Failure, Mistakes, and Lessons | CEO of $180 Million Dollar HouseHack & RoboHack

if you want to make money and there's

one video you watch tonight I hope it's

this one because frankly you're going to

learn a lot about the scars of what it's

like to run an over $100 million real

estate business to be the CEO and you're

going to learn what the scars are like

what the failures are like what the

lessons are like and changes that are

made to prepare for either luck or

opportunity we'll talk about all that in

this video so it's going to be a little

bit of a longer one but I'll try to

break it up into chapters down below but

in the meantime buckle up good luck and

hope you learn a lot

ready I brought coffee for myself all

right let's get started so uh look this

video while it's going to have a lot to

do with my real estate business house

hack I want you to know that you could

learn a lot from this whether or not

you're interested in that business so it

doesn't matter now if you are interested

in business you're going to get updates

along with this video but we're doing it

all sort of together in one so you can

learn even if you don't care about that

business but I want to start with one of

the most important lessons because it

really leads into what's going on with

house Haack right now a lot of people

look at others who are successful and

say wow they are really lucky and look

to everyone's credit yes life definitely

takes luck the luck that you're born the

luck that you're either living in now or

watching from now a place of

opportunity uh the fact that maybe you

were born in America versus a a

developing country these are things that

we just can't control so we could really

only chalk them up to luck but when it

comes to business the most important

lesson that you really have to know is

that business doesn't just start working

it takes a lot of

preparation and then let's call it luck

or opportunity and together those two

things the intersection of those two

things can really create some awesome

wonders think about this for a moment

this YouTube Studio that I'm in right

now I built this studio starting in

2015 it actually took me 2 years to

build it because honestly I built it all

myself we spent about $200,000 in

soundproofing here which I know sounds

crazy but I have seven kids and and

these walls are like a vault they're

amazing but honestly when I was building

it I'm like why am I doing this this is

a waste of money I had a successful real

estate career that financed this studio

well paid for the studio but I'm looking

at it I'm like why am I doing this I

hate filming videos in the office I like

filming videos sort of on like the Casey

niist camera running around behind

bushes and dumpsters and filming about

real estate and I'm like I don't know

but you know what I'm just going to have

it I'm going to build out a really good

Studio that's quiet so when kids are

noisy no problem I can film I can

temperature control it everything will

be perfect the way I want it and what's

interesting is I didn't really finish

perfecting this studio until

2019 and what happened the very next

next year Co and obviously that was a

moment where we were all locked inside

and people were looking for updates on

everything that was going on in the

world and that's really where I was able

to provide value and shine on YouTube

and it's really interesting because that

is sort of a combination of in some way

if you put it the luck of everybody

being stuck at home I don't ever want to

say luck though or that it was a good

thing because obviously many people died

during the pandemic but that obviously

let a lot of people to discover me the

pandemic people were locked down at home

and I'm locked down in a studio but I

have the studio that I could then use to

make news content which obviously many

of you know me from

that that same luck if you will is in my

opinion what's happening with house hack

see 6 weeks ago we were preparing to

take house hack public as soon as

January

2025 and that's well there are many

reasons for that but we decided to

postpone that a bit hopefully not too

long but because a possibly bigger

opportunity came our way that we weren't

even anticipating but something that we

had been planning for we've been

developing plans for being able to sneak

into some opportunity like this and puts

us into a really sweet spot and see this

is one of the first lessons when you

first look at business you might say to

yourself man why am I building this

business why am am I getting these

licenses why am I preparing for XYZ it's

not making us money today and this could

be one of the biggest frustrations in

business I mean if you've been watching

what we've been doing you might be

asking yourself man why is Kevin getting

his series 27 Series 7 series 24 you

know series 14 license his 65 license

his 63 license wow siie oh my gosh he

has all the licenses to create a broker

dealer why would he be doing all this

why is Kevin so keen on the banking

crisis and why is Kevin so involved in

broker dealers and FDIC and the Federal

Reserve and oh like how do all these

things are like are these just all

distractions are these just all things

that you know Kevin wants to do because

he's bored or is there something larger

going on and see for me I know that

everything that I do and that my team

works on is laser focused on making

house hack that next birkshire haway now

I know that sounds crazy because hey

here's some 32-year-old guy who says he

wants to be like Warren Buffett but I

also realize that you have to put in

years of Foundation Building to really

be prepared for opportunities let me put

this like as simply as possible imagine

you've been saying to yourself I want to

be a real estate agent I want to be able

to sell multi-million dollar homes homes

and then you kind of Kick the Can down

the road of ever getting your license

because there's no MTI multi-million

dollar home for you to sell and then all

of a sudden your cousin I'm just making

this up or your friend or your neighbor

is like hey I got to sell a

multi-million beach home 5 miles down

the road uh do you know anybody and

you're like oh my gosh if only I had my

real estate license you know that that

could be my first sale which would be

amazing any any real estate agent who

gets in and their first list is a

multi-million dollar listing you know

like the show Million Dollar Listing

that's

amazing but you would have had to have

gotten the license first and this is

where there's this intersection of

preparation and opportunity that from

the outside looking in looks like luck

but my number one lesson as we start

this video to everyone is make sure

you're doing everything in your life to

prepare prepare prepare and then when

you're done preparing start thinking

about what the next thing to prepare for

is it I I I I let me tell let me show

you how how important that is to me and

then we'll keep going with you know

house sack updates and why there's this

stroke of Fortune in my opinion for

house hack and and uh you know what this

could mean for investors and and and

everything involved but first I want to

show you

something keep it in this little safe

over here mostly cuz you got to keep

weapons away from from

children uh a subscriber sent me this uh

this is a uh a pocket knife and I want

to see if I could show you what that

says there you go see how it says meet

Kevin next yeah um that's because this

is uh a saying that I have used uh for

many many years uh this is not sponsored

by the way but shout out to the uh

Palmetto wood shop thanks for sending

this to me I didn't even ask for it they

just just like five of these showed up

one day in the mail I'm like oh that's

quite nice uh but anyway next so for me

this is a a very big lesson as well that

that goes along with the first lesson of

preparing when you're done preparing

when you're done getting your real

estate license you got to ask yourself

okay what's next for me when I got my

real estate license while I was in

college what was next was get my

broker's license what was next after

that let's spend a third of my net worth

making a TV commercial that I end up

ended up getting crazily made fun of

for you can actually still see that TV

commercial if you type into YouTube meet

Kevin Biff BFF commercial uh if you type

that in you'll see uh posted uh 11 years

ago Kevin's TV commercial uh and it's

really interesting if you look at the

comments because you'll you'll see a lot

of sort of like hate comments related to

it uh meet Kevin's TV commercial meet

Kevin Biff it will come up under either

them uh but you'll see a lot of hate

comments related to this and that was

back then I you know I spent like 60,000

bucks and I'm like oh my gosh a third of

my net worth is gone you know our net

worth was down to 120 at that point 120k

it's like oh my gosh uh and uh this to

me was just what was next agent broker

TV commercial lending license helping

people with construction property

management scale educating people like I

had been doing and then eventually you

know that evolved into YouTube and house

hack and otherwise we'll talk about

house hack of course and the latest

updates regarding that let's go ahead

and make sure the weapons are put away

in the safe

spot there we

go all right so why does all of that

matter well it matters

because it's very difficult to explain

to people what's next and say look

here's exactly how we're Road mapping

everything because you just don't know

you you don't really know what you're

going to need or what opportunities are

going to come because you don't know

what opportunities are going to come now

that doesn't mean prepare for everything

but it does mean you should be prepared

and so house Haack has recently come

upon what I think uh is a ridiculously

lucky uh but something that we could

also repeat somewhere else if it doesn't

work out with with this group Stroke of

Luck that uh could be a massive game

changer for the valuation of the company

see I look at house hack as honestly

pretty straightforward it's a company

that buys real estate and we buy really

trashy real estate that people can't

live in like nobody can live in it

they're empty right and then when we fix

them out up we actually provide a

service to communities because people

can now live in them and in the future

if we sell them somebody can buy it so

it's not like we're going around buying

homes that other people can live in

we're not taking anything away we're

actually providing inventory for people

right this is a service to the community

because we go in we take and you'll see

before and afters in just a moment but

we take these nasty moldy gross houses

and we'll put the effort in we'll deal

with the headache the risk and and

everything associated with taking a crop

property and making it great good to you

know crap to Great

basically uh and so for me I see the

bare minimum of house hack as uh

basically like if if let's say here's

the bare minimum of house hack for me

the bare minim minimum for house hack is

like an Invitation Homes let's say

Invitation Homes trades for I don't know

1.4 sorry 2.4 times Book value right uh

and then we get a 15 to 25% discount on

the properties we buy so let's say we

might have an extra valuation of 20% on

top of that so take 2.4 add 20% on top

of that that puts us around

$288 uh cents you know times Book value

right so for every dollar of Book value

we have we should be worth about 288

okay cool well if we have a book value

of about $60 million 60 mil times that

uh is about

$72.81 uh is basically up uh uh you know

to almost 3x dollar to 288 anybody who

invests a buck 40 is roughly up a dollar

right that that's just sort of what I

think of as the bare minimum in sort of

the private valuation world if you will

for house hack Okay cool so if that's

the bare minimum is is that what I want

house hack to be known for no to me

that's like that's like Ground Zero it's

like the starting line it's it's like

okay we've started we're operating

congratulations so where do we go from

here well there are many different

directions we can go from here I mean qu

quite frankly we can tokenize real

estate uh and and sell fractional shares

of real estate this is an example of how

you can do mini funds for example uh you

can uh 1031 it and basically do a

two-year hold and then flip the real

estate save the taxes and go buy more

real estate you can do 1031 exchange uh

DST funds me there are endless things

you could do you could also leverage

your real estate which we haven't

leveraged any of our real estate yet

outside you know a few million dollars

in bonds we don't have any debt uh and

uh and these are convertible at that so

we have no no debt on our real estate

it's all free and clear real estate and

we you know got about $10 million of

cash sitting around for for our next

opportunities which we'll talk about in

a moment including our developments and

other Investments

so that's sort of our bare minimum for

house Act is you we just keep doing what

we're doing we buy good real estate at a

discount we rent it out eventually we

sell it and we keep doing

it but if we can tokenize mini fund

cycle real estate more rapidly great we

could probably go to instead of uh you

know selling for a multiple of Book

value two to three bucks we could

probably go to selling for something

like 20 times earnings fantastic that's

also a wonderful opportunity but what if

we could do more than that and what is

this sort of Stroke of Luck that we're

working on right now no guarantees but

what is The Stroke of Luck that we're

working on right now well what we're

working on right now is an opportunity

where we might be able to take uh a few

million dollars

and make an investment

into let's just call it a fintech

opportunity that could work with house

hack wedge finder artificial

intelligence that we have for valuing

Real Estate underwriting real estate and

create essentially in partnership with

another company that is regulated in a

very different way from us okay details

to be determined once we get there like

there's some things I just can't say

right now

then what we could do is really create

in partnership with this company and

house Haack fintech services for

landlords tenants in the future stock

investors there there were a lot of

things we could

do I think that with this strategic

opportunity that frankly we happen to

have been preparing for something like

this with all of our licenses that our

team has been working on and then now

all of a sudden it's feeling so close

we're all kind of like whoa it really is

lesson of get ready first and then when

the opportunities come you're ready

right so when I say lessons from lessons

and failures and mistakes I want you to

know like the these are real things

where we're like wow okay yeah this

really is how business

works so what's fascinating is my take

is this potential opportunity could lead

you know a dollar in house hack to be

worth $100 or $1,000

now no guarantees I can't make any

guarantees at all it could all be you

know that opportunity could fail and

we're just back to our usual sort of

bare minimum at house hack uh but um I'm

so excited about it that uh I am

increasing my 2024 investment into my

own company to $5 million so I'm taking

$5 million of my own cash and putting it

into house hack this year in 202

actually like with in the next few days

here uh into house heck because I

believe in that this opportunity so much

I'm not saying because I'm doing it you

should do it I don't I don't want you to

think that at all the reason I'm doing

it is because I think if we can I mean

thousand X is amazing like this that

would be like really really incredible

if we could pull that off with with with

the fintech partnership uh and the

investment but let's just say 5 m00 X's

to me I'm looking at that going all

right that's half a billy that's pretty

good that's my vision has always been

billionaire or bankrupt and I just want

to be transparent about my intentions I

can't make any guarantees I just want to

prepare myself not for the next year or

two it's not like I'm here for a few

years to go all right I'll make some

money and then disappear I I want to

prepare myself for the next 30 40 50

years of of providing the value that I

do and I think that's also a very

important lesson for entrepreneurs is if

you set yourself up for short-term

profit your career might be very short

if you set yourself up for

longterm

value uh then then you could really

provide that value for the longterm and

I always did that with real estate sales

as well you know we called it relation

relationship selling there was turnam

and burn them or relationship selling

which one were you the relationship

salespeople really worked their

customers cared deeply about their

customers got referrals from their

customers whatever turn them and burn

them never built that relationship so

there was never a connection to their

agent and people just ended up selling

their home with somebody else you know

next that next time

around uh the tournament burum type were

always advertising the relationship

salespeople were never advertising and

both were busy so it just depend you

know one one net more than the other but

whatever so

um this is really exciting to me uh

house hack uh is expecting to make this

investment within the next few weeks

here uh and uh and and obviously I am as

well

one way that you could participate is by

investing in the accredited round for

house Haack just go to house.com to

learn more about that maybe in January

we'll have a non accredited version

that's sort of just dependent on the SEC

at this point if it were up to me we

would already be doing it uh or if you

just want to be involved in the fintech

part my expectation is that roboh hack.

AI will be another opportunity although

there are not that many seats left uh

there are some people who haven't funded

for that yet we can only have 99

investors in that in roboh hack. a just

type in to YouTube or sorry uh you know

your browser roboh

hack. uh and if you go there and you

fund before somebody else the other

person will get kicked out and so we do

have some slots open if you have

questions just email us at invest roboh

hack. but uh we're expecting to make a

large investment into a robotics

opportunity that closes next week and so

anybody who wants in they have to fund

by next probably

Tuesday uh and then within the week

after that we might also use roboh Haack

that's my expectation to also invest in

this fintech opportunity so it won't be

in house hack but it'll be in the

partnership uh sort of

Consortium uh and uh that would be

another way to get exposure to that

opportunity without uh investing

directly through house hack anyway I'll

leave those links down below if you have

questions just email us ious act.com and

invest at

rack. again links down below so anyway I

know all of that sounds lofty but let's

just put it this way uh I'm putting my

money where my mouth is and I get really

excited about when preparation meets

opportunity from the outside everybody

calls it luck uh this is just the way I

operate and for me it's really really

exciting so what's remarkable is it it

sort of reminds me of my days at Red

Robin you know back when I was a uh an

employee at Red Robin I was 18 years old

before becoming a real estate agent and

uh one of the reasons I became a real

estate agent is because they refused to

make me a server and then I'm like hey

I'm just going to become a real estate

agent you don't want to make me a server

uh meanwhile they hired my now wife and

promote promoted her to server and then

manager I'm like all right maybe I just

suck at serving that's also possible uh

but they're like no man you're just

you're just really good at being the

host I'm like

nah but anyway it's it's just funny now

you know I guess fate loves irony as

Elon always likes to say but Red Robin

has a market cap that is lower I mean

it's close to our book value at Robin

Hood 80 or at at um Robin Hood it's

close to our book value at house Haack

uh Robin Red Robin gourmet burgers is

worth $80 million right now honestly

they're probably trending towards

bankruptcy the only reason they're not

even worth less than this is because uh

JP Morgan just helped him with another

line of credit to try to bail him out

but I'm not

optimistic yeah let that one sink in so

uh you know is this really designed to

be something that says oh let's you know

brag about this sort of Journey no not

at all in fact a lot of scars have come

along the way and this is where we can

start talking about some failures

including failures even at house hack so

uh In fairness now I did go to school

for philosophy and economics at CLA

after saying no to going to Berkeley uh

and so lessons of

stoicism are really

everywhere uh and uh there are some

really terrible feelings that are

associated with scars in business that

can sometimes be associated with scars

that are as bad as uh a family member

having some form of terrible health

issue now I know that that sounds

potentially insensitive because it's

like oh my gosh how could you ever

compare business to to to another human

but for many people businesses are like

their family their babies and I'm not

saying it should be I'm just saying it

is and so sometimes scars in business uh

can hurt as deeply as scars in in health

for other people now I will say I

haven't ever been hurt in business as

badly as what I felt with my little baby

summer uh and so if you haven't heard

about this I'll give you a quick little

uh synopsis here but there are a lot of

similarities to the pain that comes with

a missed opportunity a mistake a failure

in business maybe you made maybe you

didn't make an investment maybe you made

an oopsies in investing maybe you didn't

take a business opportunity and you

regret it maybe you screwed something up

and and you have like guilt about it

this is very normal and it can really

hurt people a lot uh again that's why

I'm comparing it to health

issues because health issues can hurt

people a lot

and that guilt and frustration just eats

you away from the inside unless you can

remain stoic and get through it remember

the principles of stoicism this is a

very important

lesson as a stoic or somebody who even

appreciates stoic principles you must

accept that there are only things that

you can control and things you can't

control that you can't control and if

you get frustrated over things you can't

control you let somebody else dictate

your emotions if you get frustrated over

mistakes that you make or are going to

make well then this is your opportunity

to regulate those and try to correct

them anyway here's an example of

something I just could not control which

is very frustrating this is my baby

summer and uh baby summer uh came out

looking like this she was extracted via

emergency C-section and uh rightfully so

because uh her ilium was blocked

uh her ilum is basically the connector

between her small intestine and her

large intestine it was uh blocked by uh

meconium which is basically early stage

poo uh and uh this blockage built up

pressure and uh subsequent rupturing

which left a lot of undesirable

quantities of things to spill out all

over her insides which could typically

kill you from septic shock or the

destabilization that happens to your

body after a surgery kills you or the

chance that you the over 80% chance that

you end up with cystic fibrosis and then

ended up get and and end up dying early

because of that diagnosis is also a

possibility because generally a meconium

ilas is associated with cystic

fibrosis excuse

me gosh just thinking about it chokes me

up uh well anyway so um the the pain of

going through through this and and the

months of dealing with this especially

when she's a 6-hour car right away

because of where she was born in the

emergency C-section well let's just say

it sucks and it's scarring uh it's

definitely hard to you know visit a

little baby that's all alone uh in in

the nicku for two to three months uh and

and try to show them as much love as you

regularly can to to you know help them

get through

it it's scarring

uh and uh fortunately though she doesn't

have cystic fibrosis she survived the

coin toss and here she is with her

twin this is um this is Summer on the

left and uh now today she is one of the

happiest most appreciative and what we

think is one of the strongest of our

seven children it's kind of weird it's

it's almost like we don't know this

obviously with certainty but it's it's

almost as if she is one of our happiest

children uh and uh nobody knows if it's

because of what she went through or what

but the energy that comes from her the

the thankfulness for life is so great

probably because not only does she have

multiple physical scars from three

different surgeries but because she went

through hell and near death well the

similar things happen with

businesses businesses also get scarred

CEOs entrepreneurs you will suffer if

you don't want to suffer don't be an

entrepreneur don't be a CEO don't run a

business because I guarantee you there

will be suffering and it always has to

do with money which if you think about

it it's just a number but it'll still

Eat You Alive if you let it and so you

always have to remember you must focus

on the controllables and not the

uncontrollables and so many of you might

recall on the road show that house Haack

did earlier this year that we argued we

were probably

overstaffed well we were and so what did

we do at house act because frankly we

were we we built the company so quickly

we could have probably and I said this

on the road show too we could have

probably managed about 10 times as many

properties as we have now and tenants

you know let's say if we have I'm just

going to Ballpark 100 tenants now we

were built out for like a thousand

tenants like okay we don't need this

many people and so this is where a lot

of people were wondering

okay wait a

minute when you say pruning people does

that mean reducing

growth and the fun fact about

entrepreneurship is

no I think of it like a plane when

you're flying a plane that's overloaded

and overweight it becomes very difficult

to maneuver in fact it becomes very

difficult to even take off the Runway

and get going like you take an

overweight plane or a plane with a bunch

of snow loaded up on it and you try to

take off on a Runway you're just going

to keep going and going going but you're

going more straight than you are going

up and you're going to hit the trees or

you're just going to lose lift and go

right back into a field that's very bad

being overweight as a startup is bad and

most people don't realize it quickly

enough you must prune a business just

like a rose bush you let it grow you

prune it you let it go you PR it and

look I never want to come across as

suggesting that people are like a rose

that you kind of just you know you cut

off the the old stuff and and throw it

away anybody that we have let go we have

worked with with really generous

Severance payments or additional

payments or we've helped them start

their own businesses and we've given

them business we've preferred the

business whatever we really try to help

people out but let's just be really

clear when there's excess you have to

start by pulling the Elon line what did

you get done today now again I know this

sounds potentially too you know rash but

let's take a look at how you could

practically implement this as an

executive all right so let's say you

have two experts and these are experts

who have been doing I don't know

accounting and auditing or whatever for

many years and they're making $250,000 a

year or whatever it is each of them

right right let's just say we're just

going to round numbers here make stuff

up

whatever if you ask hey what did you get

done today and the answer is oh okay

well well I uh asked so and so to do

XYZ and then you ask again in a

different day oh what' you do oh I asked

so and so to do x y and z h and that's

regularly the answer that you get then

you kind of start thinking to yourself

maybe I need to talk to so and so and

see if they can do it without the other

person cut out the middle layer in other

words if something needs to get done

let's move from one person telling

something El somebody else to get it

done to just get rid of that other

person and have the person who's

actually doing it do

it now these things are not readily

apparent when you first hire something

somebody these are things that obviously

anybody can Monday Morning Quarterback

and look at a business and say oh you

should have fired XYZ a long time ago

you didn't need them but usually what

happens when a business grows is you

don't actually find these issues until

people get into their comfort zones and

that could take 6 months to a year

sometimes even longer and so what we

found is with a lot un unfortunately a

lot of different people we found that

there were a lot of people were pointing

the finger going oh yeah we uh uh we're

waiting on them to do something and

we're just kind of going to sit here and

wait until they do it and I'm like okay

well if that's what you're going to tell

me every

day

AA that's a shout out to Javier Malay

out now again this sounds insensitive I

call this a failure of not discovering

these sort of issues sooner at house

Haack and so what I've done is

unfortunately over the last uh you know

many months here we have laid off a lot

of people and the irony is the company

is running faster and more efficiently

than ever

before it's kind of like that plane

analogy where once you get rid of the

extra weight the plane now flies really

smoothly and now all of a sudden you

know I pull up on the Yol this thing is

like it's like it's fun like we can

crank now with the team that we have now

and profitably which we'll talk about

those numbers in just a moment but let

me go through some of these here so the

people as an example I just gave you've

got to regularly ask other people to get

things done for you AA sort of like hey

how come this isn't done for for

investors oh you need a certain form

drafted and you're waiting for somebody

else to do it why don't I just have the

other person do your job

then how about another one hey uh

bookkeeper working with whomever

whomever whomever you know accountant or

whatever hey um how come this reporting

isn't formatted appropriately for the

other CPA the you know the PCO pcaob

uh you know financial statement CPA oh

well because we just hire the other CPA

because they know how to do Securities

filings I'm like wait wa wait a minute

this is even confusing me just saying it

right think about this for a moment

there's a regular CPA that can help you

you know do personal tax returns then

there are SEC level CPAs that help you

do Financial filings for public

companies then there are BC aob level

Auditors that help you audit those

financials to be a public company

remember how earlier I mentioned we

wanted to get house to be public earlier

well the people we had working with us

were not familiar with how to do this

work and so they were sending this work

to the people who were familiar with it

but then I'm like well wait a minute if

y'all don't know what you're doing for a

public company obviously we weren't

public when we started working with them

but if you don't know how to be public

and you're just hiring this other person

why don't I just work with them directly

so what do I do I call that layer I go

hey can you just do it all like if we

have someone else help you with

bookkeeping and then you know we verify

it all and then you run those financial

statements and then you work with the PC

be auditor can we cut out all of this

middle

fat and when the answer is uh yeah in

fact cutting all of that out would just

make it even easier for me to do my job

and I could charge you less well then

all of a sudden I look at it I go oh my

gosh well what is a CEO supposed to do

you're supposed to do what's best for

your shareholders and your customers for

our tenants for for our you know our

investors and everyone so we look at it

and go okay we are now going to cut out

all of these expenses that are actually

unnecessary and they're bogging us down

and we are going to streamline our our

basically auditing work to the point

where now we can actually get finals

together that are SEC ready for a public

company and at pcaob auditing standards

which are like the golden threshold of

auditing standards and we could do all

of that while turning a profit in 2025

we'll talk more about profitability but

that's pretty cool so what's a lesson

there you have to find out can you do

certain things more efficiently and

you've got to regularly ask yourself

that I'll give you another example

somebody helps in Property Management

hey a problem came up with a tenant

complaining about a garbage disposal

great did you consult the house hack

manual on what to do if a tenant

complains about a garbage disposal

because if you just send a plumber or an

electrician out and they just end up

resetting the GFI or taking the end of a

broom and and moving the disposal a

little bit to dislodge I don't know

something that's in there and then it

all works again well now we're going to

pay $150 service charge for you know

something that the tenant should have

diagnosed initially themselves and the

problem would have been solved in 5

minutes without a tenant having to

coordinate with somebody and meet

somebody and usse having to pay the

service fee and all this

nonsense oh no I just asked so and so to

do it for me okay if you are asking

somebody else to do it for you why do I

need you

aera okay it sounds insensitive but

that's

business the same is true when it comes

to the dis well like how should I phrase

this things that people are waiting for

you on there are some things that only I

could do so for

example Hey Kevin we really should make

a video giving everybody an update on

house kind of like this video right and

and entrepreneurial Essence great can

you put together all of the content for

what we need to make that video oh well

no in order for me to do that I'll have

to hire other

people what do I need you for then oh

or another example oh well Kevin you

know we need you to film this okay but

if I film it I'll just cut it myself and

post it why do I need somebody

else

a this also another business lesson

comes to a conversation about

entitlement now this is also really

important because remember there are two

ways you could look at business

and you could look at life and this is

really really important okay so if

you're if you're ever if you've ever

been an

employee or uh you know you you have

employees this is very

important there are two types of people

there are hardworking grateful and

hopeful

people those people will also sometimes

get burned I'm not saying that just

because you are hardworking grateful or

hopeful that you might not get burned

you might get burned

and it sucks it absolutely

sucks or maybe you were not actually

hardworking grateful and hopeful and you

were another person the other person is

the pessimist the negative person the

doubtful person the distracting person

the person who takes bad news and

distracts other workers who are trying

to do good for the company uh the people

who are trying to be happy and

somebody's bringing them down with bad

news or bad feedback or whatever without

bringing solution instead just

distracting other people that kind of

sort of rotten mentality got to go the

sooner the better the same kind of

mentality can come from people

who and you know I I think we pay people

really well to work for us in fact I'm a

big fan of I'd rather overpay people

than underpay

people but if then that all of a sudden

turns into entitlement like well if I

don't get my stock comp by this date I'm

going to

quit well that kind of entitlement

AA like it's very simple I think there's

there's one thing that people know when

they work for

me the more entitlement there is the

shorter your stay here will

be on the flip side the rewards for

staying here will almost always be

greater than you

anticipated that's my belief and that's

my what my goal always is for both

invest

and

employees so as a leader and a lesson as

as a CEO it's very difficult to make

these decisions because you know here I

am going a uh talking about people right

these are people with livelihoods and

this is why it's important to pay a good

Severance help people transition uh help

people uh you know build a new business

get a new job

whatever you

know it's sad it's

hard it's

unfortunate but if you're running a

business you've got to do it because

otherwise the business will fail the

business that isn't paid attention to is

the business that

fails so with that said house hack has

dramatically cut its payroll house hack

has cut its payroll by about

70% and uh We've cut out about 2 and a

half million of annual expenses which is

absolutely

insane and we'll talk about what that

means for profitability but let's just

say it's really good it's

amazing how lean we could run this

business uh and uh this this team that

we have now I mean I I wholeheartedly

believe every one of the people on the

team could run the business without

anybody else uh like if they needed to

right they'd have to hire help but I'm

just saying like everybody's so good at

their job they're so good and so

involved with this company uh and they

know all the ins and outs of this

company that everybody individually

could probably be the CEO of house which

is so exciting because I feel like now

I'm just surrounded by a company of just

CEOs and it's so cool because I have the

most hardworking group uh you

know like there's like a challenge

almost of who can beat whom to the

office who can stay later than the other

person who can work hard harder uh and

it's it's so amazing

because I think what we're building is

is beyond what we ever thought we could

build which is kind of

cool anyway you want to invest in house

Haack go to house hack.com this video is

not a solicitation but again like I

don't think we're going anywhere in to

soon to me to me house is uh is my

little birk share uh and I'm really

excited about uh building it over time

it's so exciting and I want to share

these lessons but I think that's an

important one too is you want to have

you know there's a book called good to

great and one of the lessons is you want

to have not a big bus but a small bus

where everybody on that bus is in it and

if you're driving that bus and you're

like oh man now we're going to go this

way you want everybody else on that bus

being like hell yeah let's fing go

baby as opposed to oh well you know do

we really want to do that and the

negativity that sometimes comes are like

well am I going to get paid more if we

do this a we'll leave you at the other

stop uh and then this also comes with by

the way this is another lesson make sure

you were adaptable because some of the

people that didn't make it didn't make

it in part because of their reluctance

to learn basic technology basic cyber

security basic technology uh uh you know

basic uh like systems and procedures

Sops and these aren't things where it's

like oh we didn't train you these are

things where it's we're sort of like hey

let's train you let's train you again

let's train you again no I hate this no

I hate this no I

this all right

anyway

so it's

really you're always going to be in this

place where people doubt you there will

always be doubters you really just don't

want them on the inside because it makes

it a lot harder it's hard enough when

people doubt you from the outside and

there are always people who make hate

videos on me or stuff you know I always

think it's funny like the New York Times

had a a a hitpiece on me back in 2021

right before I ran for governor uh and

um you know I kind of like took it with

a grain of salt I'm like whatever but a

lot of my audience are actually like oh

my gosh you like Kevin why are you

sharing this article like they're not

being nice to you and I'm like I mean

it's kind of cool I'm in the New York

Times They like screw them they're

a-holes to you I'm like well that's a

good point uh so

you know I guess I just have so much of

an optimistic Outlook that like even if

somebody's critical of me I'm like you

know okay whatever they could have their

criticism but you know that's as as

another lesson as an entrepreneur maybe

I'm too optimistic and and I think just

that everybody ultimately can get along

I don't know probably not but you know

when I first became a real estate agent

I was doubted by a family member by

somebody who should have been moting

motivating me and instead they were

trying to pull me down they're like you

know why don't you get a real job and

looking back at it now I didn't need to

prove to these people that they were

wrong I needed to prove to myself that I

was right uh and and so that actually

makes the pain a lot more bearable

because you're always going to have

setbacks in business but then you can

say to yourself I conquered and after

all that is what the purpose in part of

life is is to come and to challenge and

to conquer will there be failures yes

but the goal is to win the goal is not

to sit outside of the Arena looking in

for your whole life wondering what it's

like on the inside it is rather to

prepare for the inside to fight and to

win and yes you'll get beat up you'll

get bruised you'll get cut you'll get

stabbed

whatever but you never ever give up you

keep

fighting and so with all of that said

what's next for house hack well another

thing we've done is in streamlining our

payroll cost we've actually transitioned

to what I'm so excited about and that is

development I'm really pleased to

announce that house hack is now moving

into our first 10 accessory dwelling

unit

developments this is really exciting

because we're taking a four unit turning

it into a six we're taking an 8 unit and

turning it into a 16 unit and we think

the ROI on these units could be anywhere

between 7 to

9% which is really really good like

that's a cash on cash unleveraged return

for Real Estate that's fan freaking

Astic in addition to that we are also

going to start

developing our first parcel of raw land

with a spec build and an Our 11th

Adu combined this experience with the

cash we have available combined this

experience will get us into development

and this is another example of preparing

the company for the future

opportunities think about it this

way the bare minimum for house PCH is

that Invitation Homes plus the wedge

Factor if we can get this fintech to

blow up this partnership to blow

up amazing that's why I'm putting $5

million in right now cuz I'm like please

give me more access to this this is

great uh if that if not that then maybe

we just do developments or the

tokenization of real estate the mini

funds or whatever or all of it see

that's the cool thing we could literally

do all of it we could do adus

subdivision track you know development

spec builds uh we could do mini funds we

could do

tokenization whatever the best option is

for house Haack is what I will will do

with the company at that time and the

best opportunities in front of us right

now are continuing to acquire wedge

deals building our adus and working this

fintech partnership and we'll worry

about our mini funds or tokenization or

whatever in 2026 as we get some more

clarity on trumponomics as I like to

call

it this is exciting to me all of this is

very very exciting I wanted to get

through you know some some hard lessons

first but I want you to also think about

this as a business lesson

you don't need to say we will do exactly

XY Z and then hit

treasure I don't like to think so

narrow-minded that we will only do one

thing and and nothing else I like to

think everything in front of me is an

opportunity that flows into the laser

point of the end goal which is the

Berkshire hathway of the future maybe

that includes doing a lot of things much

like Berkshire hathway does maybe that

means we do insurance at some point in

the future all of these you know

whatever whatever the right opportunity

is at the right time is what we will aim

towards and plan towards uh and I mean

real estate Insurance okay to be clear

uh most I feel like most insurance is

are just a ripoff and we need like to

democratize Insurance especially real

estate

Insurance that's what we're good at we

know how to underr right real estate we

know how to do real estate Finance we

can do real estate fintech like these

are all things we can do we know that

all right

cool so now what well in an effort of

expanding our ability to do all of these

things we have discovered I like to say

the magic of Outsourcing and this is a

really cool thing by the way that is a

huge lesson I want you to think about

this for a moment if you hire somebody

off of let's say upwork you're going to

get you know probably somebody from

America it's it's not like you're

Outsourcing to a different country

upwork it's mostly us-based people

Fiverr it's mostly not us-based

but uh what I love about upwork is that

I can hire somebody who's like hey I'll

do a project for you for 40 bucks an

hour and usually what I do is I tell

them hey I'll pay you 45 an hour like I

want you to to focus on me as your top

priority and the cool thing about

Outsourcing somebody for something

that's easier to Source like you know

bookkeeping or maybe website development

or software development or whatever the

cool thing about this is they're all

1099s that is their

contractors and so if they work hard for

you and you know you pay them whatever

money you pay them if you don't like

their work anymore you just tell them I

don't have work for you anymore it's

kind of like having an outsourced

painter electrician website developer

software engineer bookkeeper whatever if

at any point you don't like any of them

AA except the difference is they're not

going to sue you for wrongful

termination uh they're not going to

demand massive Seance payments they're

not uh you know you know there's there

like no hard feelings like hey we'll

call you in the future when we need you

kind of it's so much easier there are no

uh retirement accounts health insurance

plans uh payroll tax withholdings

workers comp insurances that you have to

worry about none of

that so much easier to hire it out now

guess sometimes is it more

expensive

no I used to think you have to

internalize everything to keep costs the

lowest but what I found when we had our

in-house construction team is things

were cost overrunning like crazy on some

of our first projects where I'm like no

no no no let's Outsource more and as

soon as we started Outsourcing more

things were actually starting to come in

cheaper

because now when the flooring contractor

is like hey you bought the flooring from

Lowe's Lowe's delivered it with free

delivery and the flooring guys is like

I'm going to show up and do the job for

you for four grand cool it's done for

four grand when I compare that to

overtime hours uh workers comp uh

payroll

taxes the time they spend ordering it

the time they spend talking to lows the

time they spend picking it up from lows

the time they spend on returns I put all

all that together I'm like it's cost me

7 Grand to do the job I'm like dude I

could have outsourced it you know and

usually when you Outsource the funny

thing is when you Outsource people are

like yay I get to work for Kevin whereas

when somebody's an employee you kind of

get into oh I got to go to work like the

mindset is so

different usually like again the CEO

type employees that I have now huge

shout out by the way Tristan Ken mck

yeah yeah all everybody okay you all are

amazing uh okay

so I want to be just really transparent

here these are these are okay a lot of

what I'm sharing in this video I think

these are like multi-million dollar

lessons well I mean that implies you're

multi-million dollars of cost no I mean

over time they they would be well I mean

two and a half million dollars of

payroll save that's I guess a

multi-million dollar lesson but imagine

the longer you wait to solve the these

things the costs and how those savings

can actually compound into Now new

Partnerships new ideas new Ventures

developments

fintech uh you know whatever uh you know

artificial intelligence underwriting

whatever all of these things actually

make us potentially balloon the

valuation of house Haack way faster than

being bogged down by all this weight and

people distracting each

other again we are more efficient today

than we've ever been before just crazy

because we've just cut out every middle

layer that we

have it's great like I feel like I'm

flying a plane and the lady on the on

the cockpit voice is going minimums

minimums and I'm like that's where I

want to be

baby uh so anyway too many pilot lesson

sorry I actually passed my uh written

pilot exam today it's kind of cool

anyway uh

okay so what's next well the next thing

is because we are now doing uh PC pcaob

financials uh we think that our

profitability and we are so much more

streamlined with our expenses we

actually think our profitability will

look delicious now I think 2024 is

probably kind of going to be like a buy

the dip opportunity so if you're

investing in house Haack in the

accredited Bond raise that we're doing

in December of 2024 or maybe the non

accredited raise that maybe we'll do in

January of 2025

depends if the SEC is good with it it's

up to them not us again if it were up to

me it already be live uh I think you're

buying the dip on house tack because

you're going to be buying into the

company when in my opinion the valuation

is still low it's coming out of an

expensive 2024 okay we had a lot of

severance charges in the fourth quarter

uh laying people off we had a lot of um

IPO expenses because we were planning to

IPO at the beginning of 2025 which

were're delaying a bit now uh there are

a lot of expenses and legal expenses

associated with that a lot of one-time

expenses that they're just going to hit

in 2024 and then they'll be gone but

going into 25 like I think we're going

to be we'll be negative for 24 will be

profitable probably the entire year q1 2

3 4 no guarantees but I'm I'm pretty

sure we will be profitable every single

quarter in 2025 and by the end of 2025

our Capital Improvements our Adu should

start getting rented out and then our

profit should go up even more in 2026

along with our new

acquisitions so I think we'll we'll be

like as they say in the black and then

even better in the black like I I think

our numbers will kind of look like if

this is the break even line it'll look

like 20 24 and then whoop it'll be a

really cool 24 25 26 transition and

that's why I think if somebody's

investing in 20 at the end of 24 and

beginning of 26 you're or 25 you're

really buying the dip because you're Buy

to some extent some uncertainty right uh

but again I'm just going to work on

being as transparent as possible as part

of that what I want to do starting in

2025 is basically like mock quarterly

reports so like in April we do a mock q1

house Haack quarterly report and

earnings call uh and that way we'll take

our financials especially when we have

our pcaob audited financials and we just

review them I talk about them and it's

basically just practice for being a

public company I think I think that

would be very fair to investors and

useful so we've talked about

profitability we've talked about growing

the company we've talked a lot about

lessons we've talked about the fintech

opportunity again two ways to invest in

that one is going to be through house

hack uh the other would be through Robo

Haack uh but we we only have a limited

number like we're pretty sure we're next

to full on Robo Haack but there are some

people who haven't funded yet so if you

were interested in that if you're an

accredit right now you have to be

accredited for either investment

opportunity you could also invest in

both and diversify I guess if you want

to but uh just go to those websites and

read the perspec toes there this video

can't be a

solicitation okay obviously investing

comes with risk we all know that uh okay

good so we've talked adus we've talked

developments we've talked spec build on

land we've talked lenar Invitation Homes

we talked operational efficiency we've

talked Outsourcing oh uh this also

includes software development uh

Outsourcing software development has

saved us a lot of money and there's some

really cool things with are planning on

releasing very very soon so I'm very

excited about that stay tuned for that

and uh let's see what else here we

talked about the

pcaob oh yeah I'm all in well I mean

like when when I say I'm all in I'm just

like this is all I focus on every single

day obviously not every single one of my

dollars is invested uh here but again

I'm putting five more million dollars in

after the other Investments that I've

already made and I couldn't be more

excited so

this is a really cool Journey hopefully

this video wasn't too long I realized

it's a long video but I think it's

really educational and I'm kind of

excited about it so I think now I'm

going to go bowling with the

kids so cheers my friends thank you for

watching this I hope you learned a thing

or two and if you have questions

remember hit us up at invest house

hack.com

uh sorry I house.com invest roboh hack.

those links are down below if you just

wanted to learn lessons from an

entrepreneurial point of view hopefully

this video helped you out thanks so much

my friends we'll see you in the next one

goodbye and goodbye why not advertise

these things that you told us here I

feel like nobody else knows about this

we'll we'll try a little advertising and

see how it goes congratulations man you

have done so much people love you people

look up to you Kevin P their financial

analyst and YouTuber meet Kevin always

great to get your take