RG 240 – The Politics of Real Estate Development w/ Doug McAllister
Doug is a pastor turned businessman, politician and author. His ministries took him around the world and then he became the Mayor of a town of 100,000 people and went to congress. Today he is president of Paradigm Companies which is a one stop shop for private equity and uses the last 4 years of experience helping other people succeed. He made his first dollar as a child door knocking for a school fundraiser.
Doug’s father was a pastor and he followed the same path and travelling around the world. He had a divorce and came home for a while and got into business glass etching. He sold the business in 2004 and got elected to office and moved into a real estate consulting role. By 2012 he retired from politics and went into more consulting. When he worked i town planning he saw that town planning could go from easy to difficult as soon as the town council was involved and this was why he ran for office. For a town to be successful it needs an entrepreneurial mindset and this needs to come from the very top.
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Listen to Podcast
Doug McAllister (00:35):
It is not just important to have a good planning commission and understand how they think it needs to be an entrepreneurial con context, the bureaucratic mindset that got good people in government, but when you get to the bureaucratic mindset, it’s so easy to just say no. And in many cases and planning commissions too, is is that it’s the folks who were on the planning commissions. They don’t have the expertise necessary to make the decisions that affect people’s lives. Like they do
Reed Goossens (01:14):
Welcome to investing in the U S a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the U S market join Reed, as he interviews go getters risk takers and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing
Reed Goossens (01:34):
Good day. Good day, ladies and gentlemen, and welcome to another cracking edition of investing in the U S podcast from Los Angeles. I’m your host, Rick, Goossens good as always every with us on the show. Now, I’m glad that you’ve all tuned into learn from my incredible guests and each and every one of them are the cream of the crop here in the United States. When it comes to real estate, investing, business, investing and entrepreneurship, each show, I try and tease out their incredible stories of how they have successfully created the businesses here in the U S how they’ve created financial freedom, massive amounts of cashflow, and ultimately create extraordinary lives for themselves and their families life by design. As I like to say, hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.
Reed Goossens (02:21):
If these guys can do it. So can you now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like to show the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show wherever you podcast on iTunes, SoundCloud, Stitcher, and Google play, but you can also find these episodes up on my YouTube channel. So head over to Reed goossens.com, click on the video link, and it will take you to the video recordings of these podcasts, where you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough of me, let’s get cracking in into today’s show. [inaudible]
Reed Goossens (03:10):
Dennis show. The pleasure of speaking with Doug McAllister. Doug is a pasta turn businessmen with a good portion of politicians thrown in, and he’s also an author Doug’s career has been varied over the lifetime of the last 40 or 50 years. And he’s ministries took him around the world, including to Australia. He’s also been the mayor of the local town of over a hundred thousand people, which took him to the halls of Congress. We worked within nations leaders and he’s connections coupled with these businesses experience, uh, corporate restructuring leadership development, and much, much more, and made it very, very attractive to fortune 100 companies and local businesses alike. Uh, today Doug has a current role as the president of paradon companies, a one-stop shop for private equity, and he is a natural fit for utilizing his last 40 years of experience, making those around him successful. I’m hugely excited to have him on the show today to share his incredible insight and just his massive journey through life and different careers. But not that, I mean, let’s get him out of here. Get I, Doug, welcome to the show.
Doug McAllister (04:10):
It’s good to be with your reading and boy, that, that introduction I’m kind of embarrassed. It sounds pretty good.
Reed Goossens (04:16):
Well, for those, for those people who are listening in, we, we will, we will cut to the chase. We just, this is, this is version 2.0 because we just had some technical issues. So, uh, Doug has been very kind to, to rerecord this. So thank you very much, mate. Um, but Doug, before we dive into today’s show, do you want to rewind the clock and tell me how you made your first ever dollar?
Doug McAllister (04:36):
Uh, the first one is a vivid memory for me. I was in school, I think it was first grade, um, in a little town, Claremont, Indiana, right outside of Indianapolis. And we were all tasked to do a fundraiser. And so I was going door to door, knocking on doors. That’s back when, when a first grader could do that safely. And we were, um, I was having absolutely no luck. I was trying to sell. I don’t even remember what it was to do our, all the neighbors in the area. And I got to this one guy that was very dejected and literally said to him, you’re probably not going to buy this. And he said, well, why? And said, well, no one else wants to, and to my surprise, he bought everything I had and I discover symphony works sometimes and sales. And so I, I obviously over the years, I fine tune my sales approach, but that was how I made my first dollar right there.
Reed Goossens (05:28):
Awesome. That’s awesome. And I know I was actually on your show a few weeks ago and w we, you give me the cliff notes of your career and I just gave the cliff notes just then in the introduction. Um, but now connect the dots for me because obviously growing up as a kid in near India, Indianapolis, to going into the ministry, that would have been a very different career path that not many people take. So tell me a little bit about that.
Doug McAllister (05:52):
Well, I’m a preacher’s kid. My father was a pastor, um, and he entered into the ministry later well in his thirties, which is unusual. Typically you’re going to have to start a little bit earlier. And, um, but that’s what I grew up knowing. And I kind of went into the family business, I guess. And my education was all in that, in the arena of the ministry, although, especially in my graduate degrees, uh, degree, it was a, it was, it was a focused on more of a small business type of degree, MBA type discussion, but it was for the not-for-profits and for churches. And, um, and I did that for the first 10 years of my professional life that took me in several, several States here in the United States. And I was privileged also to be able to lead a church in Australia for three years in the, in the Brisbane area.
Doug McAllister (06:41):
Um, Logan city, I’m familiar with it. And really, um, I’m not just saying, I’m talking to you read some of the best people I have ever been Matt. We’re not sure. I really, really enjoy that ministry beautiful country. And I really want to come back some days of tourism so I can actually go see most of the stuff I didn’t get to see cause I was working too much. But, um, unfortunately through the process, um, I ended up with a divorce situation and I needed to take a break. So I took a sabbatical, um, in the very early nineties and, and moved into that period of time where I had degrees, but in the wrong areas and, and, and a spirit period of time when it was recession and going up and no it was higher up. And so it was a very tough period for me, um, in our found different ways to try to make money and everything else.
Doug McAllister (07:33):
But I literally was, was firstly homeless for a period of time and had to battle back for that. And I did it business at that point, eventually having my own business, it’s called clap, [inaudible] wear glasses, a blast, and we’re actually deserved. Um, we would do, um, we would do, by this point I was remarried to the woman I’ve been married to her ever since for almost 25 years now. Awesome gal. Uh, we not prejudice that way. We, uh, we put this business together and it was a, it was, uh, it was a last ECI business and whether it was on mugs or, or, or awards, trophies, windows, and the restaurant you go into, you see glass as artwork. And we would do things like that and built that into a nationwide business. Um, sold that in 2004, by that time I had been elected to office and, um, it moved into a consulting role in real estate assaulting.
Doug McAllister (08:25):
That’s why, while I was elected office, um, I, I was there and I was able to have a lot of, quite a few experience just on the local state and national level, including the halls of Congress, um, where, where I was, had the privilege of being able to impact nationwide policy, uh, that way. And I would do it again, but by, by 2012, uh, when you live your life front page, top full of a newspaper in politics, you think about what’s going on in the world today. Trust me, I have intimate knowledge with what that’s like. Um, and it was, for me, it was, it was okay, cause I’m wired weird. I can handle that. But my wife happened to watch that over the years, it was her term. So in 2012, I retired from politics as mayor Marietta. And, um, I went back full in all into my, into my consulting and added into that, the expertise of that, knowing how to dance in that space between business and government, because they don’t, they don’t do well together and they don’t talk the same language.
Doug McAllister (09:29):
And I’m, so I’m bilingual at this point and having and being very, very intimately aware of the processes of getting approvals thinks real estate and everything like that. Through the government process, I was called on about Verizon wireless and one of my major customers and others that to come in and, and fix things. I was the fixer, um, uh, project get a cell tower that couldn’t get done in six years, I would get done in six weeks. And because of those relationships and through all of that, everything I’ve said that also gave me experience and opportunities to walk into corporations. They wouldn’t bring me on to turn them around if there were failing or if they wanted to grow and scale to show them how to do that. I have an expertise in leadership issues and, and team building and, um, what it takes to take an organization from a to B to Z. And through that, all of that, I was approached by my paradigm to come on and, um, do all of that for them and the retail investment space. And so it’s been like a, a hand in glove fit for all. It’s like, I almost feel like it’s prepared for this for all that other stuff. Uh, but it was a, it was quite a, um, quite a journey to get here, but I will tell you without reaction too long here, is that the only way you do stuff like that is you don’t quit. Right.
Reed Goossens (10:49):
I know this is version two of what I, but, but I do ultimately, and truly believe that it sounds like you’ve had a lot of restarts and particularly coming out of the ministry sounded like it would have been pretty tough to readjust to normal life. Um, and I know you mentioned when in, in version one point, Oh, you’re talking about, you know, resilience and refusing to quit. Um, how important is that to not only starting businesses, but just to keep going in life, because it sounds like you weren’t, we would have gone through some pretty dark times back in those days to get yourself back, you know, pick yourself off the ground and get back on the horse.
Doug McAllister (11:23):
Uh, the Bible talks about this guy, David and his other guy named Goliath. Um, and, um, you have to face your, the lives and you have to make a decision. I’m going to kill that giant. There’s no, there’s no other option at that point. It’s once you, once you decide the Giant’s too big, you’ve lost and you can’t let yourself get there. So you have not, you know, not that I didn’t have dark days. Um, but when, when people see me today, uh, and see what’s going on in my life today, I compare they don’t. And they don’t know about that. Either understand that’s where it came from the resilience of saying, I’m not going to quit and be like, I’m going to kill that giant. There’s no other option. I’m going to go through him because I got the spoils of the war. The other side, mainly understand that’s how that works and that they too can kill their giants if they just decide they’re not going to quit. And that’s, I had to learn that the hard way. And I did. And that doesn’t mean that I still don’t need to keep learning that because there’s more giants ahead and I’m going to kill them,
Reed Goossens (12:21):
Right? No, no, John’s Damon’s whatever, whatever you talk about, it’s, it’s the mental health. When you go through some rough patches that is tough sometimes. And for all of us to want, not only to reinvent, which has just, uh, hardened itself, but, but to delve, as you have some, some issues in, you know, the, the outside world that you couldn’t control like a recession and having to, having to face that and, and, and man up to, or not to man up to it. But, but, but face it in a way, which you don’t feel like you were constantly being pushed down or, you know, um, you know, the, the constant world of skidding said no to, no, we don’t want to hire, you know, you don’t have enough degrees. No, you don’t have the right experience. No, no. One’s looking for someone in your, in your, of your caliber or your experience.
Reed Goossens (13:00):
So it’s a, it’s definitely a hard pill to swallow at times, but I think that the resilience piece definitely comes through in, in that little, you know, stories. So thank you for sharing. Um, I want to sort of shift a little bit into, you mentioned, uh, working with governments and I know in the green room, before we press record here, we, we were talking about planning commissions and I’ve, I’ve got a it’s near and dear to my heart because I’ve worked as a structural engineer, across many different cities around the world, London, New York, uh, here in Los Angeles. But in talk to me a little bit about how you as a business leader, but also working with the planning commission, how they go about making sure they’re future-proofing cities, um, housing, uh, infrastructure projects, because all that adds to obviously wealth creation with what we do as real estate investors. Um, but it does start with government and urban planners and making sure there is an urban plan, you know, uh Mapple or some sort of idea that they want to go out and build over the next 10, 15, 20, 30 years. So how important is having a good planning commission in local city municipality in order to make it thrive for the, for future generations?
Doug McAllister (14:10):
That’s, that’s the million dollar question. The I, because I’ve been on both sides of the day is when it comes to planning commissions as well as city councils. Um, and, and the only way I, the answer to your question is why I ran for office, where I went from the appointed planning commission to an elected official. And, um, it has, it comes down to is that it is not just important to have a good planning commission and understand how they think, um, it needs to be an entrepreneurial con context, you know, the bureaucratic mindset that got good people in government, but when you get to the bureaucratic mindset, it’s so easy to just say no. And many cases and planning commissions too, is, is that it’s the folks who were on the planning commissions don’t have the expertise necessary to make the decisions that affect people’s lives like they do.
Doug McAllister (15:02):
And I was one of them when I first got appointed flat commission, the reason I was appointed because they hated the other guy and there was only two of us applying. And so I got out of the planning commission, and I didn’t know what a general plan was. I didn’t know what a specific plan was. I had no idea about anything. And now I was in a situation to where I was making multimillion dollar decisions about somebody else’s life. And so I had to learn and I had to learn quick and move through that. That’s not the best model. I’m not suggesting that’s the best model, but through the process of that, I was watching a planning commissioner. His job is basically used to make a recommendation to their city council. And nine times out of 10, the city council will accept the recommendation. Um, but not always watching the process that, how it went from the planning commission, which basically posted be one plus one equals two to the political, uh, political context of a city council and watching that.
Doug McAllister (15:58):
And that’s why I ran, because I would say that has to change, gets to them to the decision-making process process of the city when the city council level, if you’re in the political aspect of get kicks into that thing, just polluted the whole process as far as actual sir. And my attitude was you had to have an entrepreneurial mindset for your city that started at the top and to the council. It had to go through the city manager and all of their people they’re thinking entrepreneurial, which means let them fail, let them try something and let them try it if they fail great, at least they’re trying, we’ll figure it out as we go forward and understand that time is money to understand that when you spend somebody’s money it’s as if you needed to do that, like you’re spending yours, as opposed to you spending someone else’s money, you don’t really care about that. And putting all those principles in place to create an entrepreneurial mindset in government. It’s why I ran. And then that’s why I spent so much time there to make that happen. But to your original question, um, if you are dealing with a city council that just doesn’t get it in my view, when I tell a paradigm don’t do business, they’re dope. There’s plenty of other places you can do business by the ones who get it and do business there.
Reed Goossens (17:07):
And it’s interesting, you bring up that point because I I’ve invested in being involved with development in long beach here in California, obviously New York in London, uh, in Austin, Texas, where I currently invest, but also in San Antonio and looking at the different ways in which municipalities approach evolution of the city is really important, I think. And, and to your point of entrepreneurial mindset, if you don’t have the right people in place who want have a vision for the future, you talk about a specific, uh, urban plan or the downtown specific plan, which is what are they going to do to the downtown center in order to make it, to attract business, to attract spending, to attract, uh, customers, uh, to attract lifestyle it’s, it’s, it’s completely changed. And if you don’t have the right people pushing in the wrong, rolling in the right direction, I should say it becomes very hard for a city to over evolve.
Reed Goossens (17:58):
And that’s where peak cities can, can really be caught up. And I don’t want to go on a, on a rant about it, but I feel like in the last, since the last recession in 2008, like take, take downtown Los Angeles for an example, like it wasn’t the resurgence of downtown Los Angeles in the last 10 years that in its first rodeo tried it in the eighties, it tried it in the nineties, it tried it in the 2000. It wasn’t to the 2000 until the two thousands that it started to evolve. And, you know, get the, the, the, the people in there to, to try to create this incredible thing that is now called downtown LA. The same thing goes for when I invest in loss in Austin, you know, and the difference between say Austin and San Antonio, Austin has a, uh, an urban specific plan that was built back in the late nineties.
Reed Goossens (18:37):
And the reason Austin is what Austin is today is because of that planning over 20 years ago. And so having understanding that as an investor is super important, the reason I I’m sort of beating this drum and going on a little bit is because when you compare different [inaudible] municipalities and where you want to invest, that’s going to affect your investments over the longterm. And making sure that you align with that is, is super important. So I just wanted to sort of stand on my podium there for a second, but I wanted to get your thoughts on that.
Doug McAllister (19:02):
Well, yeah, you’re, you’re a thousand percent, right. You’re I mean, I can, you know, those who have the experience like you do in the investment world when you’re trying to interact with government to try to move things forward, you know, so much of the risk reward version of these transactions is the government side. And so you’ve got to figure that out. And so the only I’d add to what you said is, is that it’s, you’ve got to look beyond even beyond those plans. There’s specific plans, general plans, and you’ve got it. You got there’s, there’s a certain point where do they have the political will to actually implement the plan that they have put in place? Um, there’s a city in this region right now. I will not name that. Um, I get deals all the time. Folks wanted to do residential multi-family whatever else, and they want us to fund those deals in this city and stuff.
Doug McAllister (19:51):
I just, I, in my own due diligence, which I’m most responsible for here, as far as the underwater writing, uh, we are very, quite a few layers deep in due diligence on everything. And I’ll go, and I’ll talk to the mayor, I’ll talk city managers and finance, because I want to know the boots on the ground. What’s, what’s the reality on the ground. I know what the specific plan says, and they’ll bring me deals and say, well, it’s already been, it’s already been entitled and nnn. Well, I already know now because I’m experienced with that city, that even if it’s an entitled project, they will not let you build it. And they just, they Sue us because they have had issues with a freeway being built. That’s caused all kinds of traffic and they’re blaming residential. And so they have a political problem because the residents are saying, it’s residential.
Doug McAllister (20:34):
Therefore we don’t want you to approve anything. Okay. Well, I’m not going to fix that for that city. I’m not, I’m not going to be able to do that, but I’m going to fix it for mine, but esters, and I’ll say no to those deals. And that’s part of, you got to get into that and, and talk to those folks. Do you have the political will to enforce this plan? And you can find that out fairly easily, but you just got to be able to talk to them and speak the language. And that’s what we do
Reed Goossens (20:55):
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Reed Goossens (21:45):
Isn’t their ability to think outside the box. It’s actually the ability to manage the system and make sure everyone’s talking to the right piece, which was my job for four and a half years for a developer in long beach. And all I was doing was running around, making sure that one planner was talking to the other planning that was talking to city council, one that was talking to the neighborhood, um, council and making sure all those pieces are together to say, okay, we’ve got together. Now let’s jump. And that’s what takes the longest period of time, which adds the most amount of risk to ground-up construction while ground-up construction is so risky. Um, but in saying that back to my original point of when you invest in a city, trying to have an alignment that they have a future, what does the future look like?
Reed Goossens (22:25):
And to your point, what is it look at beyond that? And making sure that people do have the best interests of the town and that they would have put some thought around it, because that’s, if you don’t, if you’re going to invest in a city that doesn’t even buddy thought about, what’s gonna happen in 20 years time, they’re going to be sucked out the back when the big tidal wave of change comes. So, and, and that pivots into the next point that I want to talk about with you is your, your network for paradigm or your worth paradigm and the private equity space, uh, and bringing your experience in sort of conflict resolution from public and government into PE and seeing the issues of there. But you also got some, some issues in, in the, in the way that private equity is running the industry as a whole, and, and how that’s going to evolve over time. Do you want to sort of give me your thoughts and, and 2 cents on that?
Doug McAllister (23:08):
Yeah. Um, paradigm, um, part of the reason I’m here, um, is we’re a little different, um, and that’s by design. Um, our, our focus here is, is, uh, of which part of this discussion plays into that. We just, we just had our focus is, is we really, we want to reinvent the industry. We want to reinvent the space. Um, I have been for years, um, complaining that I don’t have my flying car yet. Um, you know, it’s, it’s, it’s, we should, this is 2020 crying out loud. Why, why do I not? I still, I still, it still takes gas. What’s, what’s up with that. And I always tell people that I blame trains. Obviously they say what trains got to do. A little of that with bottom line is, and I think we, you and I may have talked about this in the past was, was way back when, um, trains, they were their thing.
Doug McAllister (24:05):
They connect to the East versus the West. They had the power, they had the money and everything else, but a day, you know, unless for many cases, Alyssa, except for subsidies, they wouldn’t exist. What happened in my position is trains thought their business was trained when it was transportation. And had they understood what they were about. I’d be flying cars today because they would advance the whole transportation discussion further. Well, that has to be that, you know, for all of our businesses, but for paradigm, our attitude is what is our business. And it’s not really just money. It’s not just, um, uh, using these vehicles to, to earn more money for our investors and then for ourselves, and to redefining that in a time, and it was called whole COVID discussion. This is really emphasizing that is that we’re discovering what are antiquated ways of work compared to, you know, what this remote working with too so bad after all, and the different aspects of forcing us into the 21st century.
Doug McAllister (25:03):
And we at paradigm would like to take the lead in that. Uh, we’re, we’re a unique position. We’re newer. Um, and so we’re not so entrenched in the old ways of doing things. And so we can look at things to say, is that really the best way of doing that? Is that the best way of taking care of our investors? Is that the best way of taking care of, of our friends is, is that the best way of doing business in this 21st century context? And so our goal is to just is to really disrupt the industry. And, um, when we talked about being a one-stop shop, that’s part of that discussion is we want to, we want to reinvent the way we do things.
Reed Goossens (25:36):
Maybe give it some context to the listeners of what a private equity shop does because people talk about, like, on the show, I haven’t actually ever had never have had a CEO of a private equity firm on the show. So maybe give some context of what it does, um, and what industries you’re involved with in investing. And then maybe also some examples of what needs to change, like a specific, like, this is the problem with private equity today. And this is what I think the vision should be for the few.
Doug McAllister (26:01):
Okay. Um, private equity, uh, the best way I can summarize it, um, and understand that when I came into this, I am not a finance guy. My whole area is, is, is, is, is scaling companies and moving them forward in those kinds of things and just bringing that to bear. But I’ve had to, for the last couple of years, I got to educated. And so I’m going to probably give you a definition that a private equity person who actually knows what they’re talking about would be a whole lot more technical with. I’m just going to tell you that the way I see it, and to me, private equity, when it comes down to is, is that you’ve got in this case, it’s real estate. Uh, you’ve got this opportunity over here and you got folks who want to make money over here, and you marry them together and you bring that equity in there.
Doug McAllister (26:39):
And the equity part of that is where there’s a project that needs to be built. It this much money, and the banks need you to bring this much by the table. So they’ll give you this much money to build it. And so the part that’s called your skin in the game is the equity. And this over here is the construction loan. And so our job here in the very basis of that is that we will arrange for the equity view. We find investors who will invest into you and your project, which will qualify you for the construction loan over here. Now, we’re, we’re a little different here as we can do both. We do both the equity and we can do the debt as well. We let them, and we do both the same project. It works, it works out better for everybody involved, but where I see the problems and we’re, we’re, we’re working to fix that here.
Doug McAllister (27:22):
We talk a lot about our underwriting process. Here, we call it a forensic process where I see the problems is that too many times. And I don’t really, I seriously disparage being counters. Um, I’m not one of those, but too many times decisions are made just at the accounting level. And if the numbers look good, then they’ll do the deal. So there’s two problems there. If you’re a, if you’re a firm and you don’t have someone to do the research, you’re getting basis just on the numbers and you’re going to get burned sometimes, hopefully. And your inner success is hoping that the number times you get burned is less than the number of times you don’t. Okay. Um, so if you, if you don’t understand that there is a whole lot of other levels of underwriting, so you’ve got to go through some of what you’ve already talked about.
Doug McAllister (28:15):
You sit down with the government leaders, you discover what don’t you know about this project, so that if the sponsor hasn’t been quite honest, you’re going to find out what’s going on. We’ve saved our investors, millions of dollars, maybe hundreds of millions, of dollars of risk, because we found out the truth by talking to other folks, but you go and you begin to do this multi level, um, most high depth of version of underwriting on top of the numbers. Then you get a better picture. And that, to me, I think that needs to be done better, um, in, in, in this space, in the equity space. And in many cases, what we’re finding that we’re are able to offer our investors and the family offices, and those folks is they don’t have the back office. We do to be able to dig that deep. And so by us partnering with them, either through their investing or whatever else, we’re able to give them a higher level of security. And it’s my opinion that with real estate, with, along with maybe a couple of other alternative investment aspects, that you can have a great deal of security and still have a crane return, as long as you understand how to do the process of better running correctly. And that’s one of the areas we’re trying to take the lead in, and the industry is doing that better than anybody else.
Reed Goossens (29:26):
Got it. Got it. Then that’s super important because underwriting is what makes it a it’s more than just the numbers, as you said, it’s understanding the municipalities. And it sounds like you’re involved with predominantly ground-up construction. Is that,
Doug McAllister (29:39):
Uh, no, we’ll do it all. We are. We’re looking at listings and value add ground up. Um, our, our favorite asset classes are going to be multi-family. Um, uh, we’ll look at that. The things that we would consider recession resistant, um, we still believe in that if you do there’s places, example, there are places in this country right now that in spite of all that’s been going on, hospitality still kills it. The hospitality is, you know, the hotels and resorts. They were heavily involved raising about $20 million right now for, uh, for a resort in this region, because we know what’s going to fly because of what we know about the region. Um, and so there’s, so there’s that aspect of it, but then there’s industrial. We like industrial. Um, we’re looking closer at office now because of the way, you know, the folks understood that all of a sudden remote working isn’t so bad, how’s that going to impact off?
Doug McAllister (30:34):
So we’re looking at that real close, but if you look right now, even today, as we speak, the stock market is at one point, it was up over a thousand points. The jobs market ahead to the steepest decline in may. This has since I think, 1939, it went down 13 plus percent. I mean, there’s all these signs that they said were going to happen, they’re happening. And so we’re watching this, they’re going okay. As we’re looking at all of that, our data scientists that we have on board is looking to that and try to extrapolate from that what’s that look like from these asset classes? Cause we have to know that before we, before we push and put these opportunities out from our investors as part of an underwriting process.
Reed Goossens (31:14):
And, and, and so part of what you want to bring with the disruption that you were talking about with private equity, besides the underwriting, what else is, uh, you know, obviously the underwriting acts as a full service back office, as you were saying for the pro, um, for the family office folks, high net worth people. What other elements are you trying to bring to disrupt the P the P world?
Doug McAllister (31:38):
Well, um, I’m not sure how much this is disrupting, what the time is going to tell, but one of the other aspects of what we’re trying to do here at paradigm, I’m very focused on this because, uh, that’s part of once again, I want to scale the company. Um, is I just, I don’t want to be a one trick pony. Okay. Our thing is equity. We do equity. Yay. What about it? No, we’re not the rest. Well, we’re focused. We do, we’re going to, we’ll do the equity side. We also do the hard money loans and the debt side. Um, we want to be a comprehensive, um, service if you will, to our investors so that because when you get that made, you can package the deals a whole lot better and differently. Um, we don’t believe that you have to be the one trick pony.
Doug McAllister (32:25):
Now there’s a lot of good companies out there that all, as they do as the equity side and my hats off to them, I’m not saying there’s anything wrong with that. We’re just trying to do it that next step better. And so we we’re, we’re, we’re doing the whole, the whole nine yards. We would have our own estate division, but in real estate, uh, professionals and such, and, um, and we have our own wealth, wealth, advisory side of things. And so we were very, very focused on what we call service after the sale. We want to earn your investment. The next one, we to run the next one, by how we have, we treat you in this investment. And so part of that is, is that we have a whole division that’s dedicated to spoiling our investors. So we, we were getting their hooked up with travel arrangements and, and restaurants and memberships and different clubs and access to the, to the different things. They may not have access to and stuff. Cause we just want to take very, very good care of them that just take their money and give them a return. We want them to, because among other things we feel like we’re, I think we, on top of that, they tell their friends and that that’s that’s marketing. And we liked that part too.
Reed Goossens (33:36):
It’s just kind of like being best in class, right? You want to have an experience that everyone loves and enjoys the process because at the end of the day, doing business and investing should be fun, right? You don’t want to, you don’t want to do business with people you don’t like, and you don’t, you know, you don’t want to have to constantly be going through conflicts. So having a firm or someone that you like to do business with an invest with, and there’s a few perks and bells and whistles along the way. Well, hi, awesome.
Doug McAllister (33:59):
When you keep in mind too, that we’re not dealing with just accredited investors, uh, we have, um, we have, we’re qualified for a reggae plus tier two offering. And so we, we have our crowd funding aspect as well. And so with that, we’re dealing with accredited investors and I know those folks are skiddish. You know, they’re not maybe as sophisticated as those who have more to live more to spend or more to invest. But in both cases, we take the attitude that it’s not budget desk. They’re giving us, this is their future. This is their retirement. And we want to take good care of them, that process. So we’re trying, we’re taking care of both those accredited and non-accredited investors, and we want to treat them with respect,
Reed Goossens (34:40):
No, your investors these days. Are you doing a lot of online marketing or is it through referrals or is it a bit of both?
Doug McAllister (34:45):
Yes, it’s, it’s, it’s both. Uh, we have, uh, we do a lot of marketing, a lot of social media marketing. We find it as the place to be LinkedIn, Facebook, you name it. We do a lot of that branding through all of that. Um, but it’s one of the things that the CEO, Ryan Garland and I are, are mainly focused on, um, is, is the networking with the high net worth individuals, family offices, ultra high net worth individuals. You’ll see, I haven’t been involved in this, but you’ll see our CEO in Dubai. You’ll see him in, in Monaco. You see him dealing with working with those folks. We do a lot of networking. Um, what we’re doing right now is such as the, through the, through the pocket, I do a lot of podcasts. You do a lot of podcasts. And I look at it as a networking tool and I get to meet a lot of extraordinary people along the way, and we find ways that we can help each other out and do those kinds of things. So we they’ll do a lot of that. Um, we, we dabble sometimes from the standpoint of our sales side, um, with regard to the crowdfunding and getting lists and getting connections that way. So our, our folks on the phone can make the phone calls, but we’ve been finding that we’re patient, they’re more patient way that is just to develop the relationships and, and help each other out. And that helps us find a way in each other’s networks as we have a lot of that.
Reed Goossens (36:04):
Awesome. Love it. I guess, before we start wrapping up the show here is what’s the, what’s the future got for paradigm in 20, 20 and beyond?
Doug McAllister (36:13):
Um, well we believe we’re going to kill him. Uh, we really do. We are, we are seeing, we’ve observed this time with the COVID and stuff. That was kind of a pause going on. Um, it didn’t really slow us down that much, but it allowed us to just keep packing the pipeline and packing the pipeline. And, um, it’s, it’s, there is so much interest right now in, in investing so much dry powder out there and, and earning the ear of that investor is, is it takes time and developing those relationships, but we’re getting closer and closer to where they’re starting to see there’s something different about this company. And it gives, we get the opportunity at that point to, to, to pitch them on some deals. And we’ve got we’re opening, um, three funds right now, I’m looking at a $300 million distress asset fund, like a hundred million dollar debt fund. Uh, we already have our $50 million reggae, uh, as is in place at this point. And plus on top of that specific funds for specific projects, um, where, where, um, it’s, there’s a lot going on right now. And part of my job is to keep all those plates spinning and it looks at bios, put another one over there where that would come from, but it wasn’t all spin in the right direction. And we just see some good days coming for our investors.
Reed Goossens (37:27):
That’s awesome. Well, man, I wish you all the best of luck and we probably should talk offline about, um, some private deals that we’ve got going on as well. But, but at the end of every show, we like to dive into the top five investing tips. It’s a lightning round. You ready?
Speaker 4 (37:40):
Sure. [inaudible] have a good practice to keep on track towards your goals.
Doug McAllister (37:49):
Every day, I have certain things I do every day post to LinkedIn and connection request. And there’s this whole list of things I do every day without fail. And then I’ll talk then the other things get added to it. But those are the things that I make sure I have a very, very structured list of things that I do every day. It just keep biting to the Apple bite with the Apple.
Reed Goossens (38:13):
It’s one small step at a time. Right? Just keep, just keep walking over a question I’m gonna do is who’s been the most influential person in your career today.
Doug McAllister (38:23):
Um, I, I don’t mean to sound weird here, but it’s been gotten from, from day one. It’s been that. And, um, and it, that is why I believe I’ll kill every giant in front of me. And, and on top of that, then the most supportive person I’ve ever had is my wife. She has just been there for me. So you put those two things together and I don’t think I can move.
Reed Goossens (38:44):
Good. Good, good winning combination. That’d be for question number three in your business. Uh, what’s the most influential tool. And when I say tool, I could be a software that you use every day, or it could be a physical tool, like a phone or a journal. Um, so what’s the number one tool that you use in your business every day?
Doug McAllister (39:06):
Uh, software wise, I’m very big into LinkedIn. Um, cause I’m very much into networking. I know we use that every day. Um, I build that every day. Um, the, otherwise the, I have also found, but doing podcasts has been extremely, extremely beneficial. I’ve met some incredible people. I met you this way, um, and such, but uh, developing some good business relationships that way. Um, I would say the tools that there’s a combination that there probably are the secret sauce for us. One is computers, technology use it find a way to, to take, I’m looking at blockchain right now. I’m looking at all of those things right now to see how we can advance the company. But then there’s also yourself. You’ve got it. You got to understand your skillset and what you can’t do. You find somebody else who can do that well, and you put that team together, but those two things together and you have a better chance to be successful.
Reed Goossens (40:01):
No, that’s good. Good answer. Uh, and I think having that mindset of wanting to evolve over time is, is, is very important as well. Coupled with all the other tools that you use on a daily basis. Question number four is what has been the biggest failure in your career. And you learn from that failure, biggest value, failure failures. What’d you what’d, you what’d you learn?
Doug McAllister (40:20):
I have been in Australia for a while, so I’m the biggest failure in my career. I should choose from several here. Um, I’ll use one. I moved to this, um, region I’m in right now. It’s the macula Marietta Valley here. Um, in 1987, I’ve been here for awhile, uh, back and forth, but mostly here. And, um, I moved here because I knew it was going to explode and I didn’t buy any property. I didn’t take advantage of what I knew was coming. And, um, it was a shortsighted. I was here. I don’t know what I was thinking at that point. And, um, it was now I’ve looked around and it was this. What has happened here in this region has been off the charts and had I had I been more foresighted, then I would have a, be a much different situation than I am today. And, uh, it’s, it has been, one of the lessons I’ve learned is, is that don’t be, there’ll be thinking like this. You gotta look further out. You gotta, you gotta look and see outside the box and see what’s coming and get really good at prognosticating. And, and then acting on what you think is going to happen. And I learned,
Reed Goossens (41:35):
I think that’s, it’s just, it’s hindsight, 2020, right? It’s a little bit of a, it can be a slap in the face sometimes, but it’s okay.
Doug McAllister (41:43):
Yes. There’s expect us to, so I’m going to figure it out. Figure that part out.
Reed Goossens (41:47):
My last question before we end here is where do people, where do people reach you to continue with conversation? They want to be in your sphere. They want to find out a little bit more about what you do. What do they go?
Doug McAllister (41:56):
They can find me on LinkedIn. Um, just, just duck, Dr. McAllister it’s paradigm. You’ll find me there. That’s probably the easiest place to do it. Um, and through that they can reach out and message me. I’ll give them my email, my phone number, whatever it takes. And when we have those conversations, they can come to the paradigm investments.com. And if you see behind me, it’s spelled weird. I don’t know really why they did that. That’s before me, but it’s P a R a D Y M E investments.com. They can find us there. We’ll have to have that discussion. And I will tell your folks there at the same time that, um, anybody that’s coming to talk to me, I probably got talked about this guy named Reed, um, because we didn’t get a chance to talk about you very much in this situation, but the things that you’ve got going and your history, and then I want to get ahold of your book. I want to read that story as well. Um, folks, this guy’s got the experience you you’re looking for. If you’re, if you’re wanting to really do well in investing in real estate. So we didn’t get chance to talk about you. Um, but we’re going to do more of that maybe in our next podcast on my side.
Reed Goossens (42:55):
Thank you. Thank you for the props, the show isn’t about me. It’s about giving highlights to people like yourself. So thank you so much for jumping on the show today. I just want to quickly reflect some of the things that I took away from today’s show. I think the big thing you know, is, is resilience. You, you have gone through some many, many waves and iterations of evolving yourself, going, going, going to the depths of despair, picking yourself back up, reinventing itself. I think reinvention is another really important word. Um, but the, the, the never giving up and having that hope and that vision, that this is going to continue to get better, um, which has then helped you, I think also have a different mindset. You spoke about the transportation industry in, in the trains, and they’re not, they’re not in, they’re not in the train industry, they’re in the transportation industry and looking for that and how do we evolve and where the flying cars at and how to apply that to the private equity world in order to be the best in class. I think that is a very important mindset to have, because if you lose focus of that and we get too focused on the numbers or just staying still in our lane, we’re going to get sucked out the back when the big wave comes. So I think those are the couple of big, big takeaways that I took away from today’s conversation. Did I leave anything out?
Doug McAllister (44:05):
Well, I just want to encourage folks. One of the things I didn’t bring up earlier to drive the point home, this is not to seek sympathy. This is to drive the point home there’s folks that are gonna be watching this who are we’re focused on their careers. We’re focused on their, on their investors and their investments and things. And, um, and you know, there may be going through it right now and such one of the, one of the challenges I had in the middle of everything there was my eldest son was killed in car accident in the middle of all of them. And I will tell you that I’ve seen the worst life can throw at you, but I can also tell you that, I mean this with all my heart, that if you are, if you will not quit that, if you will keep moving forward some days taking just that one more step, but if you’ll do that, you will, you will never regret it. And you’ll be amazed at where you can go in life in the process of that. And you can take all the worst life has thrown at you and you can turn into the best. And I, I never want to go through that again. That was horrible, but I can guarantee you, if you do not quit, there is no limit to what you can do. So that’s my curse that everybody’s watching this right now.
Reed Goossens (45:13):
Momentum I’m super, super sorry for your loss. It’s um, yeah, loss is hard. I’ve, I’ve had some personal loss in my life as well, both. Uh, my youngest sister passed away when I was 11 and my mom just passed away two years ago. So it’s a, yeah, I know where you’re coming from. Yeah, I know what you talking about. And, and, and, and it, it, it just goes back to, you know, when you are at the rock bottom, just realizing that you’ve got a roof over your head, you can take the neck, another breath you’ve got the next day. The sun will rise tomorrow and putting it all in perspective, I think is really, really important to help you get, get back off in the horse. Uh, if anyone is struggling out there. So super, super and Infor inspirational podcast today. Again, thank you for taking some time out of your day to jump on the show, enjoy the rest of your week. As I say, wash your hands and we’ll catch up soon.
Doug McAllister (46:02):
Thanks. Thanks for having me Reed.
Reed Goossens (46:05):
Well, they have another cracking episode. Jen Peck was an incredible advice with Doug and he is just a wealth of knowledge. So please do connect with him on LinkedIn or any of the social media platforms, which Doug McAllister, uh, make sure you also go out and check out paradigm.com. It’s an interesting Pete private equity firm that is doing a lot of different, interesting stuff in around Southern California, but also, uh, across the nation. I want to thank you again all for taking some day, some time out of your day to tune in, to continue to grow your financial IQ, because that’s what we’re all about here on this show. If you do like this show, the easiest way to give back is giving it a five star review on iTunes. And remember, we’re going to do this all again next week. So remember be bold, be brave, and go out and give life. [inaudible].