The Business of Family - Episodes Tagged with “Real Estate”

Chris Powers - How Big Of An Impact Do You Want To Have?

Mike Boyd — Sun, 20 Mar 2022 19:30:00 +1000

Chris Powers is the Founder and Executive Chairman of Fort Capital and the host of The FORT podcast. Chris is a serial entrepreneur with more than 16 years of real estate development and investment experience. Since founding Fort Capital, the company has invested over $1.4B in Class B industrial, commercial, multifamily, student housing, and residential and land development projects.

His drive to always remain curious, desire to connect with and learn from others led Chris to start his podcast, The FORT. In the FORT, Chris talks with leaders of businesses across real estate and a variety of industries and dives deep into ideas and topics that are not regularly discussed. Chris covers each guest's story and explores in detail the critical moments that led to success, failure, growth, and confidence. He has successfully published over 200 podcast episodes.

Standout Quotes:

"You only are going to be on this earth one time, you really are not coming back again after the first time; let's make the most of it" - [Chris]
"Everything that you were mad at your parents for when you were a kid, is everything you respect them for when you're an adult" - [Chris]
"Money never mattered to my dad, being content and serving others did" - [Chris]
"I think it's a very special thing in life to really want to be good at something" - [Chris]
"If you're a parent and you actually can't give your kids the things they want, it makes it almost easy; what's tough is when you can give them what they want and you choose not to" - [Chris]
"How can you expect someone that grew up with everything easy and given to them, to ever have that burning desire" - [Chris]
"Kids don't learn by words, they learn by actions, so I can say everything I want to my kids but they're going to be watching what I'm doing" - [Chris]
"You don't keep families together, particularly with the amplification of wealth, if you're not intentionally practicing the values" - [Mike]
"We're living in a really cool generation where I think we're going to be able to tell our stories to our kids like nobody's been ever been able to do it before" - [Chris]
"There's just very few people that matter in this world that you remember because of how much money they had, it's really about what they did… you will be defined by how much people remember you" - [Chris]
"The majority of businesses that do really well hit singles and doubles over and over"
"When's enough enough?... it depends on how big of an impact you want to have" - [Chris]
The first great business decision you're going to make is who you marry" - [Warren Buffet, Chris]
"There's things in life that are either giving us energy or taking away energy" - [Chris]

Key Takeaways:

Chris Powers is the Founder and Executive Chairman of Fort Capital. He is also the host of the podcast, "The FORT", as well as a serial entrepreneur with over 16 years of experience in Real Estate Development and Investment Experience. Chris is a first-generation entrepreneur with stories that shaped him down to his relationship with his children.
Chris's dad was a lawyer who valued education, however, after 13 years of being a lawyer, He decided to become a doctor. With two kids and a wife at home, He left law and started medical school at the age of 39 which took place over 8 years with a financial toll on the family. The experience during those years created the foundation for the impression Chris has about money, feeling fortunate to have been more deprived of things than his peers. Chris also learned the importance of doing things in life that give fulfillment.
Because of the experience of not having money over those years, Chris became an entrepreneur at a young age to get the money he needed. However, Chris has a fear that his success allows him to skip the chances to deprive his kids of the things they should be deprived of.
Following the passing of his dad, Chris witnessed a turnout at the funeral and stories that depicted the level of impact people felt while his dad was alive. Although it was a traumatic unexpected event, Chris felt equipped at the time to take the reins in the family because his father had trusted him very early on to do things. This taught Chris that there's a level of transparency that is healthy with children, for them to start learning early on how the family operates.
"If you study people who are extremely successful in life endeavors, there is a common thread among them where they were in a position to really want something while growing up". This has made Chris understand that it is hard but necessary to deprive kids of certain things even when they can be gotten. He is trying to teach his kids not to be overly reliant on his wealth but to forge their path. Additionally, having the nature to treat people very well even from childhood is a good foundation to build on.
Raising great children amidst wealth is a challenge, and the importance of transparency cannot be overemphasised, especially when it comes to treating people well, or other issues affecting family values. This is important to note because kids learn by watching the actions of their parents, hence the teaching values has to be transparently done through actions. This transparency also translates to work, as Chris tries to make his work fun and appealing to his kids rather than intimidating.
Chris has been very intentional about leaving content for his children to learn from, especially in recordings and this is one of the motivations for his podcast, "The FORT".
Currently, Chris is working to create intentional family traditions that build the family experience. The first of these is an annual talk recorded and kept to give the kids later in life.
Starting Fort Capital: While in school, Chris wasn't particularly trying to make a lot of money but came across someone in Real Estate who helped him learn and start Real Estate deals which resulted in his company "Fort Capital". It is a Real Estate private equity company based in Fort Worth Texas. It is focused on buying Class B industrial and multi-tenant properties, functioning as value-add buyers. As time goes by the desire to sell lessens because there have been great liquidity events from sales and holding cash from sales isn't very impactful anymore. This is beneficial especially for newcomers because Real Estate is a great tax tool.
It is easy to get overwhelmed by other companies that seem to be doing immensely well, and be tempted to keep taking high chances. However, the majority of businesses succeed by surviving and growing incrementally.
To be an entrepreneur you need someone supportive even when things aren't so great. Chris recalls how selfless his mum must have been to be supportive of his father's unexpected decision to study medicine. This played a major role in the success of his dad just like his wife plays to get him to where he is today.
Concerning his view on generational wealth, Chris believes the easy route for a lot of folks with money is to let their kids assume that it's all going to be theirs, as soon as they believe it, whether it's true or not it can alter their lives. He is yet to decide on what he will leave for his kids but currently focuses on shaping their mindset on money. "I want my kids to have something but I want them to earn it and I don't want them to live a life dependent on it; not because I think it would be bad for them to have money but I think it would rob them the joy of living a fulfilled life"
From Chris to his kids: The way they will be judged when they leave earth is by the impact they've had on others. For them to live a fulfilled life, they need to think each day, "if it was all over tomorrow, what did I leave the world"? An exercise for listeners concerning this is "If you were at your 80th birthday party, write down what you would expect people you care about to say to you". You've got one shot, make it count.

Episode Timeline:

[00:49] Introducing today's guest, Chris Powers.
[02:25] Chris describes inspiring life lessons from his dad.
[12:24] How did you deal with the loss of your father?
[16:30] How do you create balance with depriving your kids of some things for them to learn key values?
[28:45] Are you being intentional about creating lessons for your kids to come across one day?
[33:39] Do you have any intentional family traditions to build rituals around the family experience?
[35:50] Chris shares his journey to success in his business.
[45:33] Was there a breakthrough point where you knew you could breathe?
[48:58] What did you learn from your mother and wife in the role they play to support the family?
[53:04] Have you started to think about Generational wealth?
[55:53] A letter from Chris to his kids

For more episodes go to
BusinessOfFamily.net

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Chris Powers.

Moses Kagan - On the Shoulders of Giants

Mike Boyd — Sun, 17 Oct 2021 17:15:00 +1000

Moses Kagan has been buying, renovating and managing apartment buildings in Los Angeles since 2008. His company, Adaptive Realty, along with its investor-partners, owns approximately $200MM worth of high-quality buildings in interesting neighborhoods. Unusually for a real estate private equity firm, Adaptive and its partners do not fix and flip; instead, they act as permanent holders and stewards of the assets under their control.

Standout Quotes:

"Rich families that own good assets generally don't look to sell them to maximize Pre-tax IRR" - [Moses]
"If you do not lose the building, the rents will recover" - [Moses]
"When you start to think about things indefinitely, and you're not in a rush, it kind of opens up other possibilities in terms of structure and strategy" - [Moses]
"It's very hard to go from zero to something… and it takes an entirely different set of skills to go from something to something much larger" - [Moses]
"I do not believe that we as individuals live our lives for ourselves" - [Moses]

Key Takeaways:

Moses has been buying, renovating, and managing apartment buildings in Los Angeles since 2008, through his company, Adaptive Realty, alongside investor partners. He focuses on sub-institutional deals.
The most important part of the strategy is that rather than buy, fix and sell buildings to maximize pretax IRR, they buy properties, make them high-quality assets, manage and refinance them to get higher returns. The strategy was born from his family values as they had always been involved in Real Estate but never engaged particularly in sales of property.
There are two reasons why people sell; firstly investors have a mindset too focused on Pretax IRR, and secondly, the sponsor gets their money after selling. If you just hold on and keep the building, the rents will recover.
The initial funds for the business came from friends and family of Moses, and later from another family office who partnered with them. This partnership helped them build a track record that encouraged other investors to feel comfortable with them.
The structure for the business model is not to buy, renovate and sell like the typical model with PEs, but rather they partner with wealthy families with the explicit assumption to hold on to the property not sell, however, liquidation rights goes to the family that put up all the capital. The primary strategy has been to refinance the property to pull the capital out and give it back to the investors who still retain ownership and cash flow from rents. Adaptive Realty only gets fees for their work but not cash flow from rents, sales or refinance until the investors have got their capital.
Describing his family history, Moses shares how his first building was bought with capital from the family money dating back 4 generations. The wealth he enjoyed from his family was mostly in form of basic needs being met and, particularly education.
When starting a business with a partner, it is critical to have a decision-maker or tie-breaker irrespective of how profits are split. The relationship between Moses and his partner in terms of how earnings are split is quite stable even for the coming generation but open to discussions if need be.
There is currently no long-term family structure for his family, however, Moses spends a lot of time with his kids, to instill the values of passing on to the next generation what was done for them.
Discussing Storytelling, Moses emphasizes that your forebearers are a living part of your life, and tries to make those people present for his children even though they will never meet them.
Gaining exposure and immense assistance from his friends to succeed, Moses was also motivated to start finding ways to help people who didn't have the kind of opportunities he had.
Advice from Moses to those aspiring for multigenerational success: Don't put yourself in a position where one investor can wake up one day and force you to restart your career. This involves having different capital providers rather than being completely dependent on one.
From Moses to his kids: We owe everything to those who came before us, however, we can't repay them. We can only try to do for those coming after us what has been done for us, if not more.

Episode Timeline:

[00:48] Meet today's guest, Moses Kagan.
[01:53] About the business, Adaptive Realty.
[13:50] How do you get investors to join you with your strategy of holding properties permanently?
[16:45] How have you structured Adaptive Realty to be different from the typical P.E model?
[21:55] Moses shares his family background.
[32:36] What's your perspective on multigenerational wealth?
[38:28] What does the future look like in terms of the next generation?
[41:07] Do you expect your children to get involved in the business?
[46:15] Is there any form of family governance structure?
[48:18] Moses shares his approach to storytelling as a method to pass on values.
[52:55] How Moses works to help others who haven't had the same privileges he enjoyed.
[57:06] Advice from Moses to listeners aspiring to build generational legacies.
[01:00:33] From Moses to his kids.

For more episodes go to
BusinessOfFamily.net

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Moses Kagan.

Jeff Gould - Generational Real Estate Families with Lineage Asset Advisors [The Business of Family]

Mike Boyd — Mon, 14 Dec 2020 19:00:00 +1000

Jeff Gould is the founder Lineage Asset Advisors (LAA) a full-service commercial real estate advisory and consulting firm providing customized commercial real estate services to help families make seamless transitions with their properties – from one generation to the next.
Lineage collaborates with estate planning advisers to develop and implement portfolio solutions that meet the goals of multiple generations. Their aim is to preserve and enhance family wealth and legacy during difficult life transitions while establishing a culture of respect, peace of mind and financial sustainability.

Standout Quotes:

"Like most forms of financial planning, the sooner you plan ahead, the much easier it is to implement and follow through" - [Mike Boyd]
"Even if the family is risk-averse, I think it is really critical for them to understand that the risk of doing nothing may still be higher than the risk of doing something if they plan to keep the assets" – [Jeff Gould]
"I think many families need to stay nimble in the future and really adjust for change" – [Jeff Gould]
"Wealth and wealth transfer doesn't always lead to happiness, in fact in many cases it leads to conflict and challenges and strife among family members, so we want to try to shift that conversation, and that takes effort and planning" – [Jeff Gould]
"Life is generally empty and meaningless, and we have the ability to establish positive and productive meaning in the midst of a world in constant transition" – [Jeff Gould]

Key Takeaways:

The ideal scenario would be to involve Jeff early in planning for the transition but the reality is that he is engaged much later when things need to move quickly.
There is a unique skill set that is needed to be a trusted adviser to help the family understand what they have in regards to Real Estate, and develop a plan with that Real Estate called a "Shared Asset Ownership plan" that considers the variables of the next generation.
The 3 phased process includes Discovery, Planning, and Implementation.
Addressing the issue of Deferred Maintenance; the 'Do Nothing Scenario' and the 'Do Something Scenario'
5 Transition Strategies in Real Estate planning: Communication and Education, Conflict Resolution and Accepting differences, Rediscovering your commercial Real Estate portfolio, Developing a mindful asset transition plan, and Implementing the plan and adjusting for change
Jeff's advice to Real estate entrepreneurs: Creating your estate plan and developing a shared asset ownership plan that aligns with the next generation.
Jeff explains that he helps the family understand that it is a fortunate situation to be carrying on and stewarding the transition of the assets rather than focusing on the personal value of the asset to each family member.
Be respectful to everyone you encounter.

Episode Timeline:

[00:49] Jeff Gould and his professional background
[06:06] Do you usually get called in at the time of a transition event in a family or ahead of that time to plan a healthy transition?
[08:37] Jeff gives a general picture of the different categories of clients he works with.
[11:12] What are the particular challenges with the real estate space that create the need for Jeff's specialty, to steward assets in family transition rather than a generic accountant or financial planner?
[16:51] Jeff describes the 3 phased process of his work with families
[24:00] Addressing Deferred Maintenance
[30:50] What would you say is the appetite for innovation in Real Estate?
[35:06] 5 transition strategies in Real Estate planning
[39:44] What advice would you give to a founding generation or Real Estate entrepreneur to best prepare themselves to have a great plan in place?
[43:24] Do you work with any families that are multigenerational into the 3rd, 4th, or 5th generations?
[49:38] From Jeff to his kids

*For more episodes go to *
BusinessOfFamily.net

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Jeff Gould.