Road to 100

Don't go chasing what everyone else is doing. Go find that niche that no one else is doing. And if you’re looking to start an eCommerce business, you know it’s going to be good when you can’t find them at Walmart.

In today’s discussion, corporate lawyer turned e-Commerce business owner Dan Nunney joins Pasha Esfandiary and Cody Littlewood to talk about how he was able to find a niche within a niche in the golf cart parts space. He also dives deep into the processes and systems that he had to put in place to get his business to scale massively.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[14:42] Dan’s Transition From Lawyering to Ecommerce

Dan worked next to a senior partner in his late 50s who was living miserably and was screaming at everyone who came by his office. When Dan left, he had a picture of that guy, got it developed, put it in a picture frame, and put it in his closet. So every morning that he wakes up, he looks at that guy’s face as a reminder that he’s not going back to that life and he uses this as his motivation.

Wanting to have the time freedom that he didn’t have back then, Dan decided to get into the eCommerce business. He liked the idea of creating a business on his computer and being able to work from home or practically anywhere in the world. He found a niche within a niche, selling golf cart parts For Dan, anything where you can't find parts at Walmart, can be a good eCommerce business.

[26:35] Finding Talent and Creating Systems

Finding talented people in other countries is the biggest arbitrage hack in the world. But most companies don't even think about doing it. There are highly talented people in other countries that can do everything – web developers, customer service, admin, bookkeepers, etc.

[27:28] Creating Systems and Hiring the Right People

Part of creating all the systems is getting the right people. Create an SOP or standard operating procedure for every single thing we do in the business. For instance, if you're doing something on the computer, just create a Loom video or screencast while you're doing it, and talk through what you're doing. So it takes you just as long to do it while you're talking and explaining it. And then you give the video to somebody, they create a document, and you never have to do that process again because you've given them every single little nuance of whatever that task was.

[37:07] Going Above and Beyond

In an eCommerce business, especially when you’re selling a product that’s also being sold by other sellers, you have to give an above-and-beyond experience to your customers. Be like the Zappos in whatever industry you’re in by being present at every customer touchpoint.

Resources Mentioned:

www.golfcartgarage.com

www.sidebysidegarage.com

www.supergut.com

Rich Dad Poor Dad by Robert Kiyosaki

What does it take to scale a business? In today’s episode, Pasha Esfandiary and Cody Littlewood welcome their first guest on the show! Listen to how the CEO of Patriot Holdings, Jeremiah Boucher, who shares valuable insights into building a business from hiring to scaling and how he's competing in an old-school industry using technology. Listen to how he’s delivering equity to his employees to keep incentives aligned, how he makes decisions with a long-term view, and how he’s learned to embrace the journey.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[07:35] Your Job as the CEO

The sole focus of a CEO's mind should be to allocate resources – your capital and your talent. Jeremiah started his business in manufactured housing because he had an edge. Nobody was there and it was a good asset class. From there, he transitioned to self-storage and tertiary suburban markets because of undersupply, there's not a lot of competition, and they have good yields. Then he's pivoting into industrial which is currently the flavor of the market. And right now, his linchpin is scaling his business by building a call center that handles maintenance remotely.

[15:27] How to Surround Yourself with the Right People

The people that helped you get to where you are, sometimes won't help you get to the next level where you go unless you don't adapt, and you don't see it ahead of time and anticipate as an owner. Hence, you have to first define the role, then find someone with the skill sets to fill that role, and then keep adapting.

Most importantly, you have to align the incentives. Bring in key players as partners. Phantom equity is a strong motivator where they don't earn it until they actually invest and stay at the company until the investments materialize.

[18:52] Creating a Structure for Employee Equity

One way to funnel profits and distributions into one bucket is to open a separate company. Then in each asset, allocate 1% or 2% or whatever you want it to be. That's a partner in each of the assets or funds, and that flows into that bucket.

[20:45] How to Elevate People in Your Organization

Empower your employees to be the best they can be and have them rise to the highest potential in terms of their skills. Make sure each department understands the key dependencies of how each person needs to pull their own weight. Lead from the front. Have a brand and get yourself out there. Share who you are and what you do. Be what you want to be and share that with the rest of the company, and they either come along or not. At the end of the day, it’s all about communication, and don’t ever lose connection with the team.

Resources Mentioned:

www.jerlinks.com

Finding Your Edge by Jeremiah Boucher

Good Strategy/Bad Strategy by Richard Rumelt

Almanack of Naval Ravikant by Eric Jorgenson

Sapiens by Yuval Noah Harari

Who by Geoff Smart

Cody Littlewood wanted to build really durable cash flow for his family. He was also writing really big checks to the IRS and so he wanted to stop doing it. So he originally started investing in real estate for those two reasons. He realized how much he enjoyed it and eventually, he started doing more and more deals. Currently, he has ~$100 million in assets under management and his 2023 goal is to buy another $100 million equivalent to about 1,000 units.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[10:37] The Importance of Focusing on Sales

Especially, when you have a small business, you don't want to lose having a great service or a great product. But you also have to figure out how to scale it. And that means having a solid understanding of how the sales aspect of an organization works.

Cody says that if he had only one piece of advice that he would have given his younger self, it would be to have focused on having a sales focused organization earlier in his career. Let go of the mentality that you only have to build a great product and customers will come to you. You have to put your product in front of people and be able to communicate and convey its value to them.

[12:25] Pay Attention to the People You’re Hiring

In a smaller organization, it's easy for a founder to hold up the dead weight. But you have to hire people that can grow you to the next stage. Sometimes, the team that you have at a $3-million company is not the team that will take you to a $10-million or a $15-million company.

Don't try to get by on being cheap for too long. It's way better to pay a lot more money to a rockstar than pay a salary for two mediocre people. Get the right rockstar, pay them enough and make them happy, and they will accelerate a business tremendously.

[29:53] Cody’s Current Real Estate Portfolio

Between Cody and his partner, they have about 1,500 doors with six employees. Their investments are all cash flow positive, but as a business, they're not. He and his partner are investing a lot of money into infrastructure, getting the right pieces in place to continue to grow and support more deals. They are also laying the foundation for the right hires and the leads of the different departments.

[42:30] Gut Biome

If you take a look at healthy people, what they generally have in common is their gut biome and a lot of that is around food and what your gut is doing. And there are a lot of interesting connections between a healthy gut and the rest of our health that we're just discovering right now because of our ability to sequence DNA.

Every investor invests for a couple of different reasons, and we all invest in very different ways. A lot of that has to do with where we come from, how we think about risk, what our goals are, and our values. The more you can understand that about an investor, the better you can understand their investment thesis, and how they think about making money.

On today’s episode, Pasha Esfandiary opens up about his life and how his experiences have helped shape his life now, in one way or another. He shares what it was like growing up and how he went from being a college dropout to a successful real estate investor, creating a niche within a niche. He also talks about the parallels between poker and real estate investing, and how his poker skills have influenced the way he invests and makes decisions.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[29:29] Moving From Smaller to Larger Deals

Pasha leveled up after a few years of investing. He kept recycling all his money back into more and more deals. He was buying homes around the $100k-$125k range and selling them for the $150k-$200 range. He was putting in $10k-$15k for rehabs.

Back in Las Vegas, Pasha was doing multiple projects at a time and the bigger people started to get to know him. But when he came to Los Angeles, he was like a small fish in a massive ocean. He then decided to put all his money into the Eagle Rock Highland Park area and buy cheap land. And that’s when everything took off. Those projects leveled him up to being where he is right now.

[33:31] Finding His Niche Within a Niche

Pasha found a niche within mobile home parks, particularly targeting secondary and tertiary markets consisting of mom-and-pop sellers. He’s able to build a ton of equity with his strike price usually around $3 to $7 million. He is underneath institutional money and above most mom-and-pop buyers. Due to the low-income housing crisis in America, the risks are mitigated and the demand for it has gone through the roof.

[36:08] Commercial Real Estate vs. Residential Real Estate

In commercial real estate, you can build up a lot of equity because you're in control; unlike in residential real estate, where you have to succumb to what your neighbors are doing and selling for. And so, if you know what you're doing in the commercial space, you will get your money back within three to five years, or maybe even less. Plus, it’s tax-free so you have more capacity to buy another asset. It’s a snowball effect where you’re keeping the asset while still producing cash flows.

[41:10] Lessons From Playing Poker That Shaped How He Invests

Pasha’s poker background helped shape his investment thesis. One of the lessons he learned is that you’ve got to make the right decision over and over and over again, regardless of short-term results. Second, break things down mathematically in your head.

Why should you listen to “Your Next $10 Million”?

If you’re now at a point in your business where you’ve built a solid foundation and you’re uncertain about how to get to your next $10 million or $50 million, then this podcast is for you!

In this episode, Pasha Esfandiary and Cody Littlewood get into the nitty-gritty of their lives and their story – where they're at and what they're trying to accomplish. They also share their goals for this podcast, and touch a little bit on the power of compounding as well as factors to consider when investing with someone.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[05:09] Cody’s Intro to Real Estate

Cody previously built a software design firm that catered to large organizations including commercial real estate firms. Like any other average American, Cody realized how a huge part of his income goes to the IRS. Motivated to create a durable cash flow, he finally jumped into real estate investing and now co-owns a private equity firm with 1,500 doors under their belt.

[14:50] Pasha’s Introduction to Real Estate

Pasha got into real estate, not for tax purposes, but more about taking on his father’s dream of buying a property. He started investing 11 years ago through flipping houses until he went to land up construction for residential, then to apartment complexes, and now strictly to mobile home parks in the midwest. He has created a niche within a niche since they only cater to secondary and tertiary markets, where they now have over 1,000 doors under management.

[18:27] The Power of Compounding

People think about the power of compounding only with money. But there's a lot of compounding that goes on in a business, in relationships, in being in the market for a significant amount of time, in building capital relationships, in building a deal flow. The longer you're in a market, the more you become known. And the more you are the go-to guy to bring deals.

[19:37] The Goals of this Podcast

This podcast is for people, who are not just in real estate, but who have built the foundation and a significant amount of wealth. Maybe you’re trying to get to the next level. You’ve hit your $10 million and now working on your next $10 million or $50 million. This podcast is bringing in people who are capital allocators and asset class experts who will help you grow and preserve your wealth. Pick their brains and learn some strategies so, like them, you can set yourself apart.

[39:02] Factors to Consider When Investing with Someone

Check whether the business model is safe and make sure THEIR business model is safe. For instance, if the operator isn't the greatest, can macroeconomics help cushion the margins? Then see if your initial capital is safe. Ultimately, figure out what your goals are, and from there, work backwards.

Resources Mentioned:

The Daily Stoic by Ryan Holiday

Discipline is Destiny by Ryan Holiday

This is Your Next $10 Million with Pasha Esfandiary and Cody Littlewood!

This is more than just a podcast. It's a community dedicated to folks who have already achieved wealth and are looking to achieve greatness.

You probably got to where you are today by building a great business, working incredibly hard, and having immense grit. But going to your next stage is going to require smart capital allocation with more than just a focus on growth.

Getting to your next $10 million requires a different set of skills. Each week, this podcast will feature interviews and discussions with investors across a variety of asset classes, with a focus on housing and real estate.

Pasha and Cody are both successful deca-millionaires and entrepreneurs who have built real estate private equity firms. Incredibly passionate about building great families and being great husbands and fathers, Pasha and Cody are in pursuit of excellence, growing consistently, living long and healthy lives, and just making great memories along the way.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[00:23] What to Expect From Future Episodes

There's absolutely way more to growing your wealth than just capital allocation. Your Next $10 Million is going to feature a variety of experts across these pillars to ensure you have the tools and the kind of wisdom that you need to create great relationships and live a long and healthy life.

Each week, you will learn about new strategies, how to grow your deal flow, leverage tax opportunities, and keep yourself up to date with the state of the market.

Get weekly insights, unique strategies, and introductions with operators and sponsors both in real estate and other investment classes.

Hear from experts that will help you in your journey to preserve and grow capital, earn in a tax-efficient manner, and prevent you from making mistakes that will cause you to lose what you've built.

Grinding got you here. But leverage, balance, and optimization will take you to the next level. Learn how to achieve more than just monetary wealth, but also wealth with regard to your relationships, your mind, and your body.

[02:05] About the Hosts

Pasha Esfandiary started as an investor in 2011 flipping residential homes. Since then, he's been involved in over $300 million worth of transactions across multiple asset classes. Pasha was also a professional poker player. From assessing calculated risks to long-term strategies and combative decision-making, playing poker has largely shaped how he looks at life relationships and investing.

In 2021, Pasha founded Evoke Capital with a singular focus to attack market inefficiencies and commercial real estate, primarily mobile home communities. Within the last 18 months, Evoke Capital's portfolio has grown to over 1,200 patents.

Cody Littlewood is a badass former software engineer. He founded a custom software design company and engineering firm that he built from his kitchen table to employ over 75 people throughout the Americas and Europe. In order to lower his tax liability and build durable wealth and cash flow for his family, Cody founded Carbon Real Estate Investments, a real estate private equity firm focused on providing homes for families in the southeast with over 1,500 doors under management – and growing.

Resources Mentioned:

www.evokecapital.net

www.investwithcarbon.com