← Coffeez with Joe Shalaby
Coffeez with Joe Shalaby
Trailblazing Wealth ft. Visionary Ben Reinberg | Coffeez for Closers with Joe Shalaby Ep. 52
00:57:54
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- [00:04]
A
What's up, everybody? Welcome to another episode of Coffee's Foreclosers, where success is served daily. Today we're diving into the world of commercial real estate, uncovering secrets behind building a powerhouse investment firm and learning from a true titan of the industry. Get ready for your for insights that will transform your approach to business and investing. Stay tuned, because today's guest is someone who knows how to turn vision into reality. Ladies and gentlemen, please welcome to the show the one, the only titan of commercial real estate, Ben Reinberg.
- [00:44]
B
Thank you, Joe. I appreciate the intro. That was. That was quite an intro you gave me. I mean, I don't think I've had that in all the years of doing podcasts and shows. So thank you, really. I mean, screen great to be here. What a great studio you have.
- [00:56]
A
I appreciate it. Thank you. Thanks for coming.
- [00:58]
B
Beautiful.
- [00:59]
A
I know you have an office here in Newport beach and you live here in Laguna beach, so it's awesome to have someone local and east coast or local here.
- [01:07]
B
It's, you know, I don't really have someone invite me on the spot saying, hey, you want to come on a podcast? And I had to call my assistant and say, can you move a couple meetings back so I could sit with Joe and have a podcast? Absolutely. So I'm. What a thrill to be here. And I appreciate it.
- [01:23]
A
You know, it's always some of the most efficient usage of time is going on a podcast.
- [01:27]
B
Absolutely.
- [01:28]
A
Especially, you know, when you get to tap into an audience. And we have a very similar synergistic audience, you know, one that can. We really can. And we're just kind of identifying the synergies between both of our organizations now.
- [01:40]
B
So, yeah, I mean, we love finding different avenues for capital because the capital stack in our business is everything, whether it's the equity, the debt, a blend, having flexibility to get involved in different asset classes, different lines of business within commercial real estate. And so we're doing some incredible, exciting things in commercial real estate, and we're on the leaders. And I'm really excited about the future, Joe, about where our business is going, how technology is happening, and for everyone out there listening, you know, and people are worried about the chaos. People are worried about, are we going in a deep recession? Depending on who wins the election, where's this country going? And instead of having this sheep mentality, I call it is you want to have this lion type attitude where you want to go out there. A lot of people listening are probably entrepreneurial, that listen to your show and you want to have this go Getter mentality, especially in this environment, and saying, we're going to push forward and we're going to. If we're an entrepreneur, we're going to double down. When there's chaos in the market, there's plenty of opportunities. This is the time where you really want to focus and look for great opportunities and double down. I'll give you an example. I've been doing commercial real estate. I started alliance three decades ago.
- [02:59]
A
Wow.
- [02:59]
B
And I know I don't look that old, but I am. And so 20. 20 years ago. Thank you. 20 years ago, we decided to get into medical office investing and became one of the leaders in the United States and that asset class. And the reason why is we sat down with our investors and sat down with colleagues and said, at this time, where are we going? There was recession going on, and we decided to pivot. And it was a great move. It was similar to this market that we're seeing is that there's chaos. And when you see chaos out there, this is the opportunity blood in the streets.
- [03:32]
A
Right now.
- [03:32]
B
You can pivot and have an opportunity to say, well, where are we going? How do we pivot and get into other lines of business? What are the opportunities we should be exploring? And so for everyone out there listening is, grab it. Grab this opportunity. Grab what's going on in this market, because it doesn't happen too often. And so when you have a market that has this kind of chaos, Joe, I encourage people, is don't run away from it. Run towards it, and figure out how to benefit from it.
- [04:01]
A
We did that, and with our business about a year ago, and the rates skyrocket. Two years ago, the rate skyrocketed. Everyone's like, I'm out of the business.
- [04:08]
B
Right.
- [04:09]
A
You know what I did? I'm going all in.
- [04:11]
B
Yeah.
- [04:12]
A
I don't care to make another dime for the next five years.
- [04:14]
B
Right.
- [04:14]
A
I'm gonna recruit. I'm gonna invest in technology. I'm investing marketing. And we've quadrupled all our size and grabbing so much market share, and it was the best decision to just triple down on every idea I had.
- [04:27]
B
And you're gonna. It's gonna pay off for you. I mean, in 2023, it was the first year of my career, we didn't buy one deal. Didn't buy a deal. Because the difference between the gap between the bid and the ask of a commercial piece of real estate was so vast that we said, we're not gonna. We're gonna wait. We're gonna be patient. But we knew in that environment, because of it, things were gonna turn and we're gonna have a lot of buying opportunities this year, next year, and the following couple years. And so when you have a high interest rate market, then you could say to yourself, okay, well, instead of just the capital stack being debt and equity, let's just pay all cash, make it all equity, and we'll put debt on it later on when rates start adjusting. But so what does that do? Well, if I'm buying at a price, let's say X now in this market, I could take X minus 2 and have a reduced purchase price. So there's different opportunities. And then when interest rates lower, market bounces back. Guess what? Values bounce back. I put great financing on it, potentially pull out some equity for maybe improvements, return capital back to investors. So you have to keep pushing forward. Whenever there's a down market or things don't seem that they're right, it's when you have to double down just like you did and say, how do I take advantage of this market? How do I seek opportunities? Because this is when they're coming around.
- [05:53]
A
Now we got off to the show. I like to start every show with the same question.
- [05:57]
B
Sure.
- [05:58]
A
How does Ben Reinberg start his morning every day?
- [06:00]
B
Oh, God. I am, like, religious about. I wake up and I meditate for 20 minutes and I just growl myself. I do not look at my phone for the first 30 minutes. Now, Joe, that wasn't the younger Ben Reinberg. I would look at my phone, I thought, brush, do everything fast. Now I slow things down. I slow my life down and what that does for everyone out. When you could slow things down, you could speed up a lot of things and you think better and you're clear and you make better decisions and there's less chaos going on in your mind. So I meditate for about 20 minutes and get ready and I go drive and see my trainer. I train with my trainer, Andrew for an hour. Then I head into my office in Newport Beach. That's when I'm in California, in town, which is a privilege to me. I love the weather out here. I love the people. And it's been a blessing for me to move out here. And so with that being said, that's my California routine. When I travel, wake up, same thing. I work out. Usually what I like to do while I'm on the road is I might train with a trainer in a city that I travel a lot to, or I always find a gym outside the hotel. I'm staying and I work out. I make that not the hotel, not the hotel, gym. And so what I do is I work out, come back. I do a lot of intermittent fasting, so I don't eat breakfast. I don't do caffeine. So I have tea, herbal tea. And I eat healthy and take care of myself. And at the end of the day, that's what works for me. And then during the day, after I get through my workday, usually, like late afternoon, I'll meditate again, do a little bit more work, and then get ready to wind down my night. So I am religious. I have a morning routine and an evening routine that gets me to the spot I need to. So that way I have the most energy during the day because I have so many people that rely on. Just like you, you make a lot of decisions, and people rely on it. That I want to make sure that I'm at the top of my game, that I'm thinking clearly. But also, Joe, one thing that meditating and having that morning routine to get deeper into your question is it allows me to be emotionally intelligent. It allows me to manage my emotions. And when I could do that, everything else works in life.
- [08:29]
A
You know, there's been a big trend with meditating lately. When did you get on that trend?
- [08:34]
B
I got on that trend about two and a half years ago.
- [08:38]
A
What inspired that?
- [08:39]
B
What inspired it was I was looking at, how can I slow down my mind and kind of slow down. And as I was aging, I looked at and I said, you know, what can I do? A friend of mine said, you should start meditating. And then I had a mentor, and he was really into meditation. So I learned different meditations. And then onward from that, I had a lady on my show named Emily Fletcher, and she had a meditation called Ziva Meditation. And she said, I'm going to give it to you for free. I want you to try it. And ever since I tried it, I fell in love with it. And if it wasn't for Emily, I might not continue to do it. And so she taught me how to meditate. It was a great thing. And for me, it's just. It's been a blessing because I like to slow things down. And I like to also figure out, how do I become a better communicator? How do I balance my emotions? How do I deal with stress? You know, we have a lot of stress in our businesses. And how do you deal with people of different personalities, different cultures, different work ethics, different mindsets? And so I have people all over the country that work at alliance from different generations, different Lenses, different backgrounds, religious beliefs. And I had to take a step back and say, how do I deal with all this nonsense at times? And part of that was, if I could slow things down and quiet my mind, I can go a lot further in life. And that's what inspired me to keep doing it.
- [10:05]
A
It's amazing.
- [10:06]
B
Yeah.
- [10:07]
A
Now, when did you get started in commercial real estate?
- [10:09]
B
I got started in commercial real estate in the early 90s and I went to Indiana University. I'm from Chicago. And it was something I always wanted to do is I wanted to get into assets that produce wealth. And I know a lot of people out there on social media, they get involved in fix and flips and wholesaling and I don't really understand all that I'm learning about how they do business. But yeah, whatever it is. And so what I realized, I like bigger numbers. And so when I was younger, I said, well, what produces wealth? And especially in Chicago or commercial real estate icons. And I saw the different icons in Chicago, which is a big city, I said, that's the business I want to be in, that's the life I want to live. And so I looked at all the variables of being in commercial real estate, what it would take. It's a marathon business. You have to be patient, you have to go on a steep learning curve, get to where you want. But I was so passionate and so resilient. I said, I'm going to do what it takes to be successful in this business. And and so I start off and I've always been a principal, not a broker. So I've always been the landlord, the guy that's responsible for the investment. And so when I was young, in my early 20s, I bought a 95,000 square foot industrial building as my first deal. And the first week we lost 45% of the income in the building. Guy moves out and I bought it from two well known people in commercial real estate in Chicago, one of the largest home builders in the United States at the time. And they also did commercial real estate. And they sold me the property. I ended up taking a 2, 10 industrial building, making a 3, 10 industrial building. I3X my return for the investors. And that's what launched me. And I remember one of those icons who sold me the property called me four years later after I sold it and said, so Ben, what did you do to create that value? Cause we've never seen that before on a property like that. And I went through the logic and everything and he said, you know, kid, you're gonna do something special in this business. And those comments are what fuel me. The people that have gotten me to this point are the resources and the great people around me and our leadership team, which I can't do it alone. But it's the people that inspired me on the way that have really allowed me to get to this point to learn from and grow. And I've been blessed to have incredible mentors. I've had people in the business that have allowed me to get into social circles and groups to build my resources, find great employees and staff to work at my company alliance, and really grow into the person I become. And I'm very grateful for that because I've learned a tremendous amount from listening to other people.
- [12:56]
A
Who's been your greatest, your greatest inspiration in this?
- [12:59]
B
When I was younger in commercial real estate, being from Chicago, Sam Zell was a big inspiration for me. I would watch him. They would call him the grave dancer, and I would see the deals he would do, and I would see the tough negotiations. I would go and see him speak at least a couple times a year. And I met him a few times, and I would ask him questions. And he said, if you stay focused, Ben, and you're resilient and you show up every day, you will be wildly successful in this business. And he's absolutely right. He passed away a few years ago, but he was an icon in commercial real estate around the world, especially in Chicago. So he inspired me. I watched the Pritzkers and how they built the Hyatt hotel chain in Chicago. I watched the Crown family. I got to see all these incredible fans build incredible commercial real estate empires. And I said, one day, that's me. One day I'm going to get there. And I had to see, like, what were the behavior patterns that took to become that person in commercial real estate?
- [13:59]
A
What are some of those behaviors?
- [14:00]
B
Some of those are, like you said, showing up every day, being humble, being kind, being a good listener, being persistent. Keep learning so you can keep growing. And I tell people a lot. You know, people get to a certain point in their career where they become satisfied and comfortable. They have a lot of money in the bank, they have a lot of assets. But that's when you really have to continue to grow. And I've learned in this market, Joe, in this environment, especially with technology, you know, we're fiddling with your engineers behind it. I'm constantly learning all day, right? So for me, personal development and growth has become important in my life. And so what happens is, for me, I always want to keep growing because AI is coming on the scene, and we're getting heavily into AI. We're giving heavily into the blockchain for our business. Something I want to do. And so all these are new concepts for me. Technology keeps changing all of us. Yeah, we're at Alliance. We're constantly utilizing different platforms and software. And I remember 15 years ago, and people thought I was crazy for doing this. We said, you know what? I am so tired of sending out checks and envelopes with stamps to investors to pay their quarterly distributions. A friend of mine said, I'm starting an investor portal company and it's going to be great. And I said, what will that do? He goes, that's going to solve your check and letter writing and all the issues. And you send someone a check and 90 day later they don't cash it. And so then you got to send it to them again. So we had so much staff following up with investors and the overhead, it was insane. I said, there's got to be a better way. And technology was coming on the scene and online banking was coming around the corner. And I said to my friend Rob, I said, do you really think investors are going to go for this and they're going to put their banking information on the portal and feel comfortable? I said, that's going to be a hard sell. It took us five years to acclimate all our investors from around the world to come on the portal, and we finally did. But what it did is allowed us direct deposits, direct communication, and we were one of the first companies in commercial real estate to have an investor portal. And it's been wildly successful ever since. And so technology has grown in our industry. We've been able to use it. I remember when CoStar came on the scene, and that was a big deal. Now they're one of the leaders in our industry. And so technology is always on the forefront of what I do. And I realize I have to keep pushing the envelope and learn and grow and keep evolving.
- [16:30]
A
So you have 500 million under management now?
- [16:33]
B
Yeah. At least that's just medical office.
- [16:36]
A
And then how much?
- [16:36]
B
So we probably have another half. Probably 500 million more just in industrial and other assets.
- [16:43]
A
So a billion under management?
- [16:44]
B
Yeah.
- [16:45]
A
Amazing.
- [16:46]
B
Yeah.
- [16:46]
A
What are you paying your investors right now? Because I invest.
- [16:50]
B
Well, let's talk about our new fund, the Alliance Medical Fund. So we launched the fund a couple years ago, and we're paying preferred returns of 6, 7 or 8%, depending. We have three classes of investor in that fund, and that fund is strictly buying medical and veterinarian office. And so we're still raising money for it. And if you have an interest, what you do is you'll get a preferred return. And then when we sell the fund to an institution which like the portfolios we put together, we'll probably end up in a high teens irr. So we'll double to two and a quarter, two and a half times your money.
- [17:30]
A
Wow.
- [17:31]
B
You get full tax benefits, you get one K1, which is great. And what's nice about a fund is you are able to own say 20, 30 assets with one single investment where we'll diversify your capital. Because people ask me all the time like why create a fund? Why not just do syndications? And so there's four benefits to the fund. Number one is diversification. A lot of our investors say well how do we diversify? If I Invest in alliance, 500,000, how do I take that money and diversify? Well, if we took 500,000, invest in a syndication, you might be in one property for half a million dollars. Instead we'll take your 500,000, put over 20 assets. So diversification is tremendous. Scalability is a huge advantage with a fund. When you have scalability you can have one asset. Let's say we sell that property, we bought it for 5 million, we sell it for 10 million, I got a $5 million gain, I could do a 1031 exchange tax free, say buy three more properties. So I take that additional equity without asking for investors for a penny and I got go buy more properties. So more equity in the deal, more diversification, more tax benefits without a dime of investors money. And the third benefit is cost of capital. We go out to the market to price our debt and we have repeat lenders that want to do business with us. And instead of one property, maybe we give them five or six within the fund and they see the performance of the fund, they'll lower the rate, maybe better ltv, so better cost of capital. And then the fourth which is really important is purchasing power. Even though we have 200 plus years of leadership team experience at alliance and we know how to solve problems and issues, what happens is we provide certainty in the market. So when I go out to the brokerage community or I go out to sellers and they know it's alliance and they know we have a fund, well guess what? That 7 million dollar piece of real estate might get bought for 6.2 million because we provide certainty, we are certainty of close when we put something under contract. And that's our track record. And so those are the four benefits. And that allows an investor to maximize that experience, knowledge, track record, to be able to generate great returns. But it's also what I love about what we do is full transparency because you can go and you know that you can go kick the bricks and mortar on every property we own in the fund. And there's not a lot of investment vehicles out there like you go invest in stocks and bonds and everything. You don't know what's going on behind the curtain, especially with some of these companies where you're buying stocks on the market. So, so great tax benefits, great returns, full transparency. And that's what we do.
- [20:13]
A
It's amazing.
- [20:14]
B
Yeah.
- [20:15]
A
And you started the fund 30, I mean the alliance, 30 years ago.
- [20:19]
B
Yeah, yeah, three decades ago.
- [20:20]
A
The fund has been around how long?
- [20:22]
B
This new fund that we just launched in around two years.
- [20:26]
A
And so prior funds, it's always been.
- [20:28]
B
It'S fun syndications, we've done, we've done build a suits, We've built over 11 million square feet of office industrial in our careers. And so we've done a lot of transactions, we've done thousands of transactions, billions of dollars of deals throughout our career.
- [20:43]
A
Where do you see multifamily in the next couple of years?
- [20:46]
B
Well, it's a great question. We just 30 days ago, actually it was 45 days ago, we just launched a new multifamily division and there's a reason behind it. So we hired one of the top players in acquisitions in multifamily. And I said to him, I said 90 days ago, before we hired him, I said, joe, come up with a business plan of where are we buying, what type of multifamily are we buying and where are we going? And he said, well, we're going to tertiary markets. Great. And we're buying this type of product and these are returns and this is how we're going to finance it. Great. Oh, he goes, by the way, it's all non recourse. I go, well, that's all I sign anyways. And goes, perfect, you'll be perfect. And we see that a lot of our colleagues that invest in multifamily, like big deals, you know, a couple hundred unit complexes, bought them at low cap rates, maybe they put five year debt on and it's coming due. And so a lot of the properties are underwater. So either the bank's going to take it back or the lender or they're going to have to sell. And so I was just watching this the last three to four years in our marketplace. I kept saying to my staff, Joe, I said, one day we're getting into multifamily. They're like, no, we're not. It's management intent, so we're gonna have to beef up the management company. I said, the director of our management company, she's done thousands of multifamily deals in her career. I said, we're ready and we'll be ready for it. So we started increasing staff and I started seeing the market. And when I knew $30 trillion of loans are coming due in 2025, I said, we have to start getting serious about this division. And so when I got back from, I was in Japan this winter, and I got back and while I was in Japan, I said, okay, we're doing this now. Like, it's official. I'm doing it. When I get back, I'm telling everyone we're moving forward with multiple.
- [22:36]
A
Why? Well, where was that aha moment in Japan?
- [22:39]
B
I think the aha moment was I started just kind of. I had a lot of downtime and I started talking to some friends of mine. I said, what's going on in your portfolio? I'm like, well, we're nervous. You know, we bought some things very aggressive to compete. It's very competitive marketplace. I said, really? And I just kept listening and listening. I heard the same things and. And I was watching some of the younger sponsors in commercial real estate. I saw how they were buying deals just to get money out the door, build up their fees, build up their portfolio. So when someone says, Well, I bought 300 million of multifamily properties or this, and you see on social media that boasting about it, it's like, well, how did you underwrite it? How healthy is the portfolio? And so I started learning and seeing all this, and I started talking to lenders as well before I left. And I realized, I said, there's an opportunity here. I started looking and I started thinking about the numbers and the cap rates and where interest rates are. I'm like, the numbers don't pencil out. Something's got to give. And knowing all the loans are coming due. And I said, now is the time to get in. So we're now in the market. We're looking for deals. I'm excited and I'm hopeful within the next 60 to 120 days, we'll have a couple deals under contract getting financing and. And on our way to. To opening up that division. I think it's going to be phenomenal. Our goal is to have in the next couple of years a couple billion dollars worth of Multifamily assets.
- [24:03]
A
You're thinking a lot of foreclosures coming, defaults coming.
- [24:06]
B
I think what I think is there's going to be a lot of Chapter 11 reorg deals going on. So what I think is smart sponsors are going to get in negotiations with their lenders and some of the foolish lenders are going to create that event for sponsors. So, for example, I'll give you an example is they'll look at it and they'll get the, they'll get the asset appraised and they'll say, well, wait a minute, I have a $10 million loan, property is worth 20 million. They have several 50,000 in their operating account that I can net that could offset against the loan. And I'm in a state like Arizona where I have 90 day foreclosure law. I'm going to go after it. Now. The smart sponsor is going to align himself with a good bankruptcy attorney or law firm and say, Mr. Lender, we're going to throw you into chapter 11. We're going to create a 90 plan and reorganize. And that's what Trump was great at doing, is to kind of put a pause and say, right, and we got to restructure this. And so you're going to see a lot of that happen in this marketplace. You're going to see a lot of workouts where, you know, the covenants don't make sense, the debt service coverage can't be met, or something happens in the loan, you know, where the lenders are going to have discussions and they're going to put them in workout because the government's going to say, well, this goes in this bucket in within your bank. You go in a different department and then you got to start working it out or they're going to sell loans and then you got to work it out. So the reason why people say, well, why do you only sign non recourse? It's because God forbid I have a problem, Joe, okay? Someone sells a loan or whatever, I need to have leverage on my negotiation. I need to know. And so for me, I'm at the age where it's like, I don't need to sign recourse, I won't take as much leverage, okay? Or our track record precedes it because of the assets we're buying. And so you're going to see foreclosures, you're going to see a lot of workouts, you're going to see a lot of note sales and you're going to see a lot of Chapter 11 bankruptcies going on in this market. That's what I see happening. So it's going to get real chaotic.
- [26:12]
A
And what timeframe you're seeing this.
- [26:13]
B
I'm seeing this. It's starting already. But I see in the fourth quarter of this year it's really going to ramp up and depending. That's why this election is so important is are we going to be generating revenue as a country to offset some of the things are going to put, put a dent in this economy or are we going to decide we're going to import oil and not produce revenue for this country? So how we deal with energy going forward is going to be a huge impact on everything in the world. That's going to impact our economy, it's going to impact wars, it's going to impact the decisions we make and it's going to impact how we produce revenue as a country. And to me, if we don't start producing revenue as a country, that's where this economy can get a little off the rails. And so it's an important time in our lives. And but for everyone out there, because of the uncertainty and the chaos, this is a great time to look for opportunities. That's why investing in our fund or any other asset you can, this is when you want to do it. There's going to be great buying opportunities. There's still financing out there. You got to get creative. Like we're looking at a deal right now and it's a short term lease and I'm getting three years. I owe interest only financing on it. And but I'm taking. And they want. And they said to me, Joe, they said, well, if the tenant doesn't renew, you're going to be on with recourse. I said, no, no, no. I said, we'll take your 65%, we'll lower to 50 and then you'll be fine. We'll put more equity in. So there's different ways you deal with it. I suggest in a market where there's turmoil and uncertainty, put more equity in your acquisitions. I don't care if you're buying a house. I don't care if you buy a commercial real estate. Piece of real estate. Like what we do at alliance is have enough equity in deals. And that's where I see people struggle in the business. Because people say to me, what is the key to commercial real estate? How do I survive this long? People think, you know, it's not residential where it's location. Residential is schools and location, the schools drive residential. That will always be the case in commercial real estate, it's the ability to hold. So if I'm going through a cycle and I need to have enough reserves or the ability to hold the ride through say a period like 20, 23 or rising interest rate market where values have, you know, compressed or I can't refinance a deal, I need the ability to hold. I need to have reserves where may I got paid down alone as well. And so ability to hold is a real key to our business. And not a lot of people talk about enough out in the marketplace and I do a lot because if you're going to get involved in commercial real estate, you need the ability to hold. It's critical.
- [28:53]
A
What's that sweet spot for equity for you? 50%.
- [28:56]
B
You know it's interesting. Our whole career we've always been 60 to 75 loan to value. But I think as we age and progress and we see different avenue depending on the cost of capital. In this market I'm looking at 50 to 60%. If rates drop, maybe I'll take on a little more. I try not to go above 65%. I do 65% with medical, office, office, retail and industrial food groups. They're 25 year amortization. I know in multifamily, which I'm excited about is you can get agency debt. If it's out there, you can get different lenders but they're 30 year amortization schedules and you might get some IO. That's a different game when it comes to cost of capital and so much better cost. Yeah. So for ours, when you're buying a medical office and you're at 20 or 25 year amortization, your loan constant for everyone doesn't know it's your cost of capital. You know, right now loan constants could be 9 to 11, 12% depending on.
- [29:53]
A
Your loan on medical, not on.
- [29:55]
B
It could be medical, office, retail, industrial, multifamily. You know you might be looking at.
- [30:00]
A
7, 7% even lower with any Freddie.
- [30:03]
B
Yeah. So it depends.
- [30:05]
A
You're going to be killing it.
- [30:06]
B
I am excited, I'm excited to finance a multifamily with you. To look at and say really? That's the loan constant. So and to get 30 year amortization and look at the different opportunities because. But where things went wrong with some of the multifamily is they're buying them really aggressive because they're trying to compete and then their financing is short term financing. And so one of the things I like to do in the medical office space is that we do a lot of 15 year leases. 12 and 15 year leases. We have a deal we're closing Friday. It's a 12 year sale leaseback. So if I'm going to put financing on it, I'm going to try to get at least 10 years again. Remember the premise ability to hold. So if I can lock something in and have flexibility and then I negotiate. I said, look, if we sell the property, Mr. Lender, there's no prepayment penalty and maybe I have a lockout for a year or two or three, or it might be pared down three to one depending on the, the interest rate and how we're doing things. And so understanding debt and being well educated in debt if you're going to buy assets is critical, Joe. I mean I could teach anti Dave Ramsey. Yeah, I could teach a great. Yeah, an anti Dave Ramsey. Because debt is good. It is if you use it properly.
- [31:23]
A
That's what I do.
- [31:24]
B
Right. I mean you're an expert in it. So for me I tell people, I'm like, don't over leverage. Okay. When I was a young guy, I made a mistake. I was stupid because I thought mez debt was so popular. When I was really young in the business I was like, wait a minute Joe, I can get a 65, 71st mortgage, throw on a Canadian pension fund who will put another 15 in. I'm at 85. And so now I'm taking down a $50 million deal. I have to raise as much equity. Well, you know, when you're younger, having to raise less equity is more advantage. So I did a few of those and one of them I realized real quick, if the market turns, you got way too much leverage on it. And now you gotta start working things out with your lenders. And so it got me investors and your investors. And so no one's happy in the capital stack. So I learned at a young age, more equity, less problems. Be conservative. If you have to pay a low return to your investors to protect their capital, you do it because they come first. Investors always come first in the alliance.
- [32:25]
A
World and in every world.
- [32:27]
B
Yep.
- [32:28]
A
What year did you start your entrepreneur journey? How old are you?
- [32:32]
B
I was 8 years old when I started. So coming from Chicago and I tell this story a lot. I grew up in a town called Highwood, Illinois. It was next to Highland park where I grew up. And Highwood had the most bars per square capita in the United States when I was a kid. So everything was drinking and smoking cigarettes when I was a kid. And you're a kid, you Drink Slurpees and have candy. So I loved candy when I was a kid. I still do. And so. And I love Slurpees when I was a kid. And so my goal when I was 8 was, you know, I didn't come from money. I didn't ever want to ask my parents for money because I wanted them used for other things. And I said, well, how do I get my Candy Money at 7:11? How do I go and get my Skittles or Snickers or whatever I loved as a kid. And because I was a big sports guy, I played baseball. And the guy who ran the league, like, used to buy. You could buy candy after the game from. He used to open up a VW van, and he had every candy that was made in Chicago and around the world in his van. And so it was, like, exciting. It was like Christmas for a kid. And so I decided, I said so in school. I was learning math at the time, at 8 years old, and really learning, like, longhand equations and division. And I've always been a math guy. I was fascinated by it. And in Highwood, you'd be able to walk in the bars as a young kid, and they're open. The bars were open. You'd walk in, you'd see a cloud of smoke. You'd see men, women drinking beer, drinking whiskey at the bar, smoking Marlboro Reds and Marlboro, and the women sparked marble lights or they'd smoke menthols. And I can remember as a kid, and there's a cigarette machine there. And, you know, the. The bar owner, which was the mafia that owned all the bars were. Had cigarette machines and they were selling cigarettes for. Let's say it was a buck fifty a pack. So I used to go into a Mom and Pop drugstore down the street and. And just to buy stuff for family, you know, whatever, medicine and toiletries, whatever. And so I'd walk in, and I would always see the cigarettes. And I was intrigued because I remember the memory of going into the bars and seeing the smoke and seeing everyone smoking and seeing the packs of marble reds and lights sitting on the bars with their lighters. And I said to myself, joe, I said, hmm. So a carton of cigarettes behind the counter costs X. That means it's X per pack. And I remember seeing the buck 50 and the cigarette machine at the time. And so I said, okay. So I went back home and I used long division. I'm 8 years old, and I figured, I think I could try this and make money. So I had some Money from my grandfather for one of my birthdays, whatever it was, I had maybe had like 20 bucks on me, which was tremendous amount of money. Back in 1978, I'm dating myself, and I walk into the bar with, well, first of all, let me explain how I bought the cigarettes, because that's important. So there was Latinos, a heavy concentration of Mexicans that lived in Highwood, that worked all around the areas of Chicago. And I basically gave a gentleman a couple bucks to go buy me a carton of cigarettes. He was. They'd stand outside the drugstore and the liquor stores. And so I found some guy gave money, and that's how I got my supply, was I had to grease the guy to buy cigarettes. So he bought cigarettes. I would open up the carton, put it in a pillowcase, put it in my sweatpants. After I was done playing basketball, I'd walk into a certain bar, and first thing I did, I walked up to a guy at Marlborough's, and I looked at his pack, and he had a couple cigarettes left. And I said, how would you like to buy a cigarette? And he goes, yeah, I could buy it from the machine there. I can go, you know, buy a cart. And I go, no, I'll. I'll. I'll beat the machine. And so say it was a buck fifty. I charge him a buck. And so the guy bought, and then maybe some other lady bought, you know, a pack and.
- [36:36]
A
And then against the mob, and.
- [36:37]
B
Yeah, but I didn't know. I didn't know their mafia. When I was eight years old, I thought, you know, I didn't even know what that was.
- [36:43]
A
He wouldn't kill you.
- [36:44]
B
Yeah, exactly. And so it was like a Bronx tale, if you ever saw that movie. And so I go, and I'm selling cigarettes. And it lasted six months. But it was great. I really had a good process down. And what happened was my mother was making my bed and changing my sheets, and I had older brothers. So I put the cash underneath my mattress. I couldn't put it in a piggy bank because they would take it. So I was smart. So I was like, well. And I didn't know about what a bank account was at time. I'm eight years old. So I figured, where am I going to put it? So I put a certain section of my mattress under the bed. My mom found it, and I came home from school, and she said, so where are you getting all this cash from? And so the jig was up. I explained it, and they weren't too happy because they knew who owned the bars. And they knew that to play that game against them was not a smart thing to do. It was great at the time. But to get back to that story, what was so relevant to that story was it taught me about how to treat people, how to set, how to sell people, how to educate people, how to look at a marketplace and do your due diligence. It was the little things that came out of that experience that Carrie with years old at 8 years old. And I've worked ever since, so I have a great work ethic. And. And because people ask me all the time, like, why don't you just stop working? I'm like, no, I'm having too much fun. I'm in the prime of my career, Joe. Like, why would I even stop? I've worked on my back and my stomach and standing at my feet now to get to this point in my career, and I busted my ass to get here. There's no way I'm stopping. I'm there. I'm there.
- [38:30]
A
Work out more.
- [38:31]
B
Yeah. What am I going to do? Play golf? I don't even play golf. I'm going to play golf eventually, but I'd have to develop some serious hobbies to keep me busy. I love doing this. I love meeting new people. I love growing and doing all these great things that I get to do. And I love to travel. I'm very blessed. We own in a tremendous amount of states around the United States. I get to meet great people. I get to see the people that work in alliance and all the colleagues and resources that work outside of alliance that help us and the building of my personal brand. A couple years ago, Joe kind of gave me new life where it was like, now I can educate people on what I do. I can educate people on businesses and my experience and how to grow and how to deal with stress, how to get through deals. How do you get into commercial real estate? What does it really mean? Because people see a skyscraper and they're like, well, how would I ever own that? Or they see a big industrial building or a shopping center or a mall, and they say, or a hotel. How do I do that? No one talks about it. And so I figured if I could start talking about it and slowly get into it with the public and the audience out there, why not help people learn the business and grow? Because eventually I got to step out of the business. So it's like, why not help people get into the business and grow?
- [39:47]
A
That's what it's about.
- [39:48]
B
Yeah, it's serving people. It's helping people. And that's what my personal brand is about. I mean, it's never. It's. I'll tell my story online if you watch me on Instagram, but it's really about how am I going to add value to the audience? Where are they going to take away? Because I always said, I'm like, if there's one man or woman that takes away a clip that I have out there, that changes the trajectory of their life or whatever it is. I got a DM the other day. I helped a kid out a year ago. I totally forgot about it. I was getting in a software business, and I gave him like five minutes of my time on the phone and gave him advice. He texted me, and then he called me and said, you changed my life. That stuff is priceless. It's priceless. And people, it's not the money in my bank account that matters. We look at how many kids did we put through college at alliance, through all the employees throughout the years, what did we do to change the way we do business with? And how did we create an impact in what we do? And so the money flows with hard work, talent, persistent, and building your knowledge and value in the marketplace. But what can you do differently to be different, to help others? And so that was a step that I learned that I had to grow into. That wasn't the younger Ben Reinberger, that was the older version of me that learned all that.
- [41:04]
A
What age did that wisdom click in?
- [41:06]
B
I think the wisdom kicked in. I think once I started clicking in my 40s. I'm 54, and I think 14, 15 years ago, I started realizing that there's more to life than just money. There's more to life than having a nice house and car and great vacations and doing all. There's more to life. And I remember looking at myself in the mirror and not being happy with myself. And I said to myself, joe, there's gotta be something else. And that's when I got into personal development. I really doubled down and said, all right, I gotta work on myself. I want to learn, I want to help others. And ever since, start helping people years ago. And I mentor a lot of kids in our business and create great impact with them is I enjoy it. I see their success. And by the way, they feed us more investors, they feed us more deal flow, great resources from the network we build with these kids and people out there. So it just returns the favor back to us. And I had this conversation with one of my mentors saying, I said to her, I said, you know what's interesting? I said, because there's people out there we know that run like an agency business where if they introduce you to someone, they charge you money, right? I said, wouldn't it be nice if you introduce someone and you just get it back later on some way somehow? That's how I live my life, and that's how I encourage people, too, is that if you give first to people, it will come back to you. I get calls all the time from someone I met maybe three years ago. And they're like, hey, I want to talk to you. I want to introduce you to someone. I think they would be a good fit for you and them, and you would help them, they'll help you, and it's great. I don't remember what happened three years ago, but something I did that inspired them to call me. And so I encourage everyone. Things come back around. You might not see it instantly. And I did a speech on stage about. It was about leverage, which was my first season of my new TV show, Ben Reinberg. I own it. And what was fascinating in that speech was I talk about how if you want to get in the right room and you want to create leverage in your life, you have to give first. You have to be someone that gives. And I said this to a lady at my. Where I work out. She is in the protein bar business. It's a tough business, competitive. I introduced her to someone and she said, why are you doing this for me? I said, because this guy can change your life. Yeah, but what you get? I go, I don't get anything. I said, he's a friend of mine helping him. I said, you can probably help him. Maybe there's synergy to do business. So everyone thinks there's always an agenda if you do something. When I said my speeches, if you do something without expecting anything in return, great things happen. It's when people serve others and they're expecting some sort of event to happen in return. That's when you lose. And it's a tough thing.
- [43:59]
A
My spiritual mentor told me, you do God's work first. He always does your work.
- [44:04]
B
That's right.
- [44:04]
A
Every time.
- [44:04]
B
That's a great quote. That's a smart guy that told you that.
- [44:07]
A
Yeah, it's just. It's happened every time. Like, never worry, just do God's work. He always does your work.
- [44:14]
B
And so I talk about that a lot online, is that if you seek to understand before you. Before you're understood, and you give and you listen and you go into a meeting saying, how am I going to help people. And so with this young lady, just a quick story. I said to her, I go, let me give you the secret. She goes, I don't know what you mean, but I'm listening. I go, even though he has more experience than you, I said, figure out who he is, what he likes, and give something that's going to add value to his life. I said, guess what? Your whole world will change with your relationship with him. She goes, I never thought about that. I said, that's why I'm telling you. Because if you do those little things and you carry that through in your life, you'll see. Maybe this protein bar business grows a little bit faster. Maybe you realize you have to do something else. Whatever it is in life, you'll improve. And she's like, great. And so it's those little things I talk about that I think are important. And hopefully people in your audience pick up something like that.
- [45:13]
A
You've raised some great kids, went to SC.
- [45:17]
B
My youngest is going to Cornell in three weeks. 3.
- [45:23]
A
How are you instilling that same work ethic in your kids?
- [45:26]
B
You know, it's interesting. My oldest son's in the blockchain business, and a couple weeks ago, I went to the bitcoin conference with him in Nashville, which I thought was fascinating. This whole world, he's in that world, and it's a huge industry, and he's going to do really well. But what I taught my kids is a couple things. One, I taught them discipline. I taught them, it doesn't matter Dad's success or who he is. You're humble, you're grateful, and you appreciate everything you have and you don't show off and you work hard for everything. I always have. My kids earn everything. They always had jobs. They're disciplined, they're incredible students. And part of that was, was here's a secret that I did. If you have kids, you have kids.
- [46:13]
A
Four kids.
- [46:14]
B
Okay. How old are they?
- [46:15]
A
Ten? Nine.
- [46:16]
B
Oh, this is perfect. Yeah. Okay, here we go. You're gonna love this. Okay. So when my oldest son, Joey, was a 8th grade junior high school, I said to my wife, I said, you know what? We're gonna put him on a budget, because eventually he's going to start driving and he's gonna have to pay for gas and everything else. I said, okay. So I don't know, at the time, let's say the budget was $100 a month. Okay. And what was great about putting your kid on budget that way? Because here's what happens. Dad, dad, can I have $20. A couple days later, hey, dad, can I have another $20? I'm going out with my friends. We're going to the movies. All of a sudden, $20 adds up real quick. So I said, I'm going to put them on budget. I'm going to teach them the value of money. Here was the great lesson you can install with your kids or anyone out there listening is that when day 27 comes and the hundred dollars is at like four dollars and they gotta go out, they realize how they have to budget their money throughout the whole month. And you see them learn and progress because you're putting money in their account. And you could see. So I would say to Joey, it would be day 26, and let's just say he had a couple bucks left and want to go out as friends or he wanted to go out a date or whatever it was, you know, when he was in high school. And I'd be like, how's it going? He's like, good. I'm like, what are you doing? He's like, I think I'm going to eat more at home with you guys this weekend. So you would see the lessons evolving and learning. And so budging your kids is a great thing. That way they're not always asking for money. They understand the value of the dollar. So what I've taught my kids is the value of dollar. Hard work, dedication. And it wasn't just words for me. It was like I would show them through my actions. Like, dad's traveling, Dad's working hard. You know, Dad's going in on the office on a Saturday. Even though he goes to all our events, he's gonna. He's gonna lead by example. And I do that with my employees. No one's gonna outwork me. No one's gonna work as hard as me as late. They might not show up as early. And so when Joey got in the working world and Blockchain, I taught him something. I said, you're the first one in the office, last one to leave. I said, I don't care how talented you are. I don't care if you don't know anything. But when the top guys at that company are at, see, who's that Reinberg kid that's showing up before us in the parking lot and leaving around our time or even later. Like, who is that kid? Maybe they invite you to an event and you get to know him and you start building that relationship. It's the little things you do in life and how you teach your kids that are so Important. So I have taught my kids, and even today, these little tidbits of how to negotiate, how to deal with things. My daughter is working at a summer camp in Wisconsin, which is big and from Chicago, and she said, dad, I need to negotiate this with the camp director. How do I do it? And I gave her a couple words to use just from experience. And so I teach them communication skills. I teach them respecting others and how to shake someone's hand and how to be in a room and present yourself well, how to dress appropriately. And so it's those little things that will carry through them. That way I don't have to worry about them as they get older as adults. And so I encourage everyone with kids, especially with your kids, is teach them early, Teach them the value of the dollar. Teach them how hard Joe worked to earn every penny and what that means and that you gotta earn things and putting them on budgets. And you'll see great things in these kids. Cause it's the habits and behavior you instill now at a young age that's gonna carry you through. Cause when you're older and the kids are in their 30s and then they start having kids, you'll look back and that DNA, that legacy that you carry from Joe is gonna pass on to your kids as well as anyone else out in the audience listening. That's what I learned.
- [50:09]
A
Great, great, great advice. And we struggle now in this society because we raise a bunch of entitled kids. Social media obviously amplifies that.
- [50:21]
B
Yeah, I see that in my company. I think as we grow and we progress as a company, as alliance, I think that attitude gets sucked out real quick.
- [50:33]
A
Is there a specific skill or mindset that one must have right now to succeed in commercial real estate? You think?
- [50:40]
B
Absolutely, absolutely. You have to be able to balance your emotions. You have to be able to manage fear. You have to be able to keep pushing forward. You have to be able to show up every day and not let things get you done. I'll give you an example. So we have folks that raise equity in our investor relations partner. And raising equity is tough. It's a tough job. And I said, you can make 100 calls in a day, and you have 99 no's that they want to talk to. But you have one guy that says, hey, I'll talk to you. And maybe that turns into a great relationship. I said, the more nodes you get leads you down the road to that yes that you're looking for. And so the mindset of keep pushing forward, keeping persistent, and managing your emotions and fear Is critical in any business, but especially in commercial real estate, Especially in chaotic times where you feel things are uncertain or you're not sure, can I get this financed or can I raise the equity or can I find a deal that makes sense? You have to believe in yourself. And the word belief is a really strong tool in commercial real estate. I learned, you know, there's a saying is if you work hard enough and you make enough calls and you shake enough hands and talk to enough people during the month, the real estate gods will reward you. You'll find deals, you'll find equity, you'll network and find good lenders or mortgage brokers, what have you. And so I call it, the real estate gods will always reward you. And I teach my staff that and team that, that keep pushing forward. Okay. When you're. When you're worried about something, you're worried about money or whatever. See, everything is a facade in life. Everything's in our mind. And if you control your emotions and control your mind, you can be wildly successful in any business, but especially commercial real estate, because commercial real estate, you got to go through some serious cycles to be successful.
- [52:33]
A
Amazing. Now, let me ask you this, because this is a three pronged question.
- [52:39]
B
Sure.
- [52:41]
A
What's a personal goal that you have for yourself, a business goal that you have for alliance, and a family goal that you have for the family?
- [52:48]
B
Oh, I like this question. Well, I'll start with the first one. My personal goal is I want to live to 150. Joe Biohack. Yeah, I want to. I'm going to biohack. I already have done stem cells for two years.
- [53:01]
A
I'm on the same path.
- [53:03]
B
I'm big on biohacking. Biohacking is important to me. I want to live to 150. I want to do more things in my life.
- [53:10]
A
Who are you following, by the way?
- [53:11]
B
For biohacking, I just kind of learned through doctors and friends. I kind of just do my own thing. I just keep learning and growing, listening to people. I do a lot of reading. I read a lot. I want it. My goal person is I always want to be the best version of myself and allow that to ooze out of me, to help people and serve and become a great. Because I want my legacy to be incredible, Whether it's in commercial real estate or helping people in my personal brand or whatever it is. I want people to look back where people say, oh, you're Ben Reinberg's kid. That's what I want. I want that type of impact. So from personal, from A business standpoint is I want to use technology to change our industry. I want to, I want to create things on the blockchain, our industry that no one else has. I want to, I want to use AI to create a life at alliance to help life be easier for our employees. That's important professionally. What was the third one?
- [54:14]
A
A family goal.
- [54:15]
B
Family goal. Family goal is I want to see all my kids have great careers, develop into whatever they love and they're passionate about and become great parts of society where I don't have to worry about it. And then hopefully in the next, hopefully 10 years, they're off the payroll and they could be self sufficient and support themselves. That's another goal, I think. But if they get to the first part, they'll get to that second part.
- [54:41]
A
So I actually forgot to ask you this question and I wanted to ask you, what's your favorite quote?
- [54:46]
B
My favorite quote is tough times don't last, tough people do. And that came from Joe, a fraternity brother of mine at Indiana. He passed away, who was from the Miami, Florida area. He passed away in a motorcycle accident. He left four kids behind. It was sad. But we were in college and there's something happened or whatever it was. He used to always say to me, tough times don't last, tough people do. I never forgot that. I always carry that through. So whenever I'm going through a challenge, I always remember.
- [55:18]
A
That's a great mantra. My last question, I ask it to everybody. When you're in front of the pearly gates, what do you think God's going to tell you?
- [55:31]
B
He's going to say, thank you. Thank you for working hard, thank you for doing the right thing, thank you for caring about people and thank you for giving. That's what I want as I walk through the pearly gates and so I do all these little things. My joke in the office is I'm going to heaven. And it's because I try to do things the right way and act with the highest integrity.
- [55:54]
A
That's what it's about. Yep, that's what it's about. Ben, God bless you. God bless your family. You've done great, great deeds, raised amazing kids, inspired thousands. Keep doing good.
- [56:05]
B
Thanks. I appreciate dominating. What a privilege to get invited on this last minute. So it's been a lot of fun.
- [56:10]
A
Yeah, it's been awesome. Ben Reinberg, commercial MOGUL how can people get in touch with you? If you want, they want to get in touch with you.
- [56:15]
B
Best way to get in touch with me is go to ben reinberg.com or you can go to alliance cgc.com our company, Charlie George charlie.com a lot of people ask how do we invest with you? How do we invest in your funds? How do we generate and build wealth and generation wealth? Just go on Ben Reinberg.com, you click invest with us. People reach out to me all the time. You could DM me on Instagram herealben Reinberg. If you go to Ben Reinberg.com it's got all the different social media links. You can go on LinkedIn. People reach out to me all the time on LinkedIn. I might not get back to you right away, but I will get back to you. I'm very responsive with my, my audience and people that need help. And so that's the best way to stay connected. So stay connected. And also if you're willing to learn and learn about business and life and commercial real estate is feel free to watch my show. Ben Reinberg. I own it. I think you'll get a lot of it. It's all about how we're going to provide value to you. So when you watch an episode, you could take away some knowledge that you can implement in your life.
- [57:18]
A
And that show is on.
- [57:19]
B
It's on all different streaming channels. You can even watch it on YouTube. It's also on all the podcast platforms, Apple, Spotify, Stitcher, wherever you fancy to listen to a podcast. So not only can you watch my new show on tv, but you can also listen to as well.
- [57:36]
A
Awesome.
- [57:36]
B
Yeah.
- [57:37]
A
Thank you, Ben.
- [57:37]
B
Hey, thanks for having me.