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THE FRONTIER LINE
Hosts Wayne Aston and David Murray explore the critical global pillars of infrastructure development and energy production, from traditional methods to future-forward advancements. The Frontier Line covers the latest industry news, energy innovations, and sustainability trends that are shaping the future. Through expert interviews with industry leaders in renewable energy, utility-scale battery storage, and waste-to-energy technologies, the podcast provides insights into the evolving landscape of energy efficiency and sustainable infrastructure. By focusing on the intersection of innovation and the politics of energy, The Frontier Line highlights transformative ideas and technologies poised to deliver cost-efficient, resilient, and sustainable solutions for global industries.
THE FRONTIER LINE
Invictus Sovereign- Chief Acquisitions Officer- Andrew Romney
Discover the future of real estate as we sit down with Andrew, Invictus Sovereign's new Chief Acquisitions Officer, whose impressive journey from mentorship to market leader unveils the challenges and triumphs of navigating a volatile industry. With deep insights into Utah's housing market and a candid reflection on the gap between income and housing costs, Andrew provides a thought-provoking perspective on what lies ahead for potential homeowners. His analysis, rooted in the past recessions and the pandemic's lasting effects, offers a stark yet insightful look at the realities of modern real estate.
Andrew takes us on an enlightening exploration of how remote work is reshaping rural and suburban landscapes, creating unexpected property value surges in places like Fillmore. We dive into the intricate dynamics of land development strategies in response to these changes, alongside the pressing issue of workforce shortages in construction. By examining modular housing and technological innovations, we uncover potential solutions to these industry challenges. Zoning laws and density proposals, particularly those in Salt Lake City, are also scrutinized for their potential to alter housing affordability and infrastructure.
Our conversation shifts gears to address the multifaceted nature of building relationships in high-level real estate transactions. Andrew shares the importance of authenticity and values over mere technical prowess, revealing how honesty fosters genuine connections even in high-stakes environments. As the world of real estate evolves post-COVID, we explore the transition from residential to commercial real estate, highlighting a visionary project that converts waste into opportunities. Throughout the episode, we emphasize the significance of collaboration, character, and innovation in responding to industry challenges and seizing new opportunities. Tune in for an engaging and insightful discussion that promises to keep you intrigued and informed.
Welcome to the show, Andrew. Hey, thanks so much for having me Happy to have you here today.
Speaker 1:I'm going to go ahead and kick off with an intro, because the audience has got to know what a Jedi you are and why you are the newest member of the team, the Invictus Sovereign team here. So Andrew is our Chief Acquisitions Officer and his primary responsibilities include conducting due diligence on land acquisitions, site nomenclature studies, due diligence, actual contracts, coordinating our purchase agreements, lease agreements, as well as raising capital for the company. Andrew's a seasoned realtor. The company Andrew is a seasoned realtor In 2019, 20 and 21,. Andrew was awarded with Realtor 500 Award by the Salt Lake Board of Realtors for being the top 3% producing agents in Utah. Andrew is also honored for his outstanding leadership and service within the community, recognized as part of the team leader of the year in 2019 and 2020, as well as mentor of the year in 2019. He was also acknowledged as a team to watch in both 2022 and 2023, and most recently awarded the title of team of the year in 2023. That's a pretty impressive recent relevant track record.
Speaker 2:Well, thank you so much for the nice words. I was very fortunate when I got into real estate to kind of have a good mentor and a good leader that I was surrounded by and right out of the gate we started generating all these real estate leads together and I was just giving them to a lender. He's like, dude, just go get your license and let's run, sure. And then we just hit the ground running and I was able to create an enormous amount of success, ultimately very quickly, and it's been a fun ride since then.
Speaker 1:It's been a tough real estate market too, so I commend you for not only surviving, but thriving with all of the changes that are happening.
Speaker 2:Yeah, it's been interesting. As you could hear in my bio, we had it dialed in from 2019, 2021. We had this game figured out to a T, that's pre-COVID.
Speaker 1:Yeah, pre-covid that's partly what I'm referring to is like survive the pandemic and come out of that thriving, get stronger, that's impressive, and so what we saw pre-pandemic, just for a little background is we saw what we call a balanced market.
Speaker 2:Right like the us is still in a major housing shortage. Uh, we don't have enough houses and that all stems from the great recession. We we didn't build after that. Right, they stopped building. You know this way, being a developer, it stopped when you're talking about great recession.
Speaker 1:For the listeners, that's 2008.
Speaker 2:That's the mortgage crisis of 2008 is the great recession Correct and we never recovered to a building pace I'll call it that can actually keep up with the number of houses required. So, up until COVID, we saw a pretty balanced market, although it accelerated in 2017, 18, and 19, where, by the inventory was shrinking quickly. And then, as soon as the rates really went down, down, down and COVID and then it was this influx of capital because they were printing money so fast we saw the real estate market explode and the inventory practically shrunk to where, if you weren't willing to put 25, 30, 40, 50,000 over asking price site unseen on property, you weren't able to actually acquire a home. Wow, and so it created this crazy thing and we didn't adapt quickly enough.
Speaker 2:We were still in this mentality of, hey, let's get first time home buyers, let's get them in the house, and we didn't catch that shift fast enough during the pandemic. So we had enormous amount of success still some success during the pandemic but it ultimately changed once COVID happened.
Speaker 1:Yeah, having been in real estate my entire career, 28 years. The pandemic that was impactful for me. The rate recession was impactful for me. These are big market cycles that you're talking about Yep.
Speaker 3:I was going to ask you something else to start, but I'll ask you this when do you see, I mean and obviously we have our own internal kind of ideas about the market what do you see for the average person out there right now, in the coming years?
Speaker 2:Yeah, I'm not as optimistic as most. I'm actually fairly pessimistic about the future. My parents and I'm actually fairly pessimistic about the future. My parents, and I'm sure your parents, always said we don't know how you're ever going to afford a house. I can remember my dad when I got out of high school I don't know how you're ever going to afford a house. It's so expensive now and I graduated 2006. So, right, when the first ramp up really happened, right, and I'm in my generation and I can remember a bit that you're never going to afford a house. Okay, well, I got lucky and in 2015 I bought my first house. Right, congratulations, thank you um, but?
Speaker 2:but even in 2015 there was this.
Speaker 2:There's this line of income versus affordability and housing prices, and it's always been pretty parallel if you go back to the 1930s.
Speaker 2:Well, since COVID and since really at the end of the 20 teens I'll call it this gap has really widened to where now we're in the most unaffordable time to be alive as a human.
Speaker 2:And it's not just the cost of housing, it's you go to Costco, you go to groceries, the cost of energy, everything is more expensive, despite what they tell you, that inflation is two and 3% and it's under control. Well, that's 2% and 3% from the last marker. That's not accounting for the ramp-ups of the 9, 10s and 12s, where then it's compounded on top of each other and now, literally, it's the most unaffordable time to be alive in American history. So that translates to the average working person is going to have a real hard time acquiring real estate, like our children are going to have a hard time buying homes. It will take a real Herculean effort to find a way to get it done, unless it's a two-income family, and both of those incomes in the family are going to have to be strong incomes, above the national average developer, something that underscores or illuminates what you're talking about here.
Speaker 1:Just in that's. That's a glaring real life thing to observe is driving, you know, in in the major on on I-15 corridor here in Utah and any major, uh, you know, metropolitan area, Salt Lake, Sandy, Lehigh skyscrapers Well, not thehigh skyscrapers, Well, not the skyscrapers, but the cranes, the big construction cranes building multifamily assets. We have thousands and thousands of new apartments under construction right now. You can probably see out the windows here in Salt Lake. I can see five cranes behind us. They're all working on multifamily buildings, big buildings, hundreds of units.
Speaker 1:So I'm aware, just having conversations in the last three months and with mutual friends of ours, that we have about 8,000 permitted units under construction in Salt Lake City, with a forecast of Salt Lake absorbing up to 20,000 permitted units under construction in Salt Lake City, with a forecast of Salt Lake absorbing up to 20,000 new units. Now the reason that's a glaring marker to me is that represents 20,000 households not buying homes or can't afford a home or would prefer not owning a home, would prefer not owning a home. So, to your point, homeownership diminishing, moving into multifamily, you know, residential is really trending right now across Utah and, I think, nationally.
Speaker 2:Yeah, absolutely. And just to hit on that point too, Utah has become a top 10 least affordable market right, and if you go back to five years ago, Utah was considered a bargain state. I can remember when I first got my license in 2017, taking clients out to Saratoga Eagle Mountain. That was the best bargain in the state for residential real estate.
Speaker 2:You could get a 3,500 square foot house under a hundred dollars a square foot, fully finished, and now in the last 10 years you can't get anything for under $200 a square foot. So that hyper accelerated appreciation it's really killed this market and into the point where it's either going to force the younger generations to live in multifamily or they're going to have to leave if they want to achieve the dream of homeownership.
Speaker 1:Yeah, you know, one of the things that Dave and I have been really adamant at covering on the show is supply chain issues. You know we've been focusing on energy and infrastructure, but they're related. There's a correlation here and what we're talking about is how a new home being built, trace, trace back what it takes to do that, and it goes all the way back to mining. Okay, we're talking about commodities level markets, mining and the implications on concrete availability and pricing and affordability, and how the lumber markets right and then fossil fuels to create things like shingles. So there's all of these implications that aren't just about buying materials from Home Depot. It's a much bigger national crisis. With so many moving parts, it's hard to put your finger on why exactly we're experiencing this affordability issue.
Speaker 3:I know you and I have talked where we both dip their toes in the modular space and try to look at that as a solve. Do you see this especially well? Looking at Utah, one of our unique problems is just our geography. You know we're along a corridor, the Wasatch Front, and you can only go so many places, and so we're expanding out into all these other locations.
Speaker 3:And one of the things when we were dealing with modular, this became very obvious very quickly is the premium it took to get contractors and construction workers out to what we would have typically considered a rural location, but that might be something 40 miles out of a city or 50 miles out of a city and just to get them out there, you might as well tack on 20% or 30%. Are you seeing that now as kind of our valley is filled up to get workers out into maybe some of these areas that might actually make it more affordable we're also dealing with well, yeah, in order to get them out here, it's going to cost more.
Speaker 2:So it doesn't solve the problem. Yeah, we're definitely seeing that because, to your point, it used to be drive 30 minutes each way from downtown Salt Lake. The prices start going down significantly, right? We don't get that anymore. Even in some of our sites where we're going to possibly incorporate a residential piece like Fillmore in our preliminary market research. There the housing prices, the price per square foot, is the same as suburbia Salt Lake City, which is crazy.
Speaker 2:And that's probably a direct reflection of the fact that we have to bring in the workers from far away. We have to house them, put them up and people are willing to pay it. That's the thing. Real estate is really a supply and demand market and always has been With the availability of remote workers. Now that's probably a driving factor in causing some of these rural markets to be so expensive where traditionally five, ten years ago they would have been bargained still and it would have made a lot more sense to hey, let's go rural for development because we can do more affordable housing, we can give higher wages relative to the costs. We're not seeing that anymore.
Speaker 1:You know, as a veteran land developer, I think back on the Sage Creek project yeah Right, and working with the general contractor that did that, and then subsequent conversations with contractors like Big D who we've contracted with to do our industrial work. An alarming conversation of the last six, seven years has been the fact that skilled journeymen and tradesmen average age is about 53 years old. These guys are retiring, old, these guys are retiring, and there's a massive inability to recruit new college-aged construction workers, like the kids in college just don't want to do physical labor, they don't want to frame houses, they don't want to pull wire for an electrical company, and so what does that do to the construction market when you can't even source the labor to build it traditionally? Sure, okay, and the key word is traditionally. That's why modular housing has been moving to the forefront slowly here, like okay, these are alternatives that could possibly help us mitigate the need for so much of a workforce if we could produce some of this stuff in. Factories have controlled environments for a workforce, and I can speak from experience.
Speaker 1:My first decade in business as a stone and tile contractor, one of the biggest challenges was being remote. Always I just had to go wherever the houses were being built. I spent years in Park City and many Christmases installing showers and things at 8 o'clock at night in Park City when it's snowing and then trying to get home after the kids are in bed on Christmas. So real challenges to hitting deadlines in the construction space and the whole remote working environment. I mean we went and did projects in San Antonio, texas. We did projects all over California. We went wherever the work was and we'd go where we could get the premium on price.
Speaker 1:And I would get bid solicitations from homeowners in California and I'll just admit this because it's far enough. In the past I double, triple the price and if they were desperate enough to pay me to do it, I'd be happy to pack my crew up and drive to California and be there for a month and do that work. And that's happening all the time and part of as a developer. What's been frustrating in developing commercial is that many contractors are tempted by that. They're enticed by all of the construction demand and I'll also admit that I would do this as well. I would bid more projects than I could handle. I'd accept contracts on more than I could handle and then I'd spread my crews a little too thin, and we'd bounce back and forth trying to manage projects that we probably shouldn't have responsibly taken on, but it impacted timelines, deadlines getting done effectively, and so these are all considerations that go into the affordability equation of housing.
Speaker 2:Yeah definitely definitely.
Speaker 3:Well, ultimately it's probably I mean, it's an industry that is, I think we probably watch this as ripe for tech innovation. There's a lot of inefficiency in sticks and bricks building and that's, I think, why we were both, early on, attracted to modular, because you could leverage technology, bring prices down, you could start doing some of those things and actually start tackling some of those other bigger problems. It's going to be interesting to see what the next few years brings.
Speaker 2:For sure, yeah, I think that the Band-Aid on a flesh wound cure is going to be. You're going to see lots of single-family residentials built with multiple ADUs attached to them, one in the basement, one in the backyard. There's a proposal. I don't know if it's passed. I heard rumors it was passed in Salt Lake. They're going to allow you to build six ADUs per property.
Speaker 2:Wow, so single family resident and then you could put six very small ADUs attached, and there's no restriction on the zoning, on the size of the lot. So even if it's a tenth of an acre, you could put seven structures on there. You put a sixplex.
Speaker 3:Sure In your backyard.
Speaker 3:That's interesting and that's been some of the things is the laws catching up and these communities going and responding to the need. I know when we started looking at ADUs this is back six, seven years ago now In that space, just when some of the first ones coming on the market, it was really a factor of the laws weren't there yet the code wasn't there yet Not really you wanted to go, weren't there yet the code wasn't there yet. I mean not really you wanted to go, try to do it. It took a lot of work to maybe even try and pull it off, but I think the communities are finally responding, realizing that also has to be a solve in how we do this.
Speaker 2:Well, and that's going to come with its own set of unique challenges, in that we're not going to have the infrastructure to then support that population growth in these neighborhoods. So you're going to, all of a sudden, 7x a neighborhood, and they're supposed to go on a two-way street on a 25-mile-an-hour speed limit on 8th East with four of those cutouts that you've tried, probably going to cause some issues.
Speaker 1:Yeah, not to mention any utilities implications.
Speaker 2:Exactly Power sewer water.
Speaker 1:That's interesting. Yep, that's really interesting.
Speaker 3:You mentioned something and I'll just touch on it. I wanted to ask you another question, andrew. I think one of the things that's happening too with an aging population. So we have all these dream and these people have been in the business our age, they're going to age out, they're going to retire, and this is not just in construction. We're seeing it across multiple industries the brain drain.
Speaker 3:Whereas our generation, gen X, shout out Gen X, we're like, oh yeah, sure, we'll work 60, 70, 80 hours a week, whatever it takes to just learn the job. We get thrown in, we'll do this. It's changed and I think we could argue good or bad. Now the people showing up, the kids showing up, are like no, I'm going to put in my time, tell me what I need to do, I'll come do it and I don't want to put in any more work, whereas we're like, no, I'll learn it. That was part of the job, you had to learn it and own it and it's changing and we're about to hit this just massive brain drain and I think it has a lot of industries quaking going. Okay, what are we going to do when the guy, if you will, in construction, knows how we function, where everything is and he decides to retire. How do we replace him? And that's a real, real challenge right now.
Speaker 2:It's a serious challenge.
Speaker 3:Across the trades, across the tech, across really the entire working space. For sure it's going to be interesting. I don't know, maybe AI plays a role in this whole.
Speaker 2:solve, so we'll see, but AI can't pull wires through a wall. No, it can't, no it can't.
Speaker 3:No, but what it can do and this is one of the interesting things is it can you know? There are some methodologies to help assemble some of that brain power, if you will, some of that legacy intelligence for a specific business, to say. If I've been with a company for so long, I might have a way to contribute some of my knowledge to how we did things, how certain procedures, and that might provide a baseline for going forward. But we'll see. We'll see if it's going to have to be done. So I'm going to shift just a little bit. Not that this is great.
Speaker 3:I wanted to get into a little bit more of Andrew Romney. You've been an amazing partner. It's been, as Wayne said, the latest join. It's been really, truly a pleasure to get to work with you and I think we've talked about this, wayne, we all share sort of this why We've all kind of come to this table saying, yeah, we have an opportunity to solve some really big things or tackle some really big things. What attracted you to what we're doing, how we're doing, what's the thing that pushes you to get up every morning and what are you hoping to accomplish?
Speaker 2:Yeah, no thanks. So much for that, dave. Well, the first thing that really attracted me to this project was I've got to be honest, it's Wayne. I had a little bro crush on him. Well, we all have Thanks, dave. Well, the first thing that really attracted me to this project was.
Speaker 3:I've got to be honest it's. Wayne, I had a little bro crush on him. Well, we all have. Thanks, brother.
Speaker 1:I didn't pay him to say that.
Speaker 2:Well, the first time we met it was totally I don't even know how we met. It was a very random introduction that we met and we sat down together, but we kind of just hit it off for that first hour and a half Like it really was I was just so intrigued with the fact that you could actually take waste and convert it to I'm going to call it lumber, right, we can take waste and convert it to a product. But then I got to know Wayne more and I realized, okay, we're going to help a ton of people, we can bring good paying jobs to rural communities and we can actually make a little bit of a difference. Right, and I have a family, I have two little kids, I've got a wife. I need them to be able to enjoy this world for a little bit. And so once I kind of saw what Wayne and the team you, Dave were trying to do, it was just in a line with his eye goals.
Speaker 2:I like the fact, too, that he didn't judge me based on the fact that I'm a college dropout. I tried three times and failed miserably, because I couldn't sit there and be lectured by a guy that had no practical real world experience when I was trying to figure out what to do with my life, so I really liked that. And then there was this little hole. I could fill in the real estate part. He said, well, we need to look at these real estate projects. And I said, well, I'll do that, I'm happy to do that. We started doing it. And then he said, well, we need capital. I'm like well, I know people.
Speaker 1:Let me make some phone calls.
Speaker 2:And we just kind of started hitting it off and it's been really fun since then. But really we're going to make a difference in the world and if we can get ASI, or when we get ASI running and we can start solving the landfill issues and some of that, that'll be amazing. We can put good jobs in a community and then we can rinse and repeat it multiple times and that's going to be really fun and exciting to watch happen to these communities.
Speaker 3:Well, and our scope is not creeped. I think we've just expanded it. We have ideas on how this is going to go. I guess your plate of things just grew immensely, yeah. From like, okay, we're trying to solve this thing here to. Oh well, we're also going to be going after property and locations that can service data centers and much bigger kinds of things Power plants, for example.
Speaker 2:Yeah, much bigger kinds of things, power plants, for example, yeah, and that that's been really interesting to look at because, uh, now we've spent lots of times with burns mcdonald, yeah, and and looking at some of their projects. And one that I got lost in with one of our partners, randy, is the denton energy center. Yeah, incredible project down in denton and 225 gigawatt or, excuse me, megawatt factory cost a billion dollars to build.
Speaker 2:It's going to cost us two to build it but just looking at the scale, the size and what it's going to take to replicate that. It's been a lot of fun learning some new things and kind of migrating from residential real estate into now commercial and heavy light industrial projects. It's been a lot of fun for me to just have a new challenge.
Speaker 1:On those lines, andrew, there's been some real changes in the real estate landscape just in the last post-COVID, last 24 months, impacting brokerages, realtors, commissions, the legalities of representation. Do you want to touch on that? How has that impacted your practice and how has that influenced your attitude toward transitioning, maybe away from residential more into commercial industrial?
Speaker 2:Yeah, it's been really interesting and just to bring the audience up to speed, the basis is there was a class action lawsuit against the National Association of Realtors saying that multiple brokerages colluded for price fixing, which I have my opinion on it. We didn't, because commission has always been negotiable. But the plaintiffs won and we have since had to decouple the commission. And what that means is, if I were to list your home, wayne, in the old days I would come and say hey, wayne, let's list it. 6%, 3% to my brokerage, the listing agent, 3% to the buyer's brokerage. We could have negotiated that. It's always been the case. Some people did it, but that's okay. What's now happened is it's hey, okay, wayne, we're going to list your house. I have a fee for listing it. More than likely the buyer's brokerage is going to ask you to contribute something to the buyer's agent commission. Now there's three ways a buyer's agent can be paid. Now the buyer themselves can pay a buyer's agent, the seller can pay the buyer's agent, or the seller's broker can pay the buyer's agent. And right now it's kind of a new thing. It's only been law since August.
Speaker 2:What we're seeing is really nothing has changed, right, especially where we're coming into a little bit of a we'll call it a balanced market versus the seller's market.
Speaker 2:It's been for the last decade. In order to get those contracts accepted and deals pushed through, the sellers are paying buyer brokerages right now. But even with all that, that will become a problem when the market heats up again to the point where a buyer's broker will make nothing. Because in a market where you get three, four, five offers on a single-family property and you start getting to the bottom line in the net, the first thing that's going to go is that commission to the buyer's agent. It's going to be gone. But then there's not going to be the ability of most of these buyers to come and stroke a five-figure check to their agents, especially in Utah. So my suspicion is that in this balanced market, the decoupling of the commission, nothing changes. But as soon as we go more heavily back into the seller's market which will happen we're in a housing shortage. The buyer's agent will basically start working for free. We're on very low commissions on a homey type model where they make $1,000 a transaction because that's what people can pay.
Speaker 1:That's an interesting explanation. That spurs another question how should I frame the question? How do you feel like online paths to selling your home are also impacting and kind of chiseling away at this market share of the traditional brokerage model to a? Hey, I can list my home online, I get all this exposure and I can get it done for like a percent? Yeah, I mean, how relevant is that in the market?
Speaker 2:It's definitely relevant and the discount we'll call it the discount brokerage has always existed to where, hey, we'll just put it online and sell it. Fortunately, that doesn't work right now, because you have to expose your home to enough people and you potentially have to expose it to people not in market because we have a lot of people that come from out of state and are purchasing homes here.
Speaker 2:So we have a plan with our team that we do video and then we do targeted ads in markets outside of Utah. We find places in Chicago, california, san Francisco, los Angeles, phoenix, parts of Idaho, california, san Francisco, los Angeles, phoenix, parts of Idaho to where we can target those markets to potentially attract buyers coming to our market. The role of the buyer's agent though we'll talk about buyers for a second has definitely changed, because where my real value used to be was I had the MLS and you didn't. Well, now Zillow, realtorcomcom, homescom they have all that same information. But really it comes down to what's the value I can provide you being your buyer's agent. It's like I'm your advocate. I understand the contract law, though I'm not a lawyer. I understand what the implications are of the contract we can provide. We know what contingencies to ask for. We know how to walk you through the inspection and due diligence process. There's a lot of other value we bring to the table where, if someone can truly explain that to you, it's a no-brainer on why you should have agency.
Speaker 2:But there are a lot of jackasses in my industry and a lot of people that suck and I'd say it's about 90% to where they're just out for what we call a commission check and they don't do anything other than do what's in the worst interest of the client to try to make that commission. So there's always going to be this fine line of the best are always going to survive right the people who can actually provide value. They're worth it. We've talked about this many times. You've said I have paid over listing agreements before because they took care of a problem and solved an issue that was otherwise going to blow up and become a headache.
Speaker 1:That's right.
Speaker 2:Those people will always survive. But what I do think will happen with this is it will thin the herd a little bit. It'll cull the herd because there's 1.6 million active real estate agents. Today we're only doing 4 million in transactions. So that's 60%. So the statistic I heard yesterday was 60% of agents aren't going to do a deal this year. Wow, wow. Wow, that's alarming for them. Yeah, so, so potentially it's going to send the herd to where the cream will rise to the top. So interesting.
Speaker 3:Speaking of you, you mentioned values. I'll go back to it. You know what. What in you know what has kind of led you've grown up. I love the fact that you've kind of taken a nontraditional approach to kind of where you've come out in life. I personally think I wish more people would kind of follow their gut sometimes and say I'm going to go after this and jump into it, because I think what I've seen looking back is I think people find a lot of happiness with that what influenced you? Who influenced you, how you do what you do, more than the why, but what makes you you today? Who had that? Who did that?
Speaker 2:I have no idea. I'm going to be honest, I don't read a ton of books. I'm not good at stuff like that. I just struggled enough to find something that worked for me. I've tried a lot of things. I've tried running online ad agencies, had some success, had a few clients that worked, but that led me to real estate, to where we figured out how to generate leads, and then I just figured it's really just a people business, it's a relationship business.
Speaker 2:I have this unique ability that for the most part, I can connect with people fairly quickly. Right, and I learned this through my past, past life. I used to do promotional marketing for State Farm. I learned that people wear themselves on their shirts and you're going to go, what are you talking about? But if you go into, like a home expo, for example, if you sat back and observed what people wear on their shirts like Wayne likes to wear Savage firearms on his shirts all the time what does Wayne probably have an interest in? Savage firearms, guns. So I would say, well, what? And I always had this ability of well, what, what guns do you like? You clearly like savage, do you? Are you? You must be in ar-15s. What do you like? And what would be the answer?
Speaker 1:wayne yeah, I love really, really modded mil, spec cool shit.
Speaker 2:Yeah, that's right, so then then it would just be a follow-on question of well, okay, do you have a military background, police background, or are you just a gun guy? And I probably get that. Hey, I was a veteran, I did this and then from there it's just. I have always just. I learned the Ford model when I was like 20, somehow Really working at Glenwild as a caddy weird story because I had to make sure I could carry on conversation with these guys and not look like a total loser up there just saying, oh sir, you have 162 yards to the pin, let me wipe your ball. You have to build some commonality with these guys so you can hopefully get a bigger tip right. But I just learned that that ability to connect with people and then that just kind of made real estate work for me after I struggled with a bunch of other things up to that point why, I would argue, probably wouldn't you say that that glen wild experience really, really actually came in incredibly handy A hundred percent.
Speaker 2:And being a fishing guide in Alaska, to where I'm stuck on a boat with guys for 10 hours a day rowing them down a river who I've never met. Yeah, and I have to make sure, if we don't catch fish, that they have a good day.
Speaker 1:Yeah, in.
Speaker 2:Alaska. We catch lots of fish, but I just somehow have always had that ability to talk to people and oddly enough it used to be better when I was younger. And I think the cell phone has kind of destroyed some of that human connection that we used to have to, where conversation was a lot easier back then and now it's a little more forced, but I still can connect pretty well. It's vital.
Speaker 1:It is vital. I mean, I I can go back to that first day that we met and and and how our relationship has evolved, and could definitely corroborate what you're saying here. When we talk about values and how we've selected the team, it comes down to character, comes down to character, values, philosophy, way, way before we get into technical skills, and so this is why I'm a college dropout. To me, that's commonality. So I'm all about relationship development, building meaningful relationships.
Speaker 1:I prefer going deeper with people than having thousands of people that I'm just surface level with. I don't care much to project onto you what I want you to think about me. I want you to actually know who I am at the core, because that's where we find the commonalities is in vulnerability and authenticity, and you exude that. You know your communication skills and your devotion to building relationships. I think was one of the most attractive things for me in wanting to cultivate a relationship and then ultimately bring you onto this team. I could see that value that you bring. As we expand out. We're having, you know, conversations with capital and with capital and landowners and all of this. I know I can trust that if I hand this off to Andrew, it's handled and on a very high level. I mean, we had a meeting yesterday with some of the most sophisticated no, two days ago some of the most sophisticated developers in the state of Utah yeah, the largest developer in the world.
Speaker 2:Yes, yes, yes.
Speaker 1:Yeah, there's joint venture partners. So very high-level dudes and you've been carrying this conversation and moving to contracts and letters of intent with these guys like a pro, like you could do this in your sleep and they really. They were very grateful during this meeting and thanked Andrew many times and I love to just sit there and like revel and smile.
Speaker 1:Yeah, he is a badass, you should be thanking him because it is a fortunate to be able to work with someone like you and anyone who's had that experience of working with that agent who's all commission driven the money driven guy. Man, it's a black and white experience to deal with a relationship driven guy.
Speaker 2:Yeah, well, that was the big, I think, draw that Tom kept referring to is. You know, I'm brutally honest with these guys and I learned that a long time ago that the worst thing that's going to happen is they're just going to say, okay, well, we're not a good fit, this isn't going to work for us. Yeah, well, great, onto the next one. Well, there's always another deal.
Speaker 1:Yeah.
Speaker 2:And that was something I learned very early in my careers. There in my career, there's always another deal. It doesn't matter. Just be upfront, be honest with people Because, like I referred to earlier, 90% of the other idiots aren't right and so if you just have those upfront conversations, they appreciate that and these are 25-year veterans in this space we're going up against and we're building real relationships with them now that we can probably carry to other markets and have some backscratching if we need because, we're just being honest with them, we're being straightforward with them, and it's refreshing because you don't get that in our industry.
Speaker 1:How does that specific difference delineate the residential transactions versus industrial commercial transactions? What are you seeing Because, to me, the residential transactions versus industrial commercial transactions. What are you seeing Because, to me, there's a huge chasm between the two.
Speaker 2:But touch on that if you would. Well, okay, so full transparency. I was terrified the first time I wrote a $25 million commercial contract. I'm like, holy shit, this is big. And there are $25 million residential deals in Park City. I mean there's $40, $50 million houses for sale.
Speaker 2:But surprisingly, if you're just honest with people and say, hey, look, this is what we want to do, this is what we need, this is what we need to do I don't understand all the nuance, but this is the premise Surprisingly, people are willing to help, especially if you come through of like look, we want to make the deal work, we want to do whatever it takes, but we need a fair deal and we're going to need a tiny bit of hand-holding. So it's been really fun to especially again, like Tom's been amazing. Even James Merrill's been amazing. These guys are really willing to help, especially if you're upfront and honest with them.
Speaker 2:But it's been a lot more fun talking eight-figure deals versus six, right, and it's going to be exciting once we're able to execute some of these contracts, actually start moving through due diligence, some of that process to just continue to build on those relationships with these guys, that process, to just continue to build on those relationships with these guys and I'm just going to be honest, it's a fun challenge for me because I have close to 300 plus residential deals, two markets. It's a fun challenge for me to do something different, explore these new rules, the new parts of the due diligence that you're really experiencing, that I now get to learn. It's been just a lot of fun.
Speaker 1:You know if I could touch on another corollary here. You know, as we're raising the private placement, the Invictus Sovereign Environmental Impact Fund 1, I'm looking at experience in my history of raising five other funds and I'm referring to SEC. In my history of raising five other funds and I'm referring to SEC guidelines of accreditation, Historically in those funds, all pre-2008, several of those funds would allow for me to raise money from non-accredited investors and what that means for the listeners is just that these are average everyday folks. They could take their house savings, they could take out a credit line, they could do whatever, and it's like $100,000, $50,000, up to $500,000 or not often more than that. The average American is not stroking a check for more than $500,000.
Speaker 3:I think it was a million dollars and it doesn't include your home. I think it was the current cutoff To qualify as an accredited investor.
Speaker 1:Correct and I didn't really. I understood that. I didn't really understand the value of that back then. So with this particular fund we're raising, I'm not even worried about accreditation. I'm focused on qualified purchasers who have a $5 million net worth and much larger revenue that can be verified and subsequently the minimum check size is $5 million. You want to come into this fund.
Speaker 1:It's a $5 million minimum check and the correlation I'm trying to bring here now and I'm going to elicit your response is my experience as a fund manager dealing with the questions, the logistics, all of the things with non-accredited investors who have no experience. Logistics, all of the things with non-accredited investors who have no experience, versus the guys who can stroke $5 million checks. It's on another planet of who I'm talking to. One group knows exactly how the game all works. They understand the risks, they understand all of it. They're way more experienced than I am.
Speaker 1:The non-accredited investors. I'm holding hands, I'm educating, I'm trying to reassure them that the risk is worth it and I can't make guarantees. You never make a guarantee. That's really hard for folks to swallow. How can I make an investment with no guarantee? Because you're talking about wage earners most of the time, w-2 folks who work jobs, who believe that there's a guarantee there. They still believe that working that job is secure, not recognizing that's really not that secure. If their employer decides to fire them tomorrow, it's not secure. So how has your experience been? Are you seeing some of the same things? Dealing with residential transactions versus commercial and industrial transactions? Just by way of who you're dealing with, yeah, there's no comparison to your point.
Speaker 2:You're dealing with professionals, and professionals only in this game. These are guys that our group we met with last week or, excuse me, two days ago. These are guys that have done billions and billions and billions of dollars worth of projects. They know the game inside and out. They're really making sure we're accredited right.
Speaker 2:They're like, okay, we're happy to do this, but are you guys going to perform? And I mean, it's not an issue with our team and our fund, but it's been a lot of fun because, as I've alluded to multiple times in this show, there's a lot of bad agents out there, a lot of bad actors. These are the top of the top, the best of the best. It's a lot of fun because, as being the lesser experience of the commercial guys, let's say they're so willing to help, but having even our team, it's like, hey, we need six figures for certain things. And well, yeah, no problem, it's an eight-figure deal, no problem, it's just a lot more fun. I don't have to have the hand-holding that I'm used to with a first-time homebuyer, for example. This is hey, we've got to do X, Y and Z. It's going to cost X. It's yep great, let's sign the check, let's get this thing going. We just need a few changes to the LOIs. Yep, let's get this going.
Speaker 2:It's just been a lot more, a lot less stress, because the little things don't matter as much.
Speaker 3:This is big business at this point. Yeah, agreed, I like the comparison. I'd say that was a good comparison to say yeah, that's exactly right. It was good to hear your feedback. Okay, so caddy fishing guide. There's got to be some fish stories. There's got to be some golf stories. Is there a favorite? Is there one that you do? Yeah, caddying, or when you're a fishing guide, Multiple things.
Speaker 2:So we worked at a club called Glen Wild very exclusive Park City Club. This was 2008,. Literally during the financial crisis.
Speaker 2:I was caddying for a group. He owned liquor and grocery stores somewhere in the, I want to say, middle of America, nebraska, north Coast, south Coast, something like that. Remember being on the golf course when stuff started to hit the fan in September and he got on the phone. He's like you take care of my three guys, but I've got to be on the phone and they quit after they told him he got on his private plane and went back. So that was part of it. Got caddy for Michael Jordan Very cool, he's a very avid golfer, loves.
Speaker 3:Park City Very, very avid.
Speaker 2:Loved to play, for a lot of money, a nickel and dime game. But it's not the nickel and dimes you guys are thinking of.
Speaker 3:It's between, say, residential and commercial real estate.
Speaker 2:Yeah, exactly Two more zeros, yeah exactly, and I had the club champion that I caddied for, a guy named Tim Zilka up at Glenmalt. That was super fun. Fly fishing guide on the Kinectalk River in Alaska Super fun. Lots of guys Find people that have made money in lots of very interesting fields. Had a guy that owned pigs and big pork producer Wow, Farmers that owned avocado fields.
Speaker 2:Lots of big five clients had two groups from Mertz and Young Incredibly successful. Really well guys, just down-to-earth people, super fun, caught lots of fish, had multiple 100 fish days up there with my boat. Fishing is not, it's catching up there, it's not fishing, it's way more fun.
Speaker 3:I do more fishing. Yeah, you do more fishing Of that. So is there anything? I mean I'm curious, can you remember? Is there one thing that stands out, that somebody you heard somebody say, like that piece of information, that knowledge, like I'm so glad I got to hear that or see that, taking it forward in life going, yeah, that was a really good thing to learn or see, just because you don't get to see that side of maybe you know you're hearing them doing business, you're hearing this stuff, you're picking up all this institutional knowledge, if you will. Is there anything that stands out to you?
Speaker 2:Just work harder than everyone else. That's always what they said, because I mean, there's guys up there that started businesses and stuff college dropouts and things like that didn't go to college. They just always said just work harder. Hard work outworks education every time. Now that's not necessarily true if you want to be a doctor or a lawyer, but the entrepreneur, if you work hard, you can make it. Wayne's proven that. I've proven that you can definitely do it Very good.
Speaker 1:So we're coming up on time here for the show. I want to close it out with the doozy of a question as a final thought for you. If you could explain what is the legacy, what is the thing that Andrew Romney hopes to accomplish in a lifetime that, when you die, you're going to be remembered for?
Speaker 2:I'm probably not answering your respect. I just want my kids to remember that I worked hard for them. If those two, my little Ollie and Rosie, if they can remember that I did everything I could to give them the best life possible, that's enough. We're going to do enough great things changing the world, but if those two can remember that working hard, just trying to be surrounding yourself with good people and ultimately being a good person, that's the legacy I just want to leave that's a huge legacy, I mean.
Speaker 1:I mean, we're all fathers, we're all proud fathers and and influencing the children right now is a huge legacy that that's missing in this nation. We need more of so. Thank you for that commitment to being a good dad, thanks. With that we'll wrap it up.
Speaker 3:Thank you for joining us.
Speaker 2:Thanks guys, that was a lot of fun.
Speaker 1:It was been great. We hope you'll tune into the next one on the Frontier Line. See you next time.
