$200M in Real Estate: Building the Foundation For Massive Wealth

Hey, welcome to another episode of Making Billions. I'm your host, Ryan Miller, and today I have my dear friend Gary Lipsky.

Gary is the founder of a real estate fund with over get this $200 million in assets called Break of Day Capital. Gary and his company was voted the 25th fastest growing real estate company by Inc. Magazine. Not only that, but his work got him the prestigious AAOA best syndication award.

So what does this mean? Well, this means that Gary understands how to deliver award winning real estate to his investors, and he's about to show you and I how to do the same.

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• 10:16 (Cont.) $200M in Real Estate: Building the Foundation For Massive Wealth

Transcript

Ryan Miller  

My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business, or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

So how do you go from zero to $200 million in real estate? Well, my next guest runs a $200 million Real Estate Fund, and he's about to teach you and I the fundamentals necessary to close more real estate deals and to convince investors to invest in you. All this and more coming right now. Here we go.

Ryan Miller  

Hey, welcome to another episode of Making Billions. I'm your host, Ryan Miller, and today I have my dear friend Gary Lipsky. Gary is the founder of a real estate fund with over get this $200 million in assets called Break of Day Capital. Gary and his company was voted the 25th fastest growing real estate company by Inc. Magazine. Not only that, but his work got him the prestigious AAOA best syndication award. So what does this mean? Well, this means that Gary understands how to deliver award winning real estate to his investors, and he's about to show you and I how to do the same. So Gary, welcome to the show, man,

Gary Lipsky  

Thanks for having me, Ryan, big fan of the podcast and a big fan of yours.

Ryan Miller  

Yeah. Man, that goes likewise. We've hung out quite a bit over the years. So it's great to have you on the show, and that love goes both ways, brother. So let's jump right into it, man, you've been wildly successful. Let's talk to the beginners of the audience. You've got people in over 100 countries around the world, 1000s of people listening to the audience, a lot of them family offices, expert investors, but a lot of them are starting out, and even experts need a reminder of the fundamentals. So what would you give to an investor or somebody that was looking to start their real estate journey? What advice can you give them to get early points on the board? 

Gary Lipsky  

Well, my number one thing is, don't chase IRR, I see a lot of people doing it. Actually, a friend texted me yesterday, and he's like, remember that deal I was telling you about that I invested in? They guaranteed 10% every quarter well, and he sent me the docket of like, a lawsuit against this company. Because he's like, I remember your face when I told you that, because my face must have dropped. Like, what the hell are you doing, man. So luckily, he got his money out. And if it sounds too good to be true, it is too good to be true, you know. So don't chase IRR. That's going to get you into trouble. It should be. You're going after singles and doubles and win that way. You know, if you want to have a couple of moonshots in your portfolio, that's fine. Real Estate is not the play for moonshots, maybe Bitcoin, maybe AI or some space stuff, but real estate is singles and doubles, and you will succeed over the long haul, but it's not, it's not a get rich quick scheme that so many people think it is. 

Ryan Miller  

Brilliant, yeah, so don't be this IRR chaser. Now, obviously, in investing, we do appreciate yield, especially investors, they do appreciate a return. But I think what you're saying is don't be all consuming to the point where it blinds you. Think of it like a piano, right? What is there 88 keys or something like that, and all of these things are available, but you're just hitting one key over and over, expecting a symphony or this great thing to be produced from hitting one key when there's all these other things that also contribute to something beautiful coming from guys like yourself and myself. And so I would say, don't hit that one key over and over although that is one that should be used. It's not that simple, but at times it can be. So maybe we can unwind it. How do you go about not hitting that one piano key of IRR over and over, expecting a beautiful song to come out? What else would you recommend that people do to implement this non IRR chasing?

Gary Lipsky  

It's all about the jockey. You've got to pick, you know, who's in control you want? Obviously, that person is going to have a lot of experience. Because, you know, hopefully they've been through downturns. They have a good team. There's focus, there's expertise that's more important than IRR, because they're going to, they're they don't have to hype up a sexy investment summary that they send out. It's going to be tried and true. They've done over and over again, and that's who you want to invest with. Obviously, you want to get to know them. You want to ask a lot of hard questions, but it starts with the operator, then you can get into the deal that's less important. 

Ryan Miller  

So work with a good operator, or become one yourself. But either way, you need some competency on the team. You know, one of the things, and I think you, you would agree with this, is one easy way is to say, what if I don't know any operators? How do I find them? And I know you and I both know this principle is, sometimes when you join courses or certain communities, that can not a guarantee, but that can be a great place. We obviously in the Making Billions community. We have a course called Fundraise Capital, or fundraisecapital.co. That's where you could go to really join a course in on raising capital. But the point is, whether you work with anybody, Gary me or anybody, the point that I think you're trying to make, Gary is that we want to make sure that when you're doing a deal. And you're working with investor capital, it's important to have a level of expertise, whether you have a mentor, an advisor or a straight up partner, or, in fact, it's you, but either way, you really need someone who knows what they're talking about. Because I would venture to say, and you keep me honest, investors aren't really down with funding your internship. 

Gary Lipsky  

Absolutely, absolutely.

Ryan Miller  

It's kind of a risky move. 

Gary Lipsky  

And being a part of a group like yours, when I started out, I got into a couple masterminds. I'm still in the mastermind, and it provides a tremendous amount of rocket fuel, being around like minded individuals, sharing, you know, what went well? What didn't go well? I can learn so much from other people's mistakes. It's, it's huge for me. So I know sometimes it could be, oh, it's a little bit more money than I want to spend, but you're, what you're doing is you're saving so much money because you're not having to make the mistakes, because you're learning from others and their expertise. So there's tremendous value in joining a group like, like, Fundraise Capital.

Ryan Miller  

Yeah, thank you. Thanks, thanks for that. You know, sometimes this is a bit of a process. It could take a while to piece deals together, to raise capital, to find partners. I mean, this, this is, this is a real deal. This is not meant for people who are just kicking tires, so to speak, or lifting up shingles. I don't know what the equivalent would be in real estate, but this is, this is a real deal. You got to be all in for this thing. What would you say is pretty important when you're going to investors and you're not chasing IRR and all these things that we're talking about, being patient in the process. What is your experience and maybe unpack a little bit about that? 

Gary Lipsky  

Yeah, obviously, if you're doing deals, you need to be build a team. You can't do it alone. There's people doing it mistakes both ways. So they're either not growing a team, or they're adding so many people, so they're doing all these deals, and they're not being patient, and that's going to hurt them too. So finding that middle ground of just growing at a nice pace, and I feel like we did that. I definitely know some people that grew so fast and did so many deals. Now they're in they're paying a price for that, because it was, it was not building the systems. It was not realizing, hey, you know, prices keep, you know, going up, and cap rates keep falling. You know, they think it's gonna keep going that way, or, you know, a right hand, you know, angle to the top corner all the time, and that's not the case. And so what happens when there's a down market? You take a beating, and for those that have a ton of deals and over leverage, they're going to get hit really, really hard. So you got to be patient. Grow your team, not too much. Again, it's not get rich quick. It's get rich over time. So those that are patient and and are mindful about their deals, like we've only done one deal in 20 something months, and it sucks. I wish I was doing more deals, but my investors will keep coming back, because we're only as good as our last deal. So just be patient. It'll work out. 

Ryan Miller  

Got it. Yeah, and often, as you know Gary, I'm a recovering CFO, and part of that we have a saying in internal is called Growing broke. And often to compliment your exact point, folks that Gary talked about is often these hyper growth companies. One of the issues that gives CFOs gray hairs and sometimes investors is saying, hey, we you think that investors want rapid growth, and usually they do, but what they want is common sense growth, because if you grow too fast, the actual effect, if I could geek out a little bit for you guys around the world, we can geek out a little thing called working capital, and it depends on how fast working capital turns over in your company, basically the capital that you have to work with. And just a sidebar, if you don't ever understand accounting term, just say it slower, it tends to make sense. So working capital, or the capital that you have to work with, it takes a while for money to drop in the top and turn into some cash flow. And if you're growing faster, that can, that can really put you in a financial squeeze between money coming in and money going out. And so these rapid growth companies, we call it growing broke, and sometimes you can grow. This is exactly what Gary's telling you. You can grow too fast, but don't grow faster than your working capital can replenish. Would you agree? 

Gary Lipsky  

Absolutely. 

Ryan Miller  

All right, don't. Don't break the chain. So in other words, don't drop an F1 racer engine in a 1982 Honda Civic. No offense to you, Honda 1982 Honda Civic levers out there, but sometimes too much horsepower and an old, dated thing can just rattle the bolts loose. So make sure that we're intelligent and we're growing at a rapid pace, but not to the point where the wheels come off.

Gary Lipsky  

Yeah, and don't let ego get in the way. Because I think that's, that's what, I think that's what generates this lust for growing fast and saying, Hey, look at, you know, we've got, you know, we've grown, you know, 1,000% but, you know, we're, we're bleeding, you know, more than ever. So ego definitely gets in the way of people taking it, you know, being patient and profitability.

Ryan Miller  

Yeah, especially if you get a taste of money or returns early on, that can kind of, that can lead to some very. Aggressive or ambitious young operators will say. But also, more importantly, and I just want to touch on ego, because this is really important. It's easy to throw that word around, and it gets thrown around quite a bit, but this is what we're talking about when it comes to doing deals, real estate or whatever. Often when ego is involved in deals, typically you overpay. And I remember a time when I was a young man, we were able to hang out with Warren Buffett, and one of the things he taught us, it's like these simple phrases that are so simple but so profound, is he said, every, I make money when I buy, not when I sell. And so often, when you have an ego and you're just like, let's do more deals and more deals, you're often you might find yourself overpaying for assets which can come back and bite you, and now you're crossing your fingers and your toes and your eyes, hoping that the market recovers or does this phenomenal thing. And sometimes it does, but guess what? Sometimes it doesn't and you don't want to be the guy sitting there in the corner explaining your investors how things happened or didn't happen. You want to say, hey, we made money when we bought and that's why Gary is Gary. That's why you've been able to do real estate investing to the level that you've done it, while also doing one deal and what did you say 20 months? 

Gary Lipsky  

Yeah, yeah. 

Ryan Miller  

Because you make money when you buy and Gary and all other pros like you, they all know it. 

Gary Lipsky  

Oh, absolutely, absolutely. You know there's that when you're in a best and final on a deal, and you want to win that deal, you have to have done it for a while to be like, This is my criteria. This is what I'm willing to pay. If someone's willing to pay more, so be it, that's fine. I'll get the next deal or the deal after that. And there's so many deals that I have lost. I've come in second or third or fourth place, and people paid more for me, and some have worked out well for them, and many haven't. So I can only, I can only control what we do and just be patient and know that it's, it's the deals you don't do are the ones that you really, you know, those are the ones you really benefit too. And so keeping your ego in check, and you know, I'm not going to get every deal which is fine by me. 

Ryan Miller  

That's right, yeah, don't, don't overpay. I love it. So getting early points on the board is one. So keeping your ego in check, working with experts, joining courses, just really getting in the right circles and absorbing some of that knowledge or partnership or whatever it might be, but you got to work with people so that investors don't feel like you're asking them to fund your internship. But that's not enough, is it? So getting early points on the board is great, but there's also pitfalls, especially when you're starting but those don't go away. There are always pitfalls in this game for investors and operators. What would you say are some cautionary things that you can advise people starting out?

Gary Lipsky  

Certainly leverage. Now it's not that big of a deal right now, because the banks and lenders have learned from from 2020 to 2022, when they were giving you so much leverage on a deal like you could have been almost 100% levered on a deal, which is, you know, scary. It's great if you don't have to raise a lot of money and you knock it out of the park. But, man, when things go south and you're paying a super high interest rate and you're highly leveraged. I mean, there's a lot of people losing deals right now because because of that, and so, you know, keeping it, you know, no more than 70% having a debt service coverage ratio at 1.25 and what I mean by that is your your your net income, let's say, is $125,000 and your mortgage payment is 100,000 that's a 1.25 debt service coverage ratio. So that gives you margin for error. You always want to have margin for error, and not being over leveraged will help protect your asset and your investors.

Ryan Miller  

So I have a question on that then, Gary, so at a DSCR of 1.25 Do you find that when you go and negotiate leverage, are you able to negotiate that or do banks hold that firm and they say 1.25 or get out of here? Like, what have you found? Is this something that you can negotiate, not saying you should, right? But is this something that banks or other lenders, in your experience, are open to, because typically these are put in restrictive covenants and your loan docs and everything. What have you found? Is this a number that you try to negotiate? Or what are you finding around DSCR?

Gary Lipsky  

You know, these days, yes, it's going to be around 1.25, maybe higher. But when things get frothy, when there's a lot more lending and they're competing for you, they're a lot more aggressive to win the deal. So you can push the leverage higher than you should. And certainly I've made that mistake in my past, just you know, if they're going to lever up, then some, you know, you take it in the beginning, and then you over, over time you learn, you know, I'd rather, I'd rather raise more money, and I'd rather take less from the bank, even though it means higher returns potentially. But the asset is safer. My investors are safer, and I can get through a downturn if that happens, because downturns come and, you know, all shapes and sizes at different times. So you gotta protect yourself. Take the single, take the double. You know, you'll it'll serve you well over the long haul. 

Ryan Miller  

Brilliant. So I see a lot of this, and I'd love to get your opinion. As I like to say, it's better to be two inches wide and 100 miles deep than to be two inches deep and 100 miles wide. How has focus in your asset classes, how has that helped you or hurt? You talk about a little bit about the role of focusing your efforts in specific sectors rather than all sectors. 

Gary Lipsky  

And I see this more than ever before, because of the lack of deal flow. So people are jumping into different markets, different asset classes, and that's a problem because there's a lack of expertise. You know, we've been focused on a few markets for a very long time. So we know what a good deal is and what a bad deal is. If I was just jumping into a market, I don't know what's going on. You know, maybe an employer that served, you know, hundreds of 1000s of people in that market is no longer there, or they just had something major happened in that, in that market, and because I'm not there, I just, I just don't know. So focusing on a few markets, and, you know, maybe one asset class for now, over time, you can add more asset classes. It brings you a level of expertise that you couldn't find, you know, like Malcolm Gladwell talks about 10,000 hours, you know? And so in outliers, it's so important to have that focus, because you can't be good if you're doing multiple things, you know.

Ryan Miller  

I love that. So some cautionary tales, a little bit of wisdom straight from the man himself. So let's shift gears a little bit. And you know, not all markets are the market. There's regional, there's national markets, but when it comes to real estate specific in the areas that you're looking at, I'm curious. What are you seeing out there right now, as far as the market's concerned?

Gary Lipsky  

Yeah, deal flow has dropped off tremendously. So in 2022 in Tucson, which is one of our biggest markets, there was 28 deals that sold that were 100 units or more. Last year there was three, and I bought one of them. And this year, there might have been one or two. So massive cut and deal flow. But also what you're seeing is a massive cut in prices, 20 to 25% discount from the high. So to me, it's a great opportunity to buy while interest rates are high, you're having less competition a buy. And as interest rates come down, you can refinance. You can even sell in a couple years when the cap rates compressed because of the cut in interest rates. So I think there's a really good opportunity right now, and particularly like on those, those A and B class assets, you know. So let's say a C class would have sold for almost 200,000 a couple of years ago, and with a 25% cut, that's 150,000 now, but on a $300,000 class A Class B asset, that's 225 and so there's really good opportunity in that A and B class now, because you're seeing a bigger price reduction, and you can get some newer quality assets at a bigger discount. So really good opportunity. We're certainly looking and underwriting a ton of deals, and, you know, fingers crossed we get, we get something that we really like soon. 

Ryan Miller  

Yeah, so with that big price drop, I mean, depending on what side of that transaction, it might be the best thing or the worst thing ever. But I'm assuming, and I'm sure you know the data, but I'm assuming load mods are the thing, and some people are underwater. Like, are you seeing something like that? I'm just guessing. But what are you seeing out there, as far as motivated sellers that might be underwater, is that? Is that starting to happen now? 

Gary Lipsky  

Absolutely. So a lot of them have been kicking the can down the road for a long period of time, and those things are coming due. So it's not like there's going to be a tsunami of deals, but there's certainly things off market on market that the seller has to sell because they have to put in too much money. They have to do a capital call, and maybe their investors don't want to do a capital call, and so they don't have the one and a half million, the 3 million, the 5 million that they need to refinance that loan that has come due, or they hit a clause that, you know, they're below the DSCR, and they're hurting, and so I've seen a bunch of foreclosures. So those are opportunities. It's not widespread. I know media likes to say, hey, there's, you know, it's, you know, real estate's falling apart. It's still a small percentage, but a small percentage is still opportunity for people out there that are experienced operators, that can capitalize, that can raise capital right now.

Ryan Miller  

Okay, typically when things are on sale and there's short sales, people are underwater, that's when, when the big ocean liners called investment funds start to come in and scoop things up. Are you seeing anything like that? 

Gary Lipsky  

Oh, yeah. I mean, first of all, I think there's like $6 trillion of dry capital, dry powder on the sidelines. You've seen Blackrock pick up a portfolio for a billion dollars. Someone else picked up another portfolio for a billion dollars. I mean, it's, it's insane, you know, if they're putting these massive, massive checks to work. That means there's opportunity out there, and so I'm not going to be spending a billion dollars on a portfolio, but certainly we're going to be putting our investors' money to work.

Ryan Miller  

Yeah, that's awesome. I'm just curious. Then often you will see people want different things. So in the beginning, we talked about IRR. Don't, don't make that the only thing that you're pursuing, but make sure you have more of a holistic approach. Are investors chasing yield? Now? Are they chasing risk? Are they avoiding yield? Avoiding risk like, what? What do you think the appetite right now? Why are people buying when there's so much blood in the streets? What do you think they're after?

Gary Lipsky  

Yeah, investors certainly chasing yield. They're chasing cash flow more so now where, you know, maybe a few years ago it was, you know, how much can you force appreciation on the deal? So cash flow is a little bit more safe play. And because of the cap rates expanding over the last year and a half or so, you are seeing more cash flow on deals, typically, which is, which is nice. It just gives you a level of comfort when that, when you're getting that check on a quarterly basis or monthly basis, you know, seeing it succeed in getting those that cash flow.

Ryan Miller  

Yeah, I love that. Now that's where we're at. But I think, like all investings and investor minds, we want to, we want to know. We want to hear different opinions. So it's not financial advice, just your opinion. Where do you see the smart money going? Where? What's, what are your thoughts?

Gary Lipsky  

Well, you know, I'm a big proponent of multifamily. They build Class A luxury apartments. They don't build workforce housing. We invest in the workforce housing. And the US has become so much more of a renter nation than ever before. We're at 34% of the nation rents, and that will continue to grow more and more over time, because the millennials are buying, are renting at like I think it's a 59% clip. So that number will keep skewing higher and higher and higher, and it becomes harder and harder for the average person to buy a house. Obviously, with rates where they are, it's not going to drop tremendous where it was. You know, under 3% per se, and institutional organizations have bought up 40% of the housing stock, which is incredible. So it just makes it harder and harder for your, your average person, to buy a home these days.

Ryan Miller  

Man. So I'm I, as all nerds do, I'm thinking, well, this is a bimodal distribution, or kurtosis, that this is going to say for your investors out there. If you're linking any part of your strategy to real estate, we might start looking at tail strategies rather than appealing to the masses. If the average person is no longer buying, but it's renting, and that's pushing the average is now the extreme, and it's kind of an upside down world. You know, that's what investors do, back to they don't like to pay for people's internship they want. And your point of make sure you got an experienced guy that's kind of been through some deep ocean and knows how to release the crack and so to speak. And so really understanding the different strategies for the different markets is absolutely key. And I could see why you've grown to the size you have, because you know what you're doing. So absolutely love that. So are there, are there hot spots as far as regions go, or different asset classes within those regions? I know you talked about work force housing, but what about other regions or anything else? 

Gary Lipsky  

Yeah, absolutely. So we're a big fan of the Southwest. So there's the smile states typically warmer weather, less taxes for the most part. So you've seen migration go there, particularly during covid The migration as has definitely leveled off of late, but those are the states that I feel have the most opportunity. Certainly, the Midwest has had a run of late, but it's decent rent growth, not as much appreciation, if you're looking for appreciation, those smile states are the place to invest, and certainly they've been building like crazy. Which, which will tail off, there'll be a steep drop off, calm and the 2025 and you'll, you'll see big rent growth in 2026, 2027 until production of new homes starts picking back up again.

Ryan Miller  

Man, brilliant. So, that's good. And I could tell you're, you're really paying attention the market. You know where it's at. You, you know where it's headed and investors obviously have the opportunity. All of your investors have the opportunity to continue on and ride that wonderful wave with you. So I love that now, yeah, as we round third base, I'm just, let's, let's talk about providing people, our listeners around the world, one of the things we take pride on is providing unfair advantages to our listeners. From your perspective, what are, say, two or three unfair advantages from your experience that you can provide to the 1000s of people listening to you right now?

Gary Lipsky  

So everyone's heard this, saying your net worth is your network, is your net worth and and, you know, I can't agree more. You know, I've built a really strong network over time. And so, you know, if I don't know an answer, or if I'm struggling with something, I know who to call. And if that person doesn't know the answer, someone else will. Or, hey, I'm working on a deal, I need a partner. This is a little bit big for me, like building a really good reputation. And networking will will do wonders for you. It's. I can text a number of people. Hey, you know, my insurance guy isn't working out, or I need this. You know, do you have a suggestion? And it provides so much value to you. And, you know, being around like minded individuals that are striving to do good and to do well, it's just, it's just like rocket fuel. It's like energy that pushes you forward. And so I can't say enough about a network. So joining boards, masterminds, community groups like Fundraise Capital community, you know, like that that will pay huge dividends for you.

Ryan Miller  

Yeah, brilliant. So getting out there, joining boards, being communities, I agree. I think joining boards is a really effective strategy. It's a long term strategy, but a wonderful one. And the reason why is, sometimes you get in the room and it's not the right room, you don't raise any money. I don't know about you, but I've been in tons of those rooms, and they're great, wonderful people. But the reason why you don't raise money, which is job number one, if you're in this business of alternative investments. The reason why I think you don't raise money is because everyone there is just as bad as you. They're all there to get something right. But what I found from sitting on multiple boards over my career, and I sit on the board of a pharmaceutical company right now, and I couldn't brag more about it if I was allowed to, but boy, what an exciting industry. But I can tell you this is that a board is so much better to build your network. And the reason why is it completely changes the direction of the tide everybody there is there to give. And so, for example, I was on, I was fortunate enough to support the board of the Calgary Philharmonic Orchestra. And boy, let me tell you what a delight. That was amazing. And everybody, when I was there was an executive of some oil company, some publicly traded and everybody's like, they're not there for the money or status, they got plenty of that. They just wanted to support their community, right? They wanted to support the city's local Philharmonic Orchestra, or whatever that cause is. You don't have to do that, but I think when you go into a room of high performing people who are all there to give, and it's maybe 5, 6, 12, people at most, rather than a room of hundreds of people that are all there to take, you will get more out of that room of 12 high performers than you would a whole room of 1000s or 100s of people that are all there to take. Would you agree? 

Gary Lipsky  

100% 

Ryan Miller  

Yeah. Big fan of boards, for sure. So building your network to grow your net worth, great strategy. And we went into, although that's a little on the nose these days, a little obvious. Thank you for going deep and saying no, let me tell you exactly how I love it. Boards, communities, those things, find the right find your people, find your tribe and find a group, dare I say, of people who are there to give, but these are people who really have substance. They have something to give, not just a giving heart, but they're actually a person of value, and don't mind sharing it with with the other crazy investors like us. So what's the second unfair advantage you can give to our people around the world? 

Gary Lipsky  

So never lose your thirst for knowledge. You know, you never know when you're going to get a new idea from someone older, from someone younger. There's all you know every day a new young buck is doing something, and it's like, Hey, I couldn't I, that's interesting I never thought of that. And so knowledge comes from all different places, so having that thirst will continue to help you grow versus go backwards, and it'll keep your ego in check. It allows for innovation, which is so important because I'm constantly pushing our team like new ideas, you know, whether it's from them or from someone else, we don't, we don't need to come up with all and we can copy from someone else, you know. But having that thirst for knowledge well and to figure things out is great in how you work with people, and will help your business keep scaling new heights.

Ryan Miller  

I love that, and I'm glad you brought up the young buck syndrome. I don't know that's a real thing, but there's an interesting phenomenon called the Dunning Kruger effect. And as you know, you know, I was part of a certain organization. They were, hired me to support them, and it was run by very successful young guys in their 20s. And one of the things, and this is just an example. I'm not using any names or anything like that, but just more importantly, the principle is the Dunning Kruger effect, you know, effectively says, the younger, more experience inexperienced you are, the higher you rank yourself on confidence and competence, and the older but more experienced people are, the lower they rank themselves on their competence and confidence. And so you find that the more confident and brazen and bold that these young guys are, typically is observed, and that's very common to be like you are very confident, but typically you may not know everything that you might think you know. So you don't realize you don't know what you don't know, as the classic saying goes. And then I think as you get a little gray in your beard, like I do, you realize, like, hey, I to your point, I'm always learning, which just means there's always stuff that I don't know, but I want to know. And so you're like, I wouldn't rank myself as the most confident, competent or whatever it is. I mean, I do within my realm, but not to the point where it stops me from saying, maybe there's more for me to learn here. Maybe there's more for me to understand. And typically, that comes from the times in the past when you and I have really geeked out and talked together, and so the Dunning Kruger effect is a very interesting phenomenon that we could see. And anybody listening to this, if you want to observe that, I think that would be a well use of your time, back to your earlier point of working with the right people. Just because it's the loudest voice in the room doesn't mean that's the right person you want to be with. So is there a third thing that you would recommend to people, as far as gaining an unfair advantage?

Gary Lipsky  

Absolutely become a powerful communicator. This is something that I've had to work on over the over time I've gotten a lot better. There's always room for improvement. And a great book I recommend is, Crucial Conversations, and this can help you in your business and your personal life. So many of us hate having those hard conversations so you just let it fester, or you just never you don't deal with it. But Crucial Conversations helps you understand their viewpoint, how to have that conversation in a tactful way. It just it creates a great framework to have those difficult conversations. So something that was really driving you crazy and probably driving the other person crazy. Now, if you follow those lessons, you're gonna have a much better relationship. You're gonna have a much more productive relationship, and be in a much better place that you feared for so long to have, you know, so it's a really helpful book. Obviously, I'm pretty excited about that book, but I'd highly recommend it. 

Ryan Miller  

Yeah, you're, you're a fan. Um, is there any takeaway from that book that really stands out that you're like? By far, this was one of my favorite things that I've implemented or I've learned. What would, what piece of knowledge can you pull from that book to our fans around the world? 

Gary Lipsky  

Yeah, I would say really understanding where the other person is coming from first, you know, look at it from a 360 degree view, not just from your view, because that will really help you and empathize with them. Because if you're just looking at it from your from the ego side, from your side, then it's not going to go well. So if understanding their side of things and approaching it that way, now you're on that same level. And so there's that, you know, ego is aside. How do we figure this out together and solve a problem and that will serve you well.

Ryan Miller  

Brilliant, perfect. So as we wrap things up, is there any closing remarks, or anything you'd like to say? I know you have a podcast. Let's give a shout out to that. What would you say? 

Gary Lipsky  

Yeah, I've got the Real Estate Investor Podcast, and I'm launching a new book called Invest Smart: Spotting Red Flags in Real Estate Syndications. So if you email info@breakodaycapital.com we'll send you a free copy of the book. It's for the first five people, and just put in the subject line, Making Billions podcasts, and we'll send you out a book. 

Ryan Miller  

All right, wow, that's very generous of you. Man, so we got a book, we have a show. So you're really about the business. Man, I appreciate it. So just to summarize everything that we talked about, don't go chase in. IRR, make sure you work with the right people. Make sure that you get in the right room, whether that's a board or Fund Raise Capital, or any other group where there's givers. You also never want to lose your ability to be curious. Don't fall victim to the Dunning Kruger effect. Know that there are unknown unknowns, and build your color coded bookshelf like mine here, and just keep learning. Remove that ego and then ultimately become a powerful communicator. You do these things, and you too will be well in your way in your pursuit of Making Billions.

Ryan Miller 

Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better, and make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.