hey everyone this is Richard I'm sitting here in Singapore with my good friend
John know each other in 1987-88 graduated Cornell in 1991 and you were
90 that's right so we've known each other for a long time we've recently
reconnected I just had the trip of my life thing as John's villa in Bali and I
just wanted to take a few minutes of our combined time we're about to embark on a
new business venture together and I think it's really cool as we document
you know our lives using social media and video and so on to document this
point in time because we're both doing something that's really outside of our
comfort zone and yet we're really excited about it and it'll be cool for
us to look back on this video at some point and sort of be like how naive we
were how right we were how young we were I don't know what we're going to think
but if we don't commemorate it we won't think anything so I took some notes and
we're just going to talk about it a little bit but basically I'm just going
to create some of this stuff for us to look back on also preview some of the
content that we're going to create back when I get back to New York and me in
the studio give you guys updates but hopefully some of you find this
informational educational inspirational talk a little bit about the location and
why that's interesting to develop a small boutique sort of so what we saw in
2008-2009 was the promise of this area and what we it wasn't a speculative play
but what we realized is that to develop large swaths of land we have that road
so give you were to go to a lot - just five years ago you're driving down a
stone path parking and maybe a guy's there to take $0.50 for your parking etc
now that's a paved sealed Road with pion surf stores bikini shops you're vegan
organic coffee joints very cool you see the whole area pick up that's
what I thought was the most interesting when three four years ago maybe which
was the last time that I actually visited thoroughly the lands you would
have to try to find the trail to get onto it this time as I went to
Lewin came back I saw a pretty well paved road just about 200 meters from
gula Watsu parking lot and I was like probably not that's our road so you know
kind of set off something that I was like wow the time is right in fact
you're actually reaching the period where yes you have a safe inflationary
pegged appreciation of the land but now you're going to start accelerating and
that's what got me excited about maybe there's something that you can do with
the land and instead of flipping it now and getting your inflation pegged growth
you might want to be in a position to be able to hold it that was that a minimal
right that was that was my sort of worst-case scenario that we can easily
reach for so you want the steeper part which I definitely coming now yep sealed
roads in a developing country big deal yeah this is this is raw land I mean
it's like it looks like well you can't see much because it's like a foretold
right but it's a a hectare which is two and a half acres on a slope side so I'm
going to just start with some things that I think are important to us and
when I say out to John and Olivier who's actually in Bali right now so he can't
be here on this but I think we're all on the same page and then I'd love to hear
from your perspective some of the elements that you think would be
important and so to that end I think the the most important thing that I want to
do is make something that I'm proud of and that feels true to me and my values
and that is good for the island and good for the people and is repeatable and
sustainable and so we're going to do things like an eco sort of approach
whether it's solar or recycling we're going to best practices and all that we
want it to be targeted towards people that want an experience and not just
like a bed to stay in we're going to target people that are both interested
in surfing and yoga so we're not just tied into like the seasonality of the
swell or the conditions of the swell I wanted to have a really cool sort of
like local vibe with a modern twist on that
like modern things like Wi-Fi high-speed Wi-Fi USB charging ports things that
make the modern sort of traveler feel really really comfortable but in the
very traditional sort of old teak Joe Blow type setting and then I want it to
be like hip and cool and aspirational where you walk in to the the lobby in
the reception area and maybe there's like a DJ spinning some music and you
get handed like a fresh fruit drink and we know somebody who actually was a
founder or investor and juice press and sold that and now started a similar
company in Bali so like somehow we're pretty well connected and and that's
sort of like the vision that I have look this is outside of his comfort zone this
is outside of my comfort zone but one of the things that I love to riff about
with real estate is that you don't have to be married to anyone plan it can
change right like when Jon boss's plan originally I doubt developing it was in
the plan or maybe it was just an idea then it was to flip it now we're talking
about developing it when we started talking about developing it we started
talking about selling parcels and or maybe even building villas and sending
selling villas and then we talked about maybe you know managing those villas on
Airbnb or the owners when they're not they're using is helping them monetize
it and then we were like well why do that why don't we own it and then we can
always sell it later and so the point is one of the nice things about actually
owning real estate besides the fact that it's a real asset is that it's flexible
you can modify your plans you can exit part of it we could sell one Villa and
keep Ted we could sell Ted and keep one there's no real structure to this as
long as we have an idea division where entrepreneurial we're interested in
maximizing our return and we're going to be opportunistic and you know there's
very few investments that you can do that with so if you buy an equity for
instance of stock you're either long or you're short it you might sell some of
it but you keep some of it but this is very different we could we could say get
rid of the small villas and let's build big villas we could say get rid of the
big bills and let's put small bills and so the point
one of the things I think keeps people outside of making some of these
investments is they're not exactly clear on what the game plan is and all I'm
encouraging is to keep an open mind start small leg into it let the market
dictate to you what the opportunity said it let's lead what the market is
desiring and over time as that need or desire changes respond to it yeah I
really liked how we explored the latitude in this project it was
completely not in my mind that we would do something like this so you know there
was a three-week trip in Bali at the beginning of it the land was actually
hardly on my mind right but then it then the way that things transpired just as
traders which we are we're always we're not trying to carve out a linear path to
things you're actually trying to be circumspect at all times and go down
each path as long as appropriate so that you know one thing that I think rich
didn't mention is that even though I'm not in the hospitality business I
understand it that is a tough business so for me one of the reasons that that
pushed me over the edge of get over my discomfort for the hospitality business
is what's going on in Airbnb right week one I did not really understand what's
going on there maybe but I do see the disruption happening all over the world
where there is Airbnb Amazon uber or lyft any of these things right every
everyone blockchains etc crypto currencies I did understand that but as
I understood how Airbnb is manifesting itself and what do you call like a micro
democracy privatization of of assets that's when I started to realize that as
a return this is much more encampment that's a my options 10 years ago before
your baby that I don't want to be a hotel operator in rat sense but in this
sense very interesting to me yeah and I think I think just have fun right like
do what feels good take the risk be intelligent about it
don't push it don't force anything but at the same time be like persistent and
drive towards your vision in your goal and it's going to be really interesting
we're going to continue to document this journey we're at the very early like
dreaming stages I'm sure there's going to be lots of hardship and things that
we missed or overruns or delays but you know I would say also you know with
three people three primary partners and inside this just as a person who's led
companies before I think we all did a pretty good job of some doing our G goes
yeah I'm doing what we thought should be done with the property and listening to
options and then when the options seem like they're very presentable or very
doable we changed yeah I will do it right we
should spend a moment on that because that's pretty interesting
John and I were spending it's interesting how you connect the dots he
and I are both leaders of organizations and we manage teams and entrepreneurs
and we were talking about how sometimes ego gets in the way and you don't do a
good deal because somebody objects for the wrong reasons and next thing you
know we're talking about this deal and without getting too specific about the
deal suffice it to say that Olivier had some cash constraints I have some cash
to the strains and going through a divorce right now so I'm illiquid for a
period of time there was a need for money I was interested in the deal and
so like we sat down and said okay well if any one of us puts our back up
against the wall - I need this amount of money at this valuation I need it by
this date the deal dies and then you just sell the land which we all agree is
suboptimal but if we can all like be very forward and creative and think
about this there's probably enough overlap that we can make it happen
and in the negotiation we realized that that's like the best outcome for all of
us it's sort of when like when people raise money which I have no experience
doing in businesses it's the concept of I'd rather own
of something much bigger that actually derived a lot more value for me
personally than the pride of owning a lot more of something smaller and we did
a really good job of that I'm quite proud of that guys were really helpful
to me I hope I'm being helpful to you I'm hope
I'm adding value to Olivier and in that sort of mind frame I think there's very
few people that would actually get this deal done given the myriad of
illiquidity constraint problems ego insecurities right about here I'll shut
up yeah and all these things but I did just want to get this down on on video
while we're together I fly later today to Italy so my time with John on this
trip has ended but the nice thing about this deal and doing business with
friends and on a team is this ensures that we're going to continue our
relationship and grow it and see each other more and you know I look forward
to that too he's been really helpful during a period of personal disruption
it's probably the best word and shining a light on opportunity and it's
fantastic and I really appreciate that my friend you got a brother all right
cool so I hope you found this helpful and interesting and inspiring please go
ahead and like the channel if you haven't subscribe like the video and if
you haven't subscribed go ahead and subscribe now and join us over at our
Facebook group as well short-term rental secrets calm and we really appreciate
your time and interest and John I really appreciate you my brother
thank my friend
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