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- [00:00]
Sanjeev
Ten years ago, this guy owned $0 of real estate. And today he's got a portfolio of about a billion and a half dollars. And he did that with no outside investors, just starting from scratch, one property after another, flipping, flipping, flipping, compounding, until he built a billion dollar portfolio. He's also my brother in law and I've known the guy for 10 plus years. I've been asking him to come on the podcast and he likes to keep a low profile. But finally he agreed to come on and tell his story. And the story's a little bit crazy. He started off as a broker, ends up making a few million dollars doing deals as a broker, and then gets caught holding the bag when one of his clients, I don't want to say screws him over, but leaves him holding the bag and he ends up $15 million in debt. And instead of declaring bankruptcy, he decides to try to pay it all back piece by piece by piece. He does, he pays it all back and he ends up with a billion dollar plus real estate portfolio using a very specific strategy. So in this episode, I asked him how he did it to tell that story and to explain the strategy and his approach to real estate because it's a little bit different than anybody else. So enjoy this episode. With my brother in law, Sanjeev, AKA the Rhino of real estate.
- [01:04]
Sean
I feel like I can rule the world. I know I could be what I want to put my all in it. Like my days off on a road, less travel, never look.
- [01:13]
Sanjeev
All right, my brother, we're here. Your story is a roller coaster. You have crazy highs, complete lows, where you lose it all and then rebuild back up 20 times bigger than the first time. So I want to go into that story. So today you are sitting here, you've got a collection of real estate assets that you've built up over the last 10 years. That's now how big?
- [01:35]
Sean
Roughly a little about a billion and a half in total.
- [01:37]
Sanjeev
Billion and a half. So 1.5 billion today. And that's really in kind of just a decade. So I want to go through the steps of how you got there. So where did the career start? You know the name of the podcast, My First Million. Right, right. How you made your first million.
- [01:50]
Sean
Yeah, I, you know, for me, it started I went to law school, did an mba.
- [01:54]
Sanjeev
Did you plan to be a lawyer?
- [01:55]
Sean
You thought I was full on set on being a lawyer? I went to law school, worked for a very famous lawyer, Mark Garagos out of la. We were working the Scott Peterson case and it was Very intriguing. You know, in criminal law, when I met my. My now wife, or my wife, she was very much me against me being a lawyer. For some reason. She was always programmed that, you know, you're gonna. You're gonna. You're gonna do certain things to win cases. So we'd always talked about, you know, I'm gonna work for a lawyer for five years, and then I'm getting real estate.
- [02:23]
Sanjeev
Okay.
- [02:24]
Sean
She goes, why do you need to. Why do you need to work for five years? Why don't you just do it? You know, me thinking I'm like, oh, wow, that's a different thought.
- [02:31]
Sanjeev
Yeah, I don't have a good answer to that.
- [02:33]
Sean
Yeah, you know, So I ended up opening a real estate broker's office. Went back to my hometown, where I grew up, town called Modesto, and opened up this, you know, real estate, just broker's license. And I had small 100 foot office and a phone. Start calling people, trying to understand the market. And really, I think my first high came when I sold my first building. I called someone and actually I needed to grow my office. And I called this person. I said, hey, what if I lease your office? Will you let me sell your office building? I said, yes, if you lease it, I'll let you sell it.
- [03:05]
Sanjeev
So if you become a tenant, you could be the broker when you got it.
- [03:08]
Sean
I. I never had a.
- [03:09]
Sanjeev
Was that planned or it just happened to be that way?
- [03:11]
Sean
No, I don't know if it was planned. It was kind of just like, you know, sometimes you never ask, you never know. Right, right. And so at that moment, I had asked, it was an older couple, and I sold. Sold the building for them quite fast, and I made 60 grand. And from there I started, you know, doing real estate brokerage. I started understanding, and I started meeting different tenants in retail. You know, I was working for Jack in the box autozone. BPro different tenants that I would help get them spaces for.
- [03:38]
Sanjeev
Now, tell me, because today you're a real estate developer, but you started as a broker. I think many brokers want to become developers, and it rarely gets to the scale that you got to. Right. What were you like as a broker? Are you just dialing for dollars? What were you doing?
- [03:53]
Sean
I mean, yeah, gosh, man, I would. I would be knocking on doors, I'd be calling, you know, I learned early on that if you don't ask, you don't get. Right. And so it was no real, like, shame in my game. It was kind of like, you know, just like, hey, I'll ask. And so, you know, oftentimes we'd be going to anywhere, whether we go to an Indian party, whether we go anywhere. Growing up, I. What do you do? How do you do it? Oh, you own your doctor. Oh, you own this office building. Would you ever sell it, right? No, but I'll lease it. Great. I'll take on the leasing business. Anything to anything at that point to build up my CV or resume up of things that I was able to get done.
- [04:29]
Sanjeev
Right.
- [04:30]
Sean
And so I fell kind of into a. A deal with a jack in the box operator. And, you know, this person was probably the first person in my life that ever, you know, I would call, I thought was a mentor or even like a father figure.
- [04:43]
Sanjeev
Okay.
- [04:44]
Sean
My dad was a little bit different, and I kind of drank the Kool Aid. And so I started doing really well because what would happen is I'd have this relationship with these Jack in the box guys, and I know where they want to go. I didn't have the money to do it myself because I was just starting out. So what I would do is I would basically do development in a box. I would go and I would find the property, I'd get the tenant, and I'd go to another developer and I'd say, hey, give me the buy sale, lease commission. Give me all three. I'll manage the process for you. As time went on, I started to manage their construction process. I didn't have the money to do it, but I was doing it. And that went really well for me until the jack in the box operator, you know, basically didn't pay their payroll taxes. You know, kind of fell in dire straits. And, you know, a week before, maybe, let's say three days before, we're supposed to close a big deal, and I was going to make my first 10 million, not even my first million, just.
- [05:42]
Sanjeev
On the commissions from the buy, sell, lease.
- [05:45]
Sean
So what had happened was we started buying property with these guys buying it. So in essence, we would buy it, we'd do all the work, and then they would buy it later on using their lines of credit.
- [05:55]
Sanjeev
Right.
- [05:55]
Sean
And so what happened was this. This person that we were developing for was the largest jack in the box franchisee in Sacramento. And then what ended up happening was they didn't pay their payroll taxes, but.
- [06:04]
Sanjeev
You had bought it on spec, thinking, this guy's, he's good for it. He'll take it off me.
- [06:09]
Sean
Yeah. And I still remember, it's funny, I would sit there at night and, you know, there's an old rule that, you know, people said Never count your money. But, man, I would be looking at that sheet every night. Yeah, baby, let's go. You know, because you're taking a big risk. Yeah. You know, at that time, I didn't understand the risk, but, you know, it was a big risk. I look back now and I say, wow, that was, you know, I think I borrowed, like, $15 million.
- [06:31]
Sanjeev
How are you able to borrow $15 million at the time?
- [06:33]
Sean
I mean, it was all private lending. You know, I. I went to private lenders. You know, when you. When you come out of school, you get a W2 or 1099. I was 1099. I was a broker. Banks didn't underwrite it, Right. The banks looked at it and said, oh, you went from this to this. Wow. How. We don't understand.
- [06:49]
Sanjeev
We can't understand this.
- [06:50]
Sean
We don't understand it. Right? And so, you know, as they don't understand it, then all of a sudden, you know, you're like, oh, okay, well, where's my options? And so we had, you know, we had everything kind of lined up, and, you know, literally three days before we're supposed to close, and we were. We were getting ready to close. And, you know, this person's not on their phone. This person would talk to me daily. They would call me. They were the first person in my life to ever call me son.
- [07:15]
Sanjeev
Right.
- [07:15]
Sean
You know, I was. I drank the Kool Aid harder than anybody. And then, you know, this happened where they. Where they ended up getting in trouble and, you know, kaput. The deals kind of got soft, Right.
- [07:26]
Sanjeev
How many did you have?
- [07:27]
Sean
It was 10 total.
- [07:28]
Sanjeev
So you committed to 10. You borrow almost $15 million. You're ready to make your first 10 million bucks. You're looking at the sheet every night three days before the guy gets popped for whatever he was doing outside of what you guys were doing together.
- [07:43]
Sean
Yeah.
- [07:44]
Sanjeev
And now you owe this money, and there's no way out because you signed it. You're under contract, basically.
- [07:50]
Sean
No, we bought the property and we. We owed the debt. We spent the money. It was there. And so, you know, I still remember, you know, and this is where the lows start. Right. I still remember, you know, going home to my wife. And, you know, three days I cried. You know, literally crying, grown man. Just like tears coming out of my eyes. And my wife says, you know, look, you always like to work out, Sanjeev, like, go to the gym, get out of the house, go to the gym. And so normally I used to go to the gym at like, 9, 10 o' clock at night, and there'd be two, three guys in there. You work out. You know, the gym was always an interesting atmosphere because you have no clue who the other guy is, right? He could be, you know, homeless. He could be a billionaire. You know what he asked you? Hey, what do you do in the gym? Right? Hey, bro, let me. Can I get a spot? Let me help you out. So there was a guy I used to work out with at night time, and there'd be very few of us in the gym, and so we would always say, hey, how are you? We talk about life. But we had. I generally had no clue who he was or what he did. And so this random day, we walk in, I walk in the gym at 2 o', clock, and this guy's standing behind the front desk. I look at him and I say, what are you doing, Dave behind the desk? He said, oh, come into my office. You got an office here?
- [09:02]
Sanjeev
So he was a manager. He owned the place.
- [09:03]
Sean
He owned the place. He was the owner. And he's actually said, hey, I'm trying to sell this place.
- [09:09]
Unknown
All right? So I've built a few companies that have made a few million dollars a year, and I've built two companies that have made tens of millions of dollars a year. And so I have a little bit of experience launching, building, creating new things, and I actually don't come up with a lot of original ideas. Instead, what I'm really, really good at, what my skill set is, is researching different ideas, different gaps in the market, and reverse engineering companies. And I didn't invent this, by the way. We had this guy, Brad Jacobs. We talked about him on the podcast. He started like four or five different publicly traded companies worth tens of billions of dollars each. He actually is the one who I learned how to do this from. And so with the team at HubSpot, we put together all of my research, tactics, frameworks, techniques on spotting different opportunities in the market, reverse engineering companies and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks. And so if you want to see my framework, you can check it out. The link is below in the YouTube description.
- [10:08]
Sean
I grew up bodybuilding at a young age, and so I was always, you know, very fascinated by the fitness business. I was a trainer when I was in college, and, you know, for me it was like, oh, my gosh, you know, And I asked him, does it make money? And he says, yeah, nets $30,000 a month. Oh, quickly, I'm starting to Think, all right, I can do my real estate. I can buy this gym. I can do all this.
- [10:30]
Sanjeev
So this is still. While you're on the hook for the jack of the Boxes.
- [10:32]
Sean
I am all the way on the hook.
- [10:36]
Sanjeev
And how long of a period did you have to, like, kind of resolve this or what? What was your plan? You're going to start open up Jack in the Box. What were you going to do?
- [10:42]
Sean
I couldn't open up Jack in the Boxes because I went to Jack in the Box corporate, and I'd recorded a deed restriction on these properties. So basically, I recorded something before closing again. You learn later on in life, right, never do that. But, you know, and. And so I was kind of stuck.
- [10:56]
Sanjeev
With this could only be that.
- [10:57]
Sean
It could only be that. And that was what? That it was a random deed restriction that we had created, and I couldn't get it off because the guy was still alive.
- [11:05]
Sanjeev
Yeah.
- [11:05]
Sean
So I couldn't quit claiming I couldn't do certain things. It was kind of a very unique situation.
- [11:10]
Sanjeev
Right.
- [11:11]
Sean
And so, you know, so, in essence, I bought the gems to pay for my real estate. And then, you know, the first month in, you know, I still remember.
- [11:19]
Sanjeev
Wait, so how'd you buy the gym? So the guy says, it's netting 30 grand a month.
- [11:22]
Sean
Guy says, I'm netting 30 grand a month. I need to get out of this. He says, you know, I have a big tax bill, so I don't want to get paid up front. How about you take it on and pay me over time, okay? Oh, okay.
- [11:33]
Sanjeev
Paying installments.
- [11:34]
Sean
All right. I went home, I asked my wife, I said, you know, hey, I want to buy the gym. We work out it. And she laughed, you know, no way. And then 30 days later, sure enough, we bought the gym.
- [11:44]
Sanjeev
Right?
- [11:44]
Sean
And needlessly, she doesn't laugh at anything I tell her we're gonna do. Now, she's, you know, so about the gym and 30 days in, you know, I go to the bookkeeper, and I'm like, hey, where's my check?
- [11:53]
Sanjeev
Yeah, where's that 30 grand?
- [11:54]
Sean
Where's the money at? Let's go. And she says, actually, you need to write a check for 22, 000. I said, what? $22,000? How?
- [12:04]
Sanjeev
Right.
- [12:04]
Sean
I was gonna make 30. At least give me 15. You know, let's. And so she just. She showed me.
- [12:09]
Sanjeev
Did you not diligence the thing at the time?
- [12:11]
Sean
I didn't understand how to read a profit. A profit and loss. There's a difference between cash and accrual and.
- [12:17]
Sanjeev
Right.
- [12:17]
Sean
All These things that you show. And you know, he had slimmed it down not to show every manager, he showed it, you know, and not in a bad way. He just showed it the way that he could have.
- [12:26]
Sanjeev
Yeah, yeah.
- [12:27]
Sean
He saw it wasn't what is actually there.
- [12:29]
Sanjeev
So how old are you at this time roughly?
- [12:31]
Sean
I am 28. This is 2008.
- [12:33]
Sanjeev
And there was a period of time. So the way my wife tells us we're brother. You're my brother in law. The way my wife tells the story is you start dating her sister.
- [12:41]
Sean
Yep.
- [12:42]
Sanjeev
And you're this guy that comes out of nowhere. You are like this hotshot real estate guy. Young, right.
- [12:48]
Sean
Like I think you're pretty 25, 26.
- [12:51]
Sanjeev
You're 25, 26. And you were making millions of dollars as a broker, which is not common. Correct. Like you must have been a top, top performer. Is that fair? I mean, I don't know much about.
- [12:58]
Sean
The broker at that time. I was. I mean, you know, and you're buying.
- [13:01]
Sanjeev
Her nice gifts and you're living this great life. And when the Jack in the box thing happened, at some point, I don't know, maybe, I don't know if you've got to this part of the story, at some point you're like, you have to move back in to your, to the parents house. You have to move back into your childhood bedroom. Is that already happened or am I jumping the gun?
- [13:15]
Sean
No, this actually. So what happened was, you know, basically, you know, long story short, we're paying for the real estate. I have to go become the general manager of the store. And we didn't have enough money to pay everybody. So my wife ends up becoming the Zumba instructor and you know, this. And, and so she's teaching like, you know, she must have been teaching 30, 40 classes a week, maybe more. And she was great at it. But you know, we're just at the gym all day long and in order to pay for our stuff, you know, we went from a Range Rover to a Ford Fusion.
- [13:45]
Sanjeev
Right.
- [13:46]
Sean
And we, we, we got out of our house to pay for pay again. We're paying the bills. We were always like, let's pay.
- [13:51]
Sanjeev
Right.
- [13:52]
Sean
And so we then ended up at my, my childhood high school room. And I still remember this the first night. And my wife was a little bit upset. You know, we went from this standard down to this. You know, naturally, you know, it was, it was a, it was a very big culture shock. Right. And what I didn't tell you was that in order for us to buy the gems and Not a lot of people know. I had to come up with a little down. My wife pawned her wedding ring for us to buy the gems. So she's a ride or die. When you talk about a ride or die, like, that girl's been with me through it all.
- [14:25]
Sanjeev
And so, by the way, are these. Because I know her, but I don't know her back then. Her idea, Your idea. You're like, hey, you know, if only there was a way we could come up with this. How did that conversation go? I gotta know.
- [14:38]
Sean
It was definitely not her idea, but, you know, she got on board with it fairly fast, and she understood that if we fail, we fail together, and if we. If we feast, we feast together, right? And so, you know, at that point, we were a feast or famine, right? We're either gonna be able to try to figure out how to eat, or we're starving here. And, you know, and in life, you know, it was a. It was a big up and a big down because, you know, you're 27, we're driving a brand new Range Rover. We're living in an 800,000 doll. This is amazing. You know, she's got a nice fancy and everything on the outside look great on the inside. We owe all these people money, right?
- [15:14]
Sanjeev
Who do you go to, by the way, when this stuff's going down? Because you didn't. You're not a big mentor, network guy. Like, you've always been a lone wolf as long as I've known you.
- [15:21]
Sean
Really?
- [15:22]
Sanjeev
When shit's hitting the fan, obviously you're telling your wife, but how did you try to get out of the pickle? Because that's an unbelievable amount of money to. Oh, you owed $15 million.
- [15:31]
Sean
I mean, and. And, you know, honestly, I was crying in the fetal position at home. My wife just literally said, get out of here. Get up. I have this story I tell my kids, the light bulb story, right? And what it is, is I'll plug in a light bulb for my kids, a lamp, and I'll just turn the bulb a hair, and the bulb turns off. And I asked my kids, I said, what. What does this mean to you? And my kids, look at me, they're young. Oh, I don't know. I want to see. It means that success is just this much far away. The difference between a successful light and a broken light is a hair. And so I always had that kind of mentality that, you know, I'm almost there. I might have not always been there, right? But my mentality, oh, baby, I was, let's Go. I mean, you know, that was. And so we, we lay down at night and we turn the light off when we're the first night back and we look up and in my age group, I'm a little older than you, we used to do these stars and like stickers on the glow in the dark, you turn off and the whole world appears. And we turn off the light. And we hadn't stayed in this room for, you know, forever. We just, we had our own place. And we both just start laughing out loud. And I told her, you know, I said, give me nine months, give me nine months, I'll figure it out. And, you know, the switch kind of clicked for me. Then.
- [16:51]
Sanjeev
You made a promise.
- [16:52]
Sean
I made a promise. I got to stick to it. You know, it's almost like when people take a, a weight loss challenge. Right, Right. I've got a reason to do it. This is my timeline. Let's do it.
- [17:03]
Sanjeev
But you have no plan yet or you have a plan or not?
- [17:06]
Sean
Well, I, you know, I, I, I said I'm going to grow the gyms. Right. I, I, I had, I, we started to turn it around, the first one, and then we're like, let's open up a second one. And you know, we, we ended up being able to build a second store. It took us a long time. It took us a little bit. It took us about a year. And you know, we, we just started working harder. And, and honestly, like, I just, you know, I would go to the gym if we needed to pay a bill, I would go to the gym and sell memberships myself. I'd, some nights work till midnight till we close. You know, we were 24 hour in the first store. And so I would just, if I needed, if I needed to get it, we had to go get it. And we, we lived very, very, you know, within our means. You know, we would, I still remember we would share food for probably about five years. We wouldn't go anywhere and eat, you know, two meals, right? There would be one meal. She would eat whatever's left. I would eat and, you know, and vice versa. Some nights, you know, don't get me wrong, there was times when, you know, I ate first, but most of the time it was sharing and trying to get there. And so as we started to build the gyms up, that's when we started getting back to like, okay, we're paying everybody. Good things are happening, let's go.
- [18:20]
Sanjeev
Could you not just declared bankruptcy with the jack in the box situations to at least get to zero again?
- [18:25]
Sean
I could Have. And that may have been the smarter path. You know, I went to law school, so, you know, my law school professor was always like, you know, bankruptcy is immoral. No, it's not.
- [18:35]
Sanjeev
Right?
- [18:35]
Sean
You know, but. But, you know, these thoughts are putting your head in life that, you know, you don't know where it came from.
- [18:40]
Sanjeev
By the way, spoiler here is you end up creating, I think at one point the largest gym chain in California. Right. In Northern California.
- [18:47]
Sean
We were one of the largest. We were definitely the largest just private operator. We didn't have partners. So we ended up getting to 82 stores and we were growing the business and we had done some really smart moves along the way. I would option properties, which we can talk about and like, do certain things in our leases that we just started learning and we built a great culture. We had almost 2,000 employees and it was a fun run.
- [19:12]
Unknown
Cutting your sales cycle in half sounds pretty impossible, but that's exactly what Sandler Training did with HubSpot. They use Breeze, HubSpot's AI tools to tailor every customer interaction without losing their personal touch. And the results were incredible. Click through. Rates jumped 25%. Qualified leads quadrupled, and people spent three times longer on their landing pages. Go to HubSpot.com to see how Breeze can help your business grow.
- [19:42]
Sanjeev
So the brick by brick is the first one. The guy basically says, pay me as you go. Give me a little down payment. You pawned the wedding ring, you get the down payment.
- [19:49]
Sean
Yep.
- [19:49]
Sanjeev
You turn that gym, you thought it was profitable. It turns out really wasn't. CA the cash flow really wasn't there. You start to squeeze it by working your ass off. Great. A year later, you get the second store. Give me a sense, because I've never owned a gym. A gym like this, you know, what do they, what do they net? Like if I go to a. If I see a gym around the corner. I think these were Gold's Gyms at the time.
- [20:11]
Sean
Yeah, we went to five with Golds.
- [20:14]
Sanjeev
And then you created your own.
- [20:15]
Sean
Then we created our own concept.
- [20:16]
Sanjeev
And then give me a typical. Like a Gold's Gym. What do these things make? Revenue. Profit, roughly.
- [20:24]
Sean
I mean, it depends on the Gold's Gym. If you're in Gold's Gym L. A, which was kind of like the Mecca, they're making 8 to 10 million a store, you know, and the gym revenue, or gross revenue, I mean, Jim is a fixed cost business. Once you've paid your employees and your rent and your lights doesn't really go up. Right. I mean, what may vary it is if you do personal training, it may vary it on certain services, but generally it's a fixed cost business. So you want to get to a certain number of members and then after that everything is profit. And so it's a higher margin business. You know, most people, you know, Jim said 1 point were 40% profit margin. Now I'd probably say they're closer to 20, 25 because labor has increased and membership prices haven't increased as much as maybe they could or should. But there's also a lot of competition, right? There's only so much pie in every corner or every other corner. There's gyms being opened up.
- [21:17]
Sanjeev
So what did you figure out? What did you do differently that let you build this 82 store chain?
- [21:23]
Sean
Well, we started out as Gold Gym operators and you know, we realized that Gold's Gym was a bodybuilder model. You know, there was people that would come in the gym, they work out for three hours a day, heavy protein. You know, people are farting, drinking soup, sitting there for, you know, it might.
- [21:37]
Sanjeev
Be the worst type of customer to have.
- [21:39]
Sean
Yeah, they abuse your weights and then, you know, they. But they use it, right? And then you look, you know, you start to look at this model called Planet Fitness where they're signing up 15,000 people at a low price. And when we were in the gym business, they were just coming up and so we went and saw one and said, man, this is actually interesting. They were serving pizza and bagels. Things that we just never even like understood, like why. Now we understand it's because people will come and eat pizza twice a month or every week and they'll get their 9.99 worth, right? So they were, they were, they were smarter than most. They were already ahead of the game. And we then started seeing other brands. Like we said, oh well, Gold's has some good stuff. And so we started combining the models to create our own model. And we created basically a large box, high volume, low price model with classes and group training. And we basically combined Gold's Gym and Orange Theory and a Planet Fitness all in one. And in that process, we started doing really well.
- [22:36]
Sanjeev
Did you figure out any great insights along the way? Like, you know, my first business was a restaurant business and restaurant business location really, really matters. One thing we figured out very quickly was Chipotle spends, I don't know, $40 million a year figuring out the best locations to be. You could just go, go to every, go try to get next to every. Chipotle is actually just like now you spend zero, but you get the benefit of all of their location scouting. Right. We figured out that you could look at the receipts, and if you understood how to read the code, you would know how many customers this Chipotle gets versus this one. So I could even compare within that, which location is better than the other. Right. So, like, we started getting a little smarter about how to play the game better. Were there any moments like that for you in the gym business that you started to figure out maybe how to pick up members faster or, you know, how to take the average value of a customer from $10 a month to upsell them in some interesting way? Any good business insights from that?
- [23:30]
Sean
You know, what we did was we created a really unique referral mechanism. And so what we did was we. We realized people love things for free. Right? I mean, a lot of the people I've heard talk on your podcast, it's like, give them a deal that they can't ever say no to.
- [23:43]
Sanjeev
Right?
- [23:43]
Sean
And I. I think that's always a great business tool to keep in the back of your mind, and you're starting anything or doing anything. So, you know, we created this. Me and John, who's my. Who's my COO and. And like family to me. He's been with me a long time, and we sat in a room, and we're talking back and forth. What. What would make a member want to refer someone? And John said, you know, jokingly, give it to him for free. You know, I said, yes, that's what we're gonna do. And so we're like, how do we do that? And so we're like, all right, well, Sean's paying. You know, let's say this. For every person Sean refers that joins, he could get a dollar off his dues. And so in that process, Sean is $30 a month or $20 a month. Sean has to refer 20.20dollar months for that $20. And we found that our members, like, when we did our sales pitch, we said, hey, Sean, you know, our membership's 39.99, but you can get it for free. Would you like to know how you get it for free? People be like, yeah, great. Just refer your friends, your family, your co workers, anybody you want. Here's the pass. We're gonna write your name on it. Sean, how many passes you want, John? I want. I want 40, because I'm paying $40. Right, great. And now when they sign up, they come in and give us Sean's pass. We would. We would connect it to their membership. Sean's dues would now go down by a dollar. It was amazing what we saw where people were so motivated, even for a dollar that worked. And it was amazing for people, for. Even for, like, you know, because you'd have people that would go down from 40 to zero, and all of a sudden, two people will quit. So their membership's now two bucks. Who's the two people? You know?
- [25:17]
Sanjeev
And you're like, well, okay, they start shaking people down.
- [25:20]
Sean
They start calling people and be like, how did you. How did you get out of the gym? I mean, I watched it happen myself. So we created this referral concept that was really good. And, you know, that kind of escalated us. And then we started to realize, look, we got to. As we grew the gyms, right? We. We learned what we did right, and we learned what we did wrong. For example, like, you know, we would build pools in some of our gyms. Well, there's nothing wrong with having a pool, but the reality is you're going to have two to three, maybe four people in at a time. It's going to take 10,000 square feet, right? 6,000. 10,000 square feet. That's a lot of footage for four people, right? And so we started just realizing what our model was as we went forward. And then we just decided, okay, we're going to give a great value at a great price, and then we're going to incentivize you to refer people, right? And it worked.
- [26:09]
Sanjeev
So how long did it take you to get out of the holes?
- [26:12]
Sean
So the initial mistake was big. Fast forward to 2011. Okay? I now have 12 gyms, and I'm with Gold's Gym. 12, Gold's Gym, 2011. I had bought some property, and one property I had. I paid $4 million, okay? I owed 750. I'd been paying them every month at 13% for three years. And so I go to this lender. I actually went to high school with this guy's granddaughter. And they were good old boys from where I grew up, you know, And I went to them and I said, hey, look, if I give you $50,000, and for me, 50,000 at that time was all I had, right? Will you rewrite my note and give me another year and change my interest rate? Because I'm now starting to climb up on the cash, right? And my sales. I have 12 gyms. They're all doing well. And so the guy says, sure, Chopra, bring us a $50,000 cashier's check tomorrow. I said, okay, let me have my lawyer draft up a document you don't trust us, Chopra, you need a lawyer again. No mentor, no coach. Go get the 50,000 cashier's check, bring it in, put it on their desk. Two weeks later, I get a foreclosure notice. Now call them, what's going on? Say, oh, well, we think this property's worth $4 million, so we're going to take it from you. Whoa. So in the initial time, I start calling around, and I go to Gold's Gym. The next week, I go, and the guy has now passed away, but he's the president of Gold's Gym at the time. And I go in and there's this big Gold's convention every year, whether it was Vegas, Louisiana. San Diego. It was at the time I was in Vegas. I still remember. I went and met with them, and I said, hey, look, I've opened up 12 stores in three years. You know, I'd like to open up 50. And he laughed. I'm a fan. You can't open up 50. We can't even open up 50. He said, but look, I'll do you a favor so you can have. Open up a gym for every time you have $1 million in the bank. So you want to open up 50? Show me 50 million. Remember, 50,000 for me was. So I had this franchise agreement, and so I called this lawyer really trying to save the property, right? I called somebody I knew from law school and said, hey, man, I got this property. You know, can I sue the lender? What can I do? And we're not really in the lawsuit type of thing at that. At that point. And so to file bankruptcy, I said, no, it's moral. I can't do it. And then we started looking at the benefits. At the time, we were paying everybody. And, you know, long story short, we ended up filing chapter 11. We were able to rebrand. We paid everybody 100 cents on the dollar that was secured. And we started growing the gyms after that. And in the process, we reorganized our life. We paid all the. All the people we. All the 15 million we owed, we paid with interest. But that also built me on the next round that we'll talk about, right? I was. I was very. Like, some of those lenders are still great friends to today, where I can pick up the phone and call and say, hey, we're from the Bay Area, right? Like, so I call them and say, hey, can I get a loan? I just called one, and they said, yeah, we'll do it for you in a heartbeat. You don't need anything? No, we Know, you stood behind. And so, you know, so we started building the gyms, and we started building more gyms, and then really, we had no real estate at this point. We had sold our house, we had sold our cars. We just had gyms. We were just a gym operator. And I think by 2015, we'd gotten up to about 33 stores and decided to tell my wife, like, I want to get back into real estate. And. But I didn't have the. I didn't have the seed capital. Real estate was always capital intensive. And so I looked through my portfolio, and sure enough, I remembered I optioned that second gym in Oakdale. So I basically use that option to buy the center, and then I sold it to someone else based on my new lease.
- [30:21]
Sanjeev
Sorry. So explain how this works. So if I've never done real estate, I understand how this option buys out. What do you mean?
- [30:26]
Sean
So what? You what? In our lease, we put this option. Let's say you're Mr. Seller.
- [30:29]
Sanjeev
Right.
- [30:30]
Sean
And we say, Mr. Seller, we have the right to buy this at.
- [30:32]
Sanjeev
We'll rent it for now.
- [30:33]
Sean
Correct.
- [30:33]
Sanjeev
But we have the right to buy at a defined price.
- [30:36]
Sean
Correct.
- [30:36]
Sanjeev
Okay.
- [30:37]
Sean
At this defined time.
- [30:38]
Sanjeev
Okay.
- [30:39]
Sean
And in order for us to do that, we just have to tell you we're buying it and we have 60 days, 90 days to close.
- [30:45]
Sanjeev
Right.
- [30:46]
Sean
So we knew there was a buyer who wanted to buy gyms and do other stuff in the market. Broker approached us and said, hey, would you sell this? They didn't know I didn't own it.
- [30:55]
Sanjeev
Right.
- [30:56]
Sean
But they said, would you sell it? And I said, actually, you know, and so we had optioned that. Like, I think it was like 3 or 4 million bucks. We sold it at 7 million.
- [31:04]
Sanjeev
And so you knew risk free in a way, because you have the option to buy at a defined price. You already know there's a buyer lined up. So you're not speculating as much as long as you believe that they would close, that they would actually buy the thing.
- [31:15]
Sean
Yeah. And there's no such thing as risk free, because if that buyer blows out, I didn't have the money to buy the thing anyway. So, you know.
- [31:22]
Sanjeev
But you did, like, a double escrow.
- [31:23]
Sean
Basically, in essence, we did a double escrow and we made, you know, several million dollars. And we're like, wow.
- [31:28]
Sanjeev
And so now that I've invested with you, you do this a bunch. And it is like the two sweetest worlds in the English language are double escrow, which basically, like, we agree to buy a thing, but before we even have to Take the money out of our pocket, we sell it. So the same day they ask us for the money, we just take the money from this guy, we give them their, their share, we pocket the profits. Yeah, you bought the thing and sold the thing on the same day without ever having to take the money out of your pocket. Beautiful. And you've done, you do this all the time now. It's great. Yeah, you know, we. I'll do a deal with you. And you're like, by the time we get to buy this, we're already going to have sold 10 million, $7 million worth of the equity, you know, because we already have buyers lined up.
- [32:05]
Sean
Yeah.
- [32:06]
Sanjeev
And so you did this for the. So that's how you did your first deal.
- [32:08]
Sean
That's how I got my first seed money to buy real estate. And then I just started buying and flipping for, you know, for years.
- [32:15]
Sanjeev
And you were doing it the same way, gym options or. No, that was just like, did a.
- [32:18]
Sean
Few gym options, I did a few gym sales. Then I got enough money to go buy a property and build a gym. And then I ended up hooking up with this company called Harbor Freight Tools. And so as I started getting into 15, 16, we started getting in, the higher number of gyms were like 65, 70. We bought this building in San Francisco. Yeah, I remember.
- [32:37]
Sanjeev
On Market Street.
- [32:37]
Sean
Market street, yeah. 1, 2, 3, 4 Market Street. I think you actually came there.
- [32:41]
Sanjeev
Yeah, the vanity, the address. I remember just thinking, you got 1, 2, 3, 4 market.
- [32:45]
Sean
I was, yeah, I know. And, and there was, you know, every day we go out, pick up the needles that were outside. It was, it was crazy. But, you know, like at that time we had a store there and, and a non profit, a mosque, you know, approached us and said, we'd like to put our church here. And we negotiated a deal and we said, well, we wouldn't make that money in probably like 10 years running a gym. 15 years of running the gym. So we sold it. And then, you know, like, we're like, oh, wow, made some money here. And as I was building my next store, somebody from Harbor Freight Tools randomly called me and said, we'd like to, we'd like to lease that box. So I go home and tell my wife, what do you think? You know, I want to build this gym. I'm used to building all these gems. She says, well, why don't you just do it? Right? And so we did it and we ended up building a very big relationship there. I'm a big relationship guy. A lot of the tenants we Work with, we've worked with for years and we ended up doing over a hundred for those guys as time went on. But. But yeah, it's just kind of, kind of evolved as time went on. And then we got to 17 and, you know, my dad was not really the. I won't say bad things, but he wasn't a loving type. A little bit abusive, a lot abusive at times, but, you know, he was just a different character. So, you know, my thing was whenever I have kids, you know, we can't change the past, but we can sure as hell change the future, right? Yesterday's gone, but tomorrow has not been written yet. And so I kind of always had that philosophy, but I wanted to be a great dad. But during this time, from 2008-20, probably 16, I work seven days a week, probably 80 to 100 hours every week. I mean, I would get up at 5:30 and be in the gyms, and then I'd come home by midnight. I'd come home every night, just want to see my wife and kids. And I'm thinking I'm doing a good job because I'm busting my butt. But I'm still, you know, I'm still trying, but my table was wobbly. You know, we talked about this, you.
- [34:42]
Sanjeev
Know, give the table metaphor.
- [34:43]
Sean
So I always have this belief that there's three. Your life is like there's three legs to a table, right? Your, your, your family, your job, and your faith. And your faith doesn't have to be God. It could be your faith in fitness. It could be your faith in the way you eat. It could be the faith, the way you treat people.
- [34:59]
Sanjeev
A code. It's a code you live by.
- [35:01]
Sean
It's whatever you believe your faith is in for you to feel like you are foundationally sound. Well, if, if any one of those legs, you know, let's say my job is strong, but my family life is weak, what happens to the table? It wobbles. My faith may be weak and my job may be strong. My table wobbles. And so for me, I was, you know, I was working a lot, I was making money. There was a great relationship with my wife. But one day I'm driving home from this from Santa Maria. I had a gym in Santa Maria. It was probably on the coast. It was probably, gosh, I'd say 400 miles from my house, three, four. And I would drive in the morning and I would come back the same night. I go train, I go meet the managers. I'd walk my store. I wanted to see and touch and feel. And. Anyways, my. My second son, Chase, your nephew, calls me. He's crying hysterically. Put your mom on the phone. My wife gets on the phone, honey, what's he saying? And she's crying, says, you know, he really misses you and he wants you to come visit. He doesn't think you live at home. And I'm going home every night on purpose, right? Like, I'm driving 400 miles. I'm like, I'm gonna be there. I think I'm being a good dad. You know, I'm kissing him every night. I'm watching them. I. You know, and. And so the whole day, it didn't sit right with me. And that's when I decided for myself. I said, I built this great business, but I can't do this long term, because for me to do it right or the way I wanted to do it, I was unable to do it and be a good father. And so that kind of changed my path of where I started focusing more on real estate.
- [36:45]
Sanjeev
Right. And the type of real estate you would do. Because real estate's a big word, broad word, could be anything. You do shopping centers mostly. You've done other stuff, too, but now you do retail shopping centers.
- [36:57]
Sean
Yeah.
- [36:57]
Sanjeev
And as a tech guy in Silicon Valley, that always felt super random.
- [37:01]
Sean
Like.
- [37:01]
Sanjeev
Like retail shopping centers is like, okay, oh, you're. You're like an archaeologist. You do dinosaur things. Like, I get it, you know, like, yeah, what are you talking about, dude? Like, but it's this incredible. And now I invest. Now I invest a ton of money with you. Because I'm, like, blown away by this. But so. So just explain kind of like even just the space, the sandbox you play in, why you play in that sandbox. And, like, you know, what's your model? What do you do?
- [37:23]
Sean
You know, 2010, all the news was retail's dying, you know, but what it really did was it insulated retail. Because what happened after 2010? People started building way more multifamily storage, industrial. But they didn't build retail shopping centers. No, they built these pads. A lot more post Covid. Because what happened in Covid, right, You were closed unless you had a drive through.
- [37:47]
Sanjeev
Right?
- [37:47]
Sean
And so those businesses that had a drive through, they crushed it. And as time went on, you know, there's been a lot of retailers that have left, it's no doubt, but retail has sustained, and it's kind of become a supply and demand thing where it's like, you know, and what we are is we're a value Add retailer. So developer. So basically what we do is we find things that we feel we can add value to, whether it's new tenants, whether it's breaking it up and selling it in pieces, whether it's construction. We always have a game plan to go in and do something, you know, And I often get asked, why didn't the other guy do it? Right? Why didn't the guy before you do it? I don't know. You know, sometimes it's just there, and sometimes people just been in a project too long, and I give you times that I have times. There's. Sometimes I've been in a project for five, six years and I'm like, I just want to be done right, right. And there's been projects I've been in for five minutes and I'm like, let's go. It just happens in that, in this business. And so, you know, we build a lot of good relationships with a lot of tenants. And, you know, the good part is, is that we can email these tenants or their brokers within, you know, we buy, we're looking at a center. We can, we can find out generally who wants to be.
- [38:51]
Sanjeev
Give a sense of what good looks like in real estate. What have you been able to do.
- [38:56]
Sean
In your track record? You know, I. Typically what we see is we see people trying to compare or, you know, match the S and P or kind of be Standard, you know, 7, 8% a year. They get some depreciation, you know, and.
- [39:10]
Sanjeev
They'Re happy, they're diversified, they're diversified.
- [39:12]
Sean
They, you know, they can do certain things. And we're more. We target for our folks now mid 20s to low 30s IR annually. And in order for us to get there, we actually have to go do something.
- [39:25]
Sanjeev
You went from having 00 real estate assets to over a billion dollars in real estate assets in 10 years. How do you do that? Don't we all want to know?
- [39:34]
Sean
I mean, I think you have to find someone who's already kind of figured out that game and kind of run with them. I would say. I'd also say that like it's. It's compounding. You know, it's. You buy one deal and you sell it, you made some money. Now it's when you do it again and again and again and again and again. And so in our business, I was able to compound it by doing it again and again and again and again and again for many years. And so I would tell anybody who's young, like, you know, you're going to start with something, right? And then you, you got to figure out how to make that, make money and move on to the next. Because if you stick to just one, there's a lot of people out there, they have one building, they enjoy it, but they didn't compound it to really get to where they could have gone.
- [40:19]
Sanjeev
You, you had also told me one of the deals we did. You know, I'm learning about this as you go and you're like, oh, we're buying this center. And you were like, there's a so and so grocery store. And one of the reasons we're getting this price is that that grocery store, they only have like a year left on their lease, but they have an option to extend it like 12 or 15 years. But they, you know, they're not picking it up because they don't have to yet. They have one or two years left right now. And I was like, okay, so what's the plan? You're like, I'm going to get them to extend it. And I was like, but why? Why would they do that? How do you know? And it was a combination of intelligence. You were like, well, I know it's a high performing store. I know they should want to extend it, but they won't. They don't have to do it proactively. But I do know the person who's like, runs their real estate. She used to run real estate for this other company and actually one time she left me holding the bag she pulled out of a deal last minute and I ate the loss. And I didn't, I didn't hold it against her. I didn't, you know, I treated her well. Even though we took a big financial loss on that, I believe she's going to treat us well here. And then sure enough, like, you know, we buy this thing and suddenly we got a 15 year lease extension and that property's value, you know, skyrockets from that. So sometimes it's also about taking a loss. Well, not just when somebody wins. Yeah, it's, you know, it's easy to high five when things are going great, but how do you, how you act when things don't go your way defines the character and defines the relationship. Right.
- [41:38]
Sean
100. I mean, you know, it, how you act on a loss is almost more important than how you act on a win.
- [41:43]
Sanjeev
Right. Well, your kids play sports. Do you teach them this? And you know, when it comes to their baseball, they're pitching their, you know, what, what they're doing, you try.
- [41:50]
Sean
I mean, they're young, they got a lot of emotion. So it's It's. It's kind of a fine balance because you don't want them to want to lose, right? But you want them to understand how to lose. Because in life, in order for most entrepreneurs out there, most guys have had some sort of failure in their life, and then, boom, it clicks, right? And they use that as, like, a catalyst to just skyrocket, right? Not every business person is super successful right out the gate. And most guys who have made it really far have. I've had to grind their way through, right? And so, you know, I. I'm. For my kids. That's. That's what I want. I want to see them. I wanted to do baseball. Baseball's a sport of failure, right? You hit three out of 10. You're in the MLB, right? You're a Hall of Famer, right? That's 30 of the time you're touching the ball.
- [42:35]
Sanjeev
Right.
- [42:35]
Sean
Or hitting the ball. So I like the sport because it's mentally. And I also believe, like, you know, sports are a great way for kids to learn to compete, you know, and. And have healthy competition. But at the same time, you have a lot of people teaching their kids that I've seen. They think they're competing with other kids. I try to teach my kids that you're competing. And I would tell any adult this, not to look at everyone else, right? Because I can only do what Sanjeev can do. I'm competing with me.
- [43:01]
Sanjeev
Yeah. There's a guy who came on this podcast. He had this great phrase. He goes, he's an investor, and he talks about investing in founders. What do you look for, man? What are some of the key things? And he goes, I want to know if they're pre fall or post fall. He said, all great men have a fall. I love it if they're already post fall, because I know that they know what it takes to come back up. I know that they're going to have a certain level of maturity and humility because they're post fall, right? And pre fall, you always have to be wary because somebody who's only ever seen the ups, you don't know how they'll handle the downs. You don't know if they'll even anticipate that there can be downs. They might get so full of themselves that they don't actually see that that's a possibility, and they don't guard for it and, you know, watch for the wall and make the turn as you need to do when you're. When you're riding the race. So I've always remember that.
- [43:48]
Sean
And guys that redline or push the limits, they're going to have some falls.
- [43:51]
Sanjeev
Yeah.
- [43:53]
Sean
Until you get to the edge, it's kind of like one of those things. So, you know, some of those people who have never had a fall, maybe they're playing it, not the. Playing the game as hard as they maybe could be.
- [44:02]
Sanjeev
Right. What are some other, like, core, I don't know, philosophies that you have?
- [44:06]
Sean
Yeah, I mean, I think core philosophy, I always think of this. What would I advise my son to do?
- [44:12]
Sanjeev
What's an example where maybe if you had just been thinking from your own perspective, you could kind of talk yourself into something. But when you think about it, like, what would I advise my son to do? The answer's much more clear. Can you think of an example?
- [44:23]
Sean
Yeah, I mean, like when, when, like when a tenant burns you or when people burn you and you say, man, I want to call that person and tell them, I'm not going to do any more business with you. You know, we're going to use the stick.
- [44:35]
Sanjeev
Right.
- [44:36]
Sean
And what do you gain with that? Right. What would my son. What would my son shade and gain from that? Okay. The other person knows you don't like them. They're not going to bring you any deals. They're not going to do anything. Or you could say, hey, you know what? This one didn't work out. Let's find another one to win together on. Right. There's. It's a long game. It's not a short game. Life is a long game. You know, that's, that's, it's like things go full circle, right. People say, what does it go in full circle means? It means as you're going on longer and longer, different opportunities come up. It comes all the way around. And, and so for that, it would be an example where I would probably tell him, like, hey, look, you know, don't kill the relationship. Build the relationship. Find another way to win with that person. And don't hold on to the, you know, that's the problem is most people hold on to memories that are, you know, the right word, I would say the memories that affected them in a negative way. So they carry these negative ways instead. You can forgive. You don't have to forget. Right, Right. I mean, and so it's. It. So there's been times in my life that I've even had to use this for my own. Like, I, I tell people a lot of times, like, you know, I will sometimes have to make a decision and I will think as if my sons or my daughters are the ones having to make that decision. And I ask, what would I tell them? And most times it takes me five seconds. And this is something that I have a conundrum about in my head.
- [46:04]
Sanjeev
But then for weeks, you know, oftentimes.
- [46:06]
Sean
I talk to you and we're outside, and you say things so common, senselessly, you know, like, why have I been thinking about this for two weeks? Sean got this to me in, like 30 seconds, right?
- [46:17]
Sanjeev
All right, listen. The two most beautiful words in the English language are email subscribers. You need more email subscribers. I guarantee it. I don't care how many you have. You need more of them. I need more of them. You need more of them. We all need more email subscribers because email is an amazing way to build your business, to build an audience, and to build a direct relationship that's not dependent on the TikTok algorithm, the Instagram algorithm. It's how you get people to engage directly with you so you can get them to trust you to like you. Click products, check them out, check out your stuff. That's how you build a relationship with people. And so email subscribers are key, and they're free. It's an amazing tool. And the tool I use for my email subscriber base is Beehive. It's a tool that was built by the folks who were actually running Morning Brew. So they were running growth at Morning Brewing. They grew it to 4 million subscribers. And along the way, they had to build out all these special tools in house that made Morning Brew great. It helped it grow faster, helped it make more money, helped it nurture the email subscribers. And so they took all those tools that they built internally and they said, could we provide those as a separate startup for anybody to use and not just Morning Group? And so that's. They made it available to everybody. Because before Beehive, you were duct taping five different apps together. Google Docs, mailchimp, Stripe, a spreadsheet, and your dream. It was all bundled together. Well, now Beehive is just one tool that does it. And it's a single purpose thing. It's what I use for my newsletter. I send a newsletter out to over a hundred thousand people, and that's what I use. And so for listeners of my first million, they're actually doing a special code. So if you're thinking about, hey, I should have a newsletter, I should have subscribers. I kind of want to build an audience that way. Well, check it out. They'll give you 30% off. Use the code MFM30 go to beehive.com, that's B E E H I I V.com and use the code MFM30. I'll put the link in the description to make it easy for you. Start scaling your content today. What have you seen? Just because you're in retail, like, what have you seen as the trend? What's going on? Like what, what's changing? Maybe what's dying, what's exploding?
- [48:04]
Sean
Yeah.
- [48:05]
Sanjeev
What can you teach us? Because you see a different part of the world than, than we do, and you see more of the leading indicators. You know who's expanding, you know who's contracting. Right. You know which, which locations are thriving and which ones are struggling. What have you seen? I guess what's, what's going on?
- [48:19]
Sean
So for retail specifically, there's been a lot of new things called experiential retail. It's come out, you know, and fitness centers. We've been there for a long time, but now there's pickleball, trampoline parks. You know, retail is important for any center is to drive traffic.
- [48:32]
Sanjeev
So retail used to be like, like, you know, where that. Now it's, let's say mall or a trampoline park. It would have just been go buy clothes at the store. Right. That is that basically, like, that's the shift that's happening is like people buying, you know, maybe more of that stuff's being bought online, but you can't buy the experience online.
- [48:50]
Sean
Yeah. And, and, and there's, there's places that are thriving like Ross Dress for Less or Burlington Code or TJ Maxx, my wife loves home goods. Or TJ Maxx, your wife loves it. It's like a treasure hunt. Right. And they're, they're sourcing things that people can go and they're looking for that treasure.
- [49:04]
Sanjeev
Look at all the junk we bought. But the deal we got deal was amazing.
- [49:08]
Sean
So the experience for that, so that, that also becomes experiential, but it also becomes where it's. It's not stuff you could eas. Right. And so online has definitely had some form of effect where you've had some brands that are going away. For example, as of recent Big lots went away, Joanne's went away. You know, Rite Aid is in bankruptcy. And you say, when's the last time I went to a big lots? When's the last time I went to a Joann's? They never adapted into today's market to be able to do both because really all, all retailers should have their retail also being their distribution.
- [49:45]
Sanjeev
Right.
- [49:45]
Sean
And so an E commerce person needs distribution. So now if you can do both. And that's where the smarter retailers have gotten, where they'll ship out of stores. Yeah, they'll do certain things to create where now they have a, they don't have to do a 150,000 square foot distribution because they got a Best Buy in this part of Wisconsin. That part can ship everywhere. And I think retail is also changing the fact that you've got more, you know, offices, uses now going to retail. You know, you have lawyers and shopping centers, you have insurance people, you have doctors. They're going where the foot traffic is. Right, right. And so, and then food has become a big component. Right. And the experience of food is what you know. And you can doordash anything you want. But even, you know, the ghost kitchen concept has been tested. Doordash did ghost kitchens, they closed. Majority of the reason is because people like the experience. They want to pick what they want. And yeah, you can order it from your house, you can go there, your forte, but you can get it. That kitchen has value. And so I think it's the, the fundamental is that the location and, and when, when we see things, we also see where retail is over 90% lease right now, a very high occupancy. And there's certain parts of retail that are no longer viable. You know, you think about the old town, like where I grew up, there was a small town and there was a JCPenney's on one side. Right. And then Lowe's, TJ Maxx, Home Goods all went to the other side of the freeway. Everybody went on the other side. Target, everybody's there. Well, that other side of the retail, it's hurting because it's not in the right location. So location's also another key thing that I didn't really understand when people would tell me when I was younger, location, location, location. Now. Yeah, location, location, location. And, and you know, I think in any real estate, it's important to understand, like when you're trying to make money in, in real estate or I would say any business, you really make money on the buy. If you're thinking you're going to make money on the sale immediately, you're speculating. But if you bought something, right, I buy, I could buy a car. And I know the car's worth 30,000 and I buy it for 28, 29, whatever that is, I did all right. I made money on the buy. Whereas people buy things on speculation. And when that speculation doesn't come to fruition, that's when we get hurt.
- [52:15]
Sanjeev
Exactly. You've also, you've done a bunch of these like electric car charging stations and stuff like that. Like new, new retail uses that are coming up as well. Right.
- [52:25]
Sean
Electric cars, we do recycle stuff. We're doing fireworks everywhere. Anything that we can bring traffic in, you know, and we want you to bring your, you know, your Tesla to the shopping center because you plug in and you're going to go eat for 20 minutes. Yeah, you got, you got time to go do something. Right. And so, you know, but the number of retailers has reduced over the years because a lot of those concepts were either, you know, the kind of tough part for retailers. There's been a lot of private equity that buys them. They put heavy debt and then when any change in the market happens or they don't adapt to anything, can't survive cancer. Right, right. And, and that's what happened to like Joanne's or, you know, even, you know, Big Lots. Big lots had the $2 billion in debt and, but they also never adapted.
- [53:14]
Sanjeev
One of the things I always wanted to do was you do you, when you owned the gyms, you would do these like sales trainings. You do this like motivational talks. You do a lot of these things that you, you know, maybe you, I don't know if you like doing them, but like at some point you probably were happy to, to be done doing it for a little bit. But what would have been the highlights? What were the, what were your best, what were your best bits?
- [53:32]
Sean
I'd often talk about Kobe Bryant. Right. I always love, you know, Kobe Bryant's analogies where he would say, ah, you know, I look at it like this. I work 2 hours extra a day, every day. Now you gotta take that times five days is 10 hours, you know, a week, take that times four weeks a month there's 40 hours, take it times 12, it's 480 hours. Over my 15 year career, I've almost done 8,000 more hours or 10,000 more hours than anyone else stack days. So a lot of my motivation was how do you stack days? The other thing that I was always very important on in training was when you're there, be there. What does that mean? Right, well, when you're at work, be at work. When you're at home, be home. Don't be at work thinking about home and at home thinking about work. And people don't get that often because you only get so much time. So when I, when my game faces on let's Go and when I'm with my Kids, let's go. When I'm on my own, that's what I get to do. Well, let's go. Right for myself. But a lot of people don't understand that. Like when I talk about the commodity of time, right? It's limited. And now. So if you're here thinking about here, you're here thinking about here and you're doing all this stuff like so that's something I think that every entrepreneur, young person should focus on themselves, right? And then I also would teach them to have a game plan, make a list. Some people say, I don't need a list. When you write it down. Majority of people are visual learners. I'm for me, I'm a visual guy. If I write it down, I'll remember it. You tell me that there's a good chance I forget it, right? So what's the way you remember, what's the way that you're going to remember what you're doing? Because you got to write down your goals and kind of get to the next step of, of taking that time. And were you big on that?
- [55:21]
Sanjeev
Like kind of writing down a vision or writing down whether it's affirmations or a vision or a goal, like were you a big kind of like self motivator in that way? Did you have any habits that served you well?
- [55:34]
Sean
I never really wrote down affirmations or any of that stuff, but I would always ask myself, why, why am I doing this? What is my goal here? And for. Sometimes it was, my goal was to make money because I got to pay bills. You know, I'd be at the gym at 10:30 at night calling someone randomly saying, hey, if you come in with your entire family tonight by 11 o' clock and spend $2,000, we'll give you an extra year for free.
- [55:58]
Sanjeev
Right?
- [55:58]
Sean
Whatever it was, right, Because I needed the $2,000. So at that time it was money motivated. Other times it was because I wanted to actually like for my employees or even my kids, I really want to see them succeed. And I wanted them to learn a way. I mean, there was employees that we had come in and never had made more than $8, $10 an hour at that time. And they started making 150, 200 grand a year. And it wasn't just sales, it was also treating people right. It was also understanding, you know what, what motivates people. And you know what? I always tell a story like sometimes I would tell. When I was young, my dad used to always do a thing that was pretty, you know, when I say abusive what does that mean? My dad would take me, you know, he had a few drinks. He was Indian guy. Come, he'd be sitting at the table doodling till I was probably like 12 or 13. He would come and grab you by the neck and he'd take you to the restroom and he put your head near the toilet. He say, see that? That's what you are. And I, you know, and I. I always tell people, you know, that that could have affected me in two ways. It could have completely demotivated me, or I could have used it as I never want to be that. And so everybody's experience is different from the others. That's why I always tell people you're not competing with someone else.
- [57:10]
Sanjeev
Yeah, I like your kind of. The be there, wherever you are, be here now is so, I think, even more underrated now because in a world of distraction on tap.
- [57:24]
Sean
I'm bored.
- [57:25]
Sanjeev
I can solve it right away. I'm half here. I'm tired. I could solve it right away. I'm annoyed. I can do. I can. I have this pacifier in my hand. Like I have a little baby. I have a one year old. So I think I have a passy right here. At any time, I could just suck on this. And I'm gonna have. I'm gonna have my problems soothed for a moment. And so being able to just be wherever you are, but be there fully. And like, there's a. My sister had this situation where she was in business school in Indiana. She went to Indiana University for business school. So they're in Bloomington, Indiana now. Bloomington is not the nicest place. Didn't want to be there. And the next semester they were going to go to Italy. So they had this, like, next semester we're in Italy. But while they're in Bloomington, they didn't bother going out, making friends. They didn't bother, like, checking out the area. They didn't, you know, they were just kind of going through the motions. And the reason why was they thought, oh, Bloomington's lame. Italy's gonna be amazing, though. Can't wait. Do you know how we're gonna be when we're there? We're gonna be, oh, I'm gonna be speaking Italian. I'm gonna be gelato and cafes.
- [58:28]
Sean
I'm gonna be so.
- [58:29]
Sanjeev
It's gonna be so amazing. And I was like, that's great. You're not there yet. While you're in Bloomington, you wish you were in Italy. Guess what? When you're in Italy, you're probably gonna.
- [58:38]
Sean
Wish you were back in The States.
- [58:39]
Sanjeev
You know, because you're gonna miss certain other things. Be. If you're in Bloomington, be in Bloomington, make this your Italy. Right. You can choose to have that Italian experience. You can have whatever experience you want in the place you're at. And I've now seen, over time, this has become a superpower where, like you said, like, you know, you're at work, you're thinking about home, you're at home, you're thinking about work, you're with your kids, but you're half thinking about work. You know, the half in, half out, the dim light versus being able to go off and then shine bright when it's time to shine bright. But if you're always flickering at this sort of dim level on all things, you're just going to feel unsatisfied in all aspects of your life. Right? And so I think that's a great, simple reminder that's in everybody's control. Doesn't take any talent to really do that.
- [59:23]
Sean
No.
- [59:23]
Sanjeev
Yeah. It just takes a little bit of awareness. And so that's the one I'm going to take with me the most out of this whole thing. I think we hit everything. I think we hit the highs, the lows, and the build back up. Dude, I appreciate you doing this. I know you're not. You're not a big kind of get out there and go, toot your own horn, but I appreciate you doing this.
- [59:40]
Sean
It's great to be here and. And appreciate it.
- [59:43]
Sanjeev
All right, that's a wrap.
- [59:44]
Sean
I feel like I can rule the world I know I could be what I want to I put my all in it like no days off on a road let's travel Never looking back.
- [59:55]
Unknown
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