HIP E7 Alex Kang - First Hotel While Working Full-Time

Do you have the dream of owning a boutique hotel or hospitality asset, but feel it's nearly impossible to do while working a full-time job? Our guest today, Alex King will demonstrate how he was able to purchase a nine million dollar project with zero prior experience investing in hotels. Through strategic partnerships, acquiring the right mentorship and leveraging the financial resources of his professional network, Alex proves not only is it possible to purchase a hotel while still working a W2 job, but by following the blueprint outlined in this episode, it's entirely probable. Welcome to the Hotel Investor Playbook, your guide to building wealth and freedom through boutique hotel ownership hosted by Mike and Nate. Get in the game. Welcome to the Hotel Investor Playbook hosted by Mike and Nate. In this show, you will learn how to purchase and operate a hotel in less than a year. Today, we've got Alex King. Alex, welcome to the show. Thanks for having me, Michael and Nate. Yeah. Yeah, we're stoked to have to remand. So what we want to do, we want to start right off with a great question, which I think is really relevant to a lot of listeners. So here goes it. We want to know how the heck were you able to purchase your first hotel with relatively zero experience while still working a full time job? Yeah, yeah, that's a question I've been getting relatively often. Same as I did by my first hotel six, seven months ago. So just to give you a little bit more background, I do have my W2 work in the world of software tech space. I do, you know, throughout the entrepreneurship as my day to day, you know, that's my day job. And you know, when I got my MBA, I was told that in order for you to make the career spread, you can either switch industry or you can switch function, but switching both would be very challenging, right? So kind of keeping that in mind, in a running and buying a hotel, it felt like I was new to the industry. I had some experience in real estate, but relatively basic. But I felt pretty good about all the functional areas that I had worked in in my W2 and other areas of my life, where whether it be acquisition, financial modeling, doing the strategy, planning, managing folks, and so on and so forth. So I felt like if I can work on filling the gap for industry, real estate hotel perspective, you know, I felt reasonably confident that I can, you know, make stuff happen, right? So that was just kind of a dream that I had one day. And I was like, you know, how do I feel that gap? Right? How do I actually feel that industry? Like I can probably study and do it myself or, you know, they might have taken three, four, five years who knows, or I can accelerate it through others who've done it in the past, right? And then I, you know, met with the other folks who are trying to do the same thing, join the same mastermind group where we met, and my grandmate. And that really accelerated my learning, right? So my first couple of months, I was just all about, you know, just learning the ring goal, you know, thinking about how to tough to write broker, how to use the right language, you know, putting together my personal financial statements and resumes and, you know, all the kind of stuff that's really required to learn about how to have the conversation with the broker all the way to, you know, having the right strata, the intrams prospecting and looking for deals. Okay. And then all of that. Yeah, like so I'm going to call a timeout because you dropped some absolute frickin nuggets that I want to go just go back to for a second and then we'll keep going because, yeah, I mean, you just like, you just breezeed over. I'm like, no, okay, but they were their absolute frickin nuggets. And I want to start with what you, what you said that you were, you were bringing to the table. There was this new concept of, all right, I'm going to go and purchase this hotel that maybe that industry, I don't have experience in. I got an MBA. I've got all these. But what you just said was I brought to the table through my W2 and through my life experience. I have skill. Like I come to the table bringing skill. And I think that that's, I think people miss this. They go in and they're like, okay, I have to know everything about everything to do this thing. But the reality is, if somebody's life experience, if they're W2, if what they've learned and what they've done, that in doing that, they're bringing to the table something of value. And you knew that coming in, you're like, well, look, I've got these skills. I can build teams. I've got lead. I can do these different things. And I can bring that to the table, that value to the table. So number one, I think that that's really important to just call that timeout and say, look, that's, if you're in a W2 right now and you're thinking, man, what the heck? I got to learn everything about everything to do this. I just believe that that's the wrong mindset. And I think the mindset that you just shared with us is really the important one. And that's, hey, what is it that? What do I bring to the table? What, what am I good at? What are my strengths? Because if I, and then we can get to this second part, which is surrounding yourself with people that have done it before and compressing time, right? Hey, I could figure out how to do this whole thing three to four. I could take the next three to five years to figure this thing out or, and then you just like kind of nonchalantly dropped the second nugget, which was around your ship. Yeah. If I go surround myself with people that have done it before and are trying to do it themselves and have mentorship, have a blueprint that that's where I want to go put myself. And then that's what you did. You when said, I've got skill number one through my W2 and number two, I'm going to go put myself in the room with people that are doing it and that people that have done it before. Yeah. I want to dump tail on that because you nailed it. Yes. Man, Alex, you were just spending the stuff out like like, oh, yeah, this is just normal, right? But I think that the more of them self reflection because you're working this W2 job, you have built up these incredible skill sets. And it's just so happens that you were applying them to to your full-time job, to your employment. Your employer is getting tremendous value. But to, you know, when you recognize, well, wait a second, I've built these skill sets and I can also then apply them to my own endeavors. But maybe I don't have all of the experience necessary. So if I take my individual skill sets, which might be business management, organization, you know, I don't know, you have an MBA. You might have all these skill sets we can we can dive into and drill down to. But you recognize like, this is what I bring to the table. And then you recognize, well, where are my maybe deficient? Like, I need mentorship. You started with the lingo, right? Like, you mean, well, let me start the basics. Like, I need to be able to communicate with people and have credibility. So let me start by when I can do all my own as I can self study, I can learn the fundamentals. And then I'm going to go get mentorship on really developing a plan and a strategy. But there's one more element. So those are the first two, right? Identifying your skill sets, finding mentorship. And number three is partnership. You just kind of rolled right into that. You started talking about partnership. I went and partnered with people. So like, let's just like to Nathan's for a, hey, take a time out. Well, yeah, yeah, three bullet points right there that are that we could just we could use as like the framework for this podcast because I think those are those are incredible points. Yeah. And can I ask it? So I'm like, I'm pumped. Can I ask you a couple questions? Yes, please. So having an MBA, having skills, having a little bit of experience in real estate. What made you choose and you use the word dream, but what made you have the dream of purchasing and owning and operating a boutique hotel? Yeah, yeah. So I, you know, really my real estate journey is as short as maybe your year and a half, right? So I, you know, I found my primary home in 2021. My first ever real estate project was to ever was to buy our home and then convert our garage into an A.G. So that was a very mini scale construction project that was really cool to do, right? And now we're getting rental income. So I saw a very small piece of what it could be. And then I was trying to figure out, okay, what could be next? I really liked the real estate, you know, even though it was a small thing, like how can I scale? How can I do other things? Like what do I enjoy doing? When I started kind of reflecting on what I've enjoyed doing in my W2, which was in our client service, adding value. So I was like, okay, what of that can translate to real estate? And then I stumbled upon in a hospitality. I think a lot of folks also, there was a boom in Airbnb. I was kind of part of the boom to start a a couple of Airbnb's down in San Diego. So we opened two Airbnb's and vendors. That was my introduction that gave way into hospitality, you know, understanding using the same asset, depending on what you do with it, the value, and output and outcome will be very different. So I saw that and that was very intriguing. So, you know, did that open to two Airbnb's that were doing pretty well? And then after that, I was really trying to figure out asking myself a question. I was like, do I do three, four, five more VMD's? 'Cause I was, you know, that was, he was starting to get a little bit more easier, right? Or is there a different way to like really supercharge what I'm doing? I didn't know what the answer was and I was just kind of asking my questions and trying to figure out. And then, you know, I think it was as random the one day, I heard about baby boomers retiring and all these over-trimuities that are coming in WS. And hospitality in the hotel space is one of the beneficiary of what this trend would be. So then made a lot of sense. And then I was, you know, trying to figure out what the value I would play, kind of, you know, how it is similar to what I've done in the past in my WS. So I kind of keep going back to my W2 'cause I'm trying to relate to what I've done in the past and trying to, you know, do a similar thing in the new thing I'm trying to do, right? So, you know, I think a lot of people W2, you know, get a pretty bad rep or the lot of cases, but like I actually think that W2 is one of the best over-trimuities to try out different things, you know, yes, your salary, but then that also means your downside risks that much lower. So I think it's really up to you in terms of what you're trying to get out of your W2, right? It just comes to consistent paycheck, which is fine. Or are you trying to learn on your thing? Are you trying to experiment on your thing? 'Cause I had a fortune of working in variety different functions. So, you know, I did accounting, I did finance, I did partnerships, I did operations, I did M&A, and all that kind of all led to where I am now. I didn't know that was gonna be that case, but I think if you're a little bit more intentional about what skill set, what is the thing that you're trying to get out of W2, and you can kind of relate to the vision or the version of yourself that you're trying to create. And also, you know, it may not be something that you're trying to do yourself. Like I think, you know, climbing up the corporate letter is completely fine for a lot of folks. And I think a lot of people do it just fine and they get the personal professional growth coming out of it. But in my case, I was trying to kind of, you know, translate that into my own thing. I, you know, saw and I had a joy of building my little Airbnb businesses. It felt like it's a business, it's a business. - Yeah, and I wanna touch on that because you said something in the beginning that was really powerful. You, you, as you said, I'm not exactly sure the exact words you said, but you made the point that what you recognized in starting with your short-term rentals was, you said something like, I recognized that if I could do some things right, if I could control that what I got out of that is if I could control the experience which then made ultimately my product successful, that wow, I have control over this. You said something like that. I don't remember the words that you used, but go back and then that ended up, it sounds like turning you to, well, how could I scale that concept? So can you dig back into what you meant by that comment that you made about your experience with STRs and how you were able to control the value? - Yeah, I think you're referring to, you know, having the same asset, but depending on what you do with it, like the output of the asset become tremendously different, like we currently referred to as a, you know, return on assets, right? So, you know, you can run it as a long-term rental which you'll get, hyperpatic rate, $2,000 for months, whatever. But if you are able to add all kind of value during more design, more furnish, shame, or creating the right experience for the same amount, same location, now all of a sudden you can make $3,000, $4,000, $5,000 with it, because you're putting them more effort than value in creating that asset and elevating that asset into something else. So I saw that through, you know, SDR and Airbnb and then with all the trend that was coming into the hotel and hospitality space, I wanted to, you know, really just super-chartered and scale it quickly. And I think the similar project that I'd done in the past when I was a million management, consulting before was a really typical private equity play, right? Like private equity is they come in, they try to look for the underperforming distress assets, they do a bunch of value add, they turn it around, they sell. Like I saw the similar playbook, and I consulted those P firms in the past where they get just tremendous value from doing so, right? I mean, there's a lot of use case studies and business schools and so on and so forth. And I saw that with the, you know, very little bit of it through the SDR, but definitely more with the hotel space, where, you know, maybe it hasn't been renovated for the last 28 years and owners are not really looking to put any effort into it. Systems are outdated, you know, assets are just not optimized, right? So I saw that and when I saw and understood the possibility of doing that, I think it literally took me a day or two until I decided to join the, you know, the community group that we were all part of and then decided to fill the gap that we discussed in terms of kind of hospitality gap, knowledge gap that I had, and I wanted to fill that as quick as possible of knowing that that is a possibility and, you know, not in the same setup in my previous W2 life, but I've done similar types of scope of project in the past where I felt comfortable. If I get smart on the industry and can execute and rely on some of the experiences I've had in the past, this can really be something, you know, I didn't have like a crazy amount of conviction by any means like, but I was like, you know, if I'm gonna put any spare time I had in this one, this made a lot of sense for me. - Yeah, I think what you're describing, I would assume a lot of our listeners are in the same bowl, right there. Presumably working a full time job and then dipped into short-term rentals and have recognized well. - Sure. - There's the ability Nathan talks about this all the time. Like to get the highest and best use out of an asset out of a property is, you know, the residential properties, the rents compared to short-term rentals, just it makes from a financial perspective way more sense to rent a short term because you can get a higher value, you can get more revenue by renting short-term. And you recognize that pretty quickly, but what you're describing is you recognize from a business mindset, your work experience, having experience, whether studying while you are an MBA student or in your professional life be, you know, observing how private equity companies can take assets and flip them essentially. You said, well, this concept of adding value or getting the most value out of an asset, you recognize very quickly that with commercial real estate general, this is possible. But if you could apply this to the boutique hotel market, there's an opportunity here that, I think many would say is up and coming that it's, you know, we've talked about this previously, but there's a lot of, you know, in this $10 million and under kind of market, there's a lot of people that are, you know, been doing this for 30 years. You said that they're not operating the properties as efficiently. And that's the same kind of concept that a private equity company might take is, well, where are the ways where we can squeeze out more juice out of this asset? And you applied that with saying, hey, I think that rather than we continue down this path of shorter rettles, where can I apply my skill sets to be able to get the quickest and the largest gain and similar to a private equity company? Let me scale up. Yeah. And, okay, there was one other thing that you said in there that was like, I've been fortunate that we hit very, very quickly. And because Mike and I, you know, bootstrapped our hospitality company that really almost from day one, it was like, I can leave my W to, like, the cash flow was magnificent, right? So, but what you said in keeping your W2, you made the comment of, if I was going to spend time on the side doing something, right? If I was going to spend my time on the side. And that's kind of what I'm, what I've been wondering is, okay, well, crap, you went out there and did it, man. You went out there and bought a hotel and raised the capital and went through this entire process while you had your W2. So, how much time were you, I'd like to just know how you operated your time. Like, where did you put your time, how much time were you spending to make this accomplished? And you did that in less than a year, correct? They didn't six months, correct. And six months. So, in six months from starting having this idea in this vision, in six months, you purchased a hotel and now you're going through this journey. So, how much time, how did you spend your time? - Yes, six months to be clear. Six months, we got under contract about a year to close. So, it took me, I think, literally about a year from day that I decided, hey, I'm going to do this and close, like, I think was literally, by, like, it was a good day difference. So that was a little bit crazy, but it says a lot about the mindset too. Like I was like, you know, within a year, I really want to hotel. And that was like I was just reminding myself every day, every time I wake up, you know, every morning, I was like, and I want to hotel everything a year. I want to hotel with you know, here, right? In terms of, you know, answering your question directly though. So it is, it is a challenge, right? Like it's definitely not easy. I think I had, you know, I was fortunate enough to be able to have some flexibility in my time so long as my work gets done, right? Like my boss or whoever stakeholders that I was working in, they didn't care that I was available. I mean, all nine to five, they care that things got done. So, you know, and also setting the right expectation and working at a company or to, you know, have the right manager to boss who is back there, I think is very, very helpful. I mean, and important not to moss every carman, but it definitely helps tremendously. So what that did was, you know, I was able to chunk out, for example, every morning, 7 a.m. to 9 a.m., I'm gonna do, I'm gonna be doing just nothing but studying on hotel, right? With wingos and understanding, club materials and maybe, you know, prospecting strategy and what have you. And being able to really just walk that off, I think I did 7 a.m. to 8 30 every single day for as long as I found, you know, until the day I found, I found the hotel. And, you know, I spent a little bit more afterward, but that was dedicated time on my calendar that I would be mapping out, but focus on hotel. It did get hard, right? You know, I think by my four or five, I was starting to doubt myself a little bit. Like, I'm spending all these time, but I'm getting no B's, I'm getting no results. There's a couple of conversations we are having, but like not things really, penciling, you know, I'm not sure, right? Like, I could be doing something else and making more money or maybe relaxing or more. Like, what have you? But having that accountability, so that's when I started working with, you know, a couple of other folks in the Mastermind group and really creating that accountability system, right? Like, we are in the meeting 7 a.m. today, 30 a.m. every morning together. If I don't show up, like shame on you, right? So I think having that and just understanding and talking with everybody, what we are all going through together, I think tremendously helped. And, you know, just being able to focus on just one next thing at a time was I think also helpful in terms of mindset in that I don't have to worry about operating a hotel when I don't even have a lead or don't have a property that I'm underwriting. So if you're starting to think about 15 or 500 different things that you have to do, like it's a little bit demoralized. It's almost like, you know, blessing in this guy that like, you know, it was almost better that I know what I, what I signed up for, you know, you know, signed because I was just focused on the next thing which was prospecting, talking to brokers when I get financials underrided, making sure that, you know, things work or not. So I think that definitely helped in terms of managing time. And, you know, I had to cut some things, right? Like I love golf, right? Like it's, you know, I love golfing. But during that period of time, I don't think I ever golfed, right? And, you know, that opened up a lot of time. Like I cut down what was least critical to me in that stage of my life. That was just cutting out a hobby that I had, which I loved doing. But for to fuel my professional or personal goal that I had, you know, something had to do. So that was something that was cut from my life during that period of time. And I got off. - You know, I want to go back to, that was, first of all, that was goal. There's a lot of nuggets in there. And I was writing notes as you were talking, but then the beginning there, so what Nathan was saying was, look, you know, you've got this job, how did you go and do this? And what you started with is, it starts with expectations, right? With your work, the expectation was not how much time your butt was in an office chair. It was, well, you know, how, are you getting the job done? And the expectations were, look, the communication that you had with either your manager or just your employer in general, was, I'm gonna get my work done. And they were receptive to the idea that as long as you've got your work done, they weren't gonna, you know, manage you to the point where they needed you, you know, present there, or you had to fulfill some amount of hours. It was just related to results. And so for anyone listening, you know, you mentioned, hey, it's about finding the right balance. So initially you're talking about W2, what are your expectations are? What do you wanna get out of your W2? And in this case with you, it sounds like what you wanted was you wanted a little bit of freedom and flexibility to pursue things outside of your W2 job. And your work was willing to accommodate you in that regard. But that's only part of the equation here. So it starts with communication and expectations, but what then you immediately followed up with was discipline. You talked about how every day, the first, I would assume, one of the first things you did for seven in the morning, you set out an hour to each and every single day and you had that discipline. And then you went through those periods of self-doubt and you were maybe having the limited belief syndrome or, well, gosh, could I be spending my time and elsewhere doing something that is gonna yield me some money right now. I'm putting all this effort into this, but you stayed the course and that discipline, oh my gosh, to me, that was like, were you the resonated with me? We've, Nathan, I read the book by James Clear, Atomic Habits, and that was pretty eye-opening to us where it starts like, look, if you wanna be a marathon runner and you've never done that before, it starts with one step at a time and it starts with acknowledging, look, I'm gonna do this. I'm gonna be a marathon runner. I'm not going to be, but he actually says, I am a marathon runner. So you just start, you said, I am a real estate investor. I am going to look for deals every single day and I'm gonna stay disciplined and I'm gonna limit myself down and I'm just gonna stay focused and to me that was like, wow, okay, those two things combined for someone that is in a job, how can they start immediately now if they wanna get involved in hotel investing and they have other responsibilities, communication and self-discipline start, that's the direction you go. - Yeah, and to piggyback on that, the other powerful thing that he said was, when you were about four months in and that self-doubt started occurring, you also found that by finding some guys in the group that you could be accountable to, now it's not just about you. And I think that that's so important when especially if you can't do something full-time and you're like, look, I have value on bringing it to the table, I'm gonna bring it to a partnership and part of that is saying, this is not just about me. There's a bigger thing here at stake. This is about as people being able to depend on each other and having camaraderie and teamwork and accomplishing something together. And I'd love to hear a little bit about that kind of journey as you started to create that partnership, the different strengths that the different partners had and we're bringing to the table, was everybody the same? Did you have complimentary skills? How did that kind of shake out? - Yeah, yeah. And I think without the partners, honestly, I don't think that I could have found a hotel, not to mention to help operate it after the acquisition. So that was the most pivotal thing that I had in my journey to buying and then operating my first hotel. In terms of how we kind of got together, you happen a little bit more organically, right? I saw a couple of other folks in the group that are showing similar energy, the discipline, their underwriting, they're doing deals and I was like, hey, we're all kind of struggling to find, well, not struggling by taking maybe longer and it's proven to be a little bit more challenging than what it thought it was going to be. And we also bear it on our body box and maybe that's why it took us a little bit longer than what it thought it was going to be. But I saw them and we started just talking to each other, like we're getting to know them a little bit better, you know, where do they come from? And I do think that it ended up working out in a sense that our skills at our truly complimentary, but then there's also very much of a commonality when it comes to kind of ethics and beliefs and our fundamentals. I come from more business background, a partner that I'm working, I also in the world of tech, by the way, but he's an engineer, software engineer. So by virtue of that, I think there's different skill sets that we brought to the table. And it's not like you have to find a perfect partner either, right? I think you have to find the right partner at that right time that are sharing similar goals in the vision that are aligned with what you're trying to do. Another thing that I got a lot as an advice was that, you know, that partner doesn't have to be a permanent partner either, right? So like just think about, again, I kind of going back to, what are your chances of now? You're trying to buy or tell your, you're trying to fall prey to a failure. You don't think about binding a partner that's going to be building, you know, $400 million dollar hostel, and pirate that you guys are building with these fantastic, by the way. But like if you start like to grand and to date, like I'm sure that happened. as a result and a virtue of you guys working together. When you first met and you guys taught Mike as, hey, if you want to build a 400 million hospitality business on day one, you'll be like, what is this guy saying? But we are focused on the first milestone at the goal. By the way, we are now thinking about longer term businesses in terms of hotels and other small business acquisitions and opportunities that I'm super excited about. I'm working way one of the partners in a more longer term capacity. Again, but that was more of a trot of, we are working together in the first deal. I love what he's doing. Hopefully he's making what I'm doing. And we see something in the longer term together. And that's how we are still forming our partnerships. But that was definitely a critical part of how we got the first hotel. Well, and I think that especially in, I've been able to be a part of multiple communities now. And I think that that's a really, really, really good point. Like in the beginning, when you're bringing to the table some skill, that the reality is being aligned with people that number one, you just, you gel with, right? You've got, you're aligned with your goal. You're aligned with your, you know, the mission of what you're trying to accomplish. But not needing to look at it as, okay, we're going to be with each other forever. It's like, look, do we have the right values? Do we have the right? Are we aligned like from the core of just, we're good people trying to accomplish the same thing? And can our skills come together and be better together as we would be one? But then, because I think that that's so key when you join a community, is to find that, to network, to dig in, to find the people that you do find that just natural, organic connection with. And that your skills can multiply. But on the same token, it doesn't, just because you, you accomplish this first thing together, doesn't necessarily mean that, all right, we're going to go and create a company together that's going to, you know, be tied at the hip for, you know, many, many years. It's like, okay, and I think that that's just a really, because I think that creates hesitancy in what I've witnessed in some of the communities is like, oh man, well, you got to really, really have a partnership. You got to really be damn sure that you're going to, I think on this, on the first one in accomplishing just that aligned vision and being organically enjoying each other and the process aligned in that vision, I think that that's enough of a foundation to really, to set off that first accomplishment. - A harder sign. - Yeah. I mean, you know, if it ends up being mad, yes, everything works out great. And then, yes, of course, like I'm trying to build a company with a partner now, but it doesn't have to be, you know, the commitment doesn't have to be made on their want. Yeah, I love that. - That's so good, yeah, because I think Nathan, you, like you hit the nail on the hat. A lot of times people are sitting on the silence waiting to get started and they'll come up with objections in their own mind as to why this can't work. And part of it is, well, gosh, do I really know this person? Can I trust this person, you know? But when you compartmentalize this, what you guys have done is, it's different than what Nathan and I are doing. We've got this big grand vision. You've pointed out our $400 million company, right? But like, if someone's listening to this and they're like, "I'm working a job here, man." Like, I'm just trying to get started. I want to go buy a hotel. I don't have any experience. And, you know, I don't know that I'm necessarily going to like, get married with the group or a partner here. Like, I just want to go buy a deal. How do I do this? Just compartmentalize that. Well, look, you go buy a hotel. You merge your complimentary skill sets. Something, you hold each other accountable. And that's another great piece, that accountability piece. Oh my gosh, I'm going to just segue here for a second. But you were saying, like, each week, you guys would have these meetings. And, you know, you feel like, well, I don't want to be the guy that didn't do his work, right? So you would stay more disciplined. You'd follow up. You'd presumably call X amount of brokers or you'd analyze or underwrite X amount of deals so that when you had that weekly meeting, you know, no one's going to be like, oh, well, you're not carrying your weight. And that is so important to keep progress moving forward. So yeah, but back to my point is, look, if you're thinking about it, you want to get started with a deal. These hospitality assets, you can partner, you can buy the asset. And then you can have someone manage it. And as the general partner of the deal, you're, you're, you're, of the property. You're not necessarily involved in all the operations day to day. They're after like, you can go on with your life and do other things. But yes, you're, you need that collaboration for this specific property, but you shouldn't allow that like waiting to jump in like, when is the right time? Who is the right partner? What is the right deal to block you from just getting started? And I think that you guys recognize that look, this particular property, we're going to go and buy together, but that doesn't necessarily need right out of the gate that we're going to do everything together thereafter. And I just, I wanted to make sure that that was acknowledged. Yeah. Can I ask a couple of questions? Okay. Yes, wait. Yeah. All right. So I know that some of the guys in this group are data driven. Did you track the data as to your KPIs as, as how many, how many brokers did you need? Did you end up speaking to before that six months hit and you went under contract with your, your current hotel? Yeah. I think, yeah, we have the data somewhere. I can pull that out of some point. I think it was in the hundreds. It's not maybe crypt in 2000, right? I think it was definitely in the collectively together. Three of us were doing very heavy prospecting. I think we were trying to talk to at least I was kind of talking to three or maybe four a day. Like that was kind of my goal. And then they got translated into weekly goals and monthly goals. And if I didn't do it, why didn't I do it? And if I didn't reach my goal, I was trying to make a goal for the following week. So it is, you know, it is not easy job, right? Like it's not like you can just watch Netflix and browse on CREXY and one day you're going to find a deal. No, I think it's, you know, you've got to be really invested. And if you're willing to make a store term sacrifice in terms of their time and again, like, you know, maybe letting go of your hobby. Not have you or maybe sleeping one or two hours less an hour or a night until you get to a certain milestone. What really drove me was that I knew it was a short term thing, right? Like it was not a permanent thing. Like, once we found a hotel, like all the things that I, and I'm starting to think of golf again, by the way. So, you know, things like that, like things are a lot of it getting normalized in my, like my life. But like at that time that was required. So, you know, talking to brokers, we did on market, off market, you know, we, you know, did all kinds of prospecting strategy that's pretty knowing the real space, whether it be, you know, skip tracing and trying to get to the owner and like trying to, like not from the right now, you guys found your property not here on the doors. I've certainly done it in my kind of area in LA. Like I just literally drove around and like try to see, you know, what they're occupants to look like. Is it higher? Like can I get the owner's information? So, all of that, you know, I think it just takes one deal. Like, yeah, it does. It just takes, well, it does. It takes one, right? So, and it's hard to see that when you're going through. And that's why I, I, I think this is a, I wanted to ask about some of this data. So, if you had the goal of, hey, I want to call at least two per day. And, you know, if that ends up being, you know, hey, that's 10, you know, 10 to 15 broker calls per week. And there's three of you guys doing that. If you go and do the math on this and it's just call it a minimum of 30, right? And it, and it took 26 weeks. You're right. That, that approaches, you know, that's almost 750 broker calls that were made. What about underwriting? How many, how many properties do you feel like you looked at the financials and, and under wrote? Do you think that would be a deal? Yeah, I think every five to 10 deals that I risked out to, well, we, you know, receive. At least on the paper and the surface compelling enough that we would go through the emotion of underwriting. So, I think we were trying to do at least one or two underwriting a week per person. I like, so that's 10 broker call, 10, 15, one or two underwriting, you know, maybe zero to two warrants follow up conversation with the broker. So out of the calls that we are making, you know, some are follow up calls, you know, some kind of getting into more information, some we are meeting with the seller. So, you know, there's different motions that come out of that underwriting, but that was kind of a roughly the data point. Yeah. And I just think that's just what, if you take six months, right? And you're like, all right, 26 weeks of underwriting to its 50, around 50 per person. That's 150 deals that were to the point where you were looking at financials and underwriting deals for one purchase, for one purchase. And the reason that I want to bring these numbers up, when you're in it and you're, you've now underwritten 30 deals, you feel like there's nothing out there. This is pointless. But it took 150. You don't know, I think the most important question you have to ask is, has somebody else done this before? And if the answer to that is somebody's done it and proven this, and we know that there's a lot of work, there's, hey, look, it's, you know, that this could result, you could do a thousand broker calls and under 850 deals to get one. I think it makes it easier for your mind, for the person that's like, man, am I just wasting my time? Am I just spinning my wheels? Is this ever going to happen? Maybe it's not. Maybe it's not the right thing. It's not that it's not the right thing. It's just, you're not there yet. And you don't know where you don't know when you're going to get there until you get there. And so if you just keep going, keep doing, I just, I wanted to bring those KPIs kind of to light because I think it's really important for, for those that are working, especially like you, you were doing this, you were working your full-time job. And you are, this was extra time. You were, you dedicated, made the sacrifice. Hey, things in my life that I enjoy doing, I'm going to sacrifice. I think you said, I'm going to, I'm going to sacrifice short-term pain for long-term gain. You chose that over the knowing and the mindset of this will lead to long-term gain. And I just, I want to commend you for that. And then I want that to be inspiration to those that are in this journey that you just keep pushing forward. It's all good. Yeah, I do appreciate it. And I do want to make a comment there, right? I think that for me, buying the first hotel, I think you have to be clear about what you're trying to achieve by the, the goal that you do have. I like for me example, was buying a first hotel. It was never about financials for, for me. Like yes, it's great that we are going to be making money. Yes, of course, we're going to be compensated for all the work that we are doing. But to me, it was more about building the foundation and the learning was the biggest objective for me. I'm going through the emotion of buying an operating hotel was the number one North Star and their goal and the KDI had. And everything else was kind of secondary tertiary, right? So every time I'm a little bit doubt, you know, doubting myself like, hey, like every hour and more spending, I'm making less money or, you know, it's good. You can think about that right too. Or every hour that you're spending, you're learning something, you're building towards something. And that definitely helped because again, I could be working 5200 hours or something else and making a lot more money. But I'm doing something that is not producing any monetary return. But that was okay. Like that was a very conscious choice that I made. You know, I wasn't going to make a home run. You know, that was not a goal, right? Like I'm not going to optimize for that. But you know, I think it's working out pretty, pretty good so far. Like again, I think you'd better be really clear about what you're trying to achieve by all the sacrifices you're making. Because otherwise it becomes very challenging. Did you have any moments where, you know, you kind of felt yourself drifting or maybe you were settling, you were kind of leaning into a property where, hey, you looked at so many, you kind of just, you have the impulse that you just want to fucking buy something, you know? And did you ever have that feeling where you're like, hey, let's try to pursue it. You knew like, well, it's really not the best deal that maybe emotions were kind of getting, you know, getting the best of you. Did you go? Did you experience that at all? 100%. And I had too many times, right? During that period of buying our hotel was not, not being your body any stress. It was very ups and downs and very ups and downs. Like one day our buy boxes a little too large. Another day where buy boxes took tight that maybe we should have been training ourselves to certain things. But I think that as I went through the emotion and visited a few properties and when I just pictured myself operating subpar property that I could have bought, but like, do I really see myself like running and being pet, that running this property and being passionate about it. Am I proud to share this with my friend and family? Are they going to be happy to visit this property after, you know, even after renovation and then all the value as they're done? And that was kind of a check for me, right? And if that didn't check off and there are probably a couple properties where I got really close to it. Okay, like, it's not like, you know, what we're looking for, but like, you know, five in the cellars trying to sell and we got, you know, we're negotiating and the terms are pretty good. But at the end of the day, I just didn't feel like I could be proud to our investor, than friends and family and also just don't see myself, you know, running it for a period. I guess not like six months commitment, like you're committing to multi year journey with the asset. So, you know, that is something that you have to be very clear on. Yeah, this investment class is definitely a passion project, right? A lot of people can look at alternatives and mobile home investing, affordable and storage or whatever. And those all do well. Those invest in hotels. The ones that are successful oftentimes have a passion for it. Yes, 100%. Can you tell me a little bit about how you divided the workload? I mean, you talked about with searching for a property that you guys, you split the workload in terms of calling broker, you find this property, you underwrite it, you feel like, hey, this is a good value. I want to pursue this. And then to go from the deal finding to ultimately acquire it, raising money, closing the deal, hiring a property manager, the whole deal, like there's a lot of moving parts. There's a lot, there's a workflow there. I know I've seen that you're very organized. You use technology, whether it's notion or you have different software applications that you either created or you use. But at the end of the day, there's this project management and certain people are assigned to certain tasks. I'd like to know with your partnership group, how you divided that workload once you identified the deal, the next steps afterwards. How did you divide that? Yeah. I think in the beginning it was all those hand down that. There's quite as many brokers as possible, underwrite as many deals as possible. Maybe that is not the most efficient approach, but that was what was needed to find our first deal. So, you know, three of us hand down that calling, underwriting, visiting as many as possible. After we got it under contract, though, I think that's when we started to have and feel the need to have more, a little bit more loosely defined roles and responsibilities and what our areas of the ownership look like. So we did mean harder onto what our strengths look like. So for example, you know, in my, I was a CPA before, I was a major consultant, so I was very comfortable. I feel very comfortable with numbers and underwriting. So all the numbers related stuff that I was, you know, happy to take responsibility for. And we had, you know, someone who's coordinating on the backend, you know, whether it be with the lawyer or the CPA to making sure like kind of backwardly how stuff is organized. We also had someone who's kind of in charge of just talking and negotiating with the broker and the seller and just heading that lens and just focusing on that. And then we also collectively thought about how are you going to be doing capital ways as an example. So strategy was put together, but then after executing on the rating of the fund, you know, every person on the team had to go out and do. So you know, some part we're doing in different, you know, areas, but some part we are giving up the responsibility to get to the same outcome. And you know, some are organic, and I think it's getting a little bit more defined after the close. But you know, in that, in that, in the time, like whatever that's required, because another thing was everyone had a W2 in Chrome. So a couple other, a W2 job, right? So a couple other partners. So one scarce thing that we had was time, like we were trying to just juggle our W2 and just trying to make stuff happen. And you know, whatever that may say, and that's why I think finding the right people that, you know, that you can, you know, buy it and, you know, lay with it. I was fortunate enough to have, you know, that happened a little bit more organic, very especially in the beginning. Otherwise, I think you could have, you could have in the other way around. But yeah, I was fortunate enough. Yeah. And that's, that's awesome. You said something that made me go back to the W2. And that's, so you guys all had, the three of you had W2s and you had the capital raise, right? And if, were you able to source any money from people that you've met through your W2s? I mean, I think most of my part of capital raise came from my past W2 network, right? And we talked about mentorship in the beginning too. All of my mentors basically also invested and they were biggest investors into, into my, into our deal. So you know, I think mentorship is something that I learned in early my career that I really needed to be able to get from A to B within, within the career. And I saw the same thing within, you know, my, my local journey. But yes, like I tapped into all my network, you know, friends and, you know, you know, a lot of the, I don't really have family in the US. So it was all friends and my profession on network. Every style to let me my count was somewhere between 300 and 400 people on my master spreadsheet. Someone that I talked to maybe I haven't spoken in the last 10, 50 years, some in Canada, some in the US. Some had a very light relationship in my W2. But I was like, I just got to get, I just got to do whatever it is required to be able to raise a fund that's required to optimize this property asset that I feel very passionate about. This property that we are trying to buy. So W2-- What was the reaction? Like, look, you're answer. Yeah. W2, I got a full-time job. I'm plugging ahead. I went to school, got my MBA and working a full-time job. And then I'm out of nowhere. Hey guys, I'm a real estate investor. You want to-- Yeah. What was the reaction from these folks? Obviously the folks work with you may have an idea. But do you like to your extended contacts that you're reaching out to to represent this? What was the feedback that you got from people? Yeah, you know, I was proud to surprise how encouraging everyone was. Even if they didn't invest, they're like, oh, it's really cool that you're doing this. I've been thinking about doing something on the side. I saw that you're doing Airbnb. Like, can we chat? I think a lot of conversations came out that way too. But if they are not-- I mean, there are some a lot of no replies to it. I think that it is just kind of reality. A lot of it is. But like the folks who respond there who came to the webinar, who were, you know, contemplating, you know, considering going into it, I, you know, just banged genuinely. It was painful for everyone to really just spend half an hour, 15 minutes an hour to even review the deal that I was trying to put together. Because I know everyone's busy, right? And they may or may not have interest in hospitality. I know for a fact, some people only look at the packed bed up together because he was me asking them, right? And because we had certain relationship in the past, not because they were super interested in a hotel and so on. So I think there is a mixed-- mixed reactions and feedback that I've got. But ultimately, you know, the folks who invested and thankful for it, folks who didn't invest but were closed, I do think that I'm trying to keep in touch with them. And it also just becomes a very fun topic, right? Like every time I catch up with them, hey, like, everyone's asking, hey, how is it-- how's it property doing? Like, how are your job language in the two? You know, and some organic conversation are like, I know I couldn't do it last time, but whenever you're ready to do it, I love to consider doing it, right? So I can see a path to becoming this-- this becoming easier moving forward. Now that-- because I think a lot of folks say, like, treat your heart, right? I feel like I chose the hardest, which was going from one tiny to tiny STRs to a boutique hotel first time syndicating first time fund raising first time buying a boutique hotel. No, it was good. Rich's price? The purchase price was 5.9 million. 4.7 million was a hotel. It's a 24-unit hotel up in Solving California. And then we also bought it duplex on the same lot. They were thinking of converting into-- it's a long-term rental right now. But we're thinking of converting into short-term rental, maybe do like a wedding events and things like that for both of the properties. So the all-in cost-- here's what I'm drilling down to-- Sure. --is relics. You're working your job here. You've got a couple side hustle things with Airbnb rentals and then bam. You got this big, all-booty hotel. And it was, what's the all-in all-in cost? 5.9 was a purchase price. We raised about $3 million total. But then there's rental costs, right? So like, what's the-- what's the test of all of her? Yeah, all included in the fundraising, included the rental. So 8.9 was really the all-in cost. That includes debt, equity, renovations, closing costs, lawyer fees, and everything to be required to make the transaction up. So merely $9 million project, right? And you're coming from relatively little real estate experience. And next thing, you know, you're immersed in a $9 million project. And I want to circle back on Nathan brought up this point about your W2 job. Like, hey, he asked how many people-- from the exactly what he asked. But basically, how many people from your W2 did you source with investors from your W2 job? And he said, oh, yeah, an overwhelming amount, basically. But I think this is relevant because look to go and make this $9 million project happen. You had to go and raise money. And who are the most qualified folks to be able to contribute to this? Where the people that know, like, and trust you-- and in fact, these are not an internet celebrity. You're not an influencer on Instagram. You're just a guy working a W2 job. And the people who want to invest in you are the people that know you from work that trust you, that know that you're credible. And not only do they want to invest for their personal financial game, but I believe that human nature-- people want to invest in others because they want to support them. They want to contribute. They're rooting for you. And so I think that this coming back full circle, again, is if you're working a job and you're wondering, how can I go and purchase this asset? How can I get into boutique hotel investing? You got to look at that as-- that's a positive. That you're still immersed in that network. That you've got resources that have income, presumably disposable income, that they can go and they can truly to your project, that they can benefit from financially. If you're passionate about what you're doing, you feel strongly that this is going to result in a positive gain. You're helping them. And they're helping you. So there's a symbiotic relationship. And you've got this network of earners, of people that are working, that have the money. So it seems like your strategic position in a W2 job to go and raise that money. And with all those things that you've talked about, your time management, your collaboration, your mentorship, your partnership, and then now having the financial component. That's the last piece of this puzzle is, where do I get the money for the down payment or for the rehab, or which required to make this project work? Well, tap into your job, your network. It's an important point. Yeah, Mike, tying it back to this is like, I think one of the challenges that people have is they think of their-- this is a reframe. To me, this is an absolute reframe. I think many times in the conversations that I have with individuals that are considering going into this space, they have their W2 as a limiting belief, a jab on. Yeah, but I'm in my W2, yeah, but, right? But I believe that the most powerful thing that I'm getting out of this conversation with you, Alex, is that we need to reframe that from the jab butt into one of my greatest strengths in starting this endeavor on this first opportunity is that I have a W2 because of what it can do for me, because it provides me with the ability that I may be a little bit limited by time, but I can fill that with partnership. I may be a little bit limited in my experience, but I can fill that with mentorship. And while I'm doing it, I'm mitigating my risk by having my W2 and having income, and it provides me with an automatic source of people that know me and trust me, and that I can provide access to them to some awesome returns and a super fun project that they can invest in, and I can get the support of their financial capacity because they have W2s. So to me, this conversation really, it's really going to help, I believe, our listeners and conversations that I have where it's a limiting belief to actually turn it into, I'm grateful that I have this W2 to start this endeavor. - Yeah, 100% I think is one of the biggest assets I have to this day. Like if I didn't have my W2, I have zero idea where the funds that I raised would come from. I really do. Like I would have to figure something else out, right? Like, you know, sort of media and all the other marketing, but like I was able to do this organically, which I'm very thankful for. Now as I kind of think about, you know, the second and the third and the fifth hotels, you know, there will be a time where there will be a limitation in terms of, hey, that actually only reached out to so many W2 folks, so many friends. So I'm thinking about different long-term strategy for that, but for the first one, I think it's very, very doable just to do while doing doubling between the W2, tap into your network, whether it be W2 folks or otherwise, and try to see them and then, you know, leverage them to your benefits, right? And I think it's doable. We have multiple folks in our community who've done it. So, you know, if you are putting the right effort and if you're disappointed enough, it will happen. yeah i think you got big things to come you know you explain that now you're looking at alternatives and you're gonna keep going. But the point here is look, you got started. You had the courage to go out and put yourself out there. And in many ways be vulnerable. Reach out to people that you work with or friends or anyone in your contact list and say, hey, this is what I'm working on. And anytime you put yourself out there, you're allowed to, you know, someone might give you a provide some criticism or they might doubt you or whatever. And you just, you went out there and you did it and you did it with confidence. And now that you've got the first one in your belt, the next time as you expand your eyes and whatever you invest in next, people are like, oh, okay, he's a player, he's in the game. So, you know, I think this is probably a great point to wrap this up. Man, I really enjoyed this conversation. Alex, thanks so much for being on the show. Nathan, is there anything you wanna add before we wrap up? - Yeah, no, I just, again, I just think it's a, this was an inspiring episode to me. I'm super just watching your journey. I got to be a witness to it. So, and man, you and the partners that you chose, man, it was really cool to watch you guys, watch you work, watch your success, your teamwork, the camaraderie, I think within the community, watching the community celebrate you guys as you were going. You had a whole community of freaking cheerleaders that were like, what's the update? And an update would come out and they were behind you. And so, I just wanna compliment you for having the courage to listen to the vision that you saw, and then to put the action in and to sacrifice, make the sacrifices that you did to get the sing to the finish line. And I'm really excited to continue to watch the success that you have moving forward Alex. - Appreciate it. Yeah, this was a great time to just take a little bit of pause and reflect on, you know, what has happened, you know, yourself, so thanks for having me. - Yeah, I noticed that you, I just posted a new website for your investment company. So, if you wanna plug that now, or if you wanna provide a contact point where if the listeners wanna get a hold of you, how can people get in touch with you? - Yeah, I'm not as active in social, but s.Alex.can. I'm Instagram, I'm available, and LinkedIn, I'm pretty active. Alex.can, or my company website is www.prime_rits_investment.com. - That's prime what? - Prime_rits_rid_investment.com. - Gotcha. Sweet, all right. Well, then we'll end there as always guys, if you're enjoying this show, please go ahead and subscribe. Give us a rate, us and review us. It goes a long way with building our following so that we can continue to get exposure and that leads to more guests wanting to be on the podcast, which ultimately we will provide more information for you guys, he's great reviewer podcast, and Aloha. (upbeat music)