and stuff and you know that’s really the game dude the game is buying scaling and I mean uh starting scaling buying scaling and then flipping the business you think flipping a house is cool or apartment or a commercial no yeah sell business I mean I’ve had multiple friends sell their
(38:29) businesses for well over $100 million it’s it’s the real game right yeah and so I was looking at it I’m like where where’s the puck going AI is going to disrupt a ton of Industries it’s not messing with your plumber yeah you you have a a leak you have a clogged toilet a person’s going to come over there and handle it they’re going to dig it up they’re going to relay new pipes it’s not AI at least not anytime soon and so I love that it’s not it’s not an industry that’s going to be easily disrupted private Equity loves it
(39:01) it’s I can take my branding skills and scale it so Flor daddy came into existence I I exited um uh an online education business at the end of last year and I so now I had more time and so finally it was my moment we started Flor Daddy I brought in some of my best friends we partnered up and then as I was getting the business off the ground a guy named Tommy Melo who is a friend of mine who scaled a garage door repair business called A1 Garage Doors probably the largest garage door repair and sales company in the southwest an incredible
(39:32) company I like I’ve had multiple garage doors from them and the way that they the people their training their system you can just tell and I and it’s it’s odd that you brought that company name up because if I had to Rattle off like five company interactions where I had consistent exceptional service A1 Garage Door would be and it’s freaking garage doors who would think that you and you know how smart they are not only do they have a system for everything and they got the most dialed in trained technicians and they look good and they
(40:01) show up on time and they’re great at sales and they’re just dialed in like they’ve really cracked the code um they’re smart marketers too Tommy is one of the smartest marketers in fact he would go around to houses and just put his A1 Garage can I toos you there for a second here’s what what why and I love where you’re going with this they were smart markers I don’t know who the hell they were but I found them yeah but a lot of times I’ll find that company that’s a really good marketer the delivery and follow-through
(40:29) is [ __ ] yeah they’ve survived because they’re really good at marketing yeah they the company who’s delivery and follow through and they can actually deliver on their product or service is exceptional and markeing is a lot of times [ __ ] but they’ve survived because they get referrals their customers come back to them if you can do both of those things you’re a superstar dude you’re well this is why he’s a billion dollar company already and he started you know in 2009 repairing garage doors with an ugly ass van yeah you know it’s like now
(40:55) he built an Empire and he’s one the wealthiest dudes in Arizona now you know he he he got a lot of money um he was just showing me plans for his new house that he’s building I’m like dude this is like the Palace of Versailles on the side of Campell Back Mountain this is crazy um but he’s a great he he saw what we were doing he goes dude I’m like a king in the Home Services space I’ve been wanting to get in flooring I love the name floor Daddy I love you Cody like I want to be involved with you so uh he became another one of
(41:25) our partners and he was perfect strategic partner cuz he’s exactly what I want to do yeah I want to dominate the flooring space it’s an old boring space of people who have like Tradesmen that became flooring guys I’m a marketer like I don’t love flooring but I love building and scaling a business I love creating culture I love actually you know uh selling something that has a high ticket price with high profit margins I want to be known for Quality pricing and the most insane customer service and quality install in the game
(42:00) so I’m going to smoke everybody I mean like we’re we’re we’re new school right we got a cyber truck you know R FL like that’s how I’m thinking about this marketing I want to be I want you know if I go to any homeowner and say name two flooring companies they’re going to have a hard time they might say Express they might say Empire because our model is bring the store to your door okay that’s our business model is the world’s changing we’re going to use the latest greatest technology and we’re going to make the sales process seem so you you
(42:28) you see an ad or you call us up we show up at your door after a quick interview on the phone we bring all the flooring samples to you we work through our experts Design Consultants show you everything once you pick it we have this really cool technology where you take a picture on an iPad of whatever floors you’re trying to do AI puts the floor that you chose in there and you can just like switch out switch out switch out until you pick the one that you like and then we provide uh no payment no interest financing it’s like a seamless
(42:56) very simple thing and with interest rates high right now we’re killing it and we’re scaling so fast because either people aren’t moving MH right because they’re staying yeah their rat’s low but they got some money so they want I’ve got to reinvest in my house and the holidays are coming up right now just like we’re timing talking about right now uh the wife’s looking at the husband saying you promised me and fix these floors we’re now not moving you know and then they see one of our ads and uh we just we we we’re crushing
(43:29) our competition and then we’re starting in residential where we’re just you know building that model out we’re filming our commercials right now and we’re seven months in the game um you’re getting all the systems and people and process and that’s Tommy’s been great because he’s got great systems and um what he did that was a great strategic partnership for us is he brought in his core leadership team yeah to have meetings with us to kind of guide us they you know we we’re doing all the work but guiding us and they’re sitting
(43:58) there going okay here’s all the kpis we want to hit here’s all here’s how many reviews we want to get per week here’s our connections and relationships in financing or in you know uh uh getting fleet vehicles or wraps or whatever um he’s forcing us to tie the brand together and actually pay really close attention to all the details like with A1 Garage Doors you probably got text messages and pictures of your technician and the technician was dialed in and you told me you had a 2 conversation with them which you never do yeah I had that
(44:31) I bought I’m a customer of theirs too and I went through that I bought uh when I built my one of my uh personal residences I think I paid like 40 grand for garage doors these really custom badass garage doors yeah I had such a great experience I didn’t even think about how much money I was spending yeah I want that to be with Flor Daddy but with Flor Daddy I own more than floor Daddy I floor daddy is the beginning High ticket High margins what else is high ticket High margins Windows kitchen and bass Roofing and so I own solar
(45:02) daddy roof daddy kitchen and bath Daddy I own all the daddies right I own side panel daddy window Daddy all the daddies cuz I I see the future of like we’re going to start in flooring we’re going to scale this division we’re going to get this dialed in um we’re now seven months in as of the recording of This podcast we just opened up our wholesale division because we have so many investors that are partners with us M that they’re like I can go to Home Depot and get x per sare foot or I can call Flor Daddy and I’ll beat Home Depot in
(45:30) low prices every day of the week we’ll even put it in our van if you’re here in Arizona we’ll put it in our uh truck or one of our vans and deliver it for you for a small small price and you’ll get and I’ll give you a list of some of the best installers in town so our wholesale division is taken off so once I get that fully cranking I’m going to launch our commercial Division and hopefully by the time I’m I’m really getting my stride in that and the commercials are going and all that uh I think I can drive the
(45:57) business to about a million and a half to 2 million a month within the next 6 months mhm uh probably run at like uh 35 to 40% profit margin at that scale all right which is a great business great business great business um and I mean are you staying in like the Phoenix Metro area are you going to start yeah yeah and then we’ll mushroom out we we’ll we’ll probably go to Tucson next open up our Tu Tucson division then we’ll probably go up north a little bit um next Market I want to go into is Texas yeah I I think Texas that’s and
(46:31) and some of that Intel comes from Tommy and some comes from our competitors yeah right if you look at like Express Flooring or Empire like where are they spending the most money on Advertising it’s easy to see where they’re where they’re going and it’s like well why are they so heavy in Texas well Texas is a great market so Master are you guys doing the install in the flooring too so they’re buying the product from you and then you’re also delivering the install and I think that’s a barrier that’s like the A1 garage thing is like I don’t you
(46:59) know some of these people they sell like the product but they’re like yeah you got to go find someone to install it I’m like then I’m not buying like I don’t got time for that you’re GNA give me a job I don’t want a job get don’t you have somebody that can install this you know ours at the end of it and this is the achill this is like kind of peeling back what I’ve learned so far being in flooring for 7 months the Achilles heel is in the installation of this business bad reviews will kill this business and so and we’ve had a handful we’ve had
(47:31) 100 five stars and five one stars and I obsess over what the heck happened there and dude we’ve done some dumb [ __ ] and when you’re building a business and you’re hiring team members based on referrals or oh I worked at another flooring company it’s like okay come on over um I saw an interview with uh on Joe Rogan about Trump talking about his experience like when you first show up at the White House you got all these lobbyists all these these people telling you hire this guy appoint this guy do this guy that and you just kind of like
(48:00) trust the process because you’re like all right you guys have been here forever you know what’s going on so I’m in flooring I’m new it’s like I hire the CMO of a flooring company and they’re like oh I know Katie and Katie can come over and she can do our phone sales like she’s great and so you put Katie in there and then Katie runs your business into the ground real quick and you’re like what like we’ve installed floors in the wrong house yeah three times three times in one week they got the addresses wrong in the
(48:29) system and sent our installers to the wrong place and so we had to I had to pay to rip out the floors Reby new material swap things around and put them back in it’s very easy to screw this business up that was like I listened to the Trump interview with uh with ro that was like that’s your John Bolton that’s like you know it was my crazy the crazy guy that he hired and the best thing about this dude is of course then like all of the owners pivot and we’re like what is going on we had all this momentum and then it’s like a train
(49:01) wreck happens it’s because we didn’t have systems we weren’t really going deep in the business we were just trusting that everybody was doing their job and you worked at a flooring company you know what you’re doing I’m so glad as an entrepreneur I’m so glad that it happened and that we had our implosion moment kind of early on in our business and this was months ago but it was like thank God because it forced us to level up it forced us to build systems it forced us to really pay attention to the details and dude this lady when we
(49:31) confronted her and and at first it was a bunch of excuses but then it was like no no no no show me every step of every detail of every job I’m going to triple check everything there’s no there’s no more trusting it’s trust and verify MH it was like next thing you know she’s pretending she had she told me out of nowhere she got cancer and laid on the ground and pretend puked in a trash can and then left the office and I never heard from her again like it’s why I couldn’t believe it happened like I’m like oh my God is she passing out and
(50:01) I’m like oh she pretend puking oh my god did she just run out into the parking a lot and leave yeah and then I never heard from her again I think as you’re scaling and growing fast you know you’ve told me some of the revenue growth you’ve had which is pretty exceptional and that’s just my own experience you know and growing and scaling directed you know we’ve had phenomenal growth we’re number 371 on the Inc 5000 list 1,00% growth over the last three years um is you’ve got to really get your process down and and because people are
(50:32) new you’re trying to grow and scale they got to learn the process but you got to stay on it you got to make sure you get the right people and you get them in the right seats I mean it’s easier said than done um but I love you’re like so you know authentic about it that’s a funny story I you show share the successes too but like that’s what’s great about it though is like now we have the meeting cadences now we have the documentation now we have the referral process and the testimonial process and we’re making I I
(51:01) I took a picture of your core values at your Law Firm because I’m like that’s what I’m talking about people need to buy into who we are as a company what do we stand for and our customer success is our success like we’re selling floors to your mama and we’re going to make sure Mama’s happy and I don’t care what we have to do I don’t care about profit I don’t care about anything other than quality yeah I I would rather be and we’re not but I would rather be the most expensive floors on planet Earth that give you the best dang experience than
(51:34) cheapest and the worst experience and we’re trying to find that healthy balance between sexy floors quality install amazing pricing and finding that like let’s nail that and then once we have the systems to like maintain that let’s scale to the Moon yeah I always tell my team that like how would you what what would you do if this was your mom’s account whenever in doubt okay you are going to follow up more multiple times you’re going to explain this process that sometimes people screw up you’re going to take a little more time
(52:02) and care right you’re going to check on it you’re going to you know extreme ownership yeah and I think if you if you do that and approach your customers that way that’s um that’s how you win and I think a a lot of businesses it’s not like a lack of a great idea it’s the execution of the actual original idea yep and I think so many businesses and people think that success in business is about I need the next idea I need the next cool thing now you just need to execute on a idea and that’s the other thing we’re really good at it could be
(52:32) Ira accounts it could be flooring yeah um we say no to everything now like we’re not adding any new widgets any new anything until we dial in our processes and in in becoming a great brand in the residential space like I I talked about a lot of different things we want to do we’re not going to do anything until we dominate in that one lane we say no to everything yes gets you out of Egypt no takes you to the promised land yeah let’s just end on that that’s pretty good that’s like that was like prophecy or something I wish I could
(53:04) take credit that was that was Lyle my first real estate Mentor okay I heard about him at your event he was great man he he talked like Yoda he was a shark though man he was a beast um but uh he would always say stuff like that where it was just it gave you this moment to kind of process and be like no wonder I’m dying this Death By A Thousand Cuts cuz I keep saying yes to all this dumb stuff that don’t serve me yeah whether it’s personal um and you’re being pressured by a second cousin to come to their wedding
(53:30) on the other side of the country and you’re like dude I can’t afford this I don’t even barely know this person and you feel obligated or if it’s some one of your team members or business partners coming to you saying dude I got a great idea and I’m going to stop you right there we’re going to put that on the great idea list we’re not going to touch that right now um but I will throw out one good tip um reviews matter in in the services space reviews matter and you know you got to be creative so like we’re in flooring I’m in the project if
(53:57) any of you guys know send it my way I’m in the process of either buying the equipment or the actual business of a floor cleaning company oh I just need one truck with all the equipment because I want it to be a lost leader I want to I want to get just everybody that I can to use me as a floor cleaning company so I can get floor daddy reviews to go through the roof I want to get a th reviews a month and how do I do that I mean that’s insane right to say I want so it’s like yeah I can get I can I know with my business I can do you know 150
(54:33) installs this month yeah at my capacity well that’s potentially only 150 reviews I can’t get to 500 reviews or 1,000 but if I have trucks cleaning and and and they leave a and and I’ll give you great price just give us a good review yeah and we clean their floors really good all are going to say is Flor daddy did a great job yeah I got I love my floors looks amazing thanks floor dadd mhm and boom my reviews are going to go through the roof so sometimes you got to be a little creative with like the adjacent stuff to
(55:03) support the main thing yeah sometimes there’s things like that that are a loss leader I mean you could lose money on that but it’s leading to the the what you really care about where you make money I was just going to show you you know the reviews matter see that 4.9 almost a, reviews 939 on Google he needs what is that 61 61 more reviews No 5 51 you got it right 61 61 no wait 71 71 if no 61 611 61 61 we need 61 of you listeners to go and leave a review we’re almost at a thousand yeah every day we get one um
(55:42) and and we we care about it here um and because people do look look you up but it’s also like it’s a check on your own service to be like did are we a business that can earn that that can earn the right to ask for that because you know when you ask for reviews sometimes I can backfire and but so there’s also like a lot of accountability I love asking for reviews and getting a review for somebody you know we had a a consultant that came in very early on and they said whatever you do don’t poke a bear I said what do you mean they said don’t ask for
(56:11) reviews if you don’t know the answer to the review and I said I want to know the answer to the most pissed off person out there right now because I need to build systems and processes and make it not only make it right with them I need to build a company so we don’t ever have that happen I want anything getting swept under the rug I want to know every problem in my life and eliminate it through systems yeah yeah love it yeah um well what else do people need to know about you Cody you want like you don’t have anything coming up or any events no
(56:42) that’s just running your business yeah I got my head down I’m an operator you know I got my head down I’m just look the way I feel about the world right now I’m like for the next we got an election tomorrow CU we’re shooting this yeah yeah there’ll be by the time this goes we will have we will know who the next president next president is which is exciting and scary at the same time uh but whoever it is like the way I feel like I can’t control the economy I can’t control what politicians do I can’t control gas prices I only got my little
(57:12) economy my personal little economy which means for the next 12 months especially rolling into a new year like I just want to go to the gym more I just want to have a better relationship with God and I just want to make a lot more money and do good by family that’s all I’m focused on like if you’re not in that like you know like ripped rich and rare like I want to be shredded I want to be happy I want to be making a killing super laser dialed in focused spiritually connected mentally on track you know all those
(57:42) things and if I’m worried about all this external stuff and I’m trying to kind of distra it’s too much yeah it’s like you know they say you can’t control the wave but you can’t control the surfboard I think that’s a lot of people that are stuck on politics and so worried about who’s going to be the next president I’m like just focus on the damn surfboard man that’s all you can control the wave’s going to be there yeah I want you to care about it and vote I’m not saying that but um I think for your business your family your health your
(58:10) spirituality it’s all up to you there’s just it’s you it’s you it’s you and there is a direct connection between health and wealth you know uh 70% of men can’t do a pull-up really let that sink in that’s pretty disappointing and I’ve said this a bunch of times disappointing but but I’m not surprised when I think about it oh it’s ridiculous it’s ridiculous you know I just I just did a challenge a personal Challenge and I’m not toting my own horn I just thought this is insane I’ve never I’ve never done it so I want to try it I just did
(58:37) 100 pull-ups a day for 30 days in a row and I started challenging my social media followers I’m like do it with me do it with me I don’t care if you do a hundred a day for 30 days but just do as many as you can on one day and doing them assisted and just try to do 100 pull-ups in one day and I had dozens and dozens of people filming them doing pull-ups a lot of people were like I can’t even do a pull-up but I’m going to try and they went over and did the assisted machine and I was so proud of them cuz I’m like you’re starting to
(59:05) think like the 1centers yeah right and and there’s I think the statistic was like 1 and seven or one and8 Americans is a Millionaire on paper but one in 25,000 have a six-pack when you let that sink in you’re like gez we’re a very unhealthy Nation yeah you know and that’s why I’m kind of excited to see if if Trump wins RFK kind of takes over like this champion of like health I’m like finally somebody’s like yeah championing Health yeah like why would we not want to do that like when when when when you when I
(59:37) get out of my ice bath my mindset is so dialed in not because of the ice bath Fe but because of the mental fortitude it gave me to endure self-induced trauma you know discipline of it yeah it’s discipline and it’s like if you have the discipline to go to the gym if you have the discipline to say no to that cupcake and just try to eat healthier or go for a walk you you can do a lot more as an entrepreneur so there is this direct connection and I just want to be a champion of like like setting a better standard for people like come on dude be
(1:00:10) ripped rich and rare be one of these people that actually you know cuz your people are watching right now MH your kids are watching right now and you’re setting the worst standard for them maybe you’re making a killing and you got a Rolex on good for you dude like you check one box MH but are you spiritually connected are you a great friend are you trustworthy are you doing red and yellow light behavior when nobody’s looking that’s not serving you because you’re hiding your pain in achievement or drugs or alcohol or sex
(1:00:40) or whatever it’s like we don’t we can shift all of that behavior over into healthy things that promote the family and promote your wealth and your health and uh and that’s just what what I’m focused on and yeah I think uh but it starts with you making the choice right you got to set the standard for everybody else to watch and go o I’m not doing that yeah I always do this thing with myself it’s like my own self- reality check I’m like think of the person you want to be and then go and do everything in the day that person would
(1:01:11) do you know and when I like have this like reality check with myself is like I’m off track on where I want to be it could be a lot of different areas of life is I go back to that and I’m like okay the person I want to be what time do they wake up in the morning what did they eat did they work out I used to get into this all workout we have a we have a gym right over there like a corporate gym employees got a membership it’s got showers a sauna it’s awesome I can’t make it there in the day once I get in the building here I am locked down but I
(1:01:39) think to myself oh you’ll get over there so I’m like stop doing that you work out before your ass gets into the office so i’ like i’ like change it because I’m like that’s the person I want to be the person I want to be works out before they leave the house it’s done I got it done in the morning and then I go next thing but then it goes through like all the stuff like how do I interact with people am I accomplishing the things am I staying focused on the things I know matter the most like what type of husband am I what type of Father am I
(1:02:04) you know all those things but it is like uh I just that’s that’s what works for me is like and I think a lot of people if they’re like like really think of who do you want to be what a great way to think about it because it’s like it’s like um Ed milette said this to me one day he goes dude if you died and you got to meet yourself at the Gates of Heaven but it was the best version of you would you recognize that person and when he said that I was just like cuz at the moment the answer was probably not yeah probably not you know I wasn’t healthy I
(1:02:40) wasn’t spiritually connected I was making a lot of money and on the surface you even said this like dude I thought you were killing it cuz you follow me on social or anybody on social and you’re like you see the cars and the traveling in the lifestyle and you’re like oh D that person’s killing right who would have known I would full of anxiety full of stress a failing marriage my mom’s dying of cancer my business is a hot met like who would have known yeah who would have known and I I just want to land the plane on this sometimes you got to crash
(1:03:08) and burn and allow that pain to be your best teacher and it’s in those moments where you’re really at Rock Bottom’s basement that you finally let go of control and you say you know what God my Creator whoever you’re into I Surrender I Surrender and I’m now willing to start fresh and start to put in a new create new habits and and put in the work necessary to step into my full potential what does that look like on a daily B and for you it was like dude I’m never going to get to unless I create the time in the morning and you
(1:03:41) started crafting a better stronger morning routine some people it’s just I don’t have a spiritual connection well no Doug you don’t pray you don’t read a Bible or whatever you’re into you don’t do anything to build that muscle mhm it it start you want to lose weight just go for a walk start there dude like and build up into going to the gym hire a trainer just so you can learn how to use the weights you don’t have to be like a bodybuilder on day one but you’ll be at least held accountable and forced to go and that’s it you know mhm it sounds
(1:04:14) simple right just go out there and do it you know turn your life around and make this next year your best year ever yeah I I think it’s the getting started part of it for a lot of people in all aspects of those things of where they they just feel like it’s too far away it’s going to take too long and but um everybody who is where you want to be had to get started and I don’t care what what we’re talking about business wealth go let go of something cuz you’re holding on to something with everything you got MH and you don’t even
(1:04:42) know why you’re holding it you’re just used to it it’s a habit right you got to let go of that and say that doesn’t serve me I’m out yeah yeah Cody sparber is so Dynamic you know well now just give give me all your money let me go do all the commercial real estate deals I can I’ll make us both a bunch of money yeah when you if you need flooring you know you need some flooring I got you think Flor Daddy and and next we’ll have you back I love where you’re going with the Home Services the big picture of it too and
(1:05:09) adding in all those other things the you know whatever it is Daddy Services Company what’s the you have like a big parent company name for it no no uh no well we we uh we have a parent entity that owns but not like a brand for it you you’re just going off the daddy concept though to get the brand recognition and just the different like you know could be Plumbing Daddy I don’t know yeah no exactly yeah it’s just a branding play it’s it’s looking at from marketing and saying okay where are our customer who is our customer really
(1:05:45) identifying who our customer is and then how do we repeat a jingle or a phone number or something that’s going to make us memorable and we named it floor Daddy because it’s so playful you you’ll remember it I guarantee right now every listen will never ever forget Flor daddy in the second you want to think of flooring that’s probably the only company you’re going to think of and hopefully we’re in your state wherever you are yeah uh because we eventually will scale to to outside of the states I think if I was to make a bold prediction
(1:06:15) I think I’m going to scale this for the next five years get a $300 million evaluation right now it’s probably a 10x of whatever my e is so I’m going to scale the business and I’m going to try to get to a $300 million evaluation I’m going to bring in private Equity I’m going to take some chips off the table and then I’ll scale it for another couple years and then exit a second time and take a second bite at the Apple that’s what I want to do with it yeah I mean that’s the private Equity Playbook is you get to a certain size of business
(1:06:49) and scale you get a multiple of eida which is your profits right um but you can do a growth Equity play which is what you’re talking about there where you take some chips off the table they inject more money then you’ve got the pressure to go build it even bigger though you got to go next level um but uh one of the books I I recommend a lot of people if you’re like and because I’ve talked about private Equity I’ve shot some videos on it I a little thing with A-Rod he explains private Equity because that’s what a-rod’s into right
(1:07:16) now is um there’s a book called the private Equity Playbook by the way um really good book it’s written by a guy who um kind of sold business businesses to private Equity but he talks about it from he’s like I don’t care what industry you’re in private Equity is buying it right now there’s some private Equity Firm buying it he talks about the rollover methodologies and how they use it I just for a lot of business owners I just don’t think they understand private Equity but you there’s different strategies of the growth Equity you can
(1:07:43) roll over Equity um and get another play but what happens when you have more when you get up the higher the food chain you’re getting in the you know you go from tens of millions to hundreds of millions of eida the multiple goes up oh yeah which is crazy yeah and you know unfortunately a lot of times when they buy your company they run into the ground and they don’t do nearly as well and so that’s why I would want to stay on for a little while longer it’s not just to to take a second bite of the Apple it’s to really build the brand and
(1:08:10) make it make it either a major regional player uh maybe even Nationwide I don’t know and we we’re we’re we’re flirting with franchise models and different stuff this is where I would lean on Tommy as my partner and other people that have been there and done that MH uh franchise model is tricky I was a lawyer for a franchise company for a brief minute actually all through law school I worked for a large International franchise or yeah you can’t control it you know your your brand becomes your franchisees they’re the ones delivering
(1:08:40) to the customer um I also have some contacts I could put you in touch with too that’ be very high level that could help on that but I don’t know I mean the franchise model it’s a it’s an easier way to scale yeah because you don’t need to raise the capital right the franchisees are going to pay you they’re going to inject their own money to grow their location and brand but then what are you doing you’re really just selling flooring now at this point and they control the brand yeah I I don’t know if I like that I think I can do it without
(1:09:04) it yeah we’ll see yeah so all right well Cody sperber thanks so much for coming in you he’s easy to find yeah well since your audience you know if if they have any money with you guys or you’re listening to this and you’re like hey I kind of like the commercial play just go to clever capital fund.
(1:09:23) com and you can you can see our fund and learn more about it uh talk to our you know our fund manager other team members and eventually maybe even get on the phone with me if you’re uh $100,000 minimum ACC credited investor yeah it’s pretty simple you know you can help them move some selfed money over Ira you know I mean we don’t endorse anybody of course make your own investment decisions but you have Ira investors I know because we’ve had other people use their IAS to invest in your fund and of course we always love companies businesses people doing funds
(1:09:54) even interesting things like estate development that’s a little more Niche um where you can put your IRA to play and it’s not just buying stocks bonds or mutual funds so um thanks for being on Cody appreciate you this great you got a great setup by the way oh thank you yeah and I’ve watched a bunch of your YouTube videos lately you’re fantastic at teaching oh I’m trying you’re killing it no no no and you’re getting tons of views I’m killing it right now I’m taking off huh I’m like what’s going on here we are you the secret sauce no we
(1:10:21) have a team damn yeah that’s what I’m talking about I saw that I saw saw a couple of them going and I’m like okay I need to learn from you dude I used to be the social media guy I need to go to you to get some tips guess I’m now I’m new school you are new school well thanks for having me on man I really appreciate it all right thanks Cody all right well thank you for listening to the direct di podcast of course get over directed diary.
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