Future Of Real Estate Including The Influence Of Blockchain And Crypto

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Today s guest is Ellis Hammond founder of Kingdom REI and Co-Principal at Symphony Capital Group He started his career as a missionary on the college campuses of San Diego and has since acquired more than a hundred million dollars in real estate The topic of money brings out different emotions in different people and his advice is to shift conversations from money to value By adopting an entrepreneurial mindset we can create more impact in the world He also gives his take on the future of real estate and his hope for a freer and more decentralized money system 00 01 – 09 21 From College Pastor to Real Estate Investor Ellis on his passion for serving people It s not about getting rich it s about being profitable Creating wealth and bringing value to the world The moment that made Ellis decide to go to real estate Taking action and getting into their first deal Why Ellis recommends going for larger deals Learning as you go 09 22 – 16 37 Building a Community Around Business and Faith Using their faith to impact others Everyone deserves better homes Adding value and enhancing resident experience increases profit Getting investors the best return on money in the shortest amount of time possible The ideal play for Ellis and his team 16 38 – 18 50 Blockchain Is Here to Stay The impact of this technology on real estate What their company is doing in the space 18 51 – 20 15 Closing Segment Reach out to Ellis Links Below Final Words Tweetable Quotes There s a lot of people out there trying to do good things for the world and guess what They need money to be able to do it And someone s got to go make that money – Ellis Hammond With profit there s margin And without margin there is no mission You can t do good things – Ellis Hammond —————————————————————————– Connect with Ellis Check out his website and the Kingdom REI website and podcast Don t forget to visit the Symphony Capital Group website too Connect with me I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns Facebook LinkedIn Like subscribe and leave us a review on Apple Podcasts Spotify Google Podcasts or whatever platform you listen on Thank you for tuning in Email me sam brickeninvestmentgroup com Want to read the full show notes of the episode Check it out below 00 00 00 Ellis Hammond You carve out more equity for yourself as you learn to operate and manage and do those things But you ll never get equity in cause you just like I would never trust you to asset manage our deal right now you have no experience So you re not going to get it anyways 00 00 12 Ellis Hammond Quit trying to learn that right now get into a deal Learn as you go and that s exactly what we did 00 00 17 Sam Wilson Ellis Hammond is a founder of Kingdom REI He started his career as a missionary on the college campuses of San Diego And today he is the co-principal of Symphony Capital Group an investment firm currently focused on acquiring multifamily value add real estate Ellis welcome to the show 00 00 45 Ellis Hammond I m pumped to be here Sam let s get this thing going baby 00 00 49 Sam Wilson Let s do it Same three questions I ask every guest who comes to the show in 90 seconds or less where did you start Where are you now And how did you get there 00 00 55 Ellis Hammond College pastor no network Actually I take that back I had a network They were just all 18 and 19 year olds No money a lot of fun though 00 01 04 Ellis Hammond And I was a college pastor man I wanted to live my life for a big purpose and still do And that s why I went into missionary pastoral ministry work We ran out of money and you know like it s not a marginal business You know we had big dreams and help people And one of the young men on my teams Ellis I don t have money this month to buy groceries 00 01 22 Ellis Hammond And honestly man that was like a life- changing radical time for me because it was life- changing because I couldn t help the guy And all that are really wanting to do is impact people Right And that s where we made a decision man we re going to get wealthy And if anything you can get from this podcast today is if you haven t made that decision you should because there s nothing wrong with it 00 01 42 Ellis Hammond And because there s a lot of people out there trying to do good things for the world and guess what They need freaking money to be able to do it And someone s got to go make that money And so that s what we decided to do man We re going to figure that out and real estate is become that vehicle and purchased more than a hundred million dollars last year and on our way to another couple of hundred more and excited to grow 00 02 01 Sam Wilson That s really cool I think that money discussion is an interesting one right There s the commonly misquoted verse that like money is the root of all evil It s actually not It s the love of money that is the root of all evil There s obviously I got a friend of mine I m going to go off-script 00 02 16 Ellis Hammond I love it That s what I always do to people by the way we never talked about real estate So let s just go off 00 02 20 Sam Wilson Let s just talk So I got a buddy of mine He said Hey you know if you want to know something about somebody he s says only three things you need to know how do they treat food how do they treat sex and how do they treat money 00 02 30 Sam Wilson He s like you figure out those three things and you ve gotten to know to the core of who someone is And I was like it took me a while to kind of absorb that I m like well that s really interesting It s because money is one of those topics that like it brings out all sorts of different emotions for different people in different capacities 00 02 44 Sam Wilson And so I think it s interesting you know you as a college pastor sitting here going all right you know what I wish I could help you bud but I can t I can t help you buy groceries And that light bulb went off where it s like and I got a phrase that I ve written down It says I can do more good in the world as a rich person than a poor one 00 03 01 Sam Wilson Like once you adopt that framework I think for your relationship with money like Hey Ellis you could do more good in the world as a rich guy than you can at the broke one Like it s just an economic reality So I think that s a cool kind of shift Maybe even especially for people who are in ministry Getting rich isn t exactly the thing that s talked about very often 00 03 21 Ellis Hammond A hundred percent And it s not necessarily about getting rich I mean we can name this whatever but like my point is like everyone wants options man And people need margin and the goal of a business is for it to be profitable Why 00 03 32 Ellis Hammond Because with profit there s margin And without margin there is no mission You can t do good things Like if you and your company or your family or your budget is so tight That s not serving anyone It s not serving you It s not serving your marriage It s not serving the thousands of people you re probably called to serve and help And so we got to get comfortable man with this goal of like let s be insanely profitable Not at the sake of others you don t have to do that My point is like if you re not trying if you re in business and the goal is not profit I m like what are you doing 00 04 05 Ellis Hammond Because we re gonna need to go back to the starting point right Because what I ve learned man over my journey is those who are insanely profitable are also the ones who are bringing insane value to the world So actually if we just shifted the conversation to say how much value should I create not how much money should I create 00 04 21 Ellis Hammond Well the answer is well that s an easy question Ellis it s infinite Okay Well if you exchange the word value for profit why does it change You know what I m saying Like because the value is tied to profit or profit is tied to value Then that s what we should be doing And we get paid to solve problems as entrepreneurs 00 04 38 Ellis Hammond Anyways man that s my story And we will be and are working on becoming an insanely profitable company because we want to do really cool things in the world 00 04 45 Sam Wilson I love it man That s really cool What was the transition there for you I mean it s one thing to be like snap I got to get out and figure out a way to be insanely profitable Where do I start 00 04 58 Ellis Hammond I mean I didn t know And honestly in some ways like you know you still you learn as you go I just knew he had to take action It s interesting man Maybe some people are listening to show today And the only thing you know right now is like I need to change and I need something to change 00 05 11 Ellis Hammond And I was open to that and that s where exactly where I was And I remember it was this crazy It was driving in the car It was like a month for I was getting married and I hear a radio ad that said Hey if you want to learn how to get rich through real estate come to this workshop like who s ever listened to responded to a radio ad like in their life 00 05 28 Ellis Hammond No but honestly it s because I was open I think about how many times I maybe have heard that or how many suddenly we listen to the radio Back then I drove such a poor car that I think is cause my CD player didn t work I had to listen to the radio right So that was part of why I was listening to the radio 00 05 42 Ellis Hammond That s true Like I had one of those cassette tapeswhere you plug in your iPhone Like I didn t even have a auxiliary cord I had to use one of those cassette tapes that then plug into my audio phone which was probably broken And so I was listening to radio Anyways that s how I heard about it And I went to the seminar and I think it was one of those fortune builders or something right And they were about fixing flipping and it ended up doing that But what I learned in that moment was like there s a lot of guys here that are middle-class lower middle-class poorly educated making bank in real estate And I was like if these guys can do it I gotta be able to figure this out And so I just left there man inspired of like real estate as the starting point not the end game 00 06 23 Ellis Hammond And our first deal was four months later we bought a duplex and you know the only way I found that deal is because I went and found him in tour And a guy here in San Diego buying deals I ll say Hey man I ll do whatever I just need to get into something And he was the guy who helped us find the deal put it on a contract everything man gave me the courage to buy it 00 06 42 Ellis Hammond When we had to come up with the money of course and do all the hard work But that was it That was our entry in It s not how I would recommend most people doing it but that s how we did it 00 06 51 Ellis Hammond When did you transition to commercial real estate 00 06 54 Ellis Hammond As fast as I could cause that s what I m saying Like if you re listening to this do not take my advice and go buy and duplex 00 07 01 Ellis Hammond It s just so much better ways to get into larger more profitable deals if you want to life along your business So it took us about nine months where we learned about syndication that we could actually raise capital and go do larger deals And so surprisingly it took us nine months after that So within about a year we had went from no real estate education no background no network to we got about 10 million of real estate real quick Now as you know that s vanity in terms of metric wise Cause I didn t own all of that I had investors I had partners but we were now part of 10 million of real estate from nothing you know And we got into that just so your audience knows and this is why I always recommend is the easiest way to get into multifamily or get into commercial real estate is either raise the money have the money or find the deals So forget trying to do all of this stuff You know it takes a lifetime to learn it but you can break in in the year like I did if you can focus on one of those two activities either finding great opportunities that you know someone s ready to fund or have the funding and be able to provide that to someone who can find deals like yourself Sam or like me right 00 08 10 Ellis Hammond We have deals We re always looking for great partners who can bring in capital to help us fund these deals That s how this business moves forward So that s how we got going 00 08 19 Sam Wilson That is awesome Yeah man there s business is that you like you said it takes a lifetime to learn all the nuances to it but it boils down to those two things 00 08 27 Ellis Hammond I mean honestly right I mean those are the most profitable ways Like you carve out more equity for yourself as you learn to operate and manage and do those things But you ll never get equity in Cause you just like I would never trust you to asset manage our deal right now You have no experience So you re not going to get it anyways 00 08 42 Ellis Hammond Quit trying to learn that right now get into a deal Learn as you go and that s exactly what we did You know we ve done six deals in now Now we re really we ve learned we built the team understanding the operations where now we can begin to take over all of the deal right And all folks are like oh you guys know what you re talking about 00 09 00 Ellis Hammond You know the systems you have things in place We re ready to write you a 10 million check instead of the other way around It s like you know what I mean Like we had to build that man We had to build that reputation had to build that in this industry And so you know it s taken a couple of years to be able to get to that place 00 09 15 Ellis Hammond Yeah I think most people are waiting until they have that And I m like that s the wrong way man You got to get going now And you ll never have that reputation 00 09 22 Sam Wilson Right Absolutely Tell me you got into college ministry because you saw a need and said I want to serve that need How has that shifted for you if it has shifted and how have you kind of had to reprioritize the things that you are doing I m think I m just going call it on your call it the philanthropic side 00 09 44 Ellis Hammond Yeah it s interesting A great question man So I m wearing the shirt today being called Kingdom REI I knew when I got in this business what God has always called me to he called me this on a college campus He s called me to this like throughout every season of my life is build communities like people need communities 00 09 59 Ellis Hammond And so I love this industry for so many reasons We ve built a community for faith- based leaders in this space to do those two things find deals and find capital and partner with other people So you know we ve built a community around this whole business man I mean Kingdom REI is that It is a ministry and yes it s really cool 00 10 15 Ellis Hammond I mean a lot of our deals a lot of our capital flow in and out of this incredible community that we built Kingdom REI So in some ways that s a big element of your question right is I get to teach I get to share I get to incorporate my faith into that We run a podcast show too where we ve had like 150 people now 150 operators all faith-minded 00 10 38 Ellis Hammond And I get to share my faith They get to share why they love this asset this industry and how they re using their faith to impact others So I want to think about I mean that s been downloaded 80 000 times you know like how many people like that s impacted So like it s my mission man is why get on here I m really bold about like quit worrying about being profitable Like people are going to hate you for it but guess what We need some people who are thinking about this cause this is how the kingdom is going to go forward So in that regard that from an asset or operator level you know this man walking deals Speaking of community you know when we buy an asset and this is where I think this business becomes very spiritual you re owning someone s home right This is where they raise their kids where they do dinner is like I live in an apartment We rent we sold our place in San Diego Now we rent I know how important it is to walk outside and trash is not laying everywhere I know how important it is when I leave this house that my wife and my little girl are protected because there s not a bunch of homeless crazy people living on my sidewalk Right So when I walk an asset it s always amazing to see how many things people overlook how many things the owners and property managers overlook when I m like this is people s home man Everyone deserves better than this So you know I think one just from the way we operate deals is different 00 11 53 Ellis Hammond I don t think that necessarily has to be from a faith perspective I think that definitely impacts that I think in some ways if you were a good human being you know like that would also come arise but that also could be I believe we are made in the image of God so that it has a lot to do with it And then we re building some cares programs right 00 12 11 Ellis Hammond Like we want to be good operators not just acquisition folks And so the way that we re thinking about you know we brought on a manager now that has experience kind of with social programs Bible studies after-school care programs things like that that we can begin to incorporate into our communities that just increase resident experience which would by the way this is not just because we re good Christian folks It s we also know that it increases retention which saves expenses which increases profit You know this like we re adding value which increases profits back to our communities which then flows back to our investors So you know all of this is very strategic but you know it s all incorporated 00 12 48 Sam Wilson And I liked that I mean it s that common well that s a rabbit hole I probably don t want to go down but I ll just I ll reiterate what you said which is yeah That you provide value to the people that are living there It then increases the bottom line for you guys a true win-win where it s like I m going to do the best I can for you and them And oh look you want to stay at my properties 00 13 07 Ellis Hammond Yeah I ll give you a great example man We bought the sale in Kansas city last year The woman owned it for 30 plus years and the goal I mean so we re going to go in there and we re going to innovate this place and increase rents like that upfront is what we re doing 00 13 22 Ellis Hammond So I had a couple investors who were like Hey I m just not comfortable with that model because I know people are going to have to move out I m like I understand that But like trust me when I say these people need a better place to live And here s what happened We took over some of those investors almost didn t when we took the deal over we had eight people illegally living there who just left so that all of a sudden we had eight units 00 13 42 Ellis Hammond We had the property manager who was selling furniture out of another unit Okay So now we have nine units vacant and then like two or three more we realize you know people weren t living in any ways They were vacancies that we didn t even know about So all of a sudden we have like 15 units vacant so we didn t take anybody out 00 13 58 Ellis Hammond Okay And then we started renovating these units and people were coming to us saying Hey I am so thankful you guys are renovating this Can I go ahead and get on that waiting list so that when that place is renovated I can pay more to go live there You know what I m saying This idea of like you know raising rents is the wrong thing 00 14 16 Ellis Hammond I m like dude that s not it at all man People want need a better place to live and are willing to pay money for that 00 14 22 Sam Wilson Oh for sure Yeah absolutely For sure So you had 15 vacant units out of how many 00 14 29 Ellis Hammond 85 units 00 14 30 Sam Wilson Okay 00 14 31 Ellis Hammond We were a hundred percent occupied when we took over 00 14 35 Sam Wilson Sure you were 00 14 36 Ellis Hammond And all of a sudden we were you know 75 or whatever 80 but it worked out well 00 14 41 Ellis Hammond And you know that s all in our underwriting I mean we when we re going and stuff we re underwriting 45 economic occupancy year one anyway So you know our plan is we re renovating units and we know we re going to take a hit for that 00 14 54 Sam Wilson Right now talk to me about that I mean it underwriting 45 economic occupancy 00 15 00 Sam Wilson How are you making offers that sellers are even interested in when you re underwriting it like that 00 15 05 Ellis Hammond Well one thing we re not necessarily paying our cash flow to our investors you re one either So like it s not as if we need to be cash flow positive our investors know we re going to get you the best return on your money in the shortest amount of time possible If you want 6 cash flow month one that s probably not the group for you to be honest You know what I m saying We re not your dividend retirement plan Like you want to make money and make the most amount of money in the shortest amount of time we re your group 00 15 33 Ellis Hammond So I mean that gives us like we ve just own that identity right And that s kind of who we are But I mean we re looking for we need to be able to go in and increase yield or increase revenue by 30 in the first 24 months And you know that s going to come from renovation first like some renovation or a lot renovation and some of that is going to come from leasing but that s essentially our goal when we re underwriting deals 00 15 57 Sam Wilson What class of assets are you guys focusing on 00 16 01 Ellis Hammond You know I mean we buy deals you know if there s ways to increase revenue but I mean our ideal play is probably eighties nineties bill maybe two thousands A lot of the exterior is either okay or recently renovated 00 16 16 Ellis Hammond And the big play is interiors You know that s an ideal play for us I liked that play a lot You know when I m walking deals If I got to spend a lot of time and money that first year on exterior I m not super interested in that right now I just really want to get working on units and being able to get people in and out that s important to us 00 16 35 Sam Wilson Yeah I think that s really really cool Tell me this You know one of the things that we re seeing right now is a big push in the real estate space as it pertains to crypto can you give me kind of a 60 second sound bite on what it is that you guys are doing to involve yourselves in that space and how you think this is all gonna play out 00 16 52 Ellis Hammond We have no idea but we do think that blockchain is here to stay dude the money system is terrible I have a wire right now that I m trying to send a fund one of our deals I don t even know where it is Like a little my bank doesn t know where it is 00 17 05 Ellis Hammond Wires suck Okay The whole money movement thing is so terrible It is prime and that s a true story I literally there s a lot of money in the air right now It s a terrible flawed system dude Blockchain technology transforms changes all of that right I mean it s instant It s on a ledger That s here to stay 00 17 23 Ellis Hammond It s decentralized Our government s corrupt The dollar is not here to stay you know And so people are going to rally The world is going to rally around a free system a decentralized system And I think if that s going to change the way we do things man including real estate and it s a really interesting time to be alive you know the way we can fractionalize shares 00 17 42 Ellis Hammond And so what we re currently doing to answer your question there s language in our PPM that allows us to fractionalize shares and then put those on a blockchain for a future sale which is a benefit to our investors from a liquidity standpoint I think if this does take off and this begins to catch momentum and this actually does work in a very easy way 00 18 02 Ellis Hammond Think about how much capital from around the world can now flow into United States real estate and forget where the dollar is The dollar could go away but the reality is United States real estate is still very good to own And so if you fractionalize that and allow capital around the world to be able to own that 00 18 18 Ellis Hammond You know think about Ukraine right now You know like man if you re a Ukrainian but you still have capital what do you do when you re not going to go invest in Ukraine You may not want to go park my money in United States real estate right now That d probably be a good place to put it right And so what will that do to asset prices 00 18 33 Ellis Hammond Well you have a massive surge of money coming in any asset class That typically means values increase And so I do you know we re big believers man and we want to understand blockchain and crypto we re going to prepare for it But the most important thing is we re going to own real estate and then figure out how those come together 00 18 51 Sam Wilson I love it man Ellis thanks for coming to the show today and breaking down kind of everything from how you got involved in real estate your views on money being a tool that you use to really bring massive value to other people I think that s super cool We talked about your Kingdom REI I think mastermind there and what Syymphony Capital Group is doing and also just a little bit about how you guys are positioning yourselves to use crypto and the blockchain technology in your assets in the future So certainly appreciate that Appreciate all that you do And just want to say thanks for coming on the show If our listeners want to get in touch with you or learn more about you what is the best way to do that 00 19 24 Ellis Hammond Yes the kingdomrei com if you are trying to break into this space in need community mentor thekingdomrei com Or symphonycapitalgroup com symphonycapitalgroup com You get in contact with us there We re buying deals We re always looking for partners man We re always looking for folks to we re multifamily guys and we got big goals and always looking for people to connect and collaborate with so reach out to us 00 19 47 Sam Wilson Awesome Ellis Thank you so much Appreciate your time 00 19 50 Ellis Hammond Yup Click here to visit this podcast episode