So the first 2 billion, as they say,
is the hardest. The fact is I started with one
two bedroom, two bath with 116 grad. If you guys watched that video,
you know, the process to get our first 10,000 units was a painful process,
largely, but we learned a lot. Now we have the back bone in the frame and our whole company and our organization
to take it to the next level. I had no idea how I was going to scale
the 10,000 units, and that's the truth. But what happens is once
you set a goal out there, you start to realize who you need, when
and for how long. So sometimes they can be consultants,
sometimes they can be employees. But the truth is, you don't always know. You can't map it all out. You have to have a directional goal,
obviously. But from moment to moment, year to year,
you don't always know who you need. And when you just keep focusing
on the goal and then things emerge like, I need an accountant, I need an analyst,
I need an acquisition person, I need more property management,
I need asset management, whatever it is, you start to realize
that if you're managing the goal, then you start to see the need. So to go from 2 billion to 8 billion,
you need a strategy. Obviously, for the next ten years. So for year one,
if I bought a thousand units, which is only 250 units every quarter at, let's say $250,000,
that's going to be about 250 million. So if I'm going to buy $250 million in 2024
worth of property for a thousand units, let's say I'm going to probably need
around 100 million of equity. So that's very high level. But if I'm only going to add
four properties to our existing company, it's probably not going to require
any more people. Ironically, because I already have
the structure in the backbone set already. The truth is it
will only take money to make this happen. Once you start to acquire, once you start
to buy, you start to get a cadence and then you realize
you want to take it to 25, 26, 27. Our strategy in 2025 is to buy 1500 units. 2026 is to buy 2000 units and 2027 is to buy 2500 units. And if I'm able to do all of those things
and keep a 2500 unit acquisitions
through the ten year period, then I'll have 22,000 units acquired
in that period of time. If, for example, they're all
$250,000 each, then that's about $5.5 billion in acquisitions in addition
to the 2 billion that we have currently. So that puts us really close
to the 8 billion. So if you break it down,
if we're going to acquire $5.5 billion worth of real estate,
let's say in the next ten years, we're going to need, let's say, 30%. So we're going to need about 1.6
to $1.7 billion. And I know that sounds like a lot,
but over ten years, it's a 100 to 200 million a year. That's it. But again, you just need to break it down. It sounds like a lot
at the end of ten years. But if you just divide
1.8 billion into ten years, you can see that
you just need about 180 million a year. So how do you pull that off? So obviously
the first thing that you've got to do is you've got to make sure that your debt
and your equity are all secure. So that is really easy to find. There's a lot of different brokers
and companies out there that will lend you money. So the best thing you can do is find
a few of them and get multiple bids on each project because they're all trying
to get your business. They have access
to a lot of financial products around debt,
so you might get different kinds of terms. For example, you might have different
rates, you might have things like interest only an interest only option versus
a principal and interest, which means that for the first three
or five or seven years, you might just have an interest
only payment. So there's all kinds of different things
that you would want to do through these different brokers as they start
bidding on the projects that you have. So then you take those term sheets
and you put them in your financial model, and that's how you determine your cash on cash in your cash
flow from month to month or year to year. The other thing that you're going to need,
of course, is you need somebody to bring you deals,
you need a deal funnel. So with that, you're going to have to have boots on
the ground, you're going to have to have broker
relationships and you're going to have an acquisition. People
in charge of certain areas, for example, we might have somebody in charge
of the southeast that would be North Carolina, Florida,
or maybe even Georgia, for example. And then we might have somebody dedicated
to Texas, just one acquisition person
for that state. And then, of course, in Arizona,
we don't really need anybody else but pull this off. We might only need two more acquisition
folks to hire acquisition people. You might have to pay a little bit of salary
or you might be able to go for commission depending on how their pay is structured
and who they are to support them. You're going to need a couple of analysts
that can just process deals. Look at the stuff that the brokers
are sending them and packaging them so that they can actually see
the real numbers. Does it cash flow? Does it not cash flow? And those analysts can also be in charge
of getting all the information from the individual lenders to be able
to put it in the financial model. And all this rolls up and to my weekly
investment committee meeting, and that's about 90 minutes a week
that we do every single Tuesday. So this is just a matter of tweaking
the current systems that we already have. Let's not forget,
I already have acquisitions, I already have analysts,
we already have asset management. We already our property management,
it all exists. And then as I start to buy properties,
there are other stresses around the company, like in accounting, for example, or in property management, for example. So on the average,
one account can handle 6 to 8 properties and that should be about,
let's say 1200 to 1500 units, let's say. Same thing with the property manager. So what I like to do is I like to pair up
an accountant with a property manager so that they know exactly what's going on
on those particular assets. So our goal, for example, in 2025 is to buy six assets at 250 units each. So all six of those assets would require most likely one more account
and one more property manager. So we just plug them in to the
existing system that we have already. So that should be relatively easy. So we don't have to create a new system. All we have to do is continue to
look at the one we have and build upon it. We just have to plug in more people
into the exact same system. One of the things we should be looking at
and we will be looking at how do we bring in more efficiency
things like A.I. and marketing
that can be programmatic and repetitious so that they can drive revenue and drive
deal flow even better. So right now we have about 300 employees
and most of those are in the field. Most of those are managing properties
at the properties themselves. So as many of you know, we do
all of our property management in-house, we do all our asset management in-house,
all of our construction and development in-house. So we are vertically integrated company. So in order to pull all of this off,
just the acquisitions to be able to buy another 22,000 units,
let's say in the next ten years, we're probably going to add somewhere
between 901,000 employees. Now, most of those employees
are going to be on site. Marcello's employees are going to be
the people that are actually the closest to generating the cash flow
for the investor. The corporate office is in place
to support the people
that are working at the property, as that's what the corporate opts for
in the corporate office. We're not going to have
a significant amount of stress because we already have a CFO, a CEO,
a controller and everything in place. Now we just have to hire folks who can manage those properties
and do the accounting on those properties and they can fit in very nicely
under the current system we have and under the current people that we have. So one of the big issues with scaling,
of course, is being able to maintain the same quality. Here's the main reason
people cannot scale their business. So the key around that,
of course, is who you hire. What I typically try to do is I hire on attitude
and not necessarily always on experience. So you have to hire the people
that are going to fit in your culture. Every successful business knows
how important culture is and those that don't will fail. So one of the things that can happen
when you add, let's say, 900,000 people is it could be harder and harder
to maintain the culture of the company. And that, of course,
is going to come with its own challenges. So you have to have somebody in charge
of company culture at that point. You have to have somebody that's just focused on
bringing everyone together at all times. And there are lots of different things
to maintain the culture. First of all, you have to have a vision
of what that culture is. But secondly, not
everyone is going to resonate with it. There are different things
that different people are looking for when they come to work
for a company like us. So one of the things that we're known
for is philanthropy as an example. So we're well into the millions. Our annual giving for our charity,
for example, many employees, mostly that are later in their careers,
are looking for a company that is actually socially responsible
like that. Not everyone's like that. Our some people are very financially
motivated and that's fine. So there'll be plenty of room
for those folks as well. But sometimes it's hard to bring those
people in on the culture side as well. So you got to have somebody dedicated
to culture in the company at some point when we're larger. I would anticipate us having one person
in charge of culture for our company. So growing a business is not just getting a client,
getting some money and hiring people. The visionary, what should be
you has to actually set the direction. You have to have a strategic plan
to keep all the pieces together. The culture is actually the glue inside
of all of it, and that's what attracts people and that's actually
what keeps people at the company for a long period of time and keeps
everybody marching in the same direction. So building
a corporate culture is intentional and something that you actually have
to focus on as an example, each and every quarter, Ross and I do
a State of the Union for the company and all the employees weigh in
and they're able to ask questions to be able to find out
exactly where the company's going. Is it growing
or is it expanding or is it contracting? And that's our job to communicate that
because at the end of the day, what do people want? They want security. They want safety
and they want opportunities for growth. Generally. That's what they want. So it's the leadership's job to be able
to portray that out to the whole company unilaterally so everybody can watch,
but also they can ask plenty of questions. Most importantly,
they know that we have a plan to grow each and every year,
at least for the next ten years. Biggest challenge
from growing 2 to 8 billion over the next ten years
is by far going to be the people. So one of the hardest things to do
is find the right people and the best thing you can do is just find
the right people and put them on the bus and then later figure out what seat
they're going to be in. Because as you grow and scale, great people are rarely on the market. Most great people are working somewhere. So the right way to grow is to go out
and find the very best people you can recruit them
and bring them on to the team because all the players on the team
will know if somebody is not pulling their weight
or if they're not pulling their weight. Hiring the best people in the next
ten years is actually going to be the most critically important thing, way
beyond the number of units or the debt and the equity, because Ross and I can fly to New York
and put all our stuff together pretty quickly. We can hire acquisition folks
and we can buy stuff pretty quickly. And of course, with our track record,
we're going to be in most best in finals and we're going to be
making plenty of offers already. So scaling that part of the business is
actually not going to be that difficult. The actual difficulty is going to be
finding the right people to put on the bus and then eventually recognizing what seat
do we want them in for the long haul. So most people are going to say, my God,
those are huge numbers. I'm going to never achieve that. Well, you're wrong. I need you to understand
and flip the script and understand that the folks in Wall
Street, the folks sitting there with all that managed money, it's
not their money, it's your money. They're the ones that the problem they're looking for
folks out there everywhere. They're looking for ways
to put that money out all over the country,
because unless that money's being managed and unless it's actually being placed,
it doesn't make money. So money needs to have some velocity. It needs to be an action to be able
to make money for someone else. So when you fly to New York
or you fly to Wall Street, while for some of you
that might be really intimidating, you just need to understand that
they're the ones that have the problem. You're the solution for them,
not the other way around. This money is readily available. It's managed. It's your money. It's your money. It's sitting in your pension. It's sitting in your pension,
it's sitting in your insurance policy. It's sitting in your bank. When a bank has your money as a deposit, it's an expense
and a liability to the bank. The bank has to lend it out
to cover their own expense. So once you start to realize
and flip the script on that, if you bring a good deal,
a good team and a good business plan to New York or to Wall Street,
you will get funded. They will be part of your vision. They will help fund your business plan. All you have to do is change your mindset
a little bit, be a little bit creative, and of course, move forward
with a little bit of calculated risk. So if you guys enjoy this
and you feel like you got some value in this video,
I would just appreciate it very much. If you just share this video
with somebody that you thought of. And of course, if you want to see
how I bought $3 billion in assets and we own 2 billion today,
you can check out that video over.
