Welcome And Mask Off Setup

SPEAKER_00 0:00

We are here at Family Office Society, and I want to introduce Mr. Ryan Garland, founder and chairman of Paradigm.

SPEAKER_01 0:07

Even though this is my podcast, we decided to let Joe go ahead and do the introduction today.

SPEAKER_00 0:11

Welcome to the Paradigm Shift. I know you guys love all the content Ryan does and the content that I create. Paradigm Shift has evolved over something that has turned to a farming technique with inside our investors and the way we interact with people that are coming on board or interested. And I really think the segments that we do, which I like, and it's now just considered mask off. So this is episode three of mask off. We've seen Joe and Ryan. Um so yeah, let's kind of dive right into it. Um I think one big piece that a lot of people don't know about you is what got you into this game and how you started.

SPEAKER_01 0:54

You know, it's funny is when we were talking about we got to shoot a podcast, we haven't done one in a minute, right? And we're like, what do we talk about? And I'm like, I just haven't really told my story. And when I get a chance to tell, you know, past clients or friends or family, what have you, the story and how I got into the distressed asset space from the 2008 crash? I think people really were just moved by how I positioned myself into the right rooms and really was able to get exposed to the institutional rawness of the world. We'll just use that word, kind of craziness, rawness of uh, you know, the old 2008 CDOs, distressed assets, mortgage-backed security market, the crash, what have you. So I'll go ahead and start. Maybe you want me to just kind of go raw, rugged, get going out.

SPEAKER_00 1:32

Yeah, I would say like everyone kind of knows you've gone through the divorce, you've gone through 08-09, but I think the the nuggets in between is what people that are new to the platform andor someone that you know already knows you, but don't know why you got into this and what really triggered you to like go all in.

SPEAKER_01 1:52

Yeah.

SPEAKER_00 1:53

And I think that goes in you went all in at some point in Vegas.

SPEAKER_01 1:58

Burn the bridges, yeah. So, all right. So, you know, in two thousand, so before 2008, I ended up uh getting introduced to a gentleman. Uh, his name was Justin Ty, still active in the space, uh, still one of my very close friends. But he actually

First Steps In Mortgage Sales

SPEAKER_01 2:10

owned a mortgage company before 08. This is back in 2004, is when I actually got into the business. And uh he was doing really well. He had a subprime lending uh platform and he had a huge, in essence, call center, and they were refinancing and helping people, you know, buy homes and so forth just through mortgages. And uh I met him right here at the river, believe it or not. And uh we just totally hit it off and became friends and started becoming golfing buddies. And he asked me, he goes, you know, how do you like your job? And at the time I was actually a survey technician going to college to be a um a uh surveyor or even go into civil engineering. And uh he asked me, he goes, Do you like your job? And he can tell that I was just, you know, kind of in the corporate space. I was still really young and you know, he just kind of knew that I wasn't happy. But I was working, you know, 40, 50 hours a week and then still trying to go to school and get through college. And, you know, you know, at that pace, I wasn't going to finish college until I was 25 or 26. So, you know, he goes, Well, well, have you ever thought about maybe coming over and you know, making five, six thousand dollars a week and then, you know, go to school full time so you can work part-time doing what I do and then you know, go to uh go to school full time and kind of bang out school. And I didn't really think about it, but it's the minute he said four or five thousand a week, I'm like, wait, hold on. You're talking I can make twenty thousand dollars a month? That's like more than I make in like six months, you know, as a survey tech. I was kind of on the low, low, lowest of the totem pole there. But um, he goes, Yeah, you got to come take a look. So I took a two-week vacation and at the time I was working at a a civil engineering firm called Albert A. Webb Associates. They're in uh downtown Riverside. In fact, they were the largest uh civil engineering firm in Southern California. So at the time they had um uh you know contracts with Poulty Homes, Beezer Homes, Standard Pacific, all the big, you know, home builders, uh public home builders, and they pretty much ran the entire inland empire and and all the way down to San Diego and so forth. So I was exposed to a really cool world on the development side early on and kind of understanding the the you know entitlements and planning process, but which I loved, but I still didn't understand the really that room. I was how powerful that room is, especially now going into what I'm doing. But um, so I took two-week vacation, went over to the lending side, and basically put, you know, earphones on me and put me in a cubicle and said, Okay, you're gonna start answering calls, and here's your script. And you know, I mean, it was like I literally started, you know, pushing mortgages in a in a call center. So that's kind of it in a nutshell, right? So um quickly I realized that's not my spot, but I started making $7,000 a week. So my second week, the first week I kind of got the rocks out of my mouth, learned the space, learned kind of where you know the bodies were buried, if you will, and how things worked uh with that company at least. And then the second week is when I really started turning the corner. So that by that second week, I made $7,000. And I'm like, wait, hold on. I made $7,000 two weeks in a business. Like he said, I can make money and go to school full time. Like I can literally not work for the rest of the month and live on that and go to school full time. So I'm like, I can really get through school. So I take two, I take uh, you know, I go back to my bosses at at Alberta Webb Associates and let them know I want to go ahead and, you know, put in my two weeks and, you know, start going a different direction as a career. And uh and went over there and got back in the cubicle and started pushing. And, you know, next thing I know, I'm making 10,000 a week, you know, another 5,000 a week, 15,000 the next week. And I'm just starting to do, you know, $20,000, $30,000 a month. And by six months, I'm like, there's no way I can finish school and be a civil engineer and make this type of money. I'm making more money in four or five months as I would be as an engineer, and I'd have to go through school. So unfortunately, I dropped out of school, but the money signs are right in front of me. So young man, don't care. I'm gonna do exactly that. So um ended up opening up my own big mortgage company over time. You know, I worked for a couple of other companies prior to that. And then uh my father actually, as an LA County Sheriff, he actually got hit by a um, in essence, a drunk driver and ended up breaking his back. And so um, we didn't know if he was gonna walk again. And for those of you that don't know me, my father raised me when I was since I was six months old. So I'm very close to my father. And uh, and so I wanted to move something, you know, somewhat closer to him. At the time, he was in Riverside and I was working in Rancho. So I literally uplifted my entire company, all my you know, guys that work for me, opened up an office in downtown Riverside, bought a house next to them, you know, the whole nine yards just to be closer to my father. And uh about six months later, the markets crash. Just boom. I mean when I say desolate, quiet, like phones went from, you know, 40, we went from 40 to 50 loans a month to like one, like just dead in the water, man. Wow. So, you know, I have this big office, I have all my friends working for me. We were all, you know, making, you know, 50, 15 grand a month. Maybe, you know, I was making more, but you know, the guys were all working for me, making an average of 15,000 a month. But ironically, they were all living with me at the same time, too. You know, so I'd say probably two months in after this, you know, just watching the news all day because there's nothing else for us to do, the phone stopped ringing. And I kind of went to them on a Monday morning and I said, hey guys, you know, we're dead in the water. I don't think there's any way from recovering from, you know, this market crash in essence. And uh, here's what we should do. Now, mind you, I'm young and dumb. Or let me just preface it with that. So I go to him on a Monday morning, we're all dressed in suit and ties. I kind of think of like a corporate setting, and uh I let him know I go, hey guys, you know, I have about $80,000 left over. You know, our burn rate's like $40,000 a month. Like I won't be able to survive more than two more months. But I have an idea. I said, I woke up this morning just kind of thinking, hey, this is a situation, our situation, you know, I've survived in some cases worse. I think what we should do is why don't we just go to Vegas and blow all of the money I have and then come back, file bankruptcy and become pizza delivery guys? Because pizza was just booming because I saw it on the news how pizza was booming because everyone was broken ordering pizza. I said, we'll survive by all of us like living under the same roof. We'll file bankruptcy and stay in this house, and then uh we'll just become pizza delivery guys and I'll survive, but we all just add to the kitty in essence to survive during the you know during the during the week. And they all just laughed and they're like, let's go, let's get it done.

SPEAKER_00 8:10

Did all of them? Because I've never asked you this. Did all of them say that? All of them, yeah.

SPEAKER_01 8:14

You know, at the time, those guys just they were, you know, they they were young too. And I was kind of I was the boss, I was the guy that you know kind of made something to myself, even in high school. I was always kind of making money somehow, whether it's detailing cars or something. So they all just were like, I want to do whatever you tell me to do, let's go have fun. But they're the Wolf of Wall Street type of kind of, yeah, pretty much. And what was nice is that they they really didn't care, you know, because they had a roof over their head, which was my house. And you know, we were barbecuing and swimming all the time. And, you know, we really didn't know how bad that was gonna get because, you know, our even my utility bills were so high. But uh, so they said, let's go. So Friday night, you know, obviously the phones aren't ringing all week. So we were like, okay, well, I guess Friday's coming around. Let's go. So Friday late afternoon, we flew out of Riverside Private. We flew into uh, you know, Vegas, and we took a shuttle in essence over to the Bellagio and we check into our rooms and everyone's like, let's go to the bar. And we ended up uh ended up at like a little uh a lounge, and it was probably like one or two o'clock in the morning. I'm buying everybody drinks and you know, bottles for everybody, and we're just having a blast, and like the it was pretty quiet too in Vegas, you know, it was pretty desolate there too. And all of a sudden, like our bar was getting busier and busier, and it was because I was buying everybody drinks, right? So I'd say it's probably about 2:30, three o'clock in the morning. And for whatever reason, I felt like I was pretty sober. And this guy comes up to me and he's you know, he's dressed really clean, he's uh short uh Chinese guy, he's got like Prada glasses on, IWC watch on, which was probably 30,000 at the time, probably more now. And you know, a probably a four or five thousand dollar suit, but very well spoken English and very polished. And uh he goes, you know, what's your story? Why are you, you know, having so much fun and spending the money and buying everybody drinks when the market just crashed? You know, basically, are you happy that this is happening? You know, kind of like kind of pushing me a little bit. And I said, No, I just know that the end of the world is near and we might as well go out with a bang. And he just started laughing. And so this is kind of where the story gets good. And he goes, Well, here's my card. I want you to come meet me. I have an office in the north side of Vegas, it's in kind of a mid-rise. He's I'd like for you to come, you know, see what it is I have going on, but this may be a lifeline for you to consider. And you have a huge team, I think this would be you know neat for you to take a look at what we're doing.

The 2008 Crash Hits Hard

SPEAKER_01 10:30

And he kind of just on his way, like right before he walks away, and he goes, just so you know, he's like, I'm managing billions of dollars and we're just buying up distressed assets like their Skittles. And he just said it that way. And I said, Really? And he said, You should come see what we're doing. So that stuck with me for the rest of the week, weekend, if you will. So Monday morning, just I kind of was like, Sunday night, I just want to kind of be a little mellow. Of course, I went out with the guys, but I didn't want to, you know, get too drunk or anything. So I just kind of was mellow and wanted to prepare for this meeting because I really didn't know what to expect. But I also thought, like, if there's something pretty serious, I'm I'm curious. This guy was very well put together. Just there was some sort of impact he left on me. So Monday morning we go to this, we take a limo. I think even one of my buddies was still wearing the same shirt from Friday night kind of thing, you know. So we take we take this limo over to this uh mid-rise, a little uh office building. Um kind of uh it was an office uh campus, really. But we pull up in front of this building, and uh first thing I noticed was there was a food truck outside, kind of a little bit down the street. And uh we all get out of the car and we're walking to the front door, and there's a guy standing at the front door. Well, he opens up the door and walks out as we're walking up, and he's got an AR on, he's fully dressed in like camo kind of thing, all blacked out. And we all kind of got quiet real fast. We kept walking forward, and he's all Mr. Garland, and I looked at him, I'm like, he looked right at me and I said, Yeah, and he goes, Okay, he's all you're allowed in, but your friends can't come in. He's all but I need to see some ID. I was like, Okay, and he goes, But that lunch truck is here for them. And they just looked up at the lunch truck, they're like, We'll see you later, right? So they took off to go eat breakfast. And uh I so I gave my ID and why I'm giving him my ID. What caught my attention, or at least something that stood out, was like, that lunch truck was for us. Like he said, that lunch truck is for your boys. Almost like they knew I was coming with, you know, a kind of a posse, if you will.

SPEAKER_00 12:21

Yeah.

SPEAKER_01 12:21

And you know, that kind of caught my attention. So I was now I was pretty humbled, and I'm like, this is I'm real curious now. So he just walks me through this little um, you know, foyer or whatever, whatever it is. And we walk up to the elevator. Oh, the elevator opens, obviously push the button, the elevator opens, and there's another gentleman in there with an AR, and he hands me off to another guy in an elevator with an AR. So he stays downstairs, the first guy. I get into an elevator with another security guard. We go up into, I don't know, it's like an 11th floor or something. And as soon as we get off, he hands me over to another guy. So I got the three guys in like 30 seconds that have ARs, right? And these guys are not, these are these are private guys. These aren't regular cops, you know. They have beards on, they're buff. I mean, these they're just a little different. They're private guys. Yeah. Well, as soon as I got off, not only didn't notice the security guard, but I noticed that this was packed with the smallest cubicles I've ever seen in my life, still to this day. And there was tons of Chinese people sitting inside these cubicles, and they were like sardines, dude. They're like next to each other. Like you and I, it's like if you and I were sitting in a Cessna trying to fly in a tiny little piper or a Cessna that was built in the 70s where our shoulders are gonna touch. It's like basically that small.

SPEAKER_00 13:34

Wow.

SPEAKER_01 13:35

And uh, and so we walk through this kind of little alleyway, if you will, and we just walk straight into this, you know, you know how like uh you go to um like let's say uh an event at a big hotel and they have those dividers that kind of divide rooms. They can have multiple rooms, but it's like conference rooms.

SPEAKER_02 13:52

Yeah.

SPEAKER_01 13:52

Well, it was like we walk into a two-door thing like that, which was a divider, and it was one big, we went in so basically it was the entire floor. So as we walk towards the end of the end of the hallway, there was that, you know, divider. Walk in through a double door. And as soon as I walk in, it was like a completely different atmosphere, right? And it was just basically a huge uh auction platform. And what it was was Rio Mac or what some people would remember it as Rio Mac back in the day. And I at the time, obviously, I have no idea what I'm walking into, but I look over and I see the CEO of uh of uh New Century, I see the CEO of Wacovia, Wells Fargo, I see the CEO of Countrywide, I see all kinds of CEOs of all these banks that are like filing bankruptcy and going under and this whole thing. Like it was kind of wild. But they're all just kind of enjoying life, like things are good. Like they have like their friends there, and it's kind of it was kind of like these round table, you know, where you have like like you go to a wedding and there's just a bunch of round tables with like 10 people at these stations, in essence. That's kind of what it was. But everyone was looking forward right at a stage, and there was a gentleman up there, and basically he was an auctioneer, but it wasn't a standard auctioneer where they speak fast. What he was what he was doing is he was explaining these portfolios and these distressed assets in these portfolios on a white, on a whiteboard, in essence. And he's going through these slides and explaining what heat signatures are and how many men and women that are married had mortgages, and how many men to women have mortgages and women to men, and like where all the developers, you know, uh were developing and where permits are being pulled, and you know, how many uh uh uh uh developers or builders, like public builders, had mortgage companies and the 228 LIBOR loans they're giving to homeowners and the NegAMs and Option Arms and all of those loans that went bad, ultimately the adjustables, you know, they were explaining kind of how that whole game was being played. And the next thing you know, these banks that are sitting there, these CEOs, they're off, they're basically auctioning off their distressed uh portfolios to these guys to these new investors. Now, what I caught was is these investors that are in there are just billionaires from all over the world. Why? These were people that didn't speak English, they had interpreters there, um, they had their own security guards. Some guys had dogs with them. Like these were like Russians and people from Singapore, all kinds of nationalities. And I was like completely in shock. And so when I walked in, I was kind of on my own. He kind of handed me off because I went through the doors. I'm like, where do I go? So naturally I just sit in the back in the corner, like a broke person that I was, while all these guys are buying billions of dollars in assets. And they were buying 3,000 mortgages, you know, all over the country, first, second mortgages. They were also buying like an entire bank, like small regional banks that would also go under, right? So something that's local, you know, small local community bank that I would have, you know, uh, you know, some sort of real estate. They would also have the whole bank, which had, you know, bank um like credit card debt, auto debt, employees, I mean, like an entire business, right? And it was crazy how they put these portfolios together. So I learned a lot about that. But I'd say within about three hours, I watched, I don't know, I'd say probably $600 billion in transactions transpire. And it was literally an auction platform. So once it got to the end of like the slide, the slides of these portfolios that they were all ultimately going over, these guys literally had paddles and they would lift up the paddle and they would bid against it, like a like a regular auction, but it didn't have the auctioneer vibe, right? Like we all would think. It was just a straight, like, hey guys, here's the starting price. Who wants a piece? You know, 55 cents on the dollar, 56 cents on the dollar, and it would just raise up until someone, one of the billionaires and actually would pull it down, and that was the last person who bidded. So that was, I couldn't believe my eyes. And what was crazy is the amount of supporting data that they were talking about, how many, you know, under financial hardship there's a lot of divorces

A Bellagio Stranger Offers A Lifeline

SPEAKER_01 17:45

that will transpire, and you know, all these people, all the way down to like college tuition is gonna slow down because people don't have the discretionary funds to put their kids through college, and just like all of this basically economic data on what is ultimately happening. So I was so impressed by how this worked. And I don't want to drop any big attorney's names, but I had an attorney, a friend of mine, he actually owns a big um uh debt fund right now in LA. He was a former uh FDIC attorney, and I had engaged with him on other things in the past, but he was just on the mortgage side and uh and he was in there. And uh what what happened was is the gentleman that I met, and here's how this all worked the gentleman that I met was kind of like the guy who foresaw, and so he's from China. He had he actually managed a $2 billion pension fund from China. What he did is he started circling up family offices and ended up certain, I mean, I don't even know how many billions of dollars he had in family offices. And what he did is he said, I'm gonna go and we caught the mortgage-backed security crisis kind of early in the US. We're gonna go out and open up shop. Of course, they opened up shop where in Vegas, which was the foreclosure capital of the country. Okay. The second was the Inland Empire, where I was from. Okay. So he started putting two together when he ran into me that night. And what he was doing is he was basically going to, he went to the FDIC, that attorney, and this is how I kind of figured it all out. And he basically said, Look, I have the back office to service all of those distressed assets. I will bring in all of the analysts for you and all of the asset managers. For so for those of you that are listening, if you remember back in the day in the 08 crisis, you had short sales and REOs and foreclosures and all this stuff. Well, those banks basically had a group that would come in from all over the country and they had little asset managers. And when you bought a portfolio, so you had a billionaire that doesn't have any back office, right? That billionaire comes in and buys a whole portfolio, say 3,000 mortgages, okay, as an example. Well, those are in all kinds of different states, different counties, cities, zip codes, what have you. And it breaks down. So they would have asset managers that would basically walk all the way down the line on geographic location. And then they would have other data points like are there people still living in the house? It's a married couple, or they try to short sell. What type of mortgage do they have? Are they currently an NOD? Are they, you know, foreclosure process, trying to start foreclosure, starting the modification, like all of that they managed. And when he went to the attorney with the FDIC, he said, look, one of the biggest and most important things is if you're going to start going after, you know, these billionaires to come bail out the US crisis, because the FDIC only had like 250 million at any given time to bail out banks. We had trillions of dollars in distressed assets going on. Our portfolios in every big major bank, the JP Morgan's, the you know, B of Age, Wells Fargo's, Bear Stearns, like they were just destroyed. I mean, they were 60% default rate. I mean, we use I don't care who you are, that's an entire country bankrupting, you know. So the way that they bailed that out was allowing these billionaires to come in and buy these banks, right? And buy these portfolios, and then they would capitalize and manage and report all of those assets from when they traded and kept the money in the US. So even though that those billionaires made a bunch of profit, they made a promise that they would keep the money in the US after the profit was made.

SPEAKER_00 21:03

Wow.

SPEAKER_01 21:04

Right. So then it goes back to mortgage backed securities and lending money again and insurance plays. And I can dive in, I can go into the weeds with you if you want. But this is it was just it was unbelievable watching what just transpired. And it was one of those things where he comes up to me at the very end and uh he goes, Ryan, so what'd you think? And I said, I was the most amazing thing I've ever witnessed. And I started asking him questions because there was a lot that I didn't catch, but I had questions on. And I wrote them down. I was actually somewhat smart. I had like a little, I wrote them all down, this little card thing I found. And he he was so impressed I even asked asked questions. He started giving me these answers. And he goes, Here's what I wanted to tell you is I want to give you anywhere between 30 to 50 million. I want you to go back to your office. I want to tell you, I want your guys to start refinancing families, and that was a key word was families out of these bad mortgages and seeing if they, you know, can qualify for a new loan. And right then and there, we came up with our underwriting guidelines, like to have to have still have a certain amount of income. Debt to income ratio, kind of like a regular mortgage, but like I had to come up with that guideline. And and I kind of asked him, I'm like, why'd you pick me? Like there's got to be something going on here. Why me? Right? Like, why are you at why you can ask anybody? And he goes, Well, there's a couple things. One, he goes, I'm about to make millions and millions of dollars and retire. He's probably in his 60s at the time. You know, those Chinese people, they don't look like it. So I had to take white, wild guess. Yeah. And uh he was like, you know, he goes, Look, I'm probably gonna make more money than I've ever seen in my life because distressed assets is where the money's made. He goes, but I want you to take my money and I want you to focus on one component. And I said, what? And he said, saving marriages. And I said, really? I said, okay. And at the time, you know, I don't, I wasn't married yet. Like I have, but I like that. I thought that was a cool moral compass this man had. And he's basically going to take his money and give it to me. And I'm gonna be basically his money manager, watching what he does on the front lines, and then he wants me to manage his money. And it was all just for mortgage-backed securities at first. So we come up with our underwriting guideline. I take off, I tell my boys what's going on, and they were just so excited. They all sobered up real quick. You know, we get back to the office, we start um marketing to uh basically uh real estate agents and homeowners looking to refi. So you can imagine private lending refinance, get away from underneath your bad bank loan. Oh, dude, we just it was we had blown up. Back then, we had we had like you had banker boxes full of files because we didn't have like clouds or that stuff yet, right? We weren't emailing documents like to that level we are now. So we had all of these people coming in and giving us their files, but like, and then we had attorneys like modification attorneys and short sale attorneys and so forth, literally delivering vans with banker boxes full of you know, and dude, that was so difficult to go through file after file, try to figure out what their income is. Like it was so hard. And the first month we got like six million out, and he wasn't happy. And he goes, Ryan, I told you I wanted 30 to 50 million spent. And I'm like, look, I'm trying. You know, I was like, but they, you know, they people still you have a spouse that lost their job, and like the other ones lost his overtime or his over her overtime, and they just financially don't pencil, and you know, the mortgage is too high compared to the rent profile in the area. So I I don't, you know, I don't know what I can do here. He just he basically said, Ryan, you're gonna have to figure it out. Otherwise, like I got to go a different direction. And I'm like, oh man, I said, look, give me give me a weekend, let me sleep on it and see if I can come up with some ideas. He goes, Okay, I got it. He goes, Let's do it. So I literally didn't sleep all weekend, and I started thinking, I'm like, you know, all of the he wanted families, family. I just something stuck with me. And he goes, I said, well, why don't we go to all these people who are in short sales or trying to get a modification, you know, from an attorney doing loan mods. Back then, there was a thing called SB95, which was kind of illegal where you to collect an upfront fee as an attorney to start a loan modification. And a lot of these loan mod attorneys were basically collecting upfront fees for processing, and they're not supposed to do that. And so these loan mod attorneys were getting popped, right? Because they would do 2,000 mods and they were working, but a lot of these people were starting to get denied and they were getting pissed. So what was happening was is they would, I would make contact with them and say, hey, all of your mod turndowns, we'll flip them to short sales and you guys keep managing the short sale. But what we'll do is we'll go in and buy the property at 70 cents of as is value, not what the mortgage value is. We want to look at the valuations because by that time, you know, values were dropping significantly. We'll do 70 cents of where it is now. You negotiate the short sale, we're the buyer. So here's the purchase contract, here's proof of funds, right? The whole thing. We'll buy it, and then we'll go to the homeowner and say, if, you know, if you sell it to us at this price, we'll give you a lease option to purchase in 36 months. So what Obama did do well

Inside The Distressed Asset Auction

SPEAKER_01 25:50

during his his administration and during he was in, you know, at that time, was he came up with a forgiveness act. And and that was when if you short sold a home, you were able to get a new mortgage. 36 months later, you can go FHA. Okay. If you went through a foreclosure, you had now you owe the debt. The short sale is like whatever the delta was between what the payoff was and what you sold the whole house for, that delta was forgiven. So that's what he called the forgiveness act.

SPEAKER_02 26:15

Got it.

SPEAKER_01 26:15

And then he allowed you to get a mortgage, right? So if your credit score had to go back up, what have you? But again, if you went through a full foreclosure, uh, then you're gonna owe the debt and you have to file bankruptcy, and then you got a foreclosure on your record for seven years, right? So it really incentivized people not to allow foreclosures and go right to short sales. So that started picking up. So not only did we start marketing to modification attorneys, we went to real estate agents and said, hey, you want to double in, you can represent us and the listing, but you need to go find all these people that want to keep their homes. And basically, we just had an ant farm of people scatter out there. And basically, it was the very first people they would bring to us was their own family members and their properties.

SPEAKER_02 26:55

Yeah.

SPEAKER_01 26:55

Because agents were, you know, they were making money back then and they had like maybe a spouse that made money, right? That was maybe a W-2 employee, but they lost everything. Real estate just screeching halt. So they don't have the income, right? And so they first they were the first ones in line to send us their files, and then they would just sell it like crazy. And but they're double indie now. So they were like, I got a way to make a living. So we open up, check this out. We opened up the first paradigm corporation in August of 2009. So that's the paradigm shift. This is where it all started, like going from mortgage to now bailing loans and right, just like modifications and this and that, and short sales. And I really realized how much you just have to shift. And if you think about it from the mind shift of like, we're killing it, mortgage crashed, we're going to Vegas, meet this guy, lives are safe. Now, but he has this one you know objective. Now we figured it out. You know, we started doing mortgages again. Then it that didn't work. And it was like, I just realized like for you to be able to survive, you need to learn how to shift, yeah, and and on your toes and and be aggressive. And that's where paradigm shift came in. And because it was so different, I wanted to spell paradigm different, right? Because I went from like mortgage to like lease back purchases, like what the heck? Like with two different worlds. So I was like, screw it, I'll name the I'll spell paradigm different. So um, so kind of fast forward. So I ended up opening up the the the corporation in 09, and we did by November 276 short sales for 33 million, and we exploded. Wow, just took off. We now and when we were really getting smart because we were realizing which, you know, which paper, or when I say paper, like which, you know, uh mortgage companies were doing short sales faster, and you know, we were just all about turning money now, and it was just volume-based. So I had opened up an office in Vegas, I had one in Southern California, right? In in Riverside, and then I was just going back and forth, but I started staffing up and we were just, I mean, I couldn't even tell you how many loan, how many we were doing. And we got to a point we're doing 40 million a month, 50 million a month, but we started chasing like Wacovia paper because that was like the easiest. So we were like marketing to people from Wacovia. So we were back then, we were able to get certain lists and start mailing to people. We'd spend like $2,000 on mailers and we'd have 200 loans come in, dude. It was like 200 requests for short sales come in. It was crazy how much. So for a $2,000 marketing investment, it was like maybe $400,000 in profit for the company. It was insane, right? So we went from volume mortgage to like volume bails, bailing people out, you know. So this is that whole distressed asset trying to work around things, like, you know, understanding lit um legislation and how things shift, you know, legally. And just kind of those are the things that I really started cutting my teeth on at that time. And again, things started shifting and banks started catching on that people are, you know, ultimately selling, short selling their house and then buying the properties back. So banks started having everybody sign disclosures within the short sell agreement that once they sell a distressed asset, they can never buy that asset back. Which to me, it really made me angry because I'm like, why does that matter? You know, because the bank just doesn't want you to buy your own property back. Who cares? Like, you know what I mean? Like, who cares? So they just were trying to stop that flow, but they didn't know there's nothing they can do to this type of practice because it started taking root with other people too. It wasn't just me. Once we started killing it and other people caught on what we're doing, other people started doing it in San Diego, LA, right? It started taking off. And in fact, I was actually consulting for a couple small groups to do it. But one of the things that kind of broke my heart throughout the process, just kind of like, you know, we have so many clients now, and we we we go through, you know, the the kind of the journey of people's lives when they're with us, you know, five, six years in investment. Some of us have been our investors have been with it for 10 years, you know, we're getting the phone calls of my husband got diagnosed with cancer, I lost a child, you know, I've got diagnosed with cancer. I mean, we hear the stories. And back then we did too. So the amount of, and honestly, it was really so sad. The amount of men that used to call the office when we're going through the short sale or going, they were trying to get out of a modification, or they would beg us, I'm like, Are you sure you're gonna be able to buy this thing? Like, I'm gonna lose my marriage if I don't, my kids aren't gonna finish college. And I mean, I had we had people writing us letters, we had people knocking at our door, we had people, we'd walk into the office and the guy would be camping out by the door several times, you know, just basically begging us like we're gonna lose our wives or we're gonna lose our family if we can't save this house. And it was so sad. And that's why I think I just got so like head down. Like I felt like I had an ability to fight for them and I had resources. And so I just took it upon my, I just put that weight on my shoulders and said, I'm gonna save all these people the best I can, you know? And so I think that kind of pollinates into how I operate today and just the storylines of all these people we build relationships with, because you get to know them, like you get to understand their most intimate details of their lives, their marriages, their kids, their illnesses, their fears. I mean, all of it, right? They're things that have happened to them in the past. But so, so kind of going back to the story. So I ended up kind of shifting again, right? Because those disclosures came out about short sales into ultimately going back to lending. So I went back to them and said, hey, things are gonna start slowing down here. These disclosure packages are coming out, the banks don't want this to happen. But REOs are starting to pick up. And back then, if you remember, if you could, if you just went through an entire short or sorry, an REO process. So let's say you just let your house foreclose and you were pissed off because the bank didn't um, you know, do a modification for you. So you're like, screw it, we're just gonna stay in this house and for two more years, kind of thing. You know, these people were gutting these houses. I mean, they're taking the cabinets off there, they're taking the air conditioning units, they're taking dude light fixtures, they were taking light bulbs out of the houses, they were pouring concrete down the toilets. I mean, these houses were being absolutely destroyed. So that's when the fix and flip game started getting big. You see where I'm going with it? So then I went back to the gentleman. I said, hey, listen, we should go back to private lending for fix and flips. These guys are doing really, really well. We'll do 60, 70% loan to value on ARV. You know, we'll lend money to contractors. I don't want to manage these contractors. We'll have, we have all these asset managers that are managing all the portfolios already. We'll get first in line for the REOs. Let's go get a couple REO, you know, uh asset managers in these zip codes that are close to us, and we'll lend money to these contractors. We'll bring in a a someone that'll do inspections to confirm the the projects are being renovated, right? So we just had inspectors basically work for us. And then we started lending money to contractors, hence doing hard money and private money, which I still manage a hundred million dollar fund to this day.

SPEAKER_00 33:15

So is that technically where the hard money Ryan came from?

SPEAKER_01 33:20

Hard money Ryan, dude. So, like even to this day, you'll meet friends of mine back in the day that, you know, knew me back in 13, 14, what have you, that were like, man, you're like hard money Ryan, everybody knew. So yeah, because that's and that's how I started doing so much volume because I was already parking so much money in a kind of a different direction. And since I had the mortgage background and a lot of the uh licensing requirements were so loosened for private lending, I'm like, let's just go back to private lending, but we'll do non-owner occupied fix and flip properties, distressed asset acquisitions, renovation, and basically sell these for, you know, uh for obviously an increase in price and start making some money. And that's when I started building relationships with again, we had all the relationships with the agents. Some of these agents were starting to make money and actually become the borrowers of flipping these properties. So it was like it turned into a killer gig because now I'm having 40, 50, you know, loan requests a month. Now I have the money to lend out, and it just turned into an entire like hamster will of doing hard money loans. So that's when I end up becoming, you know, number one top producer in the country for four straight years. And I had all, I was like, remember me, Rob, and Dan, we were doing like when I came on board with them, they did six million for the entire year. And within four months, when I came on board, they did 140 million bucks.

SPEAKER_00 34:32

Wow.

SPEAKER_01 34:33

We were averaging like 250 million, 350 million a year, like with a group of three of us. You know, we had one processor, but like me, Rob and Dan were doing literally $300 million in loans. And mind you, these were small loan amounts. They're the the houses have appreciated so much since then. These were like three, four hundred thousand dollar loans, you know. So imagine the volume we had to do. I mean, we were doing 50, 60 loan. We were closing 10, 15 loans on a Friday. Wow. Yeah, and it was just three of us.

SPEAKER_00 34:59

And just so the audience, if you're listening and kind of want to from this and you haven't heard, um, to learn a little bit about what Ryan just referenced from Rob and Dan, which was his mentor in a way, we have a podcast also with him. So that's another one if you want to kind of dig deep on when Ryan was working with him, and now Ryan's, you know, doing a podcast with him years later and kind of collaborating in a way.

SPEAKER_01 35:28

So and they went from doing hard money loans to managing a billion-dollar fund if you can go in public, right? So yeah, we I had the right is again kind of getting in the right rooms at the most random time, you know. And uh, and that was a really cool podcast,

Refinancing Families To Save Marriages

SPEAKER_01 35:40

by the way. If you go back to it, you can just dig uh kind of in our past podcast under Rob Seacrest. But yeah, that was uh that was a really fun time in my life. Very difficult, though, still, you know. It was I had my first son in 08 trying to, you know, still put food on the table and take all that volume on. It was very, very hard. But, you know, it I no regrets, obviously. We did very well. I mean, I tell everybody, you know, people come into the business and they go, Ryan, like, how did you learn so much? I just said straight volume. You know, I can we can sit down and I can try to teach you what we do, but there's nothing better than going through transaction in a transaction. So when you do just so many thousands of transactions, you know, you just you kind of feel like you've seen it all, you know, and there's not much you haven't witnessed. And then you see the bad contractors and you see the poor work and you see what's right and what's wrong. And, you know, you just kind of start building your business around the right moral compass, in essence, and you just start climbing out in the right direction. You know, it's all about making better decisions than poor decisions. And the more better decisions you make, the more you're gonna grow, right? In the in the in that direction. So, but yeah, so you know, kind of fast forwarding after that, still managing a hundred million dollar debt fund. We've pivoted a little bit just given the existing economic environment. Um, you know, as today's the 10th, you know, you know, uh Trump's still going after Iran right now, you know, the that helicopter just went down by a drone from Iran, and you know, that was that first that boat that's went out and saved those two boys.

SPEAKER_02 36:58

Yep.

SPEAKER_01 36:59

But you know, I think, I think, you know, with with this volatility, people really start seeing how we're we're practicing our business. So for example, one of the most, you know, I would say the majority of our clients always ask, like, what if? And if this was, you know, a month ago or a year ago, the very first question was like, What if we went to war? What do we do if we go to war? Well, now we're in war, in essence, right? What do we do?

SPEAKER_00 37:19

I want to touch on that because I just heard, I forgot who it was. Um, but they mentioned, they said, our like, you know, I'm 32, you're almost 42, 10 year gap, but we as a society in the US don't realize we have been in war for a long time.

SPEAKER_01 37:41

For a long time, somewhere, somehow. Yeah.

SPEAKER_00 37:44

And people, the average person, all the people that are probably listening to this know what's going on, but the average people don't realize that we've literally been in war with Iran for how long now?

SPEAKER_01 37:54

Oh, dude. Well, and then and look at the you know, Russian-Ukrainian war. We're involved in that too. Yep. And and and to be candid with you, you watch all this. I look the other day, I just turned off the news because I am so tired of hearing this war is almost over. There's a deal, and you know, you know, we we ceasefire this, ceasefire is that. I'm like, you know what? That's why I post. I'm like, this war's not over. These guys won't give up. I don't care what you do. You could sit around and these guys are gonna, they're willing to die. They don't care about their own citizens. Like, there's no way this is gonna give up. And of course, I'm just talking as a little guy here. We don't really know what's going on, but I just don't see that this is gonna stop. I also and we know we're seeing oil prices come back down, but you know, I don't think I don't think inflation's gonna, you know, stop going at the place that it's at now. It's dropped a little bit, but it and it's steady. But I, you know, look, the cost is gonna be high, even if it went back to normal a year ago, it's still high. And so I tell people, I'm like, look, you can't be fearful of the world. You just gotta work around it. You got to pivot and just put it on your chin and run. You know, you kind of can't have this fear of like this or wait for that. Like, you got to be proactive and grind, you know, and just know that, hey, look, if it's not this, it's gonna be something else. If it's not this problem, it's another problem, you know.

SPEAKER_00 39:05

Well, so I think going into what you kind of just shifted in, I I do have a follow-up question, but I want to throw this in there for the audience and the people because we are work, I'm working on it big time behind the scenes. Uh, we're we're not there yet. We have a new exciting project coming in Nashville. Um, and so that's one of our big things. We got webinars coming up and all that, but something that is gonna be interesting for those that listen in. We are working on building uh under the wraps a coaching program for Ryan. And I think this is a good segment, kind of just to introduce and talk about it in a way to let people know that with that storytelling that you just did, your track record, your hardships, everything you've gone through, it's allowed you to get to where you are today, but it's also you constantly, every day, the amount of times that even you know, Ryan calls me in the middle of the night, like saying, dude, this guy just hit me up, you know, he, you know, he was wondering if we offer any type of coaching or whatever. We don't want Ryan to be that average coach, you know, that the the entrepreneur and influencers, we want the high net worth and the individuals to understand and to almost want to be like Ryan or scale within that same manner. So let's touch on that just briefly. And then I kind of want you to follow up with the the mask offness on what shift have you recently just went through to compare to that last moment? But let's talk about the coaching.

SPEAKER_01 40:40

Yeah, so it really it's more of an advisory board seat. Um, so it's really called the Garland method. And because of my background, so really I wear two hats. When you look at Paradigm or you look at me, you know, in my background, you look at I wear kind of two hats, right? So if I if we talk about the debt fund, that's a lending fund, mortgage-backed security, first trustees, construction finance, very institutionalized. Obviously, we get audited financials. It's a fund, man. It's it's a it's a it's an institutional grade product. That's why we can fund loans and sell notes, right? When you look, if you just stuck on that for a second, you're gonna look at that. I underwrite for a living. That's what I do. I'm I'm always looking to poke holes. Like I'm looking for where the bodies are buried. I'm looking at where the problems are, where you know, I'm trying to mitigate the risk. That's what I do. So if I'm gonna lend money on this asset, what's the what's all the worst scenarios that can happen? Could the thing fall down? Could the borrower stop making the payments? If so, are we gonna lose money, right? So you you want to be able to underwrite, you know, projects well and loans really well. And that's really been my background, right? And if even if you look at like from the modifications and short sales, we're looking at the value. We want, we're only gonna buy at 70 cents on the dollar. Like we're looking at the methods and and the track of where the economy is going, how houses are depreciating and where it's gonna start slowing down. And like it's all about just politics and speed and just what where the money's being spent, right? Wherever the money goes is where you know where it's going. So there's that hat, that debt hat, that finance hat. And then you have the developer's hat. Then now it's like two completely different worlds. Now, putting a developer's hat on, they all think their their projects are the best. It's the best. Every bank's gonna lend money on it, but you now have to prove that this is a a bankable asset, and you have to put it together. So it's two different hats. And as you as you now know, I wear both. I'm a developer, I'm a builder, we do horizontal improvements, we do land lifts through entitlements all the way down to vertical and we build, right? So I can go from soup to nuts. That is all a dance in itself, from politics to getting things approved with the city to building relationships, shaking hands, and kissing babies, and it's a thing, you know. That's why you have all these different advisors that work with inside a builder or a developer's uh brand. And and then you have the finance, you have the bank, it's okay. Okay, we go get the approvals and the plans and get everything budgeted down. Now we got to go get financing, we got to go get the debt piece and we got to get the equity piece. All of that has its own language, and you have to put it together. You only have it's the same thing, like people judge a book by its cover. So when you deliver a package to your investors or to a bank, they're gonna look at how your delivery is. And if you aren't using specific verbiage or words, they're gonna know that you don't know what you're talking about. It's like every industry has its own language. It you have your own delivery. You won't know that unless you've been in all of the things that I've gone through. And I still go to like IMN conferences, that's $5,000 for me to get in, right? And I'm working, I'm sitting with the guys from Goldman's and you know, Morgan Stanley's, and I'm listening to what they're talking about and where they're spending their billions of dollars. But I'm watching and listening to how these guys are operating because when you see how they're shifting, we we just want to shift with it. We just kind of want to roll with the waves, right? That's the idea is to kind of go with it, get nimble and chill. What I mean all by that is that you have to understand the way the world's working. So, how are the capital markets gonna work? For example, interest rate, we knew that with the new Fed share that interest rates were gonna go up because he was gonna play this is not a political card. Right. Because Trump has been trying to push rates to come down so hard on what is it, Powell, whatever. We need to get those rates to drop. We want inflation to drop. We need to get rates to drop. He didn't do it. This guy's coming into coming in and the new chair. And we knew that he was going to go up real quick and spike in interest rates. If anything, they're going to plateau or they're going to come back down. We think they're going to come back down. But the sophisticated builders and developers are just going to wait that out or they're going to build around it and then they'll just put all their stuff in line. And when the rates come back to drop, they'll go back to the bank and they'll go lock their rate. It's just a song and dance. It's understanding it. Like I posted the other day about something, right? About this Iran war is not going to stop and people are going to start pulling out of stocks. Look at stocks today. They ended really bad. They're climbing, they're climbing, but now you have this Iran war that's not going to stop. The inflation rate just came out. Boom, rates, you know, stocks drop. That's not hard. It always works that way. So the point to this is it takes experience to be able to understand that dance. So the Garland method is me coming out and looking with a sponsor, someone who doesn't have a back office, but has maybe a pedigree of finance or maybe a developer, you know, in his past or had a partnership or something, but really doesn't have the back office, the support, the staff, and the resources to be able to take a small project and get it off the ground and raise the capital. Even yeah. So it's all of the above. It's all of the things that it takes to find a project, negotiate a purchase of the land, negotiation skills, who are you going to use for as a broker? Down to who's your contractor, construction contracts, down to what product is going to work there, building your pro forma, building your pitch deck, focusing on your capital stack, what banks are you going to go to? Are you even bankable? You know, who is your LPs and your GPs? How are you going to create your splits? I mean, down to your pit, you know, down to your um, you know, your uh feasibility studies, you know, how are you gonna create your CRM and start your marketing campaigns? Wow, what campaign are you gonna push? Where what's your demographic, you know, all the way down to like opening up a fund, opening up your CPA, who are you gonna bank with? Like, you know, who's gonna do your books, who's gonna do your audits, like all of those things are very, very serious when you open up a fund. And I'll use this as an example.

Short Sales To Fix And Flip Lending

SPEAKER_01 46:10

You and I just proved it. For us to open up a fund and to engage with our SEC attorney to open up and to run with my Proforma guy that builds, you know, he's from MIT and builds ProFormas. He was like a big portfolio manager for CIM groups, $70 billion in commercial real estate under portfolio. He was overseeing all the financials, you know, and then you have uh, and then you have uh your pitch decks, your feasibility studies, all the little marketing camp, you know, can uh comp campaigns, pitch, you know, your um your podcasts, your webinars, like your creatives, like how are you like all of that alone, just to open a five million dollar fund is at least a hundred grand. At least and a hundred and twenty days or more to do it, you know, depending on the nature of the fund. So you're I mean, and the amount of hours of talking to your attorneys and talking to your CPAs and talking, it just takes so much money. But that's not including Juniper Square that's eighteen thousand dollars a month or eighteen thousand a year or twenty-five thousand. I think it's we're getting it for cheaper because we've been, you know, forever with them, but I think it's like twenty-five thousand a year. Then you got to pay them twenty, five hundred dollars to sync it up to your your website. Like it it to do what we're doing, you to open up a business like we have, it's at least a million bucks minimum, right? And then your CRM hub spot or yeah, and and and we've got we've been burying, we've been built spending, we've spent, I don't even remember what it was year to date since we launched the crowdfunding division in like 17, 16, 17, but I think it's north of 10 million bucks. Like it's a lot, you know? And so, but our CRM and all of our technology and all our AI and all of our tech stuff, and I mean, it is a thing. It is, I I don't even know how to put a value on the company, but if if somebody were to be able to bolt on offerings to our company and go raise capital, build awareness for what they're doing, and they were able to successfully raise the money, it it would be, I mean, it's hundreds of millions of dollars where this can go because we're relevant on what's happening and we're compliant because we're implementing AI to scrub SEC compliance and we're burying those disclosures. I mean, it is, and when I say burying, like putting putting the adding the disclosures to the right offerings, focusing on the right ways to do the audits. I mean, it's a huge thing, right?

SPEAKER_02 48:13

Yep.

SPEAKER_01 48:14

And as you know, you know, Mike, our CEO, he was a compliance officer with a BD. So it's so nice to have someone at that pedigree because he's just kind of the dad of the company. You know what I mean? He's like, is where things could be problems and we got to fix this and what have you. So it's been nice. But, anyways, uh the the the the that platform, the Garland method, is ultimately helping people go from soup to nuts. So whether you've never done a development before, you need to get some track record, we'll sit on your board. You can pay us a per year fee to sit on the board. You have access to all of our resources, all of our attorneys, all of our CPAs, our bankers. I mean, everything you need to successfully open up a fund, manage the fund properly, provide reporting to your clients, down to the actual development, down to construction, down to your exit, down to HOAs, down to real estate sales, down to marketing the sale, you know, who to choose for your property management. I mean, whatever it is you're trying to do, we can provide resources pretty much across the country, or at least give you the right way to go about, you know, finding the right groups, but we will help people ultimately get into the private equity space and become a fund manager and start controlling their destiny and helping people make money.

SPEAKER_00 49:24

Yep.

SPEAKER_01 49:25

You know, and there's no other platforms out there doing it to the level that we're doing it. Yeah. And then you sit on, I sit on your back, you're you're, you know, really it's like a, it's like, you know, if an investor looks at a project that's a guy that's never done this before and he piggybacks off like our projects, he's like, Well, why don't I just invest with the guy who's done a bunch of stuff? It's the same return profile. What we do is we say, look, we you can piggy off our track record, but we do have oversight and we do have a seat at the table for decision making, which makes those investors feel more comfortable.

SPEAKER_02 49:53

Yep.

SPEAKER_01 49:53

So now we get more involved and help them kick off, kickstart their fund and and actually successfully build their project. But you've had my resources and my back office to help you. Hence the back office story by the guy that I watched basically, you know, maneuver billions and trillions of dollars in distressed assets in 2008. If you have the right back office, you can pretty much scale your business. You have the right infrastructure, the right technology, the AI, which is relevant right now. All of that is so important. So that's why I've been so heavy on back office.

SPEAKER_00 50:24

Yeah. So that's a little glimpse. Uh, there's no date yet. Uh, I think we're more excited right now with uh the news with inside Lake Havasu. Our gym is doing amazing. We're, you know, we just sponsored a young gal today for one of our athletes here at Family Office. She's a two-time world champ, jet skier, and the gym is doing amazing, getting a lot of feedback. The, you know, getting COs for buildings, permits being, you know, ready to be delivered and poured, you know, concrete within, you know, building G here soon for paradigm storage. We have so much going on. And then now a project in Nashville, which is a combination of a gym and man caves. Yep. But I think uh I want to shift into this now that I got you excited. He loves talking about stuff like this. Um and I I I think it's important for the audience to understand that we are going to be offering that here soon. Um, but with that shift, everyone already knows you know, you going through multiple different situations in your life. That story alone did bring you to where you are today. It helped you understand the level of knowledge that it needs to take to do the underwriting and decision making and what's a better deal, you know, when to pull the trigger, when not to, when to sit, when to sell. Within the last two years, what has, you know, we're 2026? I I just said this to my wife the other day. I was like, it's been six years since COVID. So since COVID, which feels like it was right around the back, yeah, since so let's just say from 2004 or 24 to now, what is something that you have gone through, whether it's personal or with inside the business? And I have a couple of things since I'm your best friend and you're you know executive of the company, but I do want to know, like deep down inside for you, what is something that you've gone through that you it was a pain in the ass for you to get through it, but you know you needed to get through it to break through that barrier for you to now level up into this company and you as a man.

SPEAKER_01 52:41

Dude, that's a good one. Well, give me one personal side or business side?

SPEAKER_00 52:49

I would say, well, with inside both. I mean, you've already talked about, you know, you your dad and you know, going through with with Shane and you know, uh as a kid, him running around in Power Wheels on podcasts before, you know. So I'm looking at like I I want you to dig deep right now and and what is something deep down that you've gone through that you were like, you know, like you said, you went all in, 80 grand left going to Vegas, and I'm gonna go all in and look at what the turnout came to. Yeah.

SPEAKER_01 53:21

I would say on well, so like from a business perspective, which obviously, if I'm gonna go all in on a business, I'm sacrificing somewhere, right? And it's if you're gonna, if you're going in all in in business, you're gonna sacrifice personal life. That's how this works. There's no such thing as gaining something with keeping everything, it just doesn't happen. Um, I think opening up our headquarters, building a design to make the gym, I think was a really big push because obviously the Barn Caves has a gym, right? And there's really no supporting data on the type of money that that gym can make. We knew what it would make when you actually go like door knock planet fitness and anytime fitness and some of the other, and you know what they're as far as how many um memberships they have, and then us just understanding the the migration here and the type of money that's here. But there's nothing that we can find or even type of any feasibility study that shows if you do this, this will turn out, right? And that's the one thing that I love about our business at this point in our career is that data just doesn't lie. It takes a lot of the emotions out of it. But when you just don't have the data, like for example, the Census Bureau, I still think shows 2022 data. Like it's not even relevant. It's not even like last year's, it's like four years ago data. Like, how pathetic is that, you know? So there's just no data points out here. So I think we had to understand that there was an institutional structure here. It just's not been seen yet. That's the that's the diamond in the rough. It's like any real estate play, it's identifying a diamond in the rough that nobody else sees, and then you capitalize on it, right? That's usually where the the money's made. So I think what happened was is as we're about to deliver our headquarters building, because the building's really set up to just basically be our main office, and then we just have a huge floor with big bay doors, and we can just you know store all of our building material for. So you know, our buyers would be able to pick their you know, cabinetry and their flooring and basically get a chance to go through, you know, all of the um uh, you know, design center in essence to buy and build their custom home, right? That's kind

War, Inflation, And Staying Nimble

SPEAKER_01 55:20

of what that whole part what play was. But we have this huge floor that we can store stuff. And, you know, one part of value engineering in our business is buying stuff at discounts when you know all these builders may not have gotten funding and there's 500 toilets sitting over at this, you know, warehouse and they want to get it off their floor and we'll just go strike a deal and get it all over it, but we need a place to store it. So that's part of our strategy in value engineering, too, right? It's just cutting our costs. But if we have storage, that really helps us compress our costs because we can strike deals, right? So that's one. So we went from, you know, knowing that we haven't broken ground yet, we're not gonna have to order 500 toilets yet, you know, or even close to it. Why don't we just go ahead and make this the gym and prove the concept? And originally, as you as you remember, we were just gonna try to bring in an operator. We were just gonna build the building and try to find a different operator to come in and rent the building. The problem was is that every operator that we had or were approached by or we approached did not have the liquidity or the money to be able to TI the building. Even if we TI'd it for them, they wouldn't have they didn't have the money to buy the equipment or even run the business. So we were like, well, shoot, man, we might as well do it on our own, right? And I've never opened up a gym, but how hard can it be when I got you?

SPEAKER_00 56:31

Yeah. Well, and I think, and and I just want to chime in with that. So my background being 10 years as a personal trainer, my connections, the guy that actually helped us outfit the equipment, you know, I when Ryan was kind of going in, because originally it was supposed to be the back bay only, just the small back bay and it what's that 30 feet? 2500 square feet.

SPEAKER_01 56:52

Yeah, it's 2500 square feet.

SPEAKER_00 56:54

Yeah, and tiny, and we were just discussing that, and then I remember we Ryan was like getting excited when we were like trying to pick out the equipment, and and then I think it just clicked in Ryan's head like, why not just make this the entire thing a gym? And I remember it started going bigger and bigger and bigger, and then like nothing up there, and then oh, now cardio up there, and you know, so I think honestly, like, yeah, inside you probably were, I don't know if this is the right thing to do, but ultimately, like hearing the testimonies today from the the uh I Andrew, I was gonna say young kid, but he's actually three years old.

SPEAKER_01 57:35

He's just he's helping genetics, yeah.

SPEAKER_00 57:38

But you know, the stories we're getting, you know, we're not even six months in yet, and we're we're around 300 members, like we are so blessed. But I like, and you can go on with being able to finish where you were at, but just the tedious things and my knowledge, art's knowledge, and us putting our mind together, it was like, you know, it's it really isn't that hard. You just gotta put in the work to get it organized, and then it really is you have to have the right few people though. And that that is what makes the biggest difference.

SPEAKER_01 58:12

Well, I I got super nerdy. I'm like, okay, we're gonna keep the building anyways, we're gonna do a cost segregation study and get the tax credits. When you look at EOS, EOS bought Gold's Gym, which was one of the top four brands in the world, next to Coca-Cola, Pepsi, right? That type of stuff. Then you're looking at all these small private equity plays that are buying up other health and wellness, which is the number one fastest growing industry right now, healthcare. And then you're hearing all of these like health modalities and you're seeing all of the political environment push out of big pharma and into more true health and wellness, farm to table environment, like that side of it is growing at an unbelievable pace. So when I started using my resources and making phone calls and doing feasibility studies and looking at the tax plays and you know, maybe converting this into a REIT, a real estate investment trust, get some cash flow on tax strategy and you know, how's that gonna make the corporation look with that? You know, all of every piece of equipment that's over $2,500 in the big beautiful bill is also a full 100% write-off. Right. And I'm sitting there going, like, wait, well, hold on. So getting into you know, in touch with my tax attorney and start circling the wagon on the entire business, I'm like, this right here can be an entire business for Paradigm on its own. We built the building and delivered a gym in one year, which this gym, and of course, I'm gonna be biased, but it's probably one of the nicest gyms I've ever walked into. And I will tell you right now, the majority of the people that have come out here that are from California have been had all that, you know, kind of uh flavor of different gyms there. They all come in here and go, like, this is like the best gym. People go, I would live here now because there's a cool gym, you know? And and the the it's the technology, it's the equipment, it's the layout, it's basically the whole, you know, it's 26-foot vaulted ceilings and the whole culture, the energy. We have no riffraff here. Everything's brand new, right? You just the list kind of goes on, but the price was good. We nailed it on the price. We kind of priced out the riffraff, but it's not too high to get most people that care here.

SPEAKER_02 1:00:07

Yeah.

SPEAKER_01 1:00:08

Um, and stick. You know, now we have we're going after the insurance plays. We have now insurance backing us too. So once you start getting insurance, you can start showing the cash, you know, the cash flow coming in here. And then obviously working with Dr. Ravi, and this is where the rubber meets the road. You know, he wants to come in here and lease that back bay, that 2,500 square feet for $15,000 a month. And now this building has a medical tenant.

The Garland Method Advisory Model

SPEAKER_01 1:00:30

Now you're talking about a whole nother evaluation because that's again one of the most fastest growing industries. And this is this area needs healthcare desperately because it is also a retirement community. So when you just kind of take it all together and you put a tight little bow on it and you look at the data, it made complete sense. And that was really the, but remember, that was the similar data we were already looked at when we made the decision to build a gym at the barn cage two years ago.

SPEAKER_02 1:00:56

Yep.

SPEAKER_01 1:00:56

It was just that was a completely different play because you do have a pool and you have other amenities that this place doesn't have. We had rack a ball and we have all that other stuff there. This doesn't have that. So this was just kind of like, I mean, we don't even have showers here. We don't have any of that stuff. This was literally just a headquarters building that we said, screw it, we'll just open it, get the cash flow coming in, prove the concept, two ears, one mouth, boots on the ground, let's figure it out. And then when the big gym opens, think about the risk drops. We can move everything from here into the big gym when it's open and it's already cash flowing.

SPEAKER_00 1:01:28

Yep.

SPEAKER_01 1:01:28

That right there is an institutional structured play, in my opinion. So put the pound of flesh in now, prove the concept, show our investors we got this under the under the rug. Let's rock, right? Or what do you say under the rug? Like in the bag. Here we go. We got this in the bag, let's do it. You know, and uh, and that's really what we that's kind of the direction. And as we kind of went down this road, I'm like, this makes like even so you know who's the most excited? Mike. Because Mike and I got a good ways on the numbers. Our CEO lost his mind.

SPEAKER_00 1:01:55

Yeah, it's it's it's crazy to when I chat with him on the numbers because I'm overseeing pretty much this entire gym on the back end of gym master systems building out, making sure things are run right. And I'm talking to Mike, and Mike's mind's like, Well, we need to be here. Like, look at the data here, and like we can. I'm like, yeah, Mike, like we we're not even six months open yet, bro. Like, let's hold the brakes. But when you like it with a thousand site, like, even for me, like I don't need to go too far into it, but when I did, which I'm proud of myself, I'm now doing feasibility and market studies.

SPEAKER_01 1:02:32

Um you came as a videographer and a personal trainer, dude.

SPEAKER_00 1:02:36

But when I saw an investment score of an 8.2 in Nashville, it was an 8.6. 8.6 on our concept. I was just I was baffled.

SPEAKER_01 1:02:49

Oh, dude, I I I I will I have to second that. I've never seen that in my entire career. And we gave the best data points we can give it because we also have proof of concept because our current project and then other boat and RV storage is whatever. We could talk about that in a second, but like that data that we plugged in was on point of exactly what we were planning on building to the from what the cost of build, timelines, exit prices, here's the comps, here's the distance between this to the marina, like all of that.

SPEAKER_00 1:03:16

How many cars go by that a day on a on a traffic study, you know, other all businesses that are from a 30-mile radius of gym membership costs, the average gym goers that median income from single to married, like the numbers itself, that's why this was hard for you to probably swallow at first because there, I mean, maybe we should have called Luke over.

SPEAKER_01 1:03:40

Well, I already knew what Luke was gonna say.

SPEAKER_00 1:03:42

Yeah, but uh there's no data here at all. And I mean, uh we don't need to say numbers-wise, but the amount of people and money and traffic that came in the week of memorial.

SPEAKER_01 1:03:54

Oh, yeah, wild.

SPEAKER_00 1:03:56

I mean, it was insane, guys. So I the the data when you follow, and that's why, again, going back to the Garland method, this guy really is I don't know how he does it. I now know why he doesn't sleep at night. Um, and I think that's why I don't, because he's making me you are who you hang out with.

SPEAKER_01 1:04:13

You know, so which is true, you can't sleep either, man. I feel I I almost feel bad for you, but I'm like, when I don't sleep, I work and I make more money or try to figure out a way to, but yeah. Um, yeah, so really like we'll we'll talk about that just to kind of talk about the investment strategy. But you know, the we have a project now that we're gonna be, it's actually just now going on to I think it's on the platform. We just haven't announced it yet. Um it's out of Nashville, and ultimately what we're doing is building a paradigm storage, you know, man cave product. It's just a you know, luxury storage condos, same thing is literally identical to paradigm storage, just all of the units are designed with the infrastructure to customize. So you can build like, you know, your mezzanine and your kitchenettes and your put your golf sims in there and put your RVs and boats. It's kind of have a little man cave, if you will, or she shed, because we have a lot of women buying them, believe it or not. Surprisingly, a lot of women. Um, but then you have, you know, so the common area, it's the same structure as barn caves, where you have a separate gym that's off the HOA balance sheet to the residential, and then the gym is open to the public. So now commercial real estate's always based on income approach. That open gym and building is, you know, generating income. Now the building has value. It's not just a cost to the residential project for a pool, right? In an amenity center. It's not just a cost with an HOA and management and insurance. The gym itself stands alone. So we we're doing the same thing. So, you know, all of these other man cave projects or car caves that are out in this country, they may have a common area, but no one ever uses it. So it's like a little bar and like a you know pool table or whatever. It never gets used because you just don't have that many people coming through there to hang out, believe it or not. Paradigm storage, 225 units. No, I'm glad we don't have a common area. We don't have that many people there all the time. People come and they work and they go. They don't come and just kick it with a bunch of people and they're just gonna go hang out in there. Like it doesn't, it's not realistic. So instead of building that common area, let's make that common area. Like make it a common area that's only for the for the units. Why don't we open it up to the public, make the building have value, build a gym based on the same metrics, 15,000 cars a day, drive by the site. It's on a main vein. And then you have, you know, the doctor coming on the building. You do the feasibility, you do the feasibility study shows an 8.6 in the risk tolerance on the on this feasibility study. And I was like floored. But what it also shows is that this vein goes right into downtown Nashville. And was what was it within like a 30 mile radius, 1.6 million people. I think it was like, I was at a 15 mile radius, 475,000 people in a 15 mile radius. And then getting closer, I think it was like a five or a 10-mile radius, like 125,000 people. Like that's insane. Right. And then you look at all the other businesses and what they're they're not producing like we are and all that support there. But where what really caught my attention, because I we know Havisu so well, we know the tourism revenue. We we understand that well. The city knows it well. We look at that for all of our residential development. What really caught my attention was the amount of registered water vessels a year in the four circle, like a four radio, uh, four uh local counties. So the closest four counties, 244,000 registered water vessels a year. 250,000 water vessels. I was like, this has gotta be wrong. There's no way. Then what happened was I said, okay, well, where are everyone migrating to Nashville? We all know that. We're in Cali and we know why people are going to Nashville, but like, where are the three most populated cities that are people are coming from? Number one, California, So Cal, even Northern Cal, but so you have Florida, believe it or not. And then you also have Illinois and you have California. Those are the three main areas where people are migrating into Nashville. But they obviously where we are, it's kind of a lake life, you know, it's up by old hickory. So those people are migrating and going into that area because it's the area where people do have boats and RVs. It's six out of ten people, six out of ten that move into this area have some sort of RV or water vessel. So you're talking about 60% of people that are migrating to this area have an RV or a boat or some sort of water vessel. That to me is shooting fish in the barrel. And there is no dry storage at all. That is any type of concept around us. We have one comp that's selling for almost $100 per square foot more than what we're selling paradigm storage for.

SPEAKER_00 1:08:28

Well, and I think we did the numbers too. So if you're listening, you know Havasu from Paradigm Storage to Windsor Launch Ramp is almost the same distance from our new storage slash gym to old Hickory.

SPEAKER_01 1:08:41

Yeah, to an old Hickory Marina. Yeah, I couldn't believe I was like, wait, this is crazy. It's like literally identical, same distance between the storage to the launch ramp here in Havasu from Paradigm Storage to Windsor, actually, to you know, from this particular project to the marina. I was I was like, this is crazy.

SPEAKER_00 1:08:57

It's like we need to start making new sure. I'll I'll call Rousey and and make sure it's data doesn't lie.

SPEAKER_01 1:09:03

That's a good yeah, data doesn't lie. That's a good one. But yeah, so that would, you know, obviously the that's where the Garland method came in. And going back to what we said, we'll sum this up here, we'll make it quicker. But you know, when you know, it'll take me, take us 90 days. Let's think about how the time we spent to do this. It'll take us 90 days to launch a fund with cost overhead, what have you. That it it gets it gets high as far as cost. With the way we're doing it now, we launched that fund. We have to obviously get our SEC attorney to sign off and everything, but with launching the fund and opening up the bank account, we did it in three weeks. That's pitch decks, data, feasibility study, you know, renderings, yeah, renderings down to um uh like detailed pro forma, not and multiple exit strategies with inside that pro forma, rentals down to tax strategy, all of that stuff baked in, you know, down to you know, where all of our comps are, distance to everything, all of that migration, everything all in kind of one shy, you know.

SPEAKER_00 1:10:03

And then I'll touch in on that. Our web development side is already done. Our AI implementation

Gym Strategy And Nashville Expansion

SPEAKER_00 1:10:10

for our communication with leads, and then we're literally right there for campaigns.

SPEAKER_01 1:10:16

And yeah, and Matt just uploaded everything to Juniper Square. So now investors can have access to a portal and they can go into the data room, they can review all the information we just listed and they can, you know, take their time and listen to the podcast and so forth. But man, it was in less than 30 days. In less than, yeah, well, three weeks. Yeah, literally we did this in three weeks. Yeah, that was like that. That's the Garland method, right? How do you get to that in three weeks? That right there saves a ton. You we did that for what, five grand? You know, a feasibility study, like a good one from Green Street Advisors. You know, they're like 25, 35, 50 grand, and it's like 60, 90 days. I would I would literally put up our feasibility study to theirs and say, let's see whose data. That's that's the thing about this. Like the data is so much easier, so much easier to get now. I I'd highly doubt they're even gonna be running in business to the to the level they were. But no, they're private equity real estate players. But I I think at the end of the day, I just the technology that's at our fingertips needs to be accessed if you want to compress your cost. And really, what you're doing is you're mitigating risk by doing that, is what's happening. That's the takeaways. How do you speed up the process, mitigate the risk, and then do what you're supposed to do best, which is babysit the transaction for it to actually get done and make money? That's the point.

SPEAKER_00 1:11:25

Yeah, you know. Well, and I think a lot of people are afraid of AI or they're iffy with it, but ultimately, this this, what we just touched on, makes this statement from Scott Galloway, which he said, and I love this saying don't be afraid of AI taking over your job, be afraid of the guy or girl who understands and implements AI better and into their business. Because once you become the master prompter, you can and will outwork anyone, but AI can't do everything for you. So I think that's where the Garland method, my experience, your experience, our entire team, it it is something to look forward to and stay tuned on. Um, but yeah, I mean, we're already an hour and 14 minutes in. I think I think this was good just because the audience does sometimes like that out-of-the-box mask off, you know, not talking. I mean, we end up talking about projects, but we're so excited about what we just expected.

SPEAKER_01 1:12:22

Well, we talked about how we you know, the real mask down was you know, the fear of like opening up the space that we did, you know. I just knew that we needed to do it. And uh, and and I think people need to see that that's where the risk kind of that's where you have to take risk. You have to take the risk, you know, and but it's it's really calculated risk if you think about it. And uh, and and it and the calculated risks we've taken on have done pretty well. We've won more than we've lost, you know, and uh, and that's really the takeaway, you know. But I think uh I think you know, we will should do another mask down. I love the fact that I was able to share my story with you today and our th with our audience on how I got into the business, like as far as this side of it. Um, but you know, that's uh I think we're I think we uh we really were able to lay an impact for people and see just really how we cut our teeth in the space.

SPEAKER_00 1:13:07

Yeah, I'm sure you're gonna get a lot of DMs on this Garland method and or the Tennessee paradigm flex, baby.

SPEAKER_01 1:13:15

Or like, hey man, I was in that auction with you. You know, I was in Vegas with you. I remember you might be.

SPEAKER_00 1:13:23

He's probably on a beach or an island. Oh, dude, he's gone.

SPEAKER_01 1:13:25

You know, it was so cool, though. You know, just is we'll we'll we'll we'll close us out with this. When he told me that all he cared about was like saving marriages and that he wants to use his money to help people because he knew he could make if you help people, you make money, right? Even Tony Robbins talks about it. If you can help people, you're gonna make money. It's the way it goes. Just the money will follow. And I just love that about this guy, man. And I just, you know, those are a lot of the people that we hang out with are everybody in our team are that way. Just it's just, I think it, you know, the stress is so high that it's just so much nicer when you have better, good people around you and you just don't question their, they're their, you know, when they're when they're it's you know, every man's the every person's like a teabag. You never know what you get until you put them in hot water. And everybody in our team right now has been in hot water and they just have not folded. They just have not made bad decisions, they haven't been too emotional to say bad things or hurt things or say bad, you know, everyone just has stuck together, knowing that the power is in, you know, to win wars is in numbers. And uh, and I just, you know, I've just had some amazing experiences that really created, I think, my my thought process. And when you when you start thinking about other people, that selfless way of thinking, I think really kind of just naturally the world would give back to you. And I think that's why I've I was so open, you know, kind of my hardship on a personal side was just I've been so open to help people that, you know, probably really shouldn't have been helped. I've kind of daddied them probably a little too long, kind of thing. But I just, you know, I just look at it and go, man, I'm blessed. I got food on the table, could be a whole lot worse. I want to open my door to people too, give people chances. I mean, dude, look at your you and I. You know, you came to me, you're going through a really hard time, and you told me the truth and what's going on. I'm like, dude, I respect that. You're going through a really hard time.

SPEAKER_02 1:15:02

Yep.

SPEAKER_01 1:15:03

Door opened, you walk through and look where you are today. You know, it's just that, but that happened to me too. You know, so I know certain people. Look at look at Matt, look at Rev. I mean, Mandy, you know, all of these people, we don't get them all the time, but some people will see the value in that door opening and will walk through it and be appreciative. And then it just becomes a part of their DNA.

SPEAKER_00 1:15:22

Yep.

SPEAKER_01 1:15:22

And that's who you are as a father, you know, and and it's just amazing to see these people with our company just do that. Even our friend, look at the people in the gym.

SPEAKER_02 1:15:30

Yeah.

SPEAKER_01 1:15:30

Just that's such a cool experience. I think that's changed. I did not expect to have like a mental, you know, this is a mental health thing at this gym. I mean, the amount of people that we've that we've heard that we've helped them, I mean, it's crazy. I post it on the social media all the time. So if anyone's watching my social media, I get DMs and I'll just screenshot it and post it. And people are talking about how we thought our lives were over and I wanted to commit suicide.

Service, Team Culture, And Closing

SPEAKER_01 1:15:50

And because of this gym, you know, I mean, the list goes on.

SPEAKER_02 1:15:52

Yeah.

SPEAKER_01 1:15:53

You know, and so it's like, man, I hope the Lord will keep blessing us because if we're really helping people like this, we're gotta be on the right track.

SPEAKER_00 1:15:59

Yep.

SPEAKER_01 1:15:59

You know, because I don't hear, oh, I was gonna commit suicide when I wired you $100,000 to invest. I don't hear that ever, you know? It's like I'm really stressed. The market's gonna crash, we're going to war. Are you sure we're gonna do this right? You know, that kind of thing. Yeah, no one's like, I can't wait to wire you this hundred grand because I'm just gonna commit suicide tomorrow. Like, no one does that. You know what I mean? So it's I guess it's just a nice way of uh I kind of a little change in in pace.

SPEAKER_00 1:16:21

So yeah. All right, guys. I think that's it for today's episode. We will do a more personal mast down, maybe uh smoking cigars next time in the back.

SPEAKER_01 1:16:30

Just not so hot. Yeah, it's we were gonna do that tonight, but it's just so hot.

SPEAKER_00 1:16:34

I was I was complaining as always. But thanks for listening, guys, and uh on to the next, Mr. Ryan Garland. I appreciate you. Love you, brother.

SPEAKER_01 1:16:43

Thanks for hosting today.

SPEAKER_00 1:16:44

Yes.

SPEAKER_01 1:16:45

Let it