Democratizing Real Estate: Exploring Tokenization and Investment Opportunities with Josh Kagan

Speaker 2: 0:11

Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevie, my co-host. Let's get started. All right, welcome back everybody to the Side Hustle City podcast, with Kyle Stevie in the building guys. Yeah, buddy, once again to my right side here.

Speaker 3: 0:40

One day we'll televised these things and everybody's gonna be like God damn, it's a good looking man.

Speaker 2: 0:44

I know they don't even know what you look like. It's all mystery right now.

Speaker 3: 0:46

I know well, you turn a good lighting on instead of that lighting that they put on you ever like. Try and close, and one of those stalls or whatever at the mall they had the worst lighting ever. Every little bit of cellulite that you possibly have ever had.

Speaker 2: 0:59

Oh any wrinkle? Yeah Like oh my God, it's all bad. Well, we got Josh Kagan today. Josh, how you doing man. I'm doing well, man, how are you doing? I'm doing really really good. It's glad to have you on the podcast here. Where are you from right now? Where you at.

Speaker 4: 1:14

I live in Denver, Colorado. I've been here a couple of years and loving to hear so, josh, what are we here to talk about?

Speaker 2: 1:20

We're talking about tokenization and crypto, and we were talking about banks. We're talking about the government, we're talking about all kinds of stuff before the show, but all the world's problems. All the world's problems and how we can fix them Now we did. Yeah, fix them all with tokenization. How about that? So tell us a little bit about your background and everything.

Speaker 4: 1:37

Yeah, so I spent the last 12, 13 years kind of in real estate and fintech. I worked at a venture capital firm where I focused on the internet of things and sort of technology buildings, and then went to go work for Richard Branson. He started a company called the Carbon War Room and I was asked to basically he asked the managing part of our fund to be the CEO of it. I migrated over, I ran the energy efficiency and building division for four years. We were investing in multifamily office and hospitality projects with specifically energy efficiency projects within those assets. And then we got acquired. I went to a sort of clean fund that was providing capital for energy efficiency and renewable energy projects and buildings. So basically working with building owners to source capital to reduce operating expenses and improve their NOI and then parallel my side hustle.

Speaker 4: 2:29

In 2011, I bought my first foreclosure. It was in the Berkeley Hills of San Francisco Really lucky timing, but I had never done a real estate project before and had to figure out how to be the GC and the property, lease it up and etc. And did another one. Then started doing fix and flips and started doing the burn method of buy, rehab, rent, refinance and built out a portfolio of single family rentals.

Speaker 4: 2:53

And Bonfire, the company I founded or co-founded and I'm the CEO of, was born out of talking to my friends who are in their 30s and 40s. They have good jobs, they make good money and they want to own a house and they can't because they still have student debt or interest rates have doubled in the last year. They want to own real estate, their portfolio. Maybe they own stocks, crypto, and you know REITs are not a good option for them, because REITs are effectively a mutual fund and you're paying all the overhead of the corporation before you're getting any sort of distribution right With a REIT. And so my co-founder and I asked ourselves why can't we? Why doesn't there exist? You know the Robinhood of real estate, and that was the sort of impetus to start Bonfire.

Speaker 2: 3:34

Interesting. Okay, so the Robinhood of real estate, that's really interesting. So talk a little bit more about that, like how does that, how does that model work?

Speaker 4: 3:42

Yeah, and we're sort of moving. You know, we're really early stage company, I should say. Like my co-founder, vi, he came from India 10 years ago. He's super impressive guy. He started and sold three companies in that time, including one for $200 million. So just like a brilliant entrepreneur technologist and he he's the camp of.

Speaker 4: 4:00

Like you know, the most important thing of an early stage startup is to stay close to our customers and get product market fit. So we started out as wanting to be the Robinhood of real estate and basically build a platform where any real estate asset on earth could be on our platform. And we're evolving. You know, we just tokenized an allocation into a $60 million hotel repositioning project in Northern California where basically it's an A plus sponsored someone I've invested in with in the past and he was buying a two star, four points hotel. He got married out to be the flag and he's repositioning into a four star hotel and we put that out to our community. We didn't know, you know, we didn't know if people would have appetite for this kind of project. It's, you know, repositioning this construction risk. It's going to take three to five years to season and we were three and a half times oversubscribed within five days.

Speaker 3: 4:52

Wow, the difference between raising money with California people and raising money with Ohio people.

Speaker 2: 4:57

That's it.

Speaker 3: 4:58

You're oversubscribed in three to five days here you've got to walk on broken glass and nails and everything else to get them to until you've proven throughout, like 16 properties, that you've actually returned to profit. The difference of mindset in this country. This country is amazing.

Speaker 2: 5:16

We got a bunch of cheap Germans here. That's what it is. They came over from Europe. The cheapness followed them.

Speaker 4: 5:22

I get that and I think we have a lot of customers who are reticent to try out our platform too. And I think, you know, by token, tokenization enables us to bring the upfront cost down from like. With this sponsor, you normally need to invest what a minimum of $100,000. In one of his deals we brought it down to $2,000. So $2,000, you know, is not, I mean, it is a lot of money for a lot of people. I don't want to discount that. But for some who want to try buying real estate for the first time and not, you know, overly commit, it could be a more bite-sized, you know, opportunity for people. And so we had people from I don't know how many states I don't remember off the top of my head, but in the sunbelt, in the middle of the country, the code international people, who bought in as well.

Speaker 3: 6:09

So when you say $2,000, you're, so you're, you're got the bonfire, bought the $100,000 buy-in and then you tokenized it into $2,000 of segments or the general partner said no, you guys can get, they can get in for $2,000. How did that work?

Speaker 4: 6:27

Yeah, it's a great question. So the sponsor, you know, would normally, on a deal like this, perhaps have a $100,000 minimum buy-in. So bonfire says great, we're gonna, we're gonna come in like worst case scenario. I mean, I like this deal so much that my co-founder and I were like, if no one in our network wants to buy this, we'll come in right. So we then went to our community and we're like, hey, you know who want, like we're going to sell these tokens for $2,000 a pop. And then you know, and that that you know ended up being way, way, way more than $100,000. And then we were one LLC that sits on the sponsors cap stack. We wired from one account into their escrow and so the sponsors only ever dealing with bonfire, not with our, you know dozens and dozens and dozens of investors.

Speaker 2: 7:15

Totally makes sense. So how do you do these people have to be accredited? I mean, there's a lot of people out there don't understand how tokenization works. They don't understand how investing in real estate works. You know we talked a little bit about accredited investors and that they're being like a gatekeeper, the government that keeps most people who are not accredited from investing in.

Speaker 3: 7:35

I guess for your own good. It's for your own good, yeah, but just going out of the casino. Why would you want to be wealthy?

Speaker 2: 7:41

Invest in lottery tickets, invest in the lottery, you know, or whatever. But yeah, you can invest in something that has like a one in 10 chance of success, like a startup fund, but you can invest in something that has a one in a trillion dollar chance, like the lottery.

Speaker 3: 7:55

So everybody gets. People are getting struck by lightning every day.

Speaker 2: 7:58

Every day, every day is that one guy, and then he just spends it on cocaine, but so it's a hell of a drug. It's a hell of a drug. So so, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh, josh. Yeah, tell us how that works. How'd that work with your fund? What were some of the challenges that you, you, came up with? Do you have unaccredited people that are able to invest? If they don't invest a certain amount, how does that work?

Speaker 4: 8:19

Yeah, it's a total cluster. You know, because you know the SEC. As your point the SEC is is, we'll publicly say that they're trying to protect people by saying, oh, you have to be accredited to invest in these kinds of investments. Accredited meaning you make $300,000 a year with your spouse, or $200,000 individually, or you have a million dollars of liquid network outside of your primary residence, which is 9.4% of the US population, right? So 90% of people in this country cannot invest in venture capital, private equity or institutional real estate, right? And we look at the last 20, 30 years, what has enabled people to make fuck you money, right, venture, private equity, in institutional real estate, whereas the rest? And so what? We have this massive wealth divide in this country. I would argue a big aspect of it is these accreditation rules, right? We're not allowing people to invest in things based upon their financial literacy, but just some bullshit arbitrary number of how much they make in a year, which is crazy to me.

Speaker 2: 9:22

Crazy, because you can make $250,000 in San Francisco and I just read this. Bloomberg put this out you can make $250,000, I think it's $250,000 in San Francisco and it has the buying power of $80,000 in like Cincinnati.

Speaker 4: 9:35

Yeah, I had that. I mean, I lived in San Francisco and I made six figures and it was like what can you buy? It's unbelievable. And so we, basically our mission, is to democratize access to real world assets and enable anyone on earth to get. Let's back up for a second. Why real estate? Right?

Speaker 4: 9:55

For most of us, for most people, the home that they live in, they own, is the single biggest source of wealth generation they'll ever have. Why? Because they own it. They put 20 or 30% down and the rest they lever, and the thing goes up on average six, seven, 8% a year, compounded every year. And so that's the power of leveraged compound equity, right? And that's how our parents made money and their parents made money, right?

Speaker 4: 10:19

This is the American dream and this is something that many of us are told that we're going to grow up, we're going to get. You know, go to college, get married, buy a house and, you know, have a nest egg. Well, unfortunately, this American, this American dream, is now American myth. Why? Because many of us go to college and we have, we take on huge student debt and we leave college with hundreds of thousands of dollars of debt now, or we go to graduate school and we do not have the means to qualify to buy a house, right? So where are people going to generate wealth if they cannot own their own house? So that's why being able to have access to real-world assets becomes really important, and that's what the heart of the Bonfire platform is.

Speaker 4: 11:01

Now we're encountering major resistance from these arcane SEC laws, and let me just clarify Bonfire is completely compliant with all regulations and laws. We adhere to anti-money laundering, we adhere to the SEC laws. But I'm also saying that these laws suck and they're antiquated and they aren't doing what they're intended to. They're pretending to do, which is to protect people. They're really holding people back. But yes, to answer, sorry to more directly answer your question.

Speaker 3: 11:29

Well, you forgot the good one that they just decided that they're going to throw lob the grenade into the development with. Was they really pushed in on the Bank Secrecy Act? So now all the nodes on the Lair 1 blockchain have to be publicly known. They can't be, they can't. You can no longer have private nodes on the blockchain too. That the nodes that say, yeah, this, this transaction was good, let's put, let's store it into the chain, that they're put it in the block. It's.

Speaker 2: 11:58

I mean so they can come confiscate your computers. Is that what the idea is there?

Speaker 3: 12:02

No, you get. You get fucked up financially Like the SEC brings down like cease and desist and all this other crap. It was what it sounds like. You get fined heavily If you're using, if you cannot verify who each node is on your, on your blockchain. Even if it's a private blockchain, it doesn't matter If you can't verify who the node is, where they. If the node I take this back if the node's getting gas like Ethereum nodes, they all get, they all get paid gas for verification. If you're paying someone to verify, if you're paying a node to verify a transaction In crypto or whatever, it is Right, yeah, and you can't verify who's behind that node, you're running a rye of the law.

Speaker 2: 12:42

That's literally every blockchain, yep.

Speaker 4: 12:45

Like what, Guys? It's all moving towards a direction of these. What are they called Central CBTC? What are they called the central bank?

Speaker 2: 12:52

Oh, digital currency Central bank digital currency.

Speaker 4: 12:55

Where all of our transactions, everything we do, is going to be stored on a government ledger. So when I go buy, you know, my coffee, uncle Sam knows about it, right, and it's all. That's where it's all going, man. But you know crypto threatens, you know the big, the big state, the big nanny government man.

Speaker 2: 13:14

Yeah, big brother is always watching and that's the scary thing. And yeah, let's just talk a little bit about like real estate too. I mean the a lot of people don't understand, like Miami, you know, new York, san Francisco, recent years, I guess, cincinnati. Well, cincinnati nodes.

Speaker 2: 13:31

The thing about Cincinnati is, in a lot of cities, when you buy real estate, you're not necessarily generating wealth, you're preserving wealth in a way, because your property values really just going up with inflation. So when you think you made $100,000 or $200,000 over the last 20 years, no, your money just essentially stayed with inflation that entire time, because the cost to build a new home, those materials to build something brand new, those go up with inflation. So a lot of times your property value is tied to what it would cost to build a new property in a lot of cases. So, and then whatever inflation is, so you're really preserving your wealth. If you don't want to lose money, in a lot of cases you need to buy property. If you don't own a home, a lot of your money is just it's depreciating every single year.

Speaker 3: 14:26

Unless you take that big down payment and put it towards something that appreciates the value, but not everybody does that. They don't put it towards another asset that's going to accrue wealth.

Speaker 2: 14:34

Well, what if you can't buy a house, like what Josh was saying? What if interest rates are so out of hand and your income isn't where the bank wants it and you can't afford to buy a house? You have no other options to invest in real estate unless you go to a place like Bonfire.

Speaker 3: 14:50

Yeah, that's why it's going to be so powerful.

Speaker 2: 14:53

Exactly. I mean right now there's a, it's going to burn.

Speaker 3: 14:56

Yeah, it's going to burn like a bonfire. It's going to burn hot.

Speaker 2: 14:59

But I mean, there's fund rise there's here which invests in short-term rentals and you can invest, I think, as little as $100 and things like that. But I feel like a lot of times they're jacking up the prices on those properties to pay themselves or whatever. They're taking a huge cut of the equity or something like that. How do you guys work? How do you see yourselves different from some of these other options that are out here and then talk a little bit about why you guys are here? I mean, you're not just. You're, in a way, you're doing a community service right now, the way these prices are in these houses.

Speaker 4: 15:33

Yeah, there's a lot of threats there. Yeah, I know. Yeah, I know Welcome to the podcast.

Speaker 3: 15:41

Take your time, go wherever you want. This is a meandering stream of failbillies. This is what we do this?

Speaker 4: 15:46

is it Good? So I think a lot of our competitors there's entities like CrowdStreet and Fundrise and RealtyMocal primarily focus on being a fund. I need to give credit where credit is due. If I want to buy an office read, which I never would, but Vernado is the gold standard right. Or malls or Simon Property Group right. But some of these entities that have come out that I just referenced their names. If I wanted to buy multi-family in the Northeast of the US, they'll create a strategy around that right. So it's kind of like a micro-read in some ways what a lot of them have been able to do and I give them credit where credit is due. But a lot of those platforms they're charging two and 20. They have their own waterfalls and they become a sponsor to I mean Bonfire. What we're doing, we're facilitating direct access into really good real estate deals and we're charging a little bit up front and we might take a percent under management to deal with all the K1s and all the legal.

Speaker 2: 16:56

Oh yeah, that's terrible. Yeah, those things are so expensive.

Speaker 4: 16:59

But our whole mission is to get as many people in as possible. We don't do that if we're just baking fee upon fee upon fee. So I think we're going to be highly curated with the assets that we're putting on our platform and, rather than the shift away from being the Robinhood of real estate, is more being like the rare bowls, which I know, that is, in the common platform. But instead of maybe doing 1,000 deals a year like some of our competitors, maybe we only do 10. But they're fucking trophy high quality, bad ass deals that I personally want to invest in. Right? Maybe that's the criteria. Right Is Joshua Kagan putting his own money into the deal and it's like, if I'm willing to put my own money in the deal, then I can stand for it. So that's a little bit how different we are. We're not trying to boil the ocean, we're just trying to give anyone access to deals with as low a fees as possible.

Speaker 2: 17:52

I went to a fund conference in Miami two weeks ago and I was also. I just got my real estate license, so I was down there the next week for a real estate conference and so I'm just real estate the last two weeks, right, and I'm at this fund conference and you've got Pace Morby and all those guys are up there talking about different strategies that they use and there's a ton of wholesalers in the room and people that are trying to work. I mean, there's people that work. They say I work for Grant Cardone, but really you're just one of thousands of people around the country that go out and try to find him deals. So it's really just a big. It is a big group of syndicators and wholesalers. Is really what it was. And when people would explain I talked to people. They're explaining me their thesis and stuff Everybody was doing the exact same thing, except for a couple people that were doing land deals. This woman, she was 23. She was making.

Speaker 3: 18:47

I don't know hundreds of thousands a month doing land deals. The guy who popularized that was at Joe Fairless's event a couple years ago at Denver. He wrote a book Land Rich or Land Poor, whatever the hell, it is Dirt Rich.

Speaker 2: 19:00

Dirt Rich, yeah, yeah, yeah, I saw that book. I'd love to have him on the podcast too.

Speaker 3: 19:03

That guy was yeah, that guy was, that guy presented.

Speaker 2: 19:05

And then I bought the book and then I read like 10 pages and didn't read it, yeah, and nobody's doing tokenization, believe it or not, like I didn't hear one thing about tokenization the whole time. Nobody understands it, they don't, they don't understand it. But they're all doing the exact same thing down there.

Speaker 3: 19:19

Here's. The thing is that he didn't say this. I don't want to put the words in his mouth, but his investors, eventually, are going to be able to take the holdings that they have potentially at some point, if they or he can. However, he wants to do it and they can sell it before they sell out the whole group. So like.

Speaker 3: 19:39

So if you've got 500 shares and the 500 shares of $2,000 a share, is that right? $100,000? Something like that? Yeah, I think people know where you were going. Yeah, whatever, anyway, mass sucks. But if you do that, if you don't want to divest yourself completely, you can just do a percentage and cash out and makes it so much easier, like because it's already going to be recorded, it's going to be a layer two that's going to make sure that the stack table is up to date and ready to rock so that you can do all the pro-rata shit for your taxes to show what you earned, what you lost, for your K1. And I think that's a huge competitive advantage as opposed to crowd street and a lot of what those guys are doing. I mean, I don't think you can. I don't. I've only invested in a couple of those guys the Reg A+ or the Reg CF guys but I don't think I could get my money back until they decided to exit their position as oh yes, yeah, you're stuck, your money's stuck there, yeah.

Speaker 4: 20:40

And what I would say to both your points, adam. You went to that conference. Someone was talking about tokenization. No one's talking about tokenization because it's a bit blockchain, crypto. This stuff confuses. Tokenization confuses people, right, and I just got to give some big props to Kyle because I ordered his book off of Amazon a couple of days ago and I've been reading it and I've now, I swear to God, I bought two copies today for two people in my life, including my co-founder, because I think it does such an excellent job of verifying and just contextualizing and just making it simple for anyone to understand what blockchain is, how it relates to real-world assets, what tokenization is, what are some of the opportunities and also what are some of the challenges, right, why this isn't. It's very, very nuanced, accessible book that I think everyone needs to read if they're interested in real estate and where it's going.

Speaker 3: 21:34

Yep, one thing Kyle agrees. The one thing I didn't do for the book was put my picture on the cover because I feel like that would have fucking sold it. I mean in New York Times best seller New York.

Speaker 4: 21:46

Times has number one baby.

Speaker 2: 21:47

They tell my wife that LinkedIn picture, that Kyle LinkedIn picture where he's kind of like three-quarters turned and he's looking at the camera.

Speaker 3: 21:55

Oh man, my cousin.

Speaker 4: 21:57

That's broken so many hearts out there, kyle, yes, my cousin Everyone wanted to know did you guys ever see the original Batman with Jack Nicholson? Oh, yes, Right, and he's with Kim Bessinger and he's like, he's like. We're beauty and a beast. But if anyone else calls you beast, I'll fucking kill them. That's it. Well, that's my wife all the time, you know.

Speaker 3: 22:17

That's a great. I'm co-opping that one.

Speaker 2: 22:21

So, joshua, so explain a little bit more. What's the website people go to to learn about this, like what's, what's some more information? I mean, do you guys provide information on the website about how this works, how this structure works, for people that maybe didn't read Kyle's book? They've never even. They don't even know what tokenization is Like? You know, the challenge at these conferences of people talking about crypto, blockchain, tokenization is they have to go through a whole thing. You know, you got two, three minutes. You're going to talk to this person you just met. You don't want to have to spend that explaining blockchain, explaining tokenization, explaining all that stuff to them, because at that point they've already lost interest and they don't care anymore and they're ready to move on. So you know how do you overcome that when you're talking about what you guys are doing. And then is there more information for people, like on the site and things like that?

Speaker 4: 23:11

Great questions. So when I was at Clean Fund, you know we were the first commercial PACE company could? Pace stands for property access, clean energy. It's a way to finance energy improvements and buildings and repay from the property taxes of the building.

Speaker 3: 23:23

Now, we did two buildings. Sorry, I'd sorry to interrupt you, but I didn't before. We did two. We did the first two buildings in Kentucky using PACE.

Speaker 4: 23:29

No way In the state.

Speaker 3: 23:31

In the state and for Thomas yeah.

Speaker 4: 23:33

Wow, petros, who did you work with? And Cincinnati.

Speaker 3: 23:37

I want to say it was Chris Thomas, as I think it was his name.

Speaker 4: 23:40

Got it. I used to come to Cincinnati and meet with the graders. What is it called the Greater Cincinnati Authority? There was another Chris there, really nice guy who ran that program.

Speaker 3: 23:51

And then I was at Clean Fund. He's like 62 a shift of our member, correct? He was tall, he was tall.

Speaker 4: 23:56

He was a military right. Yeah, Was that Air Force pilot?

Speaker 3: 23:59

Yeah, we're talking about the same guy.

Speaker 4: 24:01

Good dude, really good dude, and I bring that up because what Clean Fund did is we had to invest heavily in education and just get it and demystify explaining what this is. And we did, you know, we and I think that there's a lot of different things that have to happen, like, like you know, me appearing on these, you know podcasts like this, and we're doing webinars and content of value, blogs, etc. Like we just need to, you know, really demystify this technology, because it's not, you know, like anything new is going to be threatening to people, right? Oh, I don't understand that I'm not going to pursue. All it takes is some case studies and logos of people.

Speaker 4: 24:36

You know, people in real estate are oftentimes in a race to be second right. They don't want to stick their neck out to do a strategy, but they see someone else doing it successfully and like fuck, I want to do that right. So I think it's incumbent upon Bonfire to continue to invest in education and I'm willing to do one-on-one calls I know this is like totally non-scalable like potential customers. You know, like anything we can do to sort of empower people to get their head around it and then tell other people about it.

Speaker 3: 25:03

Yeah, I'm sorry, I was just going to say. When it comes to that, I think a major paradigm shift in this is going to be when people are speaking about this to you who aren't accredited investors and that they know that they can do it, cause a lot of people right now feel like they don't have the money or they don't have the access to good deals anyway. So what's the difference? I'll just I got a guy that does it, I, my 401k does that.

Speaker 3: 25:31

I think that when you talk about the education and demystification, I think also is the ability that it's going to bring to you to like expand your client list is going to be enormous, because people are just going to start to realize oh, I can get in on this deal six months in because the original investor had to, you know, they had emergency or whatever. They had to sell $35,000 worth of their original investment. I can get in at the ground floor, as opposed to particularly private companies. When we were talking about private companies, um, when you do do an IPO now there have already been through series, at least series D, through series, oh, yeah, uh, who was it? Uh, uber was like series H or something, so they actually lost value after their IPO and now people are going to be able to do it, but they don't. Like you said, you got. You got to demystify and understand. Help people understand that this is going to help your wealth grow exponentially, if you're willing to learn about it.

Speaker 4: 26:29

And we got to find our killer app too. Um, because you know, you look back at the internet and you know there was so many different potentials, the ways that the internet could have gone, and email was really the killer app to begin with, right, and then it was the worldwide web, you know, and then internet browsing, and then you know, it was born, it was porn. It was really into porn back in the day.

Speaker 2: 26:56

Dial up porn is what it was, I think that shit was slow. You wouldn't know anything about that, though.

Speaker 3: 27:03

I can't wait, I can't wait, I can't wait.

Speaker 4: 27:06

But to answer your question. So we're re, re, re re doing our website right now, but you know, people want to learn more. They could go to bonfirecapital, um, and I'm very accessible. I'm on LinkedIn. You know, josh, you can. I'm on Twitter, joshua Kagan one. We have a discord with about 3000 people in it. You know, we're here to empower people. That's what. That is our mission. So anything we can do, and if folks have, if you guys have, feedback on how we can do a better job telling this story, please tear us in the asshole Like we only learned from learning from others, you know.

Speaker 2: 27:37

I definitely see there's a huge opportunity with technology in this space. There's a lot of people that still do things the old way, you know, and I mean our technology company, dot loop. You know when we did that, we had to eliminate the freaking fax machine which every real estate agent that was doing any kind of deals you know they already had this huge process that involved the fax machine. So we had to overcome that. And you know, changing people's habits is really hard to do.

Speaker 2: 28:03

And when you are, you know, the one of the first ones in the pool and you're in this industry, first of all, you've got the blockchain technology stuff right. You're tokenizing assets. That's one big thing hurtled, overcome. Then you're creating a technology. You sounds like you've got an unbelievable co-founder on your team, a technology co-founder that you know he's going to want to disrupt. You know the status quo with. You know some kind of groundbreaking technology which is probably going to actually simplify the process but explain some of the challenges you guys have had and then some of the kind of forward looking things that you guys want to do to change the industry and to kind of be the technology leader in the space.

Speaker 4: 28:49

Well, kyle kind of talks about in this book and you know, again, I haven't finished it all, so apologies if I'm misphrasing any of it, but we have an interoperability challenge in our industry right now. So, for instance, bonfire, we use polygon as our, as our token, as our blockchain polygons built off of, you know, Ethereum, erc 20. We have a competitor called lofty. They use the Algorand blockchain. Right, there's a bunch of. There's every day a new standard coming out, a new, a new company saying oh, our, our standard is the best, right, and the real holy grail is when a Bonfire token can be sold anywhere and vice versa, right, where there's true interoperability among the platforms and not just between them.

Speaker 4: 29:35

And that's a huge challenge because there's a lot of ego in this space and and whatnot. And it takes someone, you know, kind of bringing the file. You know, it reminds me of the Godfather when the file, you know, the heads of the family come together, michael Corlean ends up killing all of them, but they at least tried to cooperate together, you know. And so that that's definitely a challenge. I mean, there's, you know there's, there's a, there's a risk that you have a bunch of geeks who are leading this industry. You know and like speaking geek language and and don't like. I went to the to the Ethereum what is it called? The Denver ETH conference a couple of months back. Oh, like I don't understand fucking 90% of the presentations I saw. I was like I don't see why they're using blockchain. I don't see any real world application. They don't?

Speaker 2: 30:18

they're just doing it because it's a buzzword Like it's literally the only reason.

Speaker 4: 30:23

Or they're geeking out on some piece of technology that like, like academics will geek out on something but it's never going to see the light of day in the real world, you know. And so I think my, my strength as a founder is I'm really dumb, I'm not smart at all. Like I'm like if it doesn't make sense in like common sense to me, then like I don't get it, you know. And so that's the opportunity, and the challenge is like taking all this really cool, geeky technology and translating it into how it actually impact, positively impacts people's lives.

Speaker 2: 30:55

Yeah, nobody cares how the iPhone works, like they don't care about the technology in there, they don't care about you. Know you, if you're going to talk about the processor, are you going to talk about, like, how the technology and the processor is different? No, you're going to say, no, this processor is five times faster than our last processor.

Speaker 4: 31:10

That's all you need to know, hey the iPhone's five times faster, or this processor enables me to film a studio movie on this device. You know I can go to space with it or whatever. Like right, like it's the end result.

Speaker 2: 31:24

It's the outcome that people are concerned about. What do I get to do with this? Why would I invest in a tokenized syndication instead of a typical syndication? Well, are you accredited? No, well, here you go.

Speaker 3: 31:36

Now, you can Now you can build wealth. And this is what I've tried to explain to everybody is that this isn't reinventing the wheel. This is an extra tool in your tool belt as an, as a general part, as a general partner, as a limited partner, whatever you know, I guess, are you guys get part of the GP when you do, when you bring your investors, so you're still a limited part you're an LP right, yes, yeah, so this is an extra tool to provide to his investors.

Speaker 3: 32:01

You know you're still when this, when this property is sold, you're still getting paid in cash, it's, or whatever. You're getting the wire to your bank account. It's not like you're getting paid and extra tokens that you've now got to convert to Ethereum so that you can now pay $20 in gas fees. If you're lucky to get the cash put into your bank account, where they're going to charge you for there, where they're going to hit you there too.

Speaker 3: 32:24

This is it's traditional. So when the when the building sold, whatever tokens you're selling at that time, they're going to get burned, they're going to go away and that product, that cap stack, just like any other business in the world that's compliant with the SEC, is going to say how much value you had, how much equity you had after the sale. This is your percentage of the profit, and then it's just going to get rolled into your bank account. So that's that's the part that I try to explain everybody's like. This is just an extra tool with lots of like trendy lingo and fun buzzwords, but all it is is a tool. It gives you. It gives you access to your money earlier should you need it, should an emergency pop up, you can get your 30. You get 30 out of your $100,000 out and you can take care of the emergency and you don't have to worry about destroying like a legal entity in the process.

Speaker 2: 33:15

Wait, or you don't roll it into your bank account, you roll it into your life insurance plan. That's earning 3.5% and then you bargain to your life insurance plan.

Speaker 3: 33:25

I talked to him.

Speaker 2: 33:25

This is not financial advice. I talked to him in a couple of weeks. This is yeah, there you go. We learned some things on this podcast. We have some smart people on this podcast and, josh, you said oh, I'm not the. You know you're being modest, but you're a smart guy and it sounds like you've had an illustrious career and you've been around some really smart people.

Speaker 2: 33:44

You're smart enough to know what you don't know the smart people that, yeah, what you don't know, and then who you need to be around. That's. That's the trick, guys. That is the trick Be around a. You don't feel like you're smart. Actually, some of the smartest people have the biggest imposter syndrome. They said some of the most successful people that they all have the hugest imposter syndromes, and that may be something that helps them succeed.

Speaker 3: 34:09

We had that Susie Leigh on. She talked about that, she talked about it, she talked about coaching, did you?

Speaker 4: 34:14

guys read the book a shoe dog by Phil Knight.

Speaker 3: 34:17

No the Nike book. I did watch air. That's about as much of Phil that as I got, and so forth.

Speaker 4: 34:22

I haven't seen air yet, but shoe dog is one of the best business books I've ever read and it talks about the early days of Nike, when Nike was floundering almost one out of business. And at the end of it I'm going to stick to a little bit of a spoiler is he's a few years ago, five years, I don't know how many years ago the book came out, but he's in Palm Springs in a movie theater and he's walking out and he runs into Bill Gates and Warren Buffett and they want to talk to him and he's like, at this point he's worth $10 billion and he's like, why would they want to talk to me? Like, like they're Bill Gates and Warren Buffett, right, Like even he has fucking imposter syndrome and he created Nike. Right, Like we all have it and so much of our society is about bravado and pumping our chests and showing how big we are.

Speaker 4: 35:09

You know our yellow Lambos, but I think, if you talk to, like most of my friends who are founders we all deal with this shit on a daily basis of like you know this, you know who am I to think that I could do that, you know that I could do this right, and that humility, I think, is really, you know, it will take us far, because I think, for me at least, it makes me curious, it makes me really because I have how little I think I really know, it makes me want to, you know, absorb all, like and surround myself with amazing people so that I can learn, you know.

Speaker 2: 35:41

Well, and I think also with people that you're helping the investors that you know right now they're investing in lottery tickets. You know they have an imposter syndrome too, around being an investor. They don't think that there's a fear, maybe, that it's not going to work out, because nothing in their lives ever works out right. That's the mentality oh, this can't work out for me, this isn't going to work for me. I'm not smart enough to invest in something like this. I'm not going to be able to wrap my head around this kind of stuff, you know. So I'm just going to go back to the casino and, you know, put 100 bucks on black and that's going to be my investment for the week. So I mean there's those people too. I mean there's those situations and I think the more you can help them get over that and the more people you can help and the more case studies people can see from folks that have successfully invested with you, you know, the better it's going to be.

Speaker 2: 36:38

I mean, you've already got a great track record. Your co-founder obviously has a great track record. People can go on there and on your website, look at that and see how successful you guys have been. And you know you're essentially, in a way, giving back. I mean, obviously you want this thing to do good. You guys are going to do well off of it. You know it's fun for you probably to go out here and find these houses or these investments, but you know there's an overlooked factor and that is that you guys are actually helping people and you know, kyle, you too with what you've written, because it's demystified a lot of this stuff for people and help them understand the alternative investments that are out there for them.

Speaker 3: 37:17

If you're not accredited, I want to add this to um, he was on Joe's podcast. Did Osh interview you? Yeah, so Osh interviewed him on the best ever real estate investing advice show ever, mm-hmm. Um, so if, if, you guys could check that episode out too. What do you remember? What episode number it is by chance, I doubt it. I don't remember mine either. They're like 14,000 episodes or whatever there is. But, yeah, so it'll give people a different perspective with different questions on the same on this topic, because we tend to get lost in the weeds when we ask questions and all that. Osh has 30 minutes to get it all out, but that's another. That's another place that you can find out what Josh has to say about this show.

Speaker 4: 38:00

Thanks, guys. The last thing I'll say to Adams, to both your points, you know, look, I think that I, I, in college, I spent six months living in Nepal, okay, and at the time Nepal was the second poorest country on earth. I lived with a family with no electricity, no running water, and yet they had, um, they were among the kindest and happiest people I've ever met in my life. And they had family, they had community, right, they had, they had something that oftentimes we lack in the West, despite our financial abundance. But one thing that they didn't have is real opportunity. You know, my, my, my brother from my host family had the went to the only law school in Nepal, and what does he do now? He escaped Nepal and he drives an Uber and he works at Dunkin' Donut.

Speaker 4: 38:46

Okay, now, owning assets, I really, truly believe, gives people an opportunity to climb the Maslow, maslow's hierarchy of needs. Yes, and so, if we can, as a company, as an industry, empower people who have to wake up at three o'clock in the morning to take a bus to go to Walmart you know, two hours away and in stock shelves all day and come home and not be with their kids, and, and, you know, and, and and live this life of subsistence and living paycheck to paycheck but actually have resources for the first time and the choices that they get to make with with having resources, then we can have a transform world and to me that's that's what drives me. You know, like sure this is going to make a lot of money, but you know, being the richest person in the cemetery is not, has never been my calling so um yeah.

Speaker 4: 39:35

I'm really grateful for you guys. You know and and the you know the work you're doing in the world and just you know, keep, keep up.

Speaker 2: 39:41

Man there's a reason the podcast is here, man to bring folks like you on Open People's idea, open People's minds to opportunities that are out there. Squash this narrative that there's this like a finite amount of money in the world and that the billionaires are hogging it all. I mean there is unlimited money If the government printing money doesn't show that to you. There, there, you know, you create something and money will come to you. You create wealth, you do something, you buy assets, whatever it is, it will come to you. And this is just one example of how that works and how that's possible for people. And it's it's. You know. Oh, that's for them, that's for the wealthy. I don't, I'm not going to get those opportunities.

Speaker 2: 40:22

Well, here's an opportunity staring you in the face. You can research it, do your own research, look into stuff like this. Just get over that hump. Get over that hump and just look at something and decide for yourself if this is for you. But you have to do it, you just have to. You just have to read about it, just have to learn about it, for God's sake.

Speaker 2: 40:42

And and that's the problem I think with a lot of people is, it's like oh, they just blow it off for you. Oh, they just blow it off right away instead of actually looking into it deeper and deciding for themselves if it works for them. I mean, it's not going to work for everybody, but for some people it will. You got a hundred 200,000 extra dollars laying around, you know. Start putting that money to work. Well, you just got to sit in cash. It's losing money every day. So well, josh, I really appreciate it. Man, thanks for being on the show. We've taken up a lot of your time, but hopefully this resonates with some folks and wish you all the success with your fund here, and I'd love to love to hear some case studies in the future of who's this has helped, and see that new website up and running it and give us the URL for the website again wwwbondfirecapital Don Bonfire, I can be reached out, and I can be reached out to Joshua at bonfirecapital, adam Kyle.

Speaker 4: 41:34

Thank you so much. This has been so fun. No problem, looking forward to continuing the conversation in the future.

Speaker 3: 41:38

Yeah, buddy, love it. Josh, Thanks for your weekend.

Speaker 2: 41:41

Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests, Now let's hear from you. Join our community on Facebook, Side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you.