Dalton Skach Gold Gate Starts Worlds Largest Real Estate Fund
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[00:00:00] Dalton I got dozens of emails right out of the gate, people saying good luck, loved working with you and work with you again, and then people that were saying, hey, let's meet tomorrow for lunch. Meet me for breakfast. I want to introduce you to the CEO. Let's get you let's get you, you know, going with this interview process. And I pretty much just said, no, I'm going to do my own thing.
[00:00:20] Justin Hey, you're listening to the Friends in Austin podcast. I'm your host, Justin Talent. And every week I bring you the stories of the people of Austin. Thank you for listening. Hey, welcome back to friends in Austin, my guest today is Dalton Skach, and he has a company called Gold Gate where I guess you can kind of buy shares in real estate. And then the idea is to kind of not live anywhere particular but own own property in different areas and be able to stay there.
[00:00:56] Dalton Yeah. So you got most of that. Correct. And so no problem. Thank you for having me. And so what Gold Gate is is always a real estate investment fund manager that acquires luxury real estate throughout the world for the personal use and the financial benefit of the investors in the actual fund. Right. So what we do is we syndicate investments from investors or high net worth individuals that would like to own multiple second homes throughout the world. And what we do is we syndicate the money typically between 50 and 100 million dollars, and then we take that money and we go buy 20 luxury properties throughout the world. These investors are then able to go use and enjoy every single year after 10 to 15 years of enjoyment. What we do is we sell the properties, dissolve the fund, pay back the investors, their principal, plus their profit interest. And at the end of the day, these investors will have made money while staying in some of the best properties in the entire world. And that next little piece that we offer is that we offer liquidity component to our business model as well. So a 10 to 15 year investment is a long time. It's definitely a long investment period. And so what we do is for each of the ownership interests, the shares in the fund, there's 100 shares in the fund for each of them. What we do is we securitize them using block chain technology and offer a secondary marketplace where these investors can sell their shares similar to selling their Tesla or peloton stock whenever they would like.
[00:02:27] Justin Interesting. Really interesting. So, I mean, there's a lot to unpack there. For one, where did you get this idea where to come from and how did you get started on it?
[00:02:37] Dalton So May of last year, I came back from traveling. I was in Brazil and I started Gold Gate. And originally Gold Gate was going to do commercial real estate investment in high growth markets in Texas. And after a few months after I started learning more about block chain technology and how to provide liquidity to real estate, I made a pivot in August of last year. And then as of recently, over the past month, we made the new pivot to where we are now. And so there's already a company in this industry in this niche now, luxury real estate fund niche called Equity Estates. So Equity Estates is a 15 year old company. They typically raise between 30 and 50 million dollars from a few dozen investors throughout the world, and they buy properties in that two to five million dollar range. And so it already exist. They just had their best quarter ever in Q4. Twenty twenty. The problems with equity estates are first is their fees. The next thing is their liquidity, and the third thing is their brand awareness. So for their fees, they take 20 percent off the top. So if anybody's listening in their real estate fund manager, they invest in commercial real estate or residential real estate, 20 percent off the top is kind of unheard of. It's it's usually between like two percent, maybe a little bit more, maybe even a little bit less. And so they take 20 percent off the top one percent annual asset management fee and they take 20 percent on the back end again. So their fees are a real problem, but they're able to do that because they're the only company in that space. There's no other competitor with them. The next problem is their liquidity. So if it's year three or four or five and you want to sell your ownership interest to pay for an unexpected occurrence, I maybe want to pay for your son's wedding or whatever might happen. You have to wait a few months for them to find a new buyer for your shares and then you need to pay them an eight percent liquidity fee. When the buyers found that there's not very much liquidity. And then that last thing is their brand awareness. They're a 15 year old company, but they refuse to raise money from outside capital. They bootstrap pretty much and they grow organically. But the problem with that is that they're unable to go out and expand their operations quicker, reach more people, do more funds and inevitably make more money.
[00:04:59] Justin OK, so I want to go back a little bit, because as someone who's not really familiar with too much of the stuff you're talking about, as I mean, probably many of the people listening want to go back to just the idea of being able to invest in real estate in this way. So the people that you serve and the people that the competitor now serves, people that have a lot of money and want to put it into real estate. Yes, into a fund. So I guess I mean, the benefit of that is like any other fund. I mean, instead of having to go and find a particular place and put your money on that, people are finding those. Real estate assets for you, they're deciding what to put into the fund and then you trust them, you buy into the fund and you hope to see a return, right?
[00:05:41] Dalton Yeah, exactly. So with other funds, right. In the commercial real estate space and the investment space, usually you invest in a fund, but you do it for financial purposes solely. You do it to get a dividend every quarter. You get it for property appreciation. You also get it for the tax benefits of the depreciation. Now with us, you're investing mainly for the personal use, but also the property appreciation on the back end. So when you invest in our fund, you're not getting a quarterly dividend or anything like that. What you're getting is six weeks of allocated time per year to go use these 20 luxury properties.
[00:06:17] Justin OK, so the kind of the value proposition for it is you get places to stay. Yes. You get to gain your assets gains in value while you own it. And then later you get to sell that. That's correct. Yeah. So how did you how did you go about building that company? Because, I mean, you've got to get people with a lot of money involved. And I mean, it just seems like a kind of a huge undertaking.
[00:06:44] Dalton Yeah. So in April is when we were going to be publicly announcing our first flagship fund, which is going to be our 100 million dollar luxury real estate fund, with that 100 million dollars will be buying 20 luxury properties throughout the world. We intend to have a debt ratio around 20 percent. So we'll have about 120 million dollars of purchasing power divided by 20. So 20 properties is going to be an average value, about six million dollars per property. And to kind of give you an idea about the market demand for this. So as I mentioned to you previously, the demand for I mean. Equity Estates just had their best quarter ever in 20 in Q4 2020, but in addition, the demand for second homes increased 100 percent year over year, mostly due to the pandemic. More people want more homes. The next thing is that there were more high net worth individuals created last year than there was in any other year in history, really. And one fourth of high net worth individuals throughout the world intend to buy more residential real estate in twenty, twenty one. And in terms of creating this company. Right. I mean, what we're doing is we just took an existing model, took the perfect timing of this. And then we're also using just new technology in order to create more liquidity. And we have a better kind of go to market strategy. So, for instance, not only is there liquidity, but we also have that block chain component to it. And investors are also able to invest using Fiat or cryptocurrency. So we just had thousands and thousands of newly minted millionaires from this recent crypto boom, bitcoin boom everything. And so now they actually have an opportunity to use that crypto to invest in something that they can go use. Right. Use your million dollars of crypto, go live and you know. Twenty six million dollar homes throughout the world. Right. So we're taking advantage of that. And then the last part that I wanted to bring up is that we have a sustainability component to our business as well. So gold is a public benefit corporation with a focus towards property sustainability. And so when we are acquiring these properties, we produce a sustainability benchmark report to understand how much energy we're using and how we can improve. And then in all of our quarterly updates going after we show how we've reduced that energy consumption. And right when we go in and acquire the property, we go in and invest in LED lighting. I monitored HVAC systems, smart thermostats, et cetera. So it's better for. Are our customers and our planet and just the experience itself,
[00:09:24] Justin that's really cool. So how exactly are you using Blotched? And I watched them block change videos before you came here. And I mean, I had some familiarity with it. A better understanding now, but how it was going to get utilizing BLOCKIN.
[00:09:35] Dalton Yeah. So of all of the uses that you could use chain for, I would say that token ising something is probably the most simple thing. I mean, you or I or mainly my CTO, he could create tokens, you know, block chain tokens for any kind of asset on his phone very, very quickly. So we're not creating a new protocol or anything. We're not doing DFI or not doing any of that stuff. So all we're really doing is think about it in the in the traditional aspect as you buy a hundred shares of Tesla. Right. Do you print that out? Do you have like something that like shows, hey, I have one hundred shares and I'm not going to go sell them to my friend by having them sign the PDF or anything like that. So I know you have one hundred digital shares of Tesla that you can see on your Vangard account or whatever it might be. It's the same aspect here. The tokens, all they are is digital shares.
[00:10:29] Justin OK, OK. And so then that allows them to throw an application on their phone, kind of look at what shares they have and what and.
[00:10:36] Dalton Yeah, well they just own shares in the fund and the fund owns all these properties so directly they own just ownership interest in all of these properties. If they buy one percent of our fund, they own one percent of all the properties that we acquire.
[00:10:49] Justin OK, so when you formulated this idea, I mean, first it's just you, right? I mean, you come up with the idea for the company. Yes. I mean, how did you how did you get people involved in it? And did you need to get funding or anything like that?
[00:11:03] Dalton So from my past business successes that I had with Gold Gate Version one, I was able to fund this business myself from May until January of this year. In January, we started having traction with our old business model. We were able to go out and raise around from family and friends, bring on more people onto the team. Then we have this new pivot. We're going to be going out and raising money in April and May once we've gone out and built some more traction. And by building traction, I mean getting letters of intent to invest in our fund.
[00:11:35] Justin When you go around, like pitching this to people, you know, because you need to get them to invest in the fund. I mean, what is your strategy? How are you finding these people and getting them on board? I mean, they just understand your pitch and the. It sounds good.
[00:11:47] Dalton Yeah. So first, when we made this pivot, it was only as a reason. It was last month. Right. So it's a very recent new business model. And so we've had to go out, talk to our attorneys, start getting the documents formed for the fund itself so we can go out and start pitching this to investors to high net worth individuals. But in terms of our go to market strategy, we're going to be using paid advertisements and a lot of these publications that high net worth individuals read, such as mentioned Global and Forbes and also coined desk, you know, those to those first to all, it's going to be a do. All that will be doing is announcing our one hundred million dollar luxury real estate fund, which will actually be the largest luxury real estate fund that's ever been announced or done. So I'll be the first thing we're I north individuals all over the world that are there already on Mansion Global and they're already looking for their next second home. And they only spend a typical four to six weeks in these homes every single year. So this is an opportunity for them to spend six weeks out of the year and multiple homes throughout the world and not need a maintenance anything. Right. And so we'll be announcing that I mentioned global, but we'll also be announcing and I'm desk and coin telegraph talking to those newly Krip, newly minted crypto millionaires and showing them, hey, this is a way for you to invest your crypto into ultra luxury real estate all throughout the world in one transaction. So those would be our two go to market strategies after we've gone out and announced, then we intend to go get industry and strategic partnerships, whether it be with institutions and family offices or even real estate brokerages or other companies in the crypto and block chain space. We've already been speaking with a few of those highly valued, very, very highly valued crypto lenders and other company companies in the block chain community. So just through paid advertisements and strategic partnerships, we intend to go out and syndicate these one hundred shares, these one hundred investors for our fund.
[00:13:49] Justin Cool. And then so how are you deciding what properties that you buy up here? Who determines?
[00:13:54] Dalton And that's just a perfect question. I'm really glad that you asked as we get it from investors. And investors typically just love the answer to this, because on with our our competitor, they do do some polling with their investors. But overall, you can see on some forums even where this company will just go out and buy properties and locations that they just think people want to go live in. Right. So as I mentioned before, hundred shares around a. Investors, if everybody bought one share, some people might want to buy more weeks, they might buy two or three shares, whatever it might be, but let's just say there's one hundred investors. So before people invest into this fund, there's going to be 20 properties. There should be four different categories with five properties in each category so that they know what lifestyles they'll will be investing in. So there will be that that ski and mountain category. There will be that beach in island category. They'll be that Gateway City category like Los Angeles and New York City and stuff like that. And then there'll be that mixture category of leisure and experience, maybe even like a Pebble Beach kind of golf course experience kind of category. So after we've gone out and we have told our investors all these different categories and lifestyles, once we've syndicated the money from all of the investors, what we're going to be doing is for each category presenting to our investors twenty five different locations for each category and not only showing them the pictures and the video and the language and the currency, but also showing them what population growth has been like and also the average growth of property values in these areas. And we're going to let our investors choose their top five favorite locations in each of these categories. At the very end, we'll be able to pretty much democratize the process for the locations. And then as well, our investors will also know that these properties will be built in the past 10 to 15 years. And for the selection of the properties that they're going to pretty much just have to trust that we're choosing the right architecture and and feel for each of these locations.
[00:15:57] Justin That's pretty cool. So it seems like there's going to be a well, one I want to say is kind of like Airbnb looks, but with equity,
[00:16:06] Dalton you know what? Yours so the competitors in this industry. Right, you have Airbnb. Vrba they are not really a direct competitor. They're a service for and mainly their main bread and butter is people that are spending maybe fifty to one hundred dollars a night in their traveling or whatever it might be. Their luxe program and plus program is definitely gaining some steam. By the end of the day, when you use Airbnb, when you use Vrba, when you use Covais, use in Sparano, use third home, you give them your money. And do you ever go to Airbnb and go, oh, hey, can I have some of my money back? No, you give them your money. It's gone forever. 100 percent of it is gone. Right. Then you have those two other companies that are in our industry, which is Picasso, and then you have equity estates. So those companies, at least they offer you the ability to go out and make your money back over the long term. Right. So in to kind of give you an idea. Each investor in this fund also has to pay their share of the annual operating expenses, which is going to be around four and a half percent to five percent of their investment amount. So around fifty thousand dollars per year. And so, again, there's 42 days within each year that you're able to go use these properties. So the average value, the average price per nice can be around twelve hundred dollars per night. Now, you can only imagine and guess what would the cost be to go stay in a six million dollar Aspen home per night? Right. It's not twelve hundred dollars per night is probably around ten thousand dollars per night, maybe five thousand seventy five hundred ten thousand dollars. Same thing in Monaco, same thing in Nese or wherever it might be throughout the world. So not only will you be making money on these properties, but you also be saving a whole lot of money when you're traveling, you'll be saving 50 to 75 percent more on your stays.
[00:18:02] Justin I think it's super interesting idea. I mean, it sounds awesome actually now, but it sounds like there's got to be a booking element to it because people need to share certain spaces at certain times. So you're going to have to write some basically some Airbnb style code. And you guys working on that.
[00:18:16] Dalton Exactly. So in terms of creating the platform, so in this next month, in April, we'll be raising money not only for the Gold Gate Fund, but also the Gold Gate enterprise. Right. The operations of the business. And so part of that money is used for product development and creating that scheduling piece as well. In terms of the investor management piece, in terms of the document sharing, in terms of selling your shares, we're going to be using a white label platform that's already in the digital asset space, that works with funds already. So that is can already be done. That's not a problem. But the scheduling piece. Right, that's going to be something that we have to build and customize. And that is that won't take too much time. It's not like we're creating something, you know, groundbreaking. It's a scheduling app, right?
[00:19:01] Justin Yeah, for sure. I know a guy that runs some Airbnb in town and he's not real. He doesn't like Airbnb that much. But basically he's talking about like, you know, what's how complex is Airbnb software? And I'm like, it's not that complex. I mean, other than the fact that a lot of people use it, that it's complexity. But it's like you just need to have listings and then it's calenders. Yeah. Like this.
[00:19:23] Dalton Exactly. Exactly. And so on. Exactly. So going out and creating that product development infrastructure, that's not going to be a big deal. And in terms of the amount of time that we give each of these investors, you know, we purposely make sure the properties are 40 percent vacant throughout the year to give investors more, to make sure that people aren't unnecessarily using their days when they don't need to use their days, and to also make sure that there is some time slots available in a lot of these properties. And we also do a lottery twice a year. So for those really, really important weeks. Right. And X Games, Monaco Grand Prix. Right. Stuff like that. So so that every year people, if they need to if they wanted to get into those places during those times, they have the ability to do so.
[00:20:10] Justin That makes sense. So because, I mean, during those popular times, everyone's going to want it at that time, but only so many people can. You have to resolve that somehow.
[00:20:16] Dalton And that's why we're doing these categories, too. Like with equity estates, they do have they do have their own categories, but use of their funds is a little bit different. And so by mixing all of the categories kind of together into one fund, what it allows us to do is that if somebody tries to go and book, for instance, Christmas and Aspen, but it's taken well, they still have the other choices of going maybe to Whistler or going to Jackson Hole, go into the French Alps or whatever it might be. So it's like, hey, I didn't get Aspen, but I got the French Alps of a good year still. Yeah, whatever it might be. And but then maybe, you know, or then the same thing with the islands or whatever. So we make sure that there's a very similar lifestyle. So if you can't get a specific place and a specific time, there's a lot of other options. Yeah.
[00:21:01] Justin So with this company and going forward, what do you see like what are the things that you're worried about that would be the hardest to solve? Is there any particular problems that you're more concerned with than others?
[00:21:12] Dalton I think what we would like to find out and that we will find out in April and May is we already know that there's a demand for second homes. We already know that the business model already exists and is doing really well. So now we need to go out and attract investors specifically within the customer segment that we think is going to be doing the best, which is these early crypto millionaires, but also with family offices and maybe even venture capitalists. This is something that your company could invest in and even write off the annual expenses and use the properties for events or whatever it might be or for, you know, a gift, you know, to a family member or whatever it might be. So we're really excited to see what the demand is going to look like for our product, for our offering. And we think it's going to gain a lot of a lot of attention, as I mentioned before, with our competitor. They don't they're they're a company that's been around for 15 years. And a lot of people don't even know about them right now.
[00:22:08] Justin I didn't even know about this category until exactly.
[00:22:11] Dalton So they have terrible brand awareness within their niche. And then also, I think in this industry, when you go stay, for instance, a Ritz Carlton or a Four Seasons, you go out and you tell your friends and your super excited, like stay at the Ritz Carlton. It was lovely. It was perfect. But when you're investing in another product like our competitors, where you have to pay 20 percent up front, anybody that is privy to finance or real estate is going, what are you talking about? That is not something you want to share with people. So their word of mouth, I don't think is that great. And then also just there, you know, not having that liquidity piece is a big is a big thing to people as well.
[00:22:48] Justin And liquidity is the ability to sell part of your ownership at any given time.
[00:22:53] Dalton Exactly right. So you bought one share for a million dollars every quarter. We do a net asset value report showing what the value of all of our properties are worth. Right. And technically what the value of your shares are worth. And then so if and two or three years you go, hey, you know, the one hundred million dollars fund is now worth one hundred twenty million. You know, now I can sell my one million dollar share for one point two million on the secondary market to somebody throughout the world that wants to get into this fund. Right. That didn't get on the initial offering and now they want to get in
[00:23:23] Justin and all those exchanges would be made on your platform right now.
[00:23:27] Dalton So those are already done. Those are already wireless.
[00:23:28] Justin OK, that's the white label platform.
[00:23:30] Dalton Yeah, exactly. Yeah. Yeah, exactly. So that's nothing that we're going to be going out and creating. There's already platforms for this where there's already thousands of accredited investors that already exist. Right. So there's no need for us to go and create this new ecosystem when it already exists and it's affordable. Right.
[00:23:45] Justin So so how you know, you said this competitor there are charging twenty percent. I mean, you guys have to make money. How do you see yourself making money and at what point in the process are you charging people.
[00:23:56] Dalton Yeah, so we charge five percent so up front. So there's just 20 percent upfront charges, five percent. So we're one fourth of our competitor. And so off the one hundred million dollar fund, we would make five million dollars up front. Now that's for our staffing, our legal our fund formation, our customer acquisition and our brand awareness to and also going out and doing more funds in the future. Then we make a one percent annual management fee and then we take two point five percent on the back. And remember, they take 20 percent of the profits on the back end. And so we're going to be making money not only through these fees for each fund, but going out and doing more funds, doing more funds that are specific toward specific lifestyles like a golf fund, an island fund, a European fund. So somebody will be able to go, hey, I want to buy a million dollars worth of equity in this fund, a million dollars here, a million dollars here. We even have plans in the future to introduce other asset classes, whether it be commercial real estate or fine art or whatever else it might be.
[00:25:00] Justin Yeah. So what you're overhead then is, of course, whoever you need to hire to run your team, property management companies to maintain the properties. Right. Because it's going to go in there and clean up and make sure that something breaks. It gets fixed. That's right. And then is that really about it? Is there any other big expenses?
[00:25:15] Dalton You know, it's the main expenses are the staffing, as you just mentioned, for Gold Gate itself and then also our customer acquisition going out and getting more customers so that we can create that liquidity within our platform to and then go out and do more funds. And then we have that legal piece. But as you as you mentioned, we have that one percent annual asset management fee that covers our cost, but that also covers our property management and concierge services for each of these properties so that we can give our clients the best experience, give them that, give them that Ritz Carlton Four Seasons experience. Other than that, there's not much technology that needs to be developed, right? Not much at all. So that's pretty much it. Cool.
[00:25:58] Justin So I want to go back and talk about what you done prior because you mentioned some other entrepreneurial experience, and I thought I saw that you did you go through Y Combinator.
[00:26:08] Dalton So I did the Y C Startup School and I also did the. Draper University program and I applied for my second time over at Wisk, so I hope I get into this, the summer program, the summer corps cohort, that would be great.
[00:26:20] Justin And so people that don't know otherwise seems like possibly the oldest, like incubator, right?
[00:26:28] Dalton I think it's the top in the biggest and most likely the best accelerator program in the entire year. Yeah, it's
[00:26:34] Justin like the most prestigious and it might be the oldest to so like they also have Hacker News is a popular basically news listing that a lot of programmers use. And and it's news that Y Combinator dotcom. But anyway, I used to go to that all the time, and that's actually the first time I ever saw anything about Bitcoin was on that site. And it was really early. It was like, you can still produce. Yeah, you can still mine it like. Yeah, yeah. And unfortunately I did not mine it. I read the article and I was like I started setting it up and then I left and then I never did it. Yeah.
[00:27:04] Dalton I mean who could have known, right? I mean, like I was talking to my buddy about this and some of our investors and I was just like, you know, going into twenty twenty who would have even going into twenty twenty one. Who would have known that the Browns would be going to the playoffs and Bitcoin would be at fifty thousand. Right. It's just like my mind blowing.
[00:27:22] Justin It's been wild. So you so did you get it. You got into Y Combinator previously or was there some subset of like.
[00:27:30] Dalton Yeah so y C actually has one of the best startup school programs there is. It is nuts. I mean it's free. First of all, they have excellent curriculum, they have an awesome cofounder matching tool. And so I just went through it and I just learned a lot. But it's a free program. Anybody can join with the Draper University program. You did have to be selected and pay a fee to get in and all that stuff. That was also an insane program.
[00:28:00] Justin OK, where did you grow up?
[00:28:02] Dalton I grew up in Reno, Nevada, Reno,
[00:28:04] Justin Nevada and Y Combinator. They only do it in California. Right.
[00:28:08] Dalton So in terms of their accelerator programs, typically they do. But now, because of the current environment, they are doing virtual do so. Last year I think they did virtual. This year they're doing virtual until further notice. I think maybe, maybe even in summer might change. But it's also, again, there in San Francisco. So they're not like Texas.
[00:28:28] Justin Were you always interested in real estate or something recently?
[00:28:32] Dalton So I got into real estate when I was 20 years old and my dad actually recommended that I get like my real estate brokers license. When I was in Colorado and I went out, I got my real estate brokers license, did residential real estate for a little bit, went back to college, joined the commercial real estate program over at University of Colorado, Boulder. They actually had a commercial real estate team that would go out and travel across the country and compete versus other universities from around the world. And so for three semesters, I, I did that. And so when I graduated from university, I had so much experience of knowing the financials in the marketing and what makes something valuable in commercial real estate?
[00:29:17] Justin How would they compete?
[00:29:18] Dalton It was great. So what they would do is they would give us a case study, right? So they would say they give us a building to invest in or they give us a development to go do. And so we would have to analyze the tenants in the building, for instance, we'd have to analyze how old it was, what improvements needed to be done, what we could sell for in the future, how much money we're going to need to raise from investors, how much we're putting in ourself and market demand for that kind of space, do all of this stuff. And so not only was it the analysis, but it was also the presentation, because what we had to go do is in each competition we would be pitching versus industry leaders in that market. So in Los Angeles, in Denver or even in Las Vegas, you'd have the top dogs in their industries that just make, you know, over a million dollars a year easy just in their salary. And they'd be the ones judging these college students. And you'd be pitching them pretty much asking them for money. Right, for a fake case. And then after after you did your presentation, they would question you and your team and then you had to be ready for it.
[00:30:23] Justin That sounds really fun.
[00:30:24] Dalton It was so much fun. I was even in a fraternity in college and doing this was more fun than anything at that fraternity. It was so much fun. And one of my best friends, probably my best friend I met through that program.
[00:30:36] Justin That's super cool. Yeah. So then you got into real estate and college and where did you go from there? Why entrepreneurship? What got you into that?
[00:30:43] Dalton So I started my first business six months after college and typical kind of millennial thing was just I worked for a small boutique development real estate brokerage firm, said, hey, I can do this much better than this guy. This guy doesn't know how to use his email still. Right. Which is a huge problem with people our age and their bosses. Right. Their bosses can do their email or their excel or any of these technologies. And so I said, hey. I can go out, start my own real estate brokerage and consulting firm and do it better, and when I left my old firm, I let everybody know that I had met that old firm, all these relationships that I was now on the hiring block. And I got dozens of emails right out of the gate, people saying good luck, loved working with you and work with you again. And then people were saying, hey, let's meet tomorrow for lunch. Meet me tomorrow for breakfast. I want to introduce you to the CEO. Let's get you let's get you going with this interview process. And I pretty much just said, no, I'm going to do I'm going to do my own thing and do my own thing. And so, yeah, that's how it started.
[00:31:49] Justin What does a real estate brokerage firm do?
[00:31:51] Dalton So with what we were doing originally, I was going to go out and do everything leasing and tenant rep and sales and everything in development or whatever it could be. I was going to do every little thing and over time even kind of like this niche. Right. As I spoke with people and learn more, I found a niche. And so my niche ended up becoming I would go out and source off market acquisitions for these private equity firms throughout the United States that were looking to buy industrial product and multifamily product over 10 million dollars. That was my niche. I didn't sell properties. I didn't lease, I didn't do tenant rep. All I did was I went and found deals that were not available and I made them available.
[00:32:32] Justin A school did not work out well.
[00:32:34] Dalton It worked out very well. Yeah. So the first, after nine months, closed an 11 million dollar deal with the largest industrial rate in the world. Six months after that closed an even larger deal for a sale leaseback in and the Midwest. And so my twenty three just got two large checks working out of my apartment in Denver. And I said, you know what, I can do this from anywhere in the world. So I went and traveled the world for two years while I continue to do that and nobody knew the difference.
[00:33:03] Justin That's cool. Yeah. So what brought you to Austin?
[00:33:07] Dalton Brought me to Austin was at the end of twenty nineteen. I went on a road trip throughout the United States to try to go find more deals. Twenty nineteen was just nuts for real estate. It's even nuts for it right now, but especially for an industrial park to go shake the tree and find some deals that were going to fall out at the end of. During that trip, I came to Austin and it was one of my favorite cities in the country that I had visited. And but towards the end of that trip, I said to myself, you know what? I don't really want to do the broker game anymore. I want to do something else. And I go, you know, I have a good feeling in my stomach that twenty twenty is going to be the best year for traveling ever. And I was obviously correct. So I stopped doing that brokerage business and I said, I'm going to go spend the year traveling around the world is going to be working on myself, maybe go get a master's degree, you know, whatever. Just go see where life takes me. And the first two months of of twenty twenty in Nicaragua, the next two months in Brazil. I came back in May of last year and started Gold Gate.
[00:34:06] Justin Cool. So I mean, I guess you didn't have much trouble traveling during the pandemic then.
[00:34:10] Dalton No, I actually know even during the pandemic, you know, in the middle of March is when I was down in Rio de Janeiro, made so many cool friends. They were awesome from all over the world, New Zealand and Europe, and they were great. And then one morning, everybody was just told by their countries, come on. And so even the United States said it. But I'm like, you know what? You know, everybody's freaking out in the United States at this point. There's no toilet paper. It's cold. It's cold in the United States. And I'm just like, you know what? I'm going to chill on the beach in Rio de Janeiro. You know, let me know when you guys figure this out. And so I stayed there for a month and a half. Everybody that spoke English left and they just left the country. So I was pretty much the I I was just alone in a way I couldn't speak to, like, really anybody. And so I just kind of worked out, read, kind of did some relaxing. And then, um, just like a either the travel bug or the entrepreneur bugging me, I said I can't sit around and do nothing anymore. And I saw an opportunity where I said I said, you know what? We'll probably have a dip here eventually with commercial real estate. And I said, I'm going to go back to United States. I'm going to go start a commercial real estate investment firm. We're going to invest in high growth markets. We're going to invest in Class A and Class B, mixed use properties with multifamily and retail. And we're going to take advantage of the dip. And with
[00:35:31] Justin a dip being coronavirus, the divin
[00:35:34] Dalton expected to be coronavirus. Right. And so you had but what what I didn't account for was we dropped our interest rates to zero. Right. They're non-existent. Also, we printed forty percent of our our currency in the past twelve months. Right. So real estate, a perfect investment for inflation. So prices were going up, lots of debt available to go buy these properties. And then we also had the the stimulus checks and we also had the eviction moratoriums. You couldn't evict tenants. So I said in the middle of August and I go, you know, I might have. You know. Came here a little bit too soon, we know we're about probably 12 to 18 months. Twenty four months out before we might even see anything. Right. Eventually there will be another cycle. Right. And so I said made a pivot to what we're doing now due to the fact that we had. Everybody wanting to buy second homes, right, and
[00:36:34] Justin just kind of made more sense than commercial at this
[00:36:36] Dalton time, it made more sense of commercial at this time, it just makes more sense. And then also, when you're raising money for a commercial real estate, even property or a fund and you're getting debt financing on this commercial real estate, you have to have like a lot of experience that these lenders and institutions they require of you. Right. They require all, you know, track record of going out and doing it for decades before. And it kind of inhibits young people from going out and doing it themselves at a young age, even if they're capable of doing so. But the difference between commercial real estate and residential real estate is that commercial is about the the percentage that you make, like the cash on cash that you make the IRR or when you buy residential. It's a very emotional feeling. Right. So I, I said, you know, would be a lot easier and it makes a lot more sense to go out and raise cash, all equity for something that is based off of, you know, an emotional attachment, but then also a personal use aspect rather than a having to do the cap rates and all that other stuff.
[00:37:35] Justin Yeah, that's very what the commercial sounds like is very much like how much money can we make? And then just, you know.
[00:37:41] Dalton Exactly. Exactly.
[00:37:43] Justin Hey, everyone, this is your host, Justin. I just wanted to thank everyone for listening and give those that are new to the podcasts a reminder to please subscribe to the podcast on your favorite podcast player. If you're on YouTube, please like the video share with the friend that helps us out. Thank you. So is there any place in Austin you like to hang on a.
[00:38:01] Dalton In terms of my favorite taco shop, it'd have to be one taco downtown. It's my favorite favorite one. Spend a lot of time over in Barton Springs and then over and Zilkha again, I've only been in Austin in and out since last August. So I'm still not I still don't have my my favorite spots as of yet.
[00:38:22] Justin Yeah. And I mean, it's it's a weird time to move to a new place because, I mean, the things are just different. I mean, you can do a lot here now, you
[00:38:29] Dalton know, you can do a lot here now. You know, I have a car down here, so I've been trying to do some exploring around the huge state of Texas. And once things are more lax, I'll probably go spend some time down in like the Caribbean or whatever it might be. Flights are still extremely cheap, so I'll probably go do some traveling. I love to do traveling. Do you have you you do a lot and not a lot of international traveling.
[00:38:50] Justin No, I haven't. I'd like to my girlfriend's really into travel and she's getting she's always trying to trying to book a trip to somewhere. And I'm just like chill out a little bit. But no, I mean, no, no. Soon international plans. Actually, she does want to go like on basically almost a year travel in a year. Yep. But in like chunks of like six weeks, like we'll go see New Zealand and Australia since they're close together and then, you know, come back and then, you know, then go maybe, you know, to Europe for six weeks and bounce around there, just take a section and then come home. That's a
[00:39:23] Dalton good call. It's a good call. You know, those six weeks to eight week trips are good. Even doing like three month trips are good. I typically did about six months of, you know, four to six months of traveling each time. And then I would go travel and I would come back, see some family for a month or two, and then I'd go back out traveling. Right. It would just be one of those things where I come back and see my family. One morning I would wake up and be like, Oh, I wonder what flights are to Nicaragua. I go on Google flights and then tell my my family, hey, letting you know I need a ride to the airport. I'm flying to Nicaragua next week. Right. And that's just how it just was.
[00:39:56] Justin That's cool. I mean, once you pitch that concept to me, I was like, oh, that sounds good because it's like a smaller commitment than like, hey, let's travel for a year. It's like, no, let's go to a section, come home totally.
[00:40:05] Dalton And there's so much there's countries and stuff like that that are one or two day countries like Moldova. Moldova is like a one day trip. But if you're going to go to somewhere like Spain or France or Italy, those are countries that you could spend all six weeks in and still probably not see everything. Those are just amazing countries to go out and visit and spend a good amount of time. And rather than just bounce around all of Europe, you know, too quickly, that's what I would recommend, is maybe even splitting it up or two, three, three weeks in a bigger country in three weeks in another bigger country or three weeks in a big country, then maybe two weeks bouncing around a little other places.
[00:40:48] Justin That makes sense. So what of your favorite spots mean when you're traveling? And also, do you go alone when you travel?
[00:40:52] Dalton I go alone when I travel. That's just how I prefer to travel. I think in the future when I have a girlfriend and a fiancee, traveling with somebody is a good way to figure out if you're going to be with them long time. It's definitely like when you can. I've had relationships where I've gone out and traveled with somebody and towards the end of it it's just like, can you please just delete my number? So. So definitely. Definitely, you know, I do it by myself. And then also I want to make these awesome experiences with my my future wife. And so I'm saving some of those romantic travel, those travel spots like Vienna or Venice and the Taj Mahal and the Northern Lights in Paris. I'm saving those for my wife. Right. Not even my fiance, but the wife, because I would hate to have a wife. And she's goes, oh, let's go to Paris. And I'm like, oh, I brought somebody else and it was miserable. And I broke up with that person. So definitely going to those spots. I'm trying to save those for the right person.
[00:41:57] Justin That's pretty cool that you're thinking about it that far. It's kind of neat.
[00:42:00] Dalton Yeah. I just, you know, I, I, I've seen a lot of people travel with their their spouses too, whether they're dating or something like that. And you just see them and you're just like, gosh, like they're going to be thinking about their trip to, you know, insert name here. Right. To Rome and how when they were here last, all they did was argue with their girlfriend that they're not even dating anymore. Right. So I'm just like, I want to avoid that. And then also I'm a very decisive person. So whenever I'm like, hey, let's go do this, let's go do this. I want to go here. I just want to do it, you know, I don't want anybody holding me back.
[00:42:36] Justin So it seems like it'd be difficult to fly into somewhere like Brazil. And then, you know, you don't speak Portuguese and you're traveling by yourself. I mean, what do you do in that situation? A lot of them speak English or one.
[00:42:50] Dalton No, it was super difficult. There's a few countries in the world where I've been unable to properly communicate with the people in English. Or in any language, because I was learning Spanish for over two months in Nicaragua, and so I went down to like Brazil thinking that maybe they would, you know, speak a little bit Spanish. They understand Spanish, but their whole way they speak is so different they can understand Spanish. We can't understand anything they say. So Brazil was one of those places where, after all of my friends that I had met after they left, I was pretty much as well.
[00:43:26] Justin So, yeah,
[00:43:28] Dalton I knew how to say it was like Bonga, which is like, good morning. And then obbligato. Thank you. That's literally all I knew how to say.
[00:43:35] Justin That's cool, man. Yeah. So what advice would you have to anyone that's looking to start a company or do their own thing.
[00:43:40] Dalton I would say do it early and the best investment that you can make is an investment in yourself. Right. There's a lot of students graduating from college right now that aren't going to be able to find jobs. And I really respect like even Peter Thiel has a foundation where when people graduate from high school, they he has these students apply to his program. And if they meet the criteria, he'll pay them one hundred thousand dollars to not go to college. Right. And what I have learned, for instance, in the extracurricular real estate program at the University of Colorado, that wasn't even you know, it was completely separate from the coursework. What I learned there was more than I learned in any other course during that program. Right. And the same thing with starting a business. What I have learned since last May, until now, it's just not taught in schools. Right. And so I would say go out, you know, start a business, start young, learn how to raise money, learn what makes a company fundable right. And again, make an investment in yourself and in the long run can be the best decision you ever made.
[00:44:50] Justin I think that's a good way to close it out.
[00:44:52] Dalton Yeah, I think so. Well, yeah.
[00:44:54] Justin Thanks for coming in. Thank you for having me. Good luck with Gold Gateman. I'm going to be checking it out and keeping up with the. I want to see how it goes.
[00:44:59] Dalton I appreciate it. Thank you for having me.