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Value Add Podcast - From Zero to 9-Figure Portfolios! 🚀💎
Unlock the anatomy of success in real estate!
Welcome to Value Add Podcast - where we break down the ingredients needed to build real estate empires. This isn't just a podcast - it's your roadmap from scarcity mindset to abundance mindset!
🔥 What we do here:
• Unlock secrets of buying buildings with no money out of pocket
• Study the psychology of success and mental blocks
• Break down real cases from bankruptcy to financial freedom
• Learn to turn distressed assets into money-making machines
• Build passive income through value-add strategies
💰 Our guests are:
Former teachers who built 8-figure portfolios in 5 years
Young entrepreneurs running $100M+ portfolios by age 36
Artist-developers creating unique spaces that command premium rents
Investors who went from bankruptcy to luxury flipping
Mentors and coaches changing lives through real estate
Host: Rafik Moore - the guy who runs 5M+ sq ft of commercial real estate
🎯 For those who want to:
✅ Quit their salary job and jump into real estate
✅ Scale their business to the next level
✅ Invest in continuous growth and education
✅ Become a bankable asset for investors
✅ Build generational wealth
We believe: If you can find a deal that makes money - we'll find the capital! Because the hardest thing to find is the asset that generates profit, not the money.
Hit that subscribe button and start your journey to financial freedom right now!
I bought a million square feet, too many. What the ingredients are needed to become a guy who runs a almost $100 million portfolio. How do you not take the advice when it's given to you? Do it immediately and then report back and ask for the next piece. People study, study, study, but they're so scared to take any action. How do you become have abundance mindset when you're lacking? I know a lot of people who would risk their reputation over $100,000. I'm like, what is this guy doing? Give them what they want. Yeah, exactly. while not surrendering what you need, right?
[Music]
Well, hello everybody. Today I have a special guest at our value ad podcast, guy by the name of uh Daniel Kowski in uh such young he achieved such tremendous successes. I'm very proud of you. Please welcome Daniel Kowski with Obsidian Value Ad Fund. Thanks, Rafi. Yeah, good to see you, my friend. It's been a while. We never we don't we don't talk anymore. I know. I saw you every week for years. Well, I at least when you call me now, you're interested in buying something of mine. So, I'm like, "Hey, maybe there's an excuse for us to get together." Yeah, exactly. Anyhow, I met Daniel in uh 2017. He was a residential agent for uh uh VSSM Realy. Uh some of our friends in DSM are doing really well as well. And uh I remember uh when I met you, you seemed like a very energetic, very like high IQ individual and I was like, man, this guy's going to go far. And at that time, I said you should consider get getting into commercial real estate. Yeah. So that's exact. I'll never forget one of the things that you said that jumped out to me so quickly, which is you you did a presentation. and you were very gracious and you came and you talked to our entire company. There probably a dozen agents or so and you said um you know let me turn on uh the reticular activation in your brain. These types of deals, this is what we're looking for in commercial real estate. And don't worry, you're protected. Do you think that I would ever risk my reputation over something small like a $100,000 fee? And I was like, I know a lot of people who would risk their reputation over $100,000. I'm like, what is this guy doing? Um, so then yeah, I made it my mission to I think to bother you as much as I could and try and learn what you were doing and when you explained it to me, um, it made such an impression. You were so generous with your time. You suggested I go to commercial academy, get into CCIM. So I went and I I did all those things immediately and was like, this is what I should be doing. So, one of the one of the things about uh entrepreneurs that make it because what what I'm trying to do here with all this podcast is to create an understanding what the ingredients are needed for people to be like become from a realtor to become a guy who runs a almost $und00 million portfolio of real estate. Um it's it takes a certain level of um charisma, growth, and in this particular case, curiosity. Mhm. You know, one of the things that I see in guys that do do well is curiosity and desire for growth. And I talk to hundreds of people. I'm like, "Hey, you should do XYZ." And 99% of them don't do it right. And then they and then they complain. But you you've done really well and I'm very proud of you. Well, I always think as a mentee, and thank you for that. But as a mentee, your responsibility, you're getting free advice from somebody who has way better things to do with their time. How do you not take the advice when it's given to you? do it immediately and then report back and ask for the next piece. You know what I learned actually, Daniel? Everything that's free has no value, right? I started the coaching program and I did it for free for two or three months and people show up. People don't show up. They really never took it seriously and I was about to basically call it off and say, "Look, forget about it. It's um people who need to learn will show up and we'll work with them." And then my assistant is like, "Dude, it's because you're not charging them. They're not taking it seriously. let's charge something. And I didn't want to these guys don't have any money and I don't want to take their last dollar. So I was like, dude, uh so we gave like a little fee. We lost half the audience, but the remaining audience is excited and doing deals. So um uh there is certain uh truth to it. Anything that's free has no value, so you got to charge. That makes sense. Yeah. So tell us more about Obsidian Value ad fund and how can our viewers can add value to you or help you to grow your comm uh portfolio? Yeah. So I always have to be a little bit cautious around the general solicitation rules that kind of stuff. So in general our our thesis um is you know small bay industrial is in our market very under supplied. Um so what we saw was that demand for the space was just completely inelastic. Um when we're talking about 2 to 3,000 foot suites uh there's the cost of replacing them is astronomical. we can pick these buildings up for 50 to 60% of replacement cost. We also realized that the brokerage market wasn't set up to effectively lease these because small commissions. Yeah, small commissions. Uh sometimes trickier clients, tenants, etc. And then if you think of the way that a a large team is structured at one of the major shops, it's uh usually a 50% house cut off the top and then it's a threeperson team leasing this space. They put the most junior guy on the smallest spaces. I mean, I've paid a million dollar commission to a broker before for leasing a space. Um, when we're talking about $5,000 uh going out the door on on leasing a 30,000 ft bay, for example, it's like, okay, then there's the house cut, then there's, you know, the the splits on the part. Yeah. So, a lot of times it's like you're paying $5,000 for someone who's receiving $750. Huge incentive misalignment. So no one worked those deals very aggressively. And then in the same vein, no one wanted to tenant rep these guys. So it's like, well, I own a brokerage. We own this product. Why does my brokerage need to make money when I can capture all of that in additional NOI, pay someone much more competitively so that they can be a six-f figureure person uh do leasing these small bays and making it their primary focus. Then with the fact that uh none of no one's representing these tenants, it's like how do we meet these tenants where they're at? And the answer is Facebook Marketplace, Craigslist. We'll get 170 inquiries on a building. Um one of the first deals we closed in into our fund was we had, you know, three or four vacancies in it. Um we listed it on a Saturday night. Maple Grove. Maple Grove. 90,000. Yep. Um we had 21 uh tours set up in the first week. We had proposals on every vacancy at above our proformer rate uh in the first week. So, congratulations. Thank you. Um and then the other nice thing is we've done a little bit of retail. In doing that, we got to see some of the tools that these retail guys use. There's amazing AI tools available now. They'll go out and they'll comb Google based on addresses, pull all of that information based on the industry sector that they're in and send them an automated email about availabilities. So if we're like okay we can take body shops we have these you know kind of uses that are generally under supplied let's use this tool and make sure that everyone's aware of the availabilities that we have is it R squared yeah yeah exactly we signed up for a national account thousand bucks a month so we'll see very excited about that tool by the way we've done multiple deals through that already so it's already paid for itself and then some for sure yeah that's awesome now that you run this uh massive portfolio uh what do you do on a daily basis to scale Yeah, that's so right now uh we're really focused I partner with my wife as well u who has a long kind of uh construction and development background but she ran a 60 person company for a decade. So now we're getting the policy systems in place that everything can become procedural. Everything is another one of these. So trying to get all of that implemented. But right now with the the horsepower we have we have a lot of room to run still. Um, so it's really just how do we systematically break down the market, identify all the high-v value targets of buildings that meet our acquisition criteria, regularly stay in front of those people that own those buildings because you can't ever really convince someone to sell. Maybe you can. You're the best at that in the world. Um, give them what they want. Yeah. Exactly. While not surrendering what you need, right? Exactly. So I I mean I have questions about that. Like how do you move people towards transactions? But it's it's um you know looking for those acquisitions and then as you know uh as a a principal our job is everybody's job when there's a problem too. So building out the leasing process making sure that that runs as efficiently as it possibly can dealing with accounts receivable sometimes. Um there there's times where things need to get elevated above a property manager and we're we're getting paid an asset management fee. You might as well earn it and and go deal with those tenants. That's a lot of my time. What's your target IRRa for the fund? A uh 17 to 21%. All right. Any uh preferred return you offer or what? Uh we offer a seven. Yes. 7% pre preferred return. And what are the splits? GPLP splits. Uh 7030. And if we get to a 20% IRRa to the LP, then it goes to a 50/50. 50/50. Nice. Beautiful. Good work. I might consider investing. Oh, awesome. I'm in the stage of my life where I want to do less and put some of my capital with my friends and uh help them to maximize that. You know, that'd be great. IRRa, one thing I was talking to you about is uh thinking outside the box. Now, you got to be careful because sometimes you get too creative outside the box. You might just, you know, lose everything. But um for the first seven years of my career in commercial real estate, everything I purchased was within 30 minutes of my home. Sure. Minneapolis. Yep. Minnesota. Twin Cities. And uh I didn't even consider going to St. Cloud, which is an hour away. Yep. Now, uh since 2019 when I met my first managing partner from Chicago, uh we own assets across eight states. Uh and mainly because we found local really really motivated guys kind of like you like excited and and and they needing some guidance, needing some capital or whatever. Um and we bought properties in Michigan and Ohio, Illinois, Wisconsin. A lot I've learned a lot. Apparently, um you can't apply the same metrics, same rules because demand supply dynamic is different in every market. But um I I've been able to find some really really interesting opportunities and um yeah I will challenge you to think outside the box of Minnesota investing. I I certainly will. We've looked at a few other MSAs. My my belief is I'm like to effectively compete in another market um I want to have a great depth of market knowledge there because what we do effectively our our value ad so to speak is is just to outperform everybody else in the operations side with a main focus on leasing because we see that market efficiency inefficiency across the board. Um when we looked at that market in in Fort Myers, what we really saw was um one population growth. Nothing increases demand like population growth. Um and if the inverse is is super true. Like I looked at some properties in Albertly. Yeah. And I'm like, "Oh, you can buy a house for $60,000 on the lake." But how come? Right. Because everybody's leaving. Nobody wants to live there. Right. This if the stabilized population I always think of it like this. It's like if you if there's a shortage of inventory in a market and people are growing in that market as well, the price of real estate moves very close to replacement cost. It's some percentage like what's the discount that you want to take to take an existing building versus building something brand new. So, it pushes it there. Once you've filled uh all the available uh land then like Manhattan for example, it's like then land value starts going parabolic and it continues to push value. But what I learned looking at small markets sometimes is it's like if you're at 100% stabilization at some point people were building because the product exists. If you go to I don't know what the number is 85% 90% of that demand it it craters like it is it is a hot potato where there is always or like musical chairs but there's just multiple empty seats all the time. It's like there's no stakes to the game. So you can get to like 25% of replacement cost 20% of replacement cost really quickly because nobody needs the product because demand uh is much lower than what the supply is. Exactly. But it happens. It it it's not huge numbers. It's not like there's 20% demand for the amount of inventory. It's just these kind of small differences make a big difference over the long term. So, I think you're really smart for continuing to seek places that have population growth if the growth Yeah. If the growth is there. Although, I don't think the Twin Cities are that. I think that we have some headwinds that we're we're working through as well. Uh I think we'll be stable, but that Fort Meyers uh MSA is a 750,000 person MSA. The population of Minnesota is like 7 million. Yeah. Um, we have the same projected population growth over the next 50 years. Wow. It's crazy. Well, um, Florida has their own issues such as insurance costs. Yeah. But, uh, let's go back to your original, uh, uh, start. What was your first investment like? And, um, tell us how did you come up with the capital or ability to do it? Yeah. So, the first deal, the first deal I started out in residential real estate and I worked at BSM cuz the two owners, Ryan and Goran, were relatively young. They're younger than I am now and they had a $10 million residential real estate portfolio. I'm like, I want to do that. That seems like the way to go. So, you know, I started working there. I was just picking up the phone and cold calling tenants and buildings and being like, "Do you want to buy your first house? I'd love to represent you. Let me help you." And at the same time, I would just bother Goran and Ryan non-stop. And I'm like, "Teach me everything that you're doing. How do you analyze deals? How do you underwrite these things?" So, they shared their model. I would just start analyzing every deal. Like I didn't know what I was doing. I just go on the MLS and I'd start plugging all This is houses you're talking right. Yep. So would go in and just, you know, try and understand what I was doing. I ended up finding a property. They flipped it. They made like 150 grand. I made 1,800 bucks. I'm like, I want to do that. So you you're an agent. You found a house for them. They paid you a commission and they made 150 grand on it. Exactly. Uh, and I was probably five months into the business. Um, but I I saw the value proposition. They were not allowing me space into the partnership at the time to to realize any of the equity. So, I was like, the next deal I find, I'm going to go just bother everyone I can talk to and see if I can't get the money together to go do this thing. I won't take a fee. We'll just do some profit share. So, I I started flipping houses that way. And So, you found the first house. Who was your first investor? Uh my family and I actually had some money. So I I very quickly uh was was making six figures in residential real estate just being absolutely relentless. So I had some capital to put into it as well. So take it took a lot of action. It took a lot of action. Yes. So one of the things and a lot of fear, right? The first deal is terrifying. Come by. Yeah. One of the defining characteristics of anybody who is extremely successful like you are at you know 36 running this huge portfolio is desire and and ability to take the you know relentless amount of action um most people who don't understand uh what it takes to um achieve tremendous success. I mean, if you look at United States population, average person makes $60,000 per year and uh when you look at somebody who makes $100,000, well, that guy or gal does little more than the average guy, and then you talk to a $200,000 guy, half a million dollar guy. Well, with our social media and Instagram, everybody sees the cream of the crop, people who make millions of dollars, and they make it seem like it's almost impossible to do it. But um I feel like it's all in the amount of actions you basically uh uh precipitate to uh uh achieve the desired outcome. So um yeah, that's what my experience was. To to that point, one thing I was talking with my team about is uh I said, "What do you think the average commercial real estate agent makes in the US?" And it's somewhere around $80,000. For real? Oh, I didn't know. And most people were overestimating that number. Um, but my point of that was I'm like, "Okay, what does an average police officer make, do you think?" And you know, say the number is around $100,000. I'm like, "If you want to be a broker who makes $100,000, you should have the subject matter expertise relative to your field that a police officer does for theirs. You should have that approach and attitude that you want to gain that degree of competency. If you want to make a quarter million dollars a year, think about an attorney. that's like kind of an average attorney salary. You should go have the same amount of subject matter expertise in commercial real estate as a broker that they have in law. So I think it's really about it's the amount of knowledge and um awareness. Yeah. And it's a combination of the two because it takes action to get the knowledge but when you're investing I think you know you can contribute three things right. You can contribute time, you can contribute expertise or you can contribute capital. And capital is the hardest one to get if you don't have any in the beginning. Right? So everyone has time. What's the allocation of that time towards making money versus getting expertise to increase the value of your time? In other words, what you want to advise people to do is to use their time to acquire that knowledge and as you keep growing the knowledge base, your compensation per hour of energy exerted will increase something to that effect. Yeah. And to say it's like it's incumbent on you like you're never going to get to that outcome of what your desired income is without having commensurate value. Like the market is pretty efficient and the market meets you where you're at in terms of the value that you can create. I will um take the CCIM when I forget my first class. How uh building? Yeah. I'm going to uh go join commercial academy when I get my first building. Yeah. um let me find an investor first and then I'll go learn the subject matter and that's the other way around. You know what I'm saying? I think you have to do a lot of almost uh altruistic pursuit of knowledge in the hopes of being able to be awarded that contract, you know, that investor, etc. Yeah, absolutely. Uh how do you convince someone that they should invest in your idea if your idea isn't fully formed and you're not familiar with all the relevant pieces of information? That's uh that's very that's very interesting. That's very cool. All right, let's talk about your capital raising uh ambitions. Uh by the way, are you uh with with the fund is 506C? Yes. So you can market it? I cannot. Oh, you cannot market it. Mine is B. So we might have to cut some of this honestly. No worries. I'm sorry. No, no, no. We're not talking about IRS or anything. So I my fund is 506b and I can market it uh because I register with SEC. We we're not gonna do that. Yeah. All I'm saying is u it's for uh friends and family right now only.
All right. Uh what drives you beyond just uh cold numbers? Uh I love it. It's fun. Uh doing these deals is fun. Solving problems is fun. There's so many variables always at play. Uh you look at construction, like I get a very inside look at construction all the time. And when Jesse, my wife, is doing things, uh, it's like there's so many line items that you're balancing and timelines. You have to build these complicated Gant charts, uh, to make sure that you're on time, under budget, whatever you're trying to accomplish. It's like that ends up being one line item in what we do as developers, investors, etc. There's multiple, right? We're we're navigating tenants. We're navigating feelings sometimes, the leasing team, the property management, um, all of the finances for it, the construction process. So it's just a really fun complex problem to solve. But then at a certain point there's a certain amount of freedom that you're given by having you know some passive income uh a lack of scarcity mindset. So then you can focus on things that are important to you that change that you want to see in the world. So for example like my wife is very interested in creating wellness centers uh around the state but then the country and expanding that as well. I'm super interested in being one of the the vehicles through which she's able to accomplish that. What kind of a wellness center are you talking about? Like a lifetime fitness, LA fitness type thing or uh like sort of so a spa but then balancing in mental health. Um just you know there's a lot of people who are living through all kinds of different trauma that they've experienced in their life, generational trauma, etc. So just getting them into a position to be mentally healthy so that they can feel comfortable like mental health is declining quickly. It's hard to be mentally healthy nowadays with being barrageed by negative news on every single channel you turn on. Yeah, there's no good news. Like, oh my goodness. Yeah. My wife started a clinic uh for longevity. Congrats. That's cool. Yeah. So, um I'm her patient patient one, the first patient. Yeah. So, it's been uh it's been awesome. Um my cholesterol has dropped, my testosterone has is go gone up. Uh, it's been pretty amazing. All right. If you had to start from scratch tomorrow, no contacts, no capital, what would you do in the first 90 days to get the highest amount of uh impact? Yeah. So, if I don't have the ability to pay the bills, I would immediately go out and start trying to broker because I feel like that is the lowest risk uh most immediate return. Um, sounds like a realtor. Get a license and start working as a Okay. Absolutely. And then you're building contacts, you're building uh experience in that market. So in my mind, I'm now I'm in a completely different market too because I've lost all my contacts. Um that's a great way to start building contacts. Okay? If you do a very good job for people who own buildings, most people who own buildings already have been successful at some stage of their life. And if you're a value ad proposition in their life, they're usually willing to help you and and offer some additional um benefit. But I think the first thing I would do is start analyzing as much specific market information as possible. As a broker, uh, as an investor, I think that's where a lot of the money is made. There's a lot of information that's publicly available, um, that you can search online. That's available to everybody. You're not producing value by regurgitating what everybody else can already look up, particularly with the proliference of AI right now. So, go get the information. Think about what's the information that's not readily available that I can go get share with people that they will find valuable in the market. I would try and build a strategy around going and getting that knowledge. So uh getting knowledge to become more valuable as a commercial real estate partner for investors. Absolutely. Yep. I agree with that. I think uh uh acquisition of knowledge uh is the most important thing and then after that taking action. And I think there's the the biggest issue that I witness people study study study but they're so scared to take any action. Yeah. And they you know analysis paralysis um gets them to um never never make the moves. Mh. And so uh one of the things I found very uh useful is joining a tribe, joining a community, a mastermind and interacting with people on a regular basis who are doing deals bigger bigger stuff more exciting stuff. And then um you know we all monkey see monkey do creatures, right? We see others. You saw me doing deals. You're like I'm going to do these types of deals. Now look at you. You got a lot of uh very similar deals. That 90,000 foot deal. I was talking to the lady before your sellers did. Yeah. And at the like I was super close to getting it done at 30 bucks a foot. Oh my gosh. Those guys those guys got it. They're awesome guys obviously from Kushwake and then I sold it to you. But uh it was a really good uh deal and I think her husband died and she was selling it as a result. So small world. Uh but obviously because I'm in the abundance mindset and you're in abundance mindset, we never worry about deals. There's just in my opinion there's so many deals and our job is not to necessarily accumulate as much wealth as possible but become a person who can solve as many problems as possible. At least that's how I look at things. So, I'm constantly walking away from deals when my friends are going after them like you do it. I got too much going on anyway. Well, if I can just share for the audience as well, like we're pursuing a deal right now in Plymouth, another one, and reached. You had it under contract most recently. The seller um is a bit of a tricky seller. We'll say he's like hard earnest money day one. Uh like cash close. I'm not like everything needs to be so easy for him. An unrealistic expectation. I'm like, "Hey, do you have the environmental report? Like, that's a huge risk that we need to quantify." Uh, and you guys just shared it with us. You didn't ask for anything. It was just uh very friendly and I know it's one that Rustam is continuing to monitor, but I just felt immediately that you were like, "What can I give you? I don't want anything in return." Um, so very much appreciated and something that you're doing in practice. It's difficult when you don't have money or resources and you're struggling to pay rent. How do you become have abundance mindset when you're lacking? But at the same time, I found it to be very um uh uh very useful to practice that and and go out of my way to add value to others and share and like this deal. There there's hundreds of deals. There's deals that are better. And my biggest problem today, um in confidence, make sure nobody knows. I bought a million square feet. Too many. Yeah. So, all of the stresses that I have, all of the um worries and sleepless nights and and and trepidations about the future is a byproduct of having done a little too much, more than I needed to have done. We'll see if we'll cut that out or whatever. I mean, look, I'm I'm just happy to stabilize all these deals, but I'm deliberately like trying to not to buy anything except for if you buy this property, I have to do 1031 exchange. Um Daniel's trying to buy a property from us right now and you guys bought another property from us recently. So, thank you very much. That was just Andre actually on. Oh yeah, you did. Yo, you see that's beautiful. Beautiful helping your uh uh junior partners to elevate as well. I get to feel like you like I get to see people that I help bring up now succeeding independently. Yeah. So, I want to I was going to ask you another thing. So, what is your uh what do you see yourself five years from now, Daniel? I hope at that point in five years we're operating roughly a billion dollars of assets under management now. Um billion dollars. Wow. That's a huge that's huge goal. Well, we're we're starting to get plugged in with some more of these institutional equity groups and um you know I think that it's it's very attainable. Um I just I really love the process and in making everything as programmatic as we can. So, um I am a little bit sad about the idea of letting go of some of the responsibilities that I have, which at that size would end up being micromanagement, but I'm also really looking forward to the idea of bringing in the right people and then building a community uh within our company to do it of the right people in the right seats. Well, I can tell you one thing. You want a billion dollars, you got to get out of Minnesota. It's not Minnesota's not big enough for you to I'm aware and ready for that. That's kind of our our couple year plan is to start moving into a few strategically uh selected other markets. Nice. All right. Actually, can I ask you a quick question? Of course. So, the the abundance mindset that you talk about, I think is so important. And what I've noticed in my experience is people have completely different impressions of our market where they're like, "It's so exclusionary and nobody's willing to offer any help." It's never been my experience. You were always willing to help. you connected me into that mastermind group years ago. All of those people were willing to help. Did you have help like that, too? How did you get to that abundance mindset? And and if you had a scarcity mindset initially, how did you break that? Because I feel people so stuck in that. I'm like, if you could just let go, your life would be easier and you'd be so much more successful. So, um I've been listening to and reading a lot of psychology. Um, and when you start from a low point in life, when there's a lot of months left after the end of the money and you are a professional garage sale scouter and goodwill hunter, you know, say it. Um, and I had this belief that all rich people are prude and greedy and uh like I I had that belief and so I thought I'm and I was a big um of course when you were in college what do you do? You distribute leaflet leaflets and socialism was the way to go. Long story short um I I met my mentor Alex and he this guy has everything. He had 1.5 million square foot portfolio at the time. He he lives on Lake Minnetanka and charisma if you ask him. Yeah. Yeah. And so when I met him at first I was appalled at how generous he was with information with knowledge and he says there's a deal out there and uh I'm too busy for it right now but if you buy that deal I can help you can make a million dollars. To me that was so strange. Like how why would somebody offer me to make a million dollars on a deal that he could have made money on his own? just doesn't seem right. Something is off. There's there's a catch. Yeah. Well, there was never a catch. It was a real deal. We We were supposed to do that deal together. That was our first my first commercial deal. We're going to do it together. And then two three weeks prior to closing, he bounced. He says, "I'm not going to do it. You do it yourself. You'll thank me later." I was like, "Man, I had to raise another 200,000." Yeah. To close on that deal. So having witnessed and having experienced it from people who trained me, I uh I I I was so grateful for him and I made it my mission to make sure that if I am rich, I'm not going to become a prude, selfish, inconsiderate guy. I don't want to share with others. And he says, and many of my older mentors say, you got to be generous. You got to be kind. You got to be fair. At the end of the day, it's like playing a game, right? Mhm. You're not going to take it with you. uh effect you have on others is the best currency there is. And after getting a certain amount of capital, net worth, cash flow, everything else is just digits on the screen. Like you know, the only difference between you and somebody who's making let's say um $10 million a year or $20 million a year is the fact they might be flying private, right? But that's it. And it's it's an ego thing. So um to me I realized you know I I remember my roots. I remember where I came from. A lot of my relatives and friends are still in that level of um I'm not going to say poverty but in the u scarcity mindset. And all I want to do for the rest of my life is share my knowledge, my wisdom, my experience, my connections with those who want to elevate and give them that opportunity to be able to do deals. And so to me that's what feeds my soul. And um I can tell you one thing, this is unequivocally I tell it to everybody. I am satiated with real estate. I don't want a billion dollar portfolio. I'll tell you one thing. A billion dollar portfolio means a lot more problems. What you want to learn to do is handle negative information like a champ because um like we have I have 5 million square feet uh uh right now and there's problems every day. Yeah. you know, there's a fire and there there's a lawsuit and there's somebody fell and some tenant is pissed off. And I realized, dude, the bigger you get, the more problems you'll be dealing with and you might be like you have to be you have to get used to the fact that you can lose a hundred mill 100,000. Can you can you deal with the losing 100,000? How would you how would it impact your day? Yeah. Now, if you were a bigger guy than a million dollars, can you lose a million dollars a day? How is it going to impact your psyche? so much of it psychology and I was like all right I got plenty I got and I I don't want to stop and so I'm parlaying all of my knowledge and living vicariously through this hero journey of my students and my mentees I guess that's the answer my other question that that leads me to another point that I'm interested in which is the emotional uh attachment that we all have to results because so much of our decision-m is we make the best choice with the information available to us at the time but Then there's the result. What actually happens? It could be a 2% chance and that 2% chance happens. It's a negative result. Are you able Do you find that you're able to emotionally distance yourself from that and live within the action that you're taking versus the result? It's hard to remove yourself from the result, especially when the result equals to a negative $300,000 and you have a partner who's like, "What the hell are you doing?" Y. So um but there is a lot of emotional resilience you will have to and you have to you know uh grow a a thick skin uh in dealing with problems. When you deal with value add real estate you're dealing with distressed assets in our case anyway. And um if you're not careful that distress might seep into your personal life in the way. Exactly. Because uh you come home and you're pissed off and and upset. No, I mean, look, I um and may I'm 10 years older than you, so I'll I'll talk to you hopefully 10 years from now and see how you feel, but um I want to learn to live day by day. Try to add value to as many people as possible. I'm not hanging it, by the way. I'm not going to stop. I'm just not going to pursue it as aggressively and as crazy as I used to. That's what I want to do. And so, for for uh for what it's worth, I love the process. I love the game still, but if I put in the effort and somebody else gets the result, I'm totally okay with it. Like, if you buy that deal in Plymouth and you make money, I'll be only only happy and I'll give you all the resources because guess what? I've done it so many times from the beginning. You bought the property, you fixed it, you sold it. I mean, we own 70 maybe 75 assets right now. We probably bought and sold over 200 because we constantly trade out, trade out, you know. But uh uh I've realized that there's never going to be end of distress deals. There's never going to be Oh, the other thing is um we do small bay industrial but then there's retail and there's a lot of work in the retail you can do right adaptive reuse of big box into small bay and then there's a part office. I'm working on a project office project which I want to talk to you maybe we can team up on it but I think office is going to come back in a different way as a co-working or or whatever. Anyhow, that's my answer to you.
You have one child right now? Yeah, I have two steps and one baby. Any more babies or we'll see. Yeah, it's an ongoing negotiation. Work in progress. I was touring a building uh a portfolio actually that we're going to be making an offer on next week and they had a bunch of baby stuff up top. My wife was touring with me because she does all the physical DD. Saw it and was like, I think we need to talk about number four. and I turn to the broker and I'm like, "This was an expensive tour." Hey, um that's uh that's that's true legacy right there, you know, especially if you pour all of your not just love, but knowledge, experience um in into them. When you look back 20 years from now, you're 40, you're 56 years old. What do you want people to know you as or remember you by? Not that you're going to die, but what do you what do you want me known for uh 20 years from now? Yeah. doing doing what I said I was going to do consistently. Um thinking about other people first before thinking about myself. Y and then like you, one of the things that gives me great joy is helping people. I call it breaking them out of the matrix where it's like we're so conditioned that everything needs to happen a certain way, but you actually have a lot more autonomy and freedom to to make money a bunch of different ways and ways that give you joy, that fill you up. Um so helping people get on that path so that they can break out of the matrix. Awesome. Yeah, that's great. Well, that's a good mission because uh if you can elevate others, the impact you have on others is such a you know the most amazing currency there is. Oh, it's so accreative for everybody and I always like to joke um it's like the thought of you and me being competitive with each other in a world where Blackstone is competing. It's like a thousand of us are never going to meet 10% of that. It's like it us little guys need to stick together. There's so much for us to eat. I think uh if if you focus on solving problems and whatever problems there are in commercial real estate, which there's a lot right now, I think we're not going to run out of income. Um especially with onslaught of office to towers that are we going to have to figure out what to do with them. Yeah. Do you have a take on that in general? We have a 11story tower in St. Louis that we might convert into apartments. Cool. And there's historic credits. There's tax credits in Minnesota. There is a huge tax credit for Minneapolis, I think, for conversion of office into apartments. I don't know if that law passed or not. I think it's still my wife's on the Renaissance Coalition. I think they're working through that still, but I think that that's very likely to happen. Um, the other thing is the affordable tax credits. I don't know if you've looked at LITC or if that St. Louis office could qualify as well. But when you start stacking those credits on top of each other, it becomes a pretty compelling deal. Yeah. So, I'm I'm oblivious to all of the residential business because uh I'm a commercial guy superficially understand what's going on, but um recognize that without those types of credits, the math just doesn't work because cost of construction is so high. Yeah. No, I'd love to talk to you more about that offline, too. We've got some decent inroads in that space, too, cuz my other business partner, if you recall, is masters in tax law. All of his friends are some of the biggest uh litech attorneys in the country. So, it's about getting all the people in the right seats, but I think we have a lot of that. That's where the opportunity might be. Yeah. Anyhow, well, uh Daniel, thank you very much for coming. Um if you guys, how can people find you if they want to contact you, DM you, if they want to invest with you or uh work for you? Yeah. Um, obsidianroup.com is our website, but you can email me at danielobsidiangroup.com. You can find me on LinkedIn, Daniel Kowski. That's probably the easiest ways. All right, beautiful. Well, uh, Daniel is uh, one of my u friends and uh, really successful guy in Minneapolis. I wish you all the luck. Thank you very much for coming to the podcast and um, until next time. Thank you guys. Thank you. Heat. Heat. N.