Koloa Wolfgramm: He Bought Hotels When Everyone Was Scared | DSH #1732

I think I'd rather have that and have a bunch of stuff and not have ambition.

I do think that there's a benefit to coming from the beginnings that gives you kind of that ambition and drive.

I agree. There's pros and cons, but a lot of the most successful people,

you and I talk to them, have some similar stories to what you just explained.

And I think also part of it is like a self-confidence thing, where it's like you can look back and think,

like, I wasn't necessarily given. So when I'm just, well, you know, right?

No, Ivy League is a lot of kids of governors and judges and billionaires and whatever else it is,

right? That's like very, very common. And one of the things that I did notice,

like interacting with some of them was that it was hard for them to feel like their success was

their own. It always felt like, but it was like, I was just given this.

Impostor syndrome. Yeah, exactly. So I do think that there's something that was like, I didn't have

any legacy admissions, right? I knew I had to get it on my own merit. And so when you have some of

that success, it does feel maybe a little bit sweeter than if you're always questioning, like, well,

did I get it? Because, you know, someone gave it to me.

All right, guys, we are here in Las Vegas. We got Kaloa on the show today from Houston,

Texas, doing some big things out there. Thanks for coming in today, man.

Yeah. Thanks, man. Thanks for having me.

Yeah, I know you've got a history with Vegas, done some business out here over the years.

Yep. Yep. Love the hospitality out here.

I'm going to be back. That's how you made your bread and butter, right? The hospitality industry.

Yeah. Hotels are a big part of the portion of our investment. Unveasus and continues to be

huge for us and building, buying, acquiring, managing, all that kind of stuff for hotels.

Have you had the viewpoint the whole time? Because I know an Airbnb kind of got into mix.

There was a little uncertainty. Yeah, yeah. No, we, so a lot of it happened to do with,

you know, we started a company. We've been in hotels a long time, grew up. My father,

immigrant, you know, working hotels, all kind of things. So I grew up in hotels.

You know, the first time I ever ate a steak was at a hotel. All those kind of things, right?

Yeah. And so I've been around hotels, worked at hotels. And then in 2021, 2021,

when COVID hits was like the prime buying opportunity for hotels, right? It was COVID was about

three times as bad for the hotel industry as like the great financial crisis. Well,

so if there was a time to buy hotels to invest in hotels, like 2020, 2021 is it? And so I was

doing some other stuff at the time. It was like, this is, this is, this is it. This is the time

to get into it like full-feet. And so we kind of pivoted and raised a bunch of money and started

buying hotels. And then since there we've grown. Well done. I mean, first of all, you make it sound

easy, but to have that conviction in a time like that is not easy. Yeah, it's a lot of folks are,

you know, scared about what's going on. And you know, is there going to be ramp up? I mean,

depending on where you lived, especially on the coastal cities, it still was not ramped up by like

2020 or 2021, right? People are still uncertain. Vaccines going to happen. Is any trouble going to come

back like all these kind of things. And so we, but we had conviction that, you know, travel would return,

tourism was going away. And so we were with the buy hotels as they were kind of on the decline.

And then fortunately, we were able to ride it up on 2021, 2021, 2022 wave. This kind of things

would turn back. Wow. So you were able to just raise some money through friends, family raising

capital is very tricky. That's I think that's the question that I get asked the most is how to raise

capital, especially especially when you're trying to go after like big deals. And so the way the way

that we approached it was a little bit maybe non-traditional, like traditional way of raising money,

especially like private equity or venture capital the same way is you'll have someone who's spent,

you know, 30 years on Wall Street, 20 years on Wall Street, they're a VP managing director or

whatever else it is. And then they'll go and they'll take all those experiences and connections.

And they'll go and they'll go raise, you know, 300 million billion dollar fund, right? That's like the

classic model. And so we were we didn't necessarily have those those connections. At the time, I was

at in law school on to Yale for law school. And we have some connections, you know, from that,

and all those connections. So instead we said was we're going to raise a bunch of money to buy

hotels. We don't necessarily have the institutional deep pocket billionaire friends, right, that like

is traditional. What what I had come up with on our fundraising strategy was let's look at the

areas that are adjacent to our areas. So if you have hotels, people when you're raising money,

you kind of have to solve for two issues really. One is you got to convince them to invest in the

industry. Why should you invest in hotels instead of tech startups or other types of real estate,

right? So why why why hotels and then why specifically your hotels, right? And so when we first

started raising money, we were kind of trying to solve both those at first. And it was super

difficult because we spent a lot of time educating people on the hotel industry, how it works,

all that kind of stuff. And then we get to it and they're like, okay, well, I'm not convinced that

like I still want to buy hotels. I just want to invest in my like fix it in a flip at time. My

house is our apartment deal, things like that. So it's wasted a lot of time. And so I thought I was

thinking, could we solve for one of those easier? And could we solve for finding people who already

want to invest in hotels? And then we just have to convince them to invest in our hotel smart.

And so the way we did that is just kind of look to all the different adjacent industries of

the hotel industry and look for like the small to medium businesses in that industry and try to target

those folks. Not so smart. So you were very targeted with the approach. Yeah, super. So for example,

it's like insurance industries, right? There's insurance, those guys who run insurance companies,

agencies, whatever else it is, they're making like three, four, five million dollars a year,

they're in like 60s, they're in the 60s, all right? They've been making this for decades.

And all they do is they specialize in hospitality insurance, right? They run, they're not running

these huge, you know, billion dollar companies running these small companies, but they know hotels.

They've seen all the risk factors. They've underwritten a ton of them. They know the difference

between underwriting a hotel and, you know, coastal America versus, you know, mountain America,

whatever else it is. And so going to them and saying, hey, look, you guys already know hotels,

and we're looking for 500,000 million, two million for this specific hotel and this idea and this

plan that we have, that was a lot, lot faster. So we did that with like hotel insurance folks in

the hotel industry for lawyers who they specialized in hotel, both contractual litigation,

so they knew kind of the things that looked out for in the risks. They're really comfortable with that.

And so we did that with just all the different industries and, you know, the first year we raised,

first year we bought over a hundred million dollars of hotels. Holy crap. Yeah.

To date, we've bought over five hundred million dollars worth of hotels. We raised over a hundred

million dollars of equity. That's nuts. And how do you slow down since you said it was better to buy

them during the pandemic, right? Yeah. So now we're kind of in a, we're in a recycling phase where

you're now trying to sell a bunch of those assets, you know, buy a bunch of them when they're, like

you said, underpriced undervalued state, you stabilize them, improve them, and then you sell them,

and you recycle that capital from the next thing. And so I would say that our acquisitions, we're not

buying as much, but we're also buying some larger projects. Got it. So rather than buying, you know,

one hotel for five million, another hotel for 10 million, another hotel for 15 million, another

hotel for 10 million, putting together a bunch of that. Now we're selling that and now we're looking

at large acquisitions. We're looking at, we've done a couple, you know, nine, nine figure acquisitions

in the last 12 months. We're working on a project in Houston. That's a $750 million deal. So we're

looking at some of those larger deals now. And people say, get rich quick doesn't exist.

You did a hundred million in a year, you said. Yeah. That was your nuts. Yeah. And that's just

in acquisitions. That was in acquisitions. Yeah. So we're doing, you know, as of today, we are,

yeah, we're well on track to hit a billion dollars in company size, probably in the next three years.

Holy crap. So within six years, a billion dollars. Yeah. It's unreal, right? For someone that

self-funded and was happy. Yeah. Yeah. I mean, I started a company. I was 26. So that's

straight out of law school. You were probably dead, right? I was still in law school. Oh, you still

were. Yeah. It was my, it was in my last year of law school. Wow. And you had the time to juggle

both. That's crazy. I didn't have the time, but I was trying to figure out how to make, well,

yeah, I know it was, it was, it was actually wild. Like it was, it was the most painful time

was during that time. Really? Just of how you're going to law school, you're trying to do well there.

You know, I married half kids. So, you know, obviously, I have time commitments there. Wait,

so you were married before? Yeah. Yeah. Yeah. Yeah. Holy crap. I got married and I was 20 years old.

Wow. I have five kids. That's how it's young, man. Well done. That's, that's super

better these days. I feel like. Yeah. Yeah. I mean, dude, it's, you know, it's funny. You know, a lot of

people say they're like, you know, I want, I want to go live my life. I want to, you know, go have fun,

you know, experience whatever it is. And I get it. Like I get there's some maybe less freedom or some

of that that comes from, you know, having possibilities and those kind of things when it comes to

family. But on the other hand, it's like rather than going out and having 10 years, 15 years,

whatever it is and doing, you know, traveling wherever out it is, like, I've gotten to do that for

the last 10 years with like my best friend. And so rather than having a bunch of that time,

we also got to grow together. Like so she got to see me as a freshman in college all the way through

to, you know, graduating from law school and starting a company and like she was with me through it

all. And so it was really cool to kind of grow together. And that's something I feel like if you get

married too late, some of the problem with that is that you've grown so far that like when you try

to add something else, that makes it used to be a little bit, a little bit challenge. Yeah, I agree,

especially with what happened yesterday with Charlie Kirk, you really never know when your time's up,

you know. Yeah, that was, that was shocking. I mean, I want to undergrad at BYU. Wow. So just

right by, you know, the UBU campus. And so that was, you know, incredibly tragic shocking. We know a lot

of folks that were at the, at the rally and, you know, students and my sister lives 10 minutes

from there. And so it was, yeah, shocking to have fast on that stuff. Yeah, I would have never

expected Utah. Like, right, I know, right? It's pretty conservative over there. Pretty conservative,

you know, very family friendly. Everyone's very religious. And so, yeah, it was a shock. I'm sure

there's a shock to them, obviously. Yeah. In terms of, in terms of risk factors of what

geography is going to be the most risk, you know, I don't think you expect Utah to be the bottom of

that list for real. Rest in peace, man. But yeah, I'll, like what you said, because I, I've been with

my girlfriend similar for eight years. We're getting married next month. Oh, yeah. There's been so

much growth, you know, yeah. And we've been in it together. Like, that's hard to replicate. Yeah,

you can't, I mean, you can't, like, I was talking to a buddy of mine who he's, he's done very well

for himself. And he's like, it's just different. The girls that I meet and like our conversation

stuff when it's like ready after the fact, right versus like doing it through it and seeing

the growth. And there's something about like that growing together through it that I think is

a super about 100 percent. Did you have some pretty humble beginnings? Yeah. Yeah. Yeah. My dad,

my dad comes from a little island in South Pacific. It's called Tonga. I was right by Samoa,

Fiji. I was a little island. And so he came over here and, you know, worked, started working hotels.

You know, went to school on the side, all that kind of stuff. And so we grew up, there's five,

I have five siblings or there's five of us that we grew up in a, you know, 1300 square foot house.

Holy crap. Sharing bedrooms. All the, and in California, which is like super expensive.

That's nuts. Didn't have much. But I don't know. I think I think I'd rather have that than

have a bunch of stuff and not have ambition. I do think that there's a benefit to coming from

the beginnings that gives you kind of that ambition and drive. I agree. That is hard. There's pros and

cons. Yeah. But a lot of the most successful people you and I talked to them have some similar

stories to what you just explained. Yeah. Yeah. Exactly. And it's, you know, some of it is,

and I think also part of it is like a self-confidence thing where it's like you can look back and think

like I wasn't necessarily given, like I, so when I'm just going to school at you, right?

No. I believe there's a lot of kids of governors and judges and billionaires and whatever

outside is, right? That's like very, very common. And one of the things that I did notice,

like interacting with some of them was that it was hard for them to feel like their

success was their own. It always felt like, but did they just, was I just given this?

Impostors in the room. Yeah. Exactly. And so I do think that there's something that was like,

I didn't have any legacy admissions, right? I knew I had to get it on my own merit. And so when

you have some of that success, it does feel maybe a little bit sweeter than if you're always questioning

like, well, did I get it because, you know, someone gave it to me. Right. You were the first

Pacific Islander to graduate from Yale Law School, right? Yeah. Which is, which is shocking

considering it was in 2022, right? Yeah. It's been around for a couple of years ago. So you

might still be the only one. Yeah. Exactly. And there's, you know, it's lost, the loss has been around

like 300 years, 200 years. I think even before the founding of the United States, it was, it was

around. Wow. And so every, you know, every racial category has had a graduate. Lots of them,

right? Black, white, Hispanic, Native American, all that kind of stuff. And I mean,

Polynesians are small populations that probably released some of it, but almost every other

law school I'd had a Polynesian graduate. So just kind of one of those things where it was,

it was weird. And so you kind of get in there and you get the first and you find that out from

the admissions folks. And you're like, oh, very interesting. Going through the full Ivy Lake

experience now, looking back on it, any big takeaways, would you recommend it for your kids?

Like, what do you think over all? I think it's good for them to not. I think if they're

going to go to school, I think it's good for them to have a non Ivy League experience. And like,

I like that. I didn't my undergrad at a private school. Yeah. And it was a private school, but

wasn't, you know, I went to bring a new university in Utah. And so I like that I had that experience.

And then, and then had the other experience. I think if you had only one, you kind of,

you know, yeah, yeah. And so I'm part of the experience is like, it was shocking to me how,

how little the academics mattered and how much all the other stuff mattered. And that took me like,

a while because I think I think it's true for most colleges. Shout out to today's sponsor,

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You go there until I get good grades, so you get a good job. Yeah, I'm like, yeah, it was like,

yeah, do the school stuff if you have time, but really it's like you want to get to know the people,

the professors, and the people, the speakers coming, and do the dinners, and go to the

interesting. There's a lot of politics. It took me a lot to figure that out because I was always

like, put my head down, you know, get good grades, and I was like, oh, I'm missing something if

that's all I do here. Interesting. I did not know I be leagues were like that. Oh, man, it was,

I don't, I thought it would maybe be the opposite. I thought I was like, oh, if you can be the top

of your class, then that would be really impressive, whatever. And it's like, no, no, dude, it's like the

guy who goes around and goes to the speakers and says, hey, you know, Hillary Clinton, she spoke

our first day of law school. Hey, Hillary Clinton, I loved your speech, whatever. Do you think I could

come talk to you and DC something? She's like, yeah, sure. And then they go drive DC two months

later, and you go talk to her and she offers you an internship. And then, and then chief of staff,

you know, that's all a lot of these kids started. When you look at a bunch of their staffing,

including like really, really high level staffing starts from meta-meda law school campus,

meta-mon campus, and they go to the mainly the Ivy League campuses. And so that's not. Was that

kind of intimidating your first day there, Hillary Clinton? They're speaking. Yeah, super, super,

I mean, no matter what political beliefs you have, that must be like holy crap. Yeah, yeah,

and it was like, it was also doing, it was a 2020. So this is like right after like the election

stuff, and there's a lot of just like angst in there. And so, yeah, it was intense. And I think it was

also like eye opening to me of what kind of opportunities could come from it. How much of your success

in the hotel industry do you attribute to your law degree? I think that a law degree, not necessarily

from me. I think there's two things. There's such success that I think I can trace back to having

a Yale law degree and with the name brand of Yale. And that does help getting certain doors.

You know, people take your calls, people take your emails, they might not otherwise.

That is actually I think less than the skills that you learn in a law degree. So when you learn

in a law degree, they teach you how to think linearly, to think critically, be able to manage

risk and judge risk. I mean, when you're looking at a hundred million dollar deal, like you have to

be organizing your thinking. And there's no way to get around that. And most people just aren't trained

to do that way. And so when you go to law school, they train you to think a certain way that in

a lot of our success, I would attribute to the critical things that come from a lot of interest

there. Yeah, because a hundred million dollar deal, if it goes south, I mean, you're cooked.

Yeah, on those big deals, you're, you know, it's all out there. One wrong deal can ruin everything

you built. Yeah, you can build it for decades. You see that a lot in real estate. Yeah, especially

in real estate. People get a little, yeah, people have success at a certain level. And then once they

get to the higher level, they mess up once and everything they work for is gone. Yeah, I mean,

and that still happens with big, I mean, Donald Trump is a good example where I think he was in

the 90s where he was ready. Like the guy was a billionaire, right? And he's like talking about how,

I think he has a story about him walking down the street, seeing a homeless guy and being like,

oh, that guy's in a better position than me because he's not in nine hundred million dollars worth of

debt. Yeah, I got that time. Things were kind of struggling in terms of things around the real estate

side. And then eventually, obviously, turned it around. But even, yeah, even on that level, billionaires,

you know, have the same. Yeah, yeah, I grew up in Jersey. I think he got wrecked in Atlantic Sandy,

right? Yeah, that's right. With the casino. That's right. Yeah. They're saying, I don't know if you've

seen this on social media that Vegas is struggling right now. Yeah, I think Vegas is coming back to

market. I think so hospitality had this like, hospitality does have some ups and downs. And so like

2018, 2019 were banner years hospitality, highest prices ever, you know, room rates kept going up

basically just like this for a decade. And then COVID hits, right, resets up a ton of stuff.

And then when COVID hit, though, it created a bunch of like pent up demand, right? Anyone who's,

you know, sat at home for a year, two years and want to get out. And so then coming out of COVID,

like hotels could almost chart whatever they wanted to. People were willing to pay it. Yeah,

right. That was those were the days of, you know, $8,000 a night in some of these resorts and that

kind of thing. And it was still booked up 100% occupancy those kind of things. And I think as some

of that has waned a little bit, now people have gotten that out of their out of their system.

In addition to some of the pricing, I think challenges that are happening right now and with,

and also with some of the international tourism hasn't fully rebounded, we still are a lot lower

than we were pre-COVID when it comes to Asia specifically traveling to the United States for

tourism. Interesting. I think that is putting pressure on areas like Vegas, these are that to

drop their prices. Yeah. Pick up some of that demand. Do you focus on the US only? We are US only

right now. Okay. Do you have plans to expand or you just focused on America? We're pretty

opportunistic when it comes to international things. So I think if something comes along,

that was really interesting. We'd look at it and we've looked at things internationally,

but so far, it's never made sense. Okay. Part of the problem with international is as soon as

you get into certain countries, like the ownership of land isn't always certain and how to

loss treat that. If you're ready to get an issue and then you just have to have a local partner,

so it just gets more and more complicated. So we've looked at stuff internationally, but right now,

we're super focused on America. Do you have a certain pricing tier of hotels that you go off

through like the luxury, I don't know what to call it, everyday ones? Yeah. Like the limited service.

Yeah. Yeah. So we do. We like a little mix of them both. So we like to have a bunch of the

limited service or the complex select service hotels. These are like your courtyard, fairfield,

holiday and express, those kind of ones. And those things are nice because they're pretty simple

in terms of running them. They're usually anywhere between 8 to 12 million if they're unless they're

in a big, big city, right? And so you can buy a bunch of those up. And the nice thing is when you buy

a bunch of them up, you can often sell them for more. It's called a multiple arbitrage, two bigger

groups that are trying to buy big portfolios. Ghana. So for example, if you were to sell, if you're

to buy 10, $10 million hotels, just to the fact of going through all that effort, usually these big

companies are trying to acquire 10 or 15 or 20 packs at a time because they don't want to go through

and buy 100 different hotels at a time, right? And so we'll buy like 10 of these individually,

you'll package them up and then sell them as a package from 10 to 15 or everything next group.

Make sums. So you're 10 million per year, you're saying? No, sorry, 10 million per hotel.

10 million per hotel. We'll group a bunch of them. Maybe we'll do 10 of them, 15 of them in a year,

and they'll package them up. Ghana. So we do that on that side. And those have different economics

because those hotels you're running to construction folks if they're traveling to them from consultants

or whatever else it is. And then on the other side, we like to do luxury. And the luxury has,

especially when you do construction or value, value add construction or luxury has huge upside.

So you can, you know, you like take a wall door for its Carlton, Weston, the addition to

any of these big hotels, luxury hotels, you can go into them. And sometimes with just a

slight, you know, tweaking a strategy, you can increase room rates by $400 or $500 a night,

without doing anything to them. That's nuts. You can't do that for a hotel that you're selling

$100 a night. Yeah. You might be able to squeeze out next to $3 or $4. I mean, I just booked my

honeymoon and I think we spent like two thousand a night. So I can't imagine their margins.

It must be like 70% if I had to guess. Yeah. For on the room side, you're making a lot. Yeah,

on the room side, you can make anywhere between probably 50 to 70%. Like you said, on the thing,

the problem with luxury where you start to get into trouble is you have a lot of staff to try

to make a luxury experience. A lot of times with driving and when you go to that hotel,

you drive in someone will be there to greet you at the door. That's then a different person

will be there to take your luggage. Then a different person will be there to point you to the front

desk and then you start to get some staffing. But areas that do really well, especially this is

why actually international luxury hotels do really, really well because they charge American

prices, but their labor is in local labor. Yeah. And so like Mexican hotels, I can't

go anywhere else. Another charging $2 an hour for some of those labor, but they're still charging

two grand a night. Got it. That makes sense in Mexico. Yeah. How many of your hotels are using AI

to check in people right now? So we have zero branded hotels that are using AI to do full on

checking. So the hotel brands have a lot of backend stuff that use AI and manage trends and other

things. And you can do like the virtual check in all that kind of stuff is managed. But right now,

none of the brands that we have that we own, this is across Marriott, Hilton, and IHG, none of them

allow fully AI check in. That's common. That's common. I just stayed in Miami last few months ago.

All AI. Yeah. I believe it. Yeah. What was the checking experience like? So you walk in, you type

your name on like a computer thing, and it pulls no one's there. No one's there. There's a guy

like on the side to help. If if you like can't figure it out. And then you get a blank card,

then you have to scan it. And then it gives you your room number and everything. It was not

stewed because it was like 2 a.m. too. So to to be fair, I guess it makes sense at late hours,

right? Yeah. Yeah. I mean, there's like certain busy hours, right? Like the checking hours busy

and the check out hours are busy. But there's a lot of stuff that I'm like, we've we've done

tests right now with fully automatic cleaning robots. For example, they can go and clean get

get put itself on the elevator, get up to the new floor, get out, go out and mo or not mo vacuum

all the hallways. And there's one that's being prototype right now that we've been looking at

that goes in and that has this little like worlds around like a like a car washing cleans the

bathroom. Yeah. That way the cleaners only have to come in, just strip everything down and remove

it. And the robots come in and clean everything. That is fascinating. I'd imagine the cleaner cost

is pretty high at these big hotels. Yeah, that's a big one. You know, it can take them 15, 20 minutes,

sometimes even 25 minutes, depending on the size of the hotel to clean each room. Imagine a 700 room

hotel. These big, especially these big Vegas convention ones. Yeah. 700 room hotel, right? 30

minutes maybe depending on the size of the room and the layout. Probably close to 15, 20 minutes per

room. And if you're having a lot of turnover, like people aren't staying in the room for five or

six days, saying for a night or two. Vegas. Yeah. Because there's like a hundred cleaning

ladies in these hotels. Yeah. Yeah. Yeah. Holy crap. A lot of these big hotels have over a thousand

stuff. Oh my god. That's insane. Yeah. I'm sure you've studied these line algorithms extensively

when you're looking at these deals. Yeah. Yeah. But you invest in any other stuff or just hotel

right now. So hotels is our biggest portion of our of our portfolio. We also invest in

non-hotel real estate. So we'll do especially mixed-use developments. So something that we're really

bullish on is the idea that I think that there's a natural idea. And for maybe those if you've

lived in more urban areas, you'll feel this feel. There's like an energy where you're not just

living in a suburb somewhere, right? Where when you live in the suburb, it's kind of you always

have to drive everywhere. Right? And it's and it's and you don't necessarily feel connected to

the community. And so we've seen a ton of like demand from folks to live. That's why people

like to live downtown areas. You can live in New York. You can you can look outside and you see

people milling about and you can go to Central Park and have a picnic and then you can go to your

favorite, you know, cafe down the street and then go get lunch and do the all within walking

distance and kind of seeing other people, right? And so we've been really interested about can you

recreate that feeling of, you know, Manhattan? But maybe, you know, not 500 story buildings,

but can you create that feeling of community in Manhattan? But can you do that in a suburb in

area? And so we're we're building one right now in South of South of Houston in

Fresno, Texas, 750 million dollar deal. We're building apartments, condos, office building,

restaurants, hotel, convention center, all the rest of that. And so that's something that we're

super excited about is is that kind of development. And then on the other side, we also have been

making a couple of big bets into manufacturing. So we were a little bit fortunate that we were

early to manufacturing. We started we bought a manufacturing company about two years ago. And we

took it from doing oil and gas, you know, Houston big oil and gas area. And we started moving them

into more aerospace. And so like right now, we make parts for SpaceX, Blue Origin, Lockhe,

NASA, Boeing, like all the big companies. And they have huge margin right now. It's a bunch of

a production going on all the rockets. And then also we're working on getting contracts into

the department of defense. I think that's the next area that we're going to see a lot. There's a

lot of overlap between aerospace and department defense. That's amazing. So you're really going to

change the future of Houston. That's what we're trying. I think we're we are seeing a pivot from,

you know, oil being a traditional oil and gas to being really aerospace and defense focused.

Yeah. Like we just saw a we saw a demo of a company out in right by us on down by NASA,

where they can get from I think it's from Houston to Paris in two hours. Why?

Supersonic commercial jets. Dude. And they have like a working prototype. It's crazy.

Because right now that flight is how long? Oh, man. It's probably like 8, 9, 10 hours or something like that.

Wow. So they cut it by 80%. Yeah. It's as wild. That's awesome.

Not how many people can fit on it. I think they said they can fit like 40. Oh, that's not bad at all.

So I mean, it's not like it's not going to be for every day in Paris,

Traveler, but for like business folks. It's time is money. Yeah. That's why I fly JSX when I can.

Yeah. You know, Vegas is a huge one. I think they come out to Houston all the time. Yeah.

I think Houston's every couple days. Yeah. Have you been on it? I've been on JSX. I like it. It's like

a little more expensive, but it's so easy. Yeah. And you can pull right up and you know,

sometimes the the start time is a little bit can move a little bit. But as long as you're not

trying to get something within a half hour or something like that, then yeah. I mean, there's

so many commercial delays. Yeah. I just assume my flight's going to get delayed at this point

with how often it happens. Yeah. I think JSX goes out to Phoenix too, right? Yeah. Phoenix. I'm going

to Phoenix from a bachelor party. Nice. Yeah. You like it out there? Yeah. We have a hotel in Phoenix.

Oh, nice. Switch one. It's a midtown. So it's going to be a courtyard. We're converting it from

an unbranded to a courtyard. Sick. Yeah. Still an innovation. Yeah. I did an Airbnb this one,

but sometimes I like getting like you said, that local vibe versus a hotel just depends on the city,

I think. Yeah. And I think I think Aaron, like Airbnb definitely took market share from the hotels

for sure, right? But I think there's a couple of things with Airbnb that is that is interesting.

One, I think they're going to have a collective action problem. So the hotel lobby is huge. Yeah.

Right. Like when you're talking about when when when cities and stuff like that are trying to

figure out the folks that are lobbying those those laws behind making Airbnb's not allowed.

For example, like in Hawaii, when it became illegal for a little bit, and a lot of cities are

past. Vegas too. Oh, Vegas is that. Yeah. I don't know that. Not surprising. The right to the hotel

lobby. Airbnb doesn't have an Airbnb lobby necessarily. They have a tech they have a couple of tech

companies that lobby for sure, but they pale in comparison to market size. I think Airbnb has

something like five or six percent of the total like transient market. No, no, or as hotels like

95%. Wow. So if you're a lawmaker or you're anything and also Airbnb employees a lot less

employees than hotels. So as soon as like labor laws start getting a Airbnb when there's issues

on the hotel side, you have massive collective action behind keeping hotels in power. And so I

do think that's a it's a long-term struggle to Airbnb has. The other thing is I think if you're

going to stay somewhere real quick for a night or two, Airbnb can struggle a little bit with branding.

Because when you stay at a Marriott, you kind of know generally where you're going to get a courtyard.

But I've stayed at Airbnb before, especially if I wanted to just stay at night or something like that.

And I wanted it. And I go there and it looks nice in the picture. You get there and it's like

bullet holes in the door. Wow. And you're like they're so hit or miss. I'm gonna be honest. Like most

of the times my expectations are let down. Yeah. Yeah. With Airbnb. Yeah. But with hotels, it

happens. But there's so many reviews you can read. Yeah. I feel like it doesn't happen as much.

Yeah. Because the hotel you're just expecting a room. Yeah. Exactly. And I think Airbnb's do

well for like that like family union, bachelor party. Like you want to get a bunch of people together.

Yeah. I think that's an Airbnb makes it 100%. Yeah. But if you're just solardola like yeah hotel

all day, right? Less work too. Yeah. Don't have to cook. I saw you on another show. You put your

own money in every deal. Yeah. Yeah. We're usually around 10% of respect of the equity. So

sometimes we're more of the little couple deals that we're 100% of the equity. Because basically

our thing is like we'll put together good deals, right? And if investors, for whatever reason,

you know, don't want to invest in it. Maybe there's some investors that are like I don't like

manufacturing. I'm just kind of I want to do the hotel stuff, whatever else it is. Then the deal

is good enough that we'll put we'll put our money into it. Yeah. All of it if it needs to be

to finish the deal. So we have I think we have like four deals right now where we are 100%

of the equity. Wow. And some of that had to do with sometimes sometimes sometimes it's with

timing where it's like if you don't have time to raise the money, sometimes these deals are just

you need to close quick. Yeah. We had a deal. It was a nine-figure deal. We signed the PSA,

the purchase sale agreement and we had to close within 48 hours. She's for a nine-figure deal.

So all cash. She's no debt. Like no one has a time to you don't even have the time to put together

a contract to raise money. But we don't actually go out and start talking to people. A wire

takes some can take two days, you know? Literally. And so we had to close that like all cash.

Hold on without any investors. So best and worst deals that you could talk about.

Best and worst. Oh yeah. So best deal. We had this deal in in East Texas. And it actually came

out when I was in law school where we found out that when you know like when you get on your phone

or it routes and it has the terms conditions. Yeah. They just put a agree on it. You go through

every tech company has it, right? There's a little clause in there called the form selection

clause which basically says if you sue us, you have to sue us in a certain venue. A lot of

companies will put it where their headquarters are so that way they don't have the five or six

yields out somewhere random. But what this this this this entrepreneurial judge in East Texas said

is hey like patent cases when it comes to patent and IP litigation they can be really long because

complicated. Okay. You know how does this little you know part of the patent and this engineering

thing comply with this. You can imagine how complex that gets all do we do we breach the patent

or broach on it or whatever else. And so this this judge in East Texas said I'm going to make this

court in East Texas be the place where we're going to try to fast fast track this. And so then

what ended up happening is basically every single tech company started putting in their in their

clause in this like in the 90s that we're going to if we're going to litigate over patent or IP

we're going to litigate in the Eastern district of Texas. Turns out in these districts in Texas

there's not a lot of hotels. But the hotels that are there have a ton of lawyers like tons of them.

Because you can imagine Google, Apple, Facebook, Instagram every single one of them are litigating

in this one little city. And like these are big litigations you know bet the company type

of litigation where if you're if you're suing Facebook for their matching algorithm right like

this is where it's happening. And so we'll start looking around and found out that guess what

there's not only are there not many hotels in this area there's only one Marriott in the entire

city. And if you're the only Marriott in a city like that that has a ton of corporate business.

You can strike corporate deals with those law firms because they all have you know their reward

points. Yeah exactly. And so we ended up buying that hotel and it turns out it was for

it was going to be for sale. You know most hotels are for sale if you have the right number.

Ended up buying that hotel and started marketing more toward the law firm side. We ended up doing

took out some rooms, turned it into a war room where lawyers could come smart always could kind of

set up all of their you know desks and everything. We even had a storage container on site. We

we put like couches and desks and chairs and all that and so they can rent it for us. And so

we kind of made the hotel very very friendly toward litigate litigators and they're coming in.

And so ended up yeah ended up you know increasing revenues like I think it was 2x in the first 18

months. They increased profitability like 7x. Holy come because you know as we were increasing

prices and stuff like that it wasn't adding any extra costs. Just instead of selling the room

for a hundred dollars a night to the local truck drivers to look we got to we got to reserve 80%

of these rooms and sell them to Gibson Dunn, Kirkland, Alice like all the big law firms. Yeah

at a group rate. That is brilliant. So that was more was that pre-planning or was that kind of

go it as it went on. It was as we were as we were thinking about buying it that was the plan.

Well, we'll do that. So we had some of the stuff came along like as you talked to a lot of lawyers

hey what do you want? Oh by the way for example one of the things they wanted was the breakfast area.

It's really awkward when they're all in the breakfast area and you have like opposing count counts.

That's so fun. And so and so they said could you can we can we put doors on it and normally

Mario doesn't allow but they allowed us for this can we can we basically block it off? Yeah and

can we rent it? Well first they said can we block it off? We said we can't block it off and

they said well what if we rented it from you guys okay yeah. And so then you sweet so now our

breakfast area which is like a bunch of seeding and all that kind of so you know you've been to those

yeah yeah breakfast a little buffet things now it can be blocked off and we can rent it by the hour

wow and they can have their to their team there for a little bit and the next team comes in and

just small stuff like that I mean that's like what adding the doors was what maybe eight nine

hundred dollars you can rent it out for a thousand dollars an hour. Holy crap pretty good return.

Yeah that is nuts. Let's talk about the worst deals because I'm sure you haven't won on every single

one right. So right now we've we've never lost money on a deal. Really? It's been good. Holy crap.

So that's impressive. Yeah we never lost money on a deal. I would say the worst deals have to do

with timeline. So the hardest part especially in real estate development the hardest part is

is getting the timeline right because because on real estate everything moves slowly. Sometimes

that's a good thing because it means that you're not going to buy a like you take crypto right so

the people you can buy crypto and a day later it can crash you know day later it can also

500x right real estate doesn't move like that right basically is going to move slowly up or

slowly down and so you have some time and so I think that like we have a deal right now where

and this is all public so I can share this yeah we have a we have a deal where we're buying

and we bought a neighborhood and we're going to put some houses in the neighborhood and it was

a big track of land and so we you buy the track of land and you're going to divvy it up into

different you know tracks so unless it's 40 acres you put in one acre tracks and you sell the one

acre tracks that people would have built homes on and you got to put in roads and utilities and

lights and all that stuff and so we bought that and everything's going through the process got

approvals all that kind of stuff and then it turns out that the sun of a drainage district

is the exact next door neighbor to that track hmm so a drainage district has to approve in Houston

drainage has to approve your drainage plans to make sure that the water you know

Houston is a lot of flooding yeah and so they have to approve your plans and so turns out that one

of the guys on that board his son was our neighbor was the neighbor to this project and he

don't want this project to go on because he goes I don't I don't want 40 new neighbors wow I like

this big track of land literally this will happen this and this is like you can't predict that yeah

you can't predict that and so so he sued the city to stop it city figured out with him you know

worked work to deal out where you know there'd be some certain amount of distance away from his

house that we would build that kind of stuff what right does he have to do that though that's

it's like mind blowing to me yeah and it's not even a right it's more of a nuisance thing it's like

he could when he litigates it he could just cause an additional you know six months of of just

delay while they litigate it out okay so they said okay we'll just figured out okay fine we'll

give you an extra 30 feet where we won't build god anything kind of thing so it's like a tactic yet

but then his dad votes against our project and turns the board against the project no way

so then we have to go bring a lot so there's a whole like and now now that's all been you know

figured out but you know that added a year whole figuring out and so that one was that was a project

that you know we thought we'd be done when Tommy bought it Tommy finished I think it was like 18

months yeah and now it's probably gonna be like 28 months right I guess the lesson there is to

toss the neighbor yeah ask of their daddies are I mean to be fair no one probably if they're

living there once extra noise and yeah yeah and I think and that's like a fair it's a very fair like

like idea like why would you want more 40 the problem is if you don't want that then you should go

by that go by that land right like because you don't have the right to stop other people from

buying that land facts so long as it's allowed within the city ordinances yeah I put down a ton of

money in the deal yeah yeah wow that was just kind of figuring it out but it's one of those things

where it's like how do you predict can't right yeah holy crap well thanks for sharing that because

that's that's a very interesting lesson I would have never thought that if I'm buying land somewhere

like someone's gonna sue the city over yeah yeah yeah and that and that their parent is on one of

the approval boards yeah you think it'd be a conflict of interest and that's one of the arguments

that we made but how did the boards work like who selects those people they're elected from the

citizens yeah yeah yeah from people live within their district it's interesting I wonder if they're

so they're in every city like I don't even know about that I don't know if every Texas I think

every county has one county yeah so Clark County biggest probably house one yeah yeah especially

if there's areas that have issues with like so this is like a drainage thing and so like in

Texas we have a lot of drainage so there might be like a water dish like a water reserve district

for example in Vegas it's pretty common and it gets created by state code and they're giving

certain power into that state code and then they're elected that's my fear with investing in land

because I see these ads all the time and I hear horror stories of like oh you can't get the

approval you already put down all the money yeah you're not a man yeah so there's different time

of approvals this is only like we think about a lot so there are a couple things when it comes to

approvals and people do this there's an entire like sector of investment where they invest in land

that's not worth much because it has having approvals yeah and they get the approvals and this

worth a lot and I sell it yeah it's a land banking and so you we typically will not invest in land

that isn't fully approved and entitled the only thing and the same thing with this one this one

was already approved and entitled got it the only approval that we didn't have was the approval

of the actual engineering plans and the engine and the nice thing about engineering plans is like

there's no like wishy washi it's like does the engineering plans get rid of the water in the

way that the water you know laws require it to be done and so there's not like I don't like that

color you know kind of thing it just like it comes out of the math and so luckily we were able to

overcome those concerns they brought up I think it was really a tactic I think they were hoping

that we would kind of back away whatever else it was and then we doubled down and let's go what do

you name the street because I've spent a bucket list goal of mine oh we name it street we named

it after some fellow members oh nice yeah yeah yeah what's the process for the I don't even know

what I mean I just want to say like y'all that streets mine you know digital social what's the process

for getting the street you just you submitted as part of your plans so you have like a plot which

shows basically where the lots are going to be what size they're going to be how the roads are

going to be where the lights are going to be how wide things are going to be and so as part of

that they usually let you submit names that's cool sometimes the city has naming conventions like if

you're in an area where it's like 51st 50s I can't you know you can't go in there and name it like

go low Wolfgang Street they're not gonna they're not gonna like that because some cities have two

of the same names that's always confusing to me yeah and that probably was they're under different

approval areas or they'll have different appendages at the end so sunset lane instead of sunset

or instead of sunset avenue or something like that oh by some and sometimes the streets actually

at one point they did connect and then something got built in the middle of them or a lot of

stuff got built in the middle of them and so now you have like you know 57th Street here and it

used to be one big 57th Street but then right in the middle someone built a massive and now it's

like two 57th Street yeah it used to be connected I could see that we'll do it I'm excited for

your future future Houston's looking bright thanks to you and some other people um where could

people find you support you and learn from you and all that man yeah I just uh we just you know

it's funny we we've been moving in quiet the whole time we don't we don't we don't have any

socials until like a couple weeks ago um and then we just thought look there's uh there's a benefit

to being a little bit more public about some of the projects we're doing we've had a lot of times

where we've talked to people about stuffness and even little things always find out about your

website and then you know some city guy calls us hey we have 500 acres up here and you know Dallas

whatever we want to do something we heard about your project so we you know I find us just my name

at Kaloah Wolfgram on instagram wolfgram.com for you know um that's beautiful thank you

below thanks coming on man yeah thank you check them out guys peace I hope you guys are enjoying

the show please don't forget to like and subscribe it hopes they show a lot with the algorithm thank you