Paul Julian
And we found over the years larger apartments are more efficient than smaller apartments. So we like to buy larger apartments.
November 7, 2025 · 1 hr 22 min
They Built 12,000 Multifamily Units from Scratch (Here’s How) | Paul Julian
With Paul Julian — Multifamily Investor & Operator
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From small beginnings to billion-dollar portfolios — Paul Julian has seen it all. In this episode of The Group CRE, Taylor Avakian sits down with Paul Julian, a multifamily investor and operator who…
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Episode show notes
From small beginnings to billion-dollar portfolios — Paul Julian has seen it all. In this episode of The Group CRE, Taylor Avakian sits down with Paul Julian, a multifamily investor and operator who built success through persistence, partnership, and purpose. Paul shares how he scaled from early real estate deals to managing large multifamily assets, breaking down the strategies, risks, and mindset behind long-term success in a volatile market. You’ll learn: - How Paul got started in real estate and built early traction - The secrets behind scaling a multifamily portfolio sustainably - How partnerships and investor trust drive long-term growth - Lessons from navigating interest rates, market cycles, and risk - The mindset and systems that separate top operators from the rest - Why consistency, humility, and patience are the keys to real wealth --- 🔗 Connect & Resources 🎙️ Hosted by: Taylor Avakian — The Group CRE 🌐 Website: https://www.thegroupcre.com 💼 Connect with Paul Julian (LinkedIn): https://www.linkedin.com/in/tayloravakian/ 📧 Business Inquiries: info@thegroupcre.com 🎧 Listen on Spotify / Apple Podcasts / YouTube --- Subscribe and Stay Ahead! Stay informed and empowered in the multifamily real estate market. Subscribe to the channel for exclusive insights, rental updates, and expert analyses on the Los Angeles market. 🔔 Don’t miss out on the latest trends and tips to maximize your property's potential: https://www.youtube.com/c/TaylorAvakian #TheGroupCRE #PaulJulian #MultifamilyRealEstate #RealEstatePodcast #TaylorAvakian #WealthBuilding #PropertyManagement #CRE #RealEstateInvesting #InvestmentStrategy #Entrepreneurship #FinancialFreedom
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Episode transcript
This 18,226-word transcript is matched to English (Original) automatic captions. Timestamps seek the episode player to the matching passage.
0:00–10:00
Taylor Avakian
And you guys have 12,000 units right now.
Paul Julian
Yeah, we're a little over 12,000 units, about close to $5 billion of real estate.
Taylor Avakian
Why do you still want to deal with the brain damage that comes with owning in this state?
Paul Julian
Our company were started 45 47 years ago. My father, he he started it with the premise that everyone needs a place to live. So that's the safest investment, apartments. We've done it all through private individual investments. So we syndicate with friends and family and that friends and family network has grown to about a thousand. So we figured out a pretty cool structure where we can let them use their retirement fund to put up the bulk of their investment. It can even be your personal residence, believe it or not, while you're living in it. You put it in this fund and not pay taxes on
Taylor Avakian
it. Real quick before we hop into today's episode, I am so excited to share that we have a sponsor for today's episode and that is AI for Siri Collective. This is actually a community that Jake Keller and myself started because we were tired of getting left behind with AI. We're nerds about it. We love to dive into it. Jake is a master at crafting these prompts and I'm very heavily invested in trying to be a better broker and use all of the tech and tools that I can to make myself just that much better. And I will tell you this since starting this community and exploring the workflows and the things how to use AI effectively in my business, 25 listings at the moment. We're closing four or five deals a month. It's been incredible.
Taylor Avakian
So, if you want to learn, if you're in commercial real estate, how to use AI in your business, whether you're a property manager, a broker, an investor, really anyone, we have a huge group, over 400 people in this community. And the website, if you want to go check it out, is AI forcollective.com. So, appreciate you guys. Now, back to the episode. Welcome to the show. My name is Taylor Avakian, and I am here with my esteemed guest, Paul Julian. Paul is the president of Advanced Real Estate. Paul, I'm excited to have you here, man. Thank you for being here. Um, walk me through your business model because I find it very fascinating and I know you have multiple business models, but just give me the overarching. You say you have a couple couple companies under Advanced. Walk me through the stack.
Paul Julian
Oh, well, thanks for having me first of all. Um, I've never done anything like this, so this will be interesting. But uh our our company you know is structured an interesting way where we uh you were started 45 47 years ago I believe by my my father and he's still involved and uh would have loved to have him here actually as well. I can be here today but um you know he he started it with the premise that everyone needs a place to live. That's the simplest business plan there is right? So that's the safest investment apartments. So, and we found over the years larger apartments are more efficient than smaller apartments. So, we like to buy larger apartments. And then the next thing is, you know, where do you want them? And uh we looked at Southern California and he was born and raised here as I was.
Paul Julian
And we said, it's the perfect market. You know, you've got probably 20 million people, 25 million people in our marketplace. That's bigger than probably five states put together more. Um you have a diversity of economy. So, let's buy apartments in Southern California. So, we've stuck with that. And then he learned a long time ago that you know buying and selling is expensive. So hold the properties you know and we have Prop 13 on top of it keeps the property taxes low. So hold them long term and uh you know and then refinance the properties you know pull money out go buy more. So I know uh you know many people have that philosophy that's nothing that unique but uh we've been doing it for many years and we've done it all through private individual investments. So we syndicate with friends and family and that friends and family network
Paul Julian
has grown to about a thousand. Wow. So it's a lot of people, a lot of cats to her. That I was going to say that's a lot of backend operations. It is. And you know these days it's gotten a little easier because you have things like you know investor management software programs at Folios.
Taylor Avakian
You guys use that folio?
Paul Julian
Yeah, we use that folio. We've used others in the past and our our property management other companies were using Appfolio. So we kind of try to integrate it all together. Um, and so it's made it it's made it possible to have that many investors and and we uh we changed the business plan a little bit or updated it in 2020 when we went to a fund model. You know, we used to buy properties individually. We went to a fund model where we're raising all the money up front. It's all discretionary and it's made us really good buyers. You know, we u we started in 2020 and that year we were the largest buyer in Southern California of apartments. Wow. And then again in 2023. So, um, because we can show a seller, here's here's the money. It's already raised.
Paul Julian
We don't have an investment committee, you know, like some of our institutional counterparts, you know, you're you're talking to the investment committee. My dad and I will make the decision we're buying or not. So, um, you know, we could pay out cash for properties if we need to and close quick. So, that's been able to get us, you know, better deals. Uh, the other aspect of our business plan that's, I think, unique is back in the 90s, you know, our group of investors were sort of tapped out on what they had to invest. you know that my dad would say, "Hey, you know, we got this new deal." They go, "Listen, we don't have any money left. You you have it all and you're doing great. It's working, but um but one of the, you know, a friend who was an attorney, he goes, "But, you know, I've got
Paul Julian
this retirement fund and, you know, 401k IRA and it doesn't really do anything for me. Just sits there. It might be growing or whatever, but I'm not really using it." And uh how can you tap into that? And that really sparked with my dad, how do we tap into that? So, we figured out a pretty cool structure where we can let them use their retirement fund to put up the bulk of their investment. Okay? Self-directed. Okay? And you don't really feel that, right? I mean, instead of putting it in, you know, Charles Schwab's account, five, mutual fund, whatever, you put it in our deal and uh and by doing that, you then come up with a very small percentage of personal funds, but we give all the tax write off to the personal fund side. M so you used your whole investment to leverage and get you used
Paul Julian
your retirement to to create leverage to get all this write off personally and then all the upside. Interesting.
Taylor Avakian
And so how does that work structurally? So is that like a was that a new vehicle that was found or was this just no one was doing it before?
Paul Julian
Yeah. You know I my dad's kind of known for these creative structures. He he's a unique guy. He uh you know as a kid would read the master tax guy. You know that that was his reading. Um, so, so he he's always he's he's a mad professor coming up with these things and, and over the years we tweak them a little bit, you know, and figure out how to work with a thousand investors. You've a lot of different situations, a lot of families and and uh we came up with this concept where um, you know, once we got your money back, we can then reallocate so that the IRA doesn't keep getting ballooned up because you have to pay tax on that someday. So we get that their money back first and then after that we reallocate so that all the rest of the upside comes to you
Taylor Avakian
personally. Can you walk me through an example with someone who has like a million dollars? Sure. Can you walk me through like the math on that?
Paul Julian
Yeah. I mean you you I don't want to give away all the trade secrets.
Taylor Avakian
Yeah.
Paul Julian
Yeah.
Taylor Avakian
Yeah.
Paul Julian
But uh as much as you can. No. They you know 90% let's say they put a million dollars out of their retirement fund. They self-directing our deal. Then they can buy a hundred grand personally of of of our B shares. And then um you know it takes a long time because we're returning capital through a refinance, not a sale. We never sell the properties. Uh and so let's say 7 to 10 years goes by and we can refinance, pull their money out, we'll first give it back to the retirement fund. But then after that, instead of the retirement fund being the 90% owner, now they are
Taylor Avakian
uh switches.
Paul Julian
Got it. So they they get the uh they're the majority owner personally. Got it. So then all the upside, all the future goes to them. retirement plans replenished, they can go use that money to reinvest in the next
Taylor Avakian
deal.
Paul Julian
And you guys have 12,000 units right now. Yeah, we're a little over 12,000 units about, you know, the valuation's nice and high because they're all Southern California, very close to $5 billion of of real estate. And, you know, we're a select sponsor with the agencies. So, you know, we use that kind of financing on all these properties and and do long-term 10ear fixed rate loans, intereston loans, and then we'll do supplemental loans sometimes to harvest capital halfway
Taylor Avakian
through. What is uh the typical return profile that you guys shoot for or have have I guess the over the funds, right? What is the you guys IRRa based or how do you look at that?
Paul Julian
Yeah, we're IRRa based. Um but we're actually, you know, it's just really cash flow and after tax cash flow. Okay. Um you know, we do cost segregation. and we get big tax write-offs. So, the after tax cash flow is really good. The the going in cash flow is pretty conservative on these deals. Southern California, so you're not going to get, you know, crazy cash flow, but, you know, 4% going in is what we're shooting for. Uh we try to get, you know, within the first three to four years, we want to get some positive leverage, get our cap rate, you know, going in we'll have negative cap rate leverage, but, you know, by three or four we've renovated, turned over a lot of the units, got the rents up, and we'll have positive leverage on the Got it.
Taylor Avakian
And are you um structuring these deals where you're basically waiting uh cuz you're trying to refinance these people out, right? Like that's that's the goal of this. So you're looking at it from a long-term perspective and the capitals the capital partners are willing to wait that amount of time. You found the right partners per se, right?
Paul Julian
Yeah. Because if you think about it, if they're using retirement funds for majority of it, that money is locked up anyway. Mhm. You know what we found out many years ago is that people spend their whole lives squirreling away retirement funds, right? You're you're putting it in your 401k, you're putting it in your higher defined benefit plan and and you don't use it. You get to 73 years old and you take out your required minimum distribution, your and that's it. People don't want to take any more out because they don't want to pay tax on it. And so every year they'll take this little 1% out or whatever it makes them take out and then unfortunately 101 15 years later they pass away. and their kids inherit these IAs and the kids are usually in their highest earning years at the time and so they're
10:00–20:00
Paul Julian
paying 50% of it in taxes because there's no step up in basis on an IRA and so our goal is to get let the IRA work for them today. You want to live on that money today, right? Otherwise, you never live on it. It's been a waste all this time.
Taylor Avakian
What's the purpose?
Paul Julian
So, so the money would be going back to the IRA anyway. So, they're okay, you know, waiting the long period to get these returns back.
Taylor Avakian
Got it.
Paul Julian
you know, we we're the patient ones. You know, our promote we don't get for many years because we're not buying and selling. You know, we're doing it on a refi. So, it takes a long time, but we're, you know, we're putting up our own capital into the funds, too. So, you know, we think it's the right way to do hold it long
Taylor Avakian
term. What is the structure? Um, like what's the pre that you guys are shooting for? Can you walk me through the actual structure of the investors? So, if I was an LP, right, in the fund, um, you guys getting a five pref six pref over is there waterfall? Can you walk me through the details of that?
Paul Julian
Yeah, I mean um you know that there's different classes, like I said, the A and the B classes. And so the the the A class will get depending on if they use retirement funds or if they don't have retirement funds, you can just put personal money up. I mean, I've been investing these since I was a kid. You know, every dollar I had saved since I was 16, I sock away in these deals. So, I never really set up an IRA or anything. Yeah. So, I go in as cash and the people who go in as cash, they'll get a nice uh 4% cash flow every quarter. Okay. And it goes up from there. That's kind of where it starts. And then the uh the A2, which is the the guys that put the retirement fund, they'll get a six pref that compounds on a cruise. Got it.
Paul Julian
You know, and then and then we'll have the B shares, which is the personal side get a 10 pref. Got it. We kind of combine them all together. And I don't know what the blended is exactly, but um you know, and then we don't get a promote till they get all their money back plus all their prefs back.
Taylor Avakian
Then we'll get a backside promote. And are you guys 75 2550?
Paul Julian
We're 3565. 356. very, you know, we think it's a fair deal for for sure for the investors.
Taylor Avakian
You know, I talked to an investor recently and I'm like, you better hold those investors cuz his is like I think it's like an eight prep, but it's 50/50 after eight prep and I'm like, dude, keep those people, man. Lock them up cuz it is that is a that is a great structure to be in, right? He's like, I didn't know I I just this is what I thought. So, I just said that's what we're doing for him if if he performs, right? I mean, if you're, you know, if you're the Michael Jordan of business and you're performing, then people will, I guess they'll pay, they'll pay for those returns for him 100%. Um, how I got familiar with you guys actually was from a unique structure from Brian who's over here, the X fund. Can you walk me through the X fund?
Taylor Avakian
Because when I heard that, it took me a very long time to kind of understand it. Um, it made sense, but also I was like, is this legal? Like, I don't really I don't really know. So can you walk me through what the X fund is and then I guess how that came to be, how was the idea and then what does the execution of that actually look like?
Paul Julian
Yeah, it's you know another another brainchild of my dad that he kind of comes up with the concept and then he and I work on how to implement it together and tweak it and and uh this came from many years of investors, you know, with with a thousand investors, like I said, you hear every situation out there and a lot of them would say, "Listen, I'm I'm doing so great in your funds. I love it. I sit back and collect a check every quarter. It goes right into my account. And um but you know, on the side here, I have a 10-unit apartment building and I've owned it forever. And there's nothing I don't know what to do. I don't want to deal with it anymore. I'm getting old and and all the laws in California and the the latigious nature of California.
Paul Julian
I don't want the liability and my kids don't want to deal with this.
Taylor Avakian
How do I get out of it?
Paul Julian
you know, how do I get that equity out of there and into your fund so I can kick back, you know, be protected? And so we we used to do, you know, we'd sell the property for him and then we get a tenant in common piece that would go in with our fund and but you'd have to have a couple different, you know, we have a couple different guys doing at the same time and you're matching up their equity and their debt and timing the sales and it was pretty ownorous to do it. Mhm. And so we said, "What if we took in all their properties first and didn't do the sale?" You know, because really that you don't want to be under that 45day gun. It's really where you get in trouble on a on a 1031 exchange. And
Paul Julian
you know, so many people will overpay for a property just to not pay taxes. 100%. So we said, let's let's come up with this concept where they put it into our fund, a separate fund, this X fund, using code 721. So it's like the upre, you know, same as an upre model. and they put it in there and we hold the property for two years because you need two tax cycles really with the IRS so you're not a disguise sale to go flip it. Uhhuh. And we'll manage those properties. We'll deal with them. They could be from all over the country. They could be any property type. They can even be your personal residence, believe it or not while you're living in it. You put it in this fund. Um because we found a lot of people, you know, down in we're in Newport Beach
Paul Julian
and and uh we were looking at some of the people that bought, you know, 15 years ago for 2 million bucks. Their house is worth 15 million bucks right now and they have 13 million of gain. It's like even though they get an exemption of 500,000 bucks if they're married, it doesn't do much when you have that much gain,
Taylor Avakian
right?
Paul Julian
Correct. So, they never sell. They just sit stay in the house and even if they want to move, they don't. So, we said, "Hey, put it in the X fund. You can live in the house for this 2-year period. Figure out where you want to go, what you want to do. You'll be collecting the cash flow. You'll pay rent, but it'll offset. So, you're living for free for a couple years. And then you know after the two years we'll sell the house and you move on and do what you want to do and you have a great cash flow have not paid taxes on it right so but most of it's income property I would say so they put them in we hold them for two years um and then after that this is the key it's all about what you're buying right we we go find the 300
Paul Julian
unit apartment building you know the big juicy institutional property we find that first and then we tie it up we have our other fund to back stop and tie it up with maybe give them hard money, get a nice long escrow, and then we 1031 exchange out of all the properties in the X fund, that equity goes into the big property. Wow. And we hold that long term, just like our other property, hold that one forever, refinance it down the road, pull money out, give it back to them. So, they went from owning their little property to being a piece of a
Taylor Avakian
big property that's a lot more lucrative. So, it's kind of similar to a DST in that format, right?
Paul Julian
It is. I I'd like to say that we're we're more efficient than the DST and that we're we're buying better properties. Yeah. Yeah. Very sure uh selective on what we're buying and we're not chasing yield or anything like that. So I like to think it's it's better.
Taylor Avakian
That seems like a logistical nightmare to try to have to sell all those properties, right? Because then if you have to sell them in a certain amount of time, you have to sell them, right? So there's kind of some motivation there. You don't want to sell them for too cheap, right? Because I assume you guys have a pre-etermined price that you you buy the property at, right? Are you giving people money when you put them in the X fund, when they put the property in the X fund? Is that how it works?
Paul Julian
It's a great question. Um, that's something we had to figure out as we're doing it. It took took a couple months to figure that out. We came up with a net equity adjustment model where we put it in at the price that we all agree to, but then in two years when it actually sells at full market, we adjust their equity in the fund based on what it sells for. So if they put in at $10 million and it sells for 11, they equity gets adjusted up. It sells for nine, their equity gets adjusted down. And usually it's a small percentage because the fund's pretty big. So it's not a huge adjustment on their equity. Yeah. To do that. And then uh you know before that you were talking about the logistical nightmare. The beauty is because we have our regular opportunity fund.
Paul Julian
We if we don't say we don't want to sell them for too cheap. We don't we don't want to underell the property. Give them full market value. So let's say there's 15 properties in the fund and we sell 13 of them but two don't sell in time. We'll backfill that amount of equity with our other fund into the new property. So we always have a back stop. Got it. Gives us confidence to do it and and it sets us apart. I mean, I think it'd be hard for someone else to execute this plan because they don't have
Taylor Avakian
that. If uh if those two properties, right, that didn't sell, right? Yeah. There are two-year timelines coming up. You got to find something. Are you able to extend that a little bit longer?
Paul Julian
There's no gun on the two years. Two years is just the minimum. Got it. You just have to get through two taxes. It if if they want to stay in the X fund for five years, we might already have bought this big property and still have them in there as well. It's fine. And then we'll sell that, you know, the next property we go into.
Taylor Avakian
We'll sell those two properties and put them in. Okay? So, let's say I want to do an example. So, let's say I own a $10 million property, right? Zero debt on it. Um, I've owned it for 40 years and I am 85 years old and I'm tired. I'm really tired. Um, especially California politics and all this stuff and I want to get a decent return. I want to get 5% 6% of my money, whatever it is. So, you a broker um, you know, brings me an offer from you guys, right? Why? Why should I sell to you? Right? What what does it look like to me? Okay. This X fund, do you give me 10 million bucks? Do you give me a million dollars? I'm waiting two years. What's my cash flow? Can you walk me through a tangible example?
Paul Julian
Sure. Sure. That's and that's a a good profile of the people we're talking, you know, um the the cool part is the equity they go in with. Let's say you did have debt. Let's say you had 2 million of debt on there, too. Just make it even more complicated. we have a line of credit, you know, pretty lucrative line line of credit that we can pay off your debt. So, now we take the property in. Um, let's say then you had 8 million of equity. You're going to get starting at 4% on that equity day one and it's going to increase. And then when we exchange into the new property, that 4% is going to go up much higher. And and the other part of it is you've run out of tax write off probably on this property you bone by going into our fund.
Paul Julian
We're renovating all those properties in the fund. So there's a lot of expensing that's going on and we're spreading some of that to you. So what we found is you look at the K1s of the people that have gone in and they're after tax much better off than they were before. So they're actually getting higher cash flow.
20:00–30:00
Paul Julian
And a lot of times even the 4% Yeah. on today's value and today's equity is a lot more than they're making currently. For sure. Because a lot of the, you know, smaller property owners, they're keeping their properties full. They don't want to have the highest rents in the market, right? They're not pushing them as hard. Uh-huh. Um, and so we can get in there usually and uh do some renovations and usually get the rents up a bit and increase the cash flow.
Taylor Avakian
It's almost like an asset management p, you know, kind of like you're asset managing it for them in the in that time period and to then roll them into it almost, right?
Paul Julian
Yeah, exactly. And and they're diversified day one amongst all these other little properties that are in there.
Taylor Avakian
So that's kind of cool, too.
Paul Julian
Okay.
Taylor Avakian
So you can spread the risk around.
Paul Julian
Interesting.
Taylor Avakian
Um, what's why would someone not do this? Like who's not a good person for this?
Paul Julian
Someone who's levered up pretty high. I mean, we need pretty low uh debt to to go in there and make sense. Um a syndicator probably wouldn't do it. He wants to be in charge. It it really is for a private private
Taylor Avakian
owner. And how many people do you have in this X fund at the moment?
Paul Julian
Well, we're on our third. So, we do a new X fund every year. Oh. Because we want to track the two-year time frame of each of those. Got it. So, every property that came in in 2023, that was our first year. We launched it actually in the the fall of 2023. So, it was a really short year that year. Mhm. And we probably ended up with uh I think uh uh 39 million of equity or something like that that first year. So, it was pretty good. And then the next year we ended up with I think about 70 million of equity. You know, it's gone up. And this year we'll see where we end up, but hopefully even more than
Taylor Avakian
that. Is there a is there a maximum amount of uh value that can be put in the X fund? Like if I had a $100 million property?
Paul Julian
You know what's funny is we we actually had a property that went in last year that we might keep, you know, it was big enough and it's right by one of our other properties. Not quite to our usually we try to stay nothing below 100 on our other fund units, you know, on our main fund. This one I think, you know, 68, you know, it's it's just under that, but it's it's two blocks from another property we own. There's some efficiencies, excuse me. So, we can keep it in there. Got it. And then buy other properties. So, that funk can own more, you know, ultimately own more than one property. So, it's like an evergreen that at a certain point you can you can keep it as an evergreen if you wanted it to, right? Yeah. And I and I and I might pitch since I'm I'm on here.
Paul Julian
You're a broker there. It's great for brokers. So So
Taylor Avakian
Okay. Why?
Paul Julian
If you're a broker, what's nice about it is we're going to give you a full commission when you bring it in. Uh as if you sold the property. So you're not making less than you would selling on the market.
Taylor Avakian
You're getting the full commission.
Paul Julian
My fee is expensive. Yeah, I'm sure it is. I'm sure it is. But the but the good part about it too is you get paid. I mean it only takes us three or four weeks to do all these transactions. You're in the fund quickly. So you're paid. The next part of it is you're guaranteed the listing in two years when we sell it for those properties when we sell out. So So you now are going to get two fees in two years full commissions and you're going to know that you're selling that for the next two years. And you're going to know we're fixing up and making it a nicer property for you to sell to be able to sell. So during that two years you're figuring out who that buyer is. You probably already have it lined up.
Paul Julian
So when we say go that hey we've identified the bigger property it's time to go you're probably already you know marketed the property a bit on in your pocket a little bit and you know who's buying it.
Taylor Avakian
Got it.
Paul Julian
Okay. Very interesting. It's Yeah.
Taylor Avakian
When I first heard it I was like it took me a little while to wrap my arms around the functionality really because whenever these vehicles for um exchanges or sales or or anything like that I have to be able to explain this to a seller, right? because I get the same objections. I don't want to pay taxes, right? I need to find my 1031 exchange. I I find it for you before and then I'll sell. Um, you know, it's in a trust. Uh, there's so many so many objections that we hear for for things that likely could be solved with different vehicles. People just are unaware of those, right? And so, for me to be able to articulate that, I almost have to be a sales salesperson for for these different vehicles, right? to be able to explain. So, it helps.
Taylor Avakian
Thank you for for explaining that to me because yeah, I mean it seems like for a lot of a lot of people, especially in LA with the way that the politics are going and we can dive into that like it is tough being a landlord. It is not what it once was, right? And you guys own in Orange County and in Los Angeles, right? Um, what has your experience been with the regulation politics? Why do you still want to deal with the brain damage that comes with owning in this state?
Paul Julian
Yeah. And and before I jump in, I'm going to touch back on when your sales pitch. That's a good point. You know, to to all the brokers out there that are listening to this and for you. We always say just get them on the phone with us. You know, we we I say that pitch every day. You know, it comes off the tongue. I I've said it so many times that it's hard for you to articulate exactly how the X Fund works. So, we're always saying number one, get them into our our headquarters. We have a pretty unique headquarters. Um that we can maybe talk about more an hour later, but um we're we're based down in Irvine and we have a 50,000 foot headquarters that has it's a unique uh zoning we found on this building where we have corporate office in the front and in the back manufacturing.
Paul Julian
So we have a full um cabinet shop. We build our own cabinets for our properties. We have our uh you know distribution warehouse where we're you know loading in and out and you know sending pods out to the properties on our flatbed truck fleet to drop a bit the properties with the cabinets we built and the renovation materials to go renovate. So uh we're a bit unique in how vertically integrated we are as far as property management and construction as well. Um, but going back to the question of of why still California and Southern California, you know, we like I said, we do a 50 milei radius and we only buy within 50 milesi of our headquarters, maybe 55, I think our properties is, but but pretty close. And that that puts us in, you know, in a market that has, like I said, over 20 million people.
Paul Julian
And so you're you're not going to find barriers to entry like this anywhere else. You know, you go to I've seen so many people, you know, go to Arizona, go to Texas, go to Vegas, and it's tough. You know, I mean, they can build a thousand units next door to you really quickly. You know, the titlements are a lot easier in Oh, for sure. Texas than they are in and the evictions are a lot easier, too. That's true. That's true. And so, so all of a sudden, you could, you know, you could be doing fine and then there's land forever in those states. Yeah. Somebody builds a thousand units next to you and your your your occupancy drops pretty quick. Yeah. you know, the the uh the wear and tear on the buildings and those kind of weather markets as well.
Paul Julian
You know, here it's like you've got the Pacific Ocean on one side, you got the Inland Empire, you know, mountains on one side, you got Mexico on the south and and you know, central coast. It's just like the perfect market to stay, you know, to stay within and and not have to worry about overbuilding. You know, it takes so long to build here. We have a project, we don't do a lot of groundup development, but we have a project in San Capistrano, 160 acres that we've been developing for like 20 years. You know, it's just it granted it had a a landfill on a portion of it. You know, there was some some stuff to deal with, but the bureaucracy and regulation on development is so tough that we're kind of like we're done with development. Let's just buy existing and renovate it. You know, next day we're cash flowing.
Paul Julian
We go in and over the counter you get a quick permit to do the renovations. It's not not the same heavy lift that you have on
Taylor Avakian
on on the ground up stuff. Ground up. Have you have you felt the impacts over the last let's say five seven years of of these regulation changes and the difficulties with the evictions and the tenants and all the steps that you have to take. You have to take photos before and then there's right to council and like there's all these things that keep stacking and stacking up and specifically in in Los Angeles I would say. Have you felt that within the portfolio?
Paul Julian
I'd say that actually the place we felt it the most, believe it or not, is Saint Ana. You know, Saint An, you know, implemented a rent control about two years ago that is more ownorous than LA's. Really?
Taylor Avakian
Yeah, I knew it was was I know they did and I knew it was tough, but it's it's worse than LA.
Paul Julian
It's worse than the RSO in LA, believe it or not. they they put even higher restrictions on it. And it's incredible what it's already done to the the economy in Saint Ana and to the the uh investment sales market in San Nobody's nobody's buying properties. Nobody's investing in their properties anymore down there because you're not going to get return for it. You know, we're we're one of the largest if not the largest owner in Saint An of apartments and have over 1,600 units there and you know, overnight boom
Taylor Avakian
rank. What is the what is the specific loss? I'm not familiar.
Paul Julian
So they so so Anna says uh you can raise the rent 80% of CPI or 3% whatever's less. Oh gosh.
Taylor Avakian
So you know CPI is quite a bit.
Paul Julian
Yeah.
Taylor Avakian
It's like county of LA. So you're raising your your rent 1% or one and a half% right. Yeah. And the expenses go up uh 25%. Exactly.
Paul Julian
Thank you very much. Yeah.
Taylor Avakian
How does that work?
Paul Julian
Right. I mean so so are you going to be motivated to paint your building every seven eight years? That's kind of what we do in our portfolios. We try to keep our buildings really top-notch and and be, you know, be the shining example in each of the cities and the markets. We get a lot of awards for that. Yeah. But Santa Ana now, I mean, can't afford to do it, you know, and so people are going to get a lesser product. Um, you know, luckily, we had rents that are already kind of top of market because we kept our building so nice. We run them like a real business. Whereas, you know, I feel bad for the mom and pop owners in Sana that were doing, like I said, where they kept their properties full, so they kept the rents low for their tenants.
Paul Julian
Well, they're never going to get that back now, right? They're they're their basis is set. So, they think they're they're hitting the real big landlord when they make these these laws. Really, they're hurting the smaller landlord even worse.
Taylor Avakian
Are is there push back from from people? Like, do you see that any of these I'm going to say, you don't have to say it, but draconian laws that come into play. Do you see any push back for them these reversing? Like is there a way for us to realize that we've made a mistake or people have made a mistake in in some of these laws? Do you see that reversing?
Paul Julian
You know, I think it's really
30:00–40:00
Paul Julian
hard in certain places where you have a higher renter than owner demographic, right? When you know, California as a whole, I think we're like 60% homeownership, 40% renters typically.
Taylor Avakian
Yeah.
Paul Julian
But then you get into the specific cities like LA and I think it's more like 65 35 renter to owner. Yeah. And Saint An is probably the same way. And so when you get a city council that runs on, hey, I'm going to lower your rent or freeze your rent if you vote for me, it's easy to get voted in, right? And so you end up with a council that is uh you know is is going to stick with that and it's never going to get overturned. you know, we brought when when they were implementing it, we went to the council meetings and we tried to bring in experts and, you know, talked about, you know, I'm on the uh the board at USC, the Lusk board, and we have the the head of the center, Richard Green, who's brilliant, smart guy. Yeah. Done a lot of studies on
Paul Julian
on rent control. And, you know, I brought in a lot of his statistics, and you know, they they laughed me out of I mean, they didn't even want to hear it. You know, it's I Stanford's done studies, everybody's done studies to show MIT that it it doesn't work. It's not good for a city. But when you have politicians running on that, you know, they're going to win and they're going to keep that in place and and the tenants are going to vote for it because, you know, tenants aren't going to hear the whole narrative. They're going to hear, "Hey, my rent's going to be cheaper." They don't know what the the fallout is of that.
Taylor Avakian
It sounds like I got your answer, but do you believe in rent control?
Paul Julian
I I don't think it's the right thing. I I think you you need to build more supply. It's all supply and demand, right? I mean, it's like Richard Green says, the natural, you know, filtering process where if you build enough um you know, people will move from, you know, from a from a C-class to a B-class, from a B-class to A class as they move up and make more money. When you stifle that, it changes things. Look at Santa Monica. I mean, you have, you know, so many people that are illegally subrening apartments and and you have people who could afford to move up. You know, they they made more money, but they're going, I'm I'm in a $1,500. I can't give this away. Yeah. So, I'm going to stay in this apartment. Well, that doesn't free it up for the guy who needs the $1,500 apartment, right?
Paul Julian
It doesn't allow for affordable housing to naturally take place. And so, that's why, you know, look at the rents in Santa Monica, you know, West Hollywood, that the rent control cities are the highest rents.
Taylor Avakian
Yeah.
Paul Julian
in the market, you know. So, it's it's not making it affordable for people.
Taylor Avakian
So, I I don't think it works. And you don't think we can you don't think people are going to get rid of it?
Paul Julian
I I think we fought it pretty well on a statewide basis. Look at, you know, how we did on the last proposition and and defeating it. I think it, you know, in the last two, three elections, we've had to defeat it and a lot of money was put towards that. you know, we we put everybody put money towards towards fighting it because it's the right thing to do. But, um, so, but once again, that's an that's a statewide vote in a market where there's more owners than renters. At some point, maybe it flips. I don't know. Or maybe people are going to see the example. Maybe they'll see that Santa it's not working, you know, and go, "Oh, we don't want to have that." You know, all the cities around there that were kind of watching it, I think, might watch that as a case study and
Paul Julian
go, "Okay, maybe we won't go that route." I don't know.
Taylor Avakian
What headwinds do you think are on the horizon for for investments, for real estate? What do you think is actually going to be coming down the pike, if anything?
Paul Julian
You know, I actually think it's a good time. Um, we, you know, we buy, like I said, we're the largest buyer in 2020. There weren't many people buying. It was easy to be the largest buyer because people were buying in 2020, the pandemic. Then 2023, you know, interest rates went skyh high and we were the largest buyer in Southern California in 2023 as well because not many people were buying and so um that's when we like to as a private investor were able to be a little more nimble and buy during those times. You know, I said it's a corny phrase, but you know, you you uh you marry your basis, you date your cap rate, right? You know, it's you you're I I don't mind if the interest rates are high for a little while because that's going to change at some point. Yeah.
Paul Julian
When those are high, that means the basis is low because the property is going to go for a lower price. Yeah. And so I'm going to get that. I'm holding forever. Well, it doesn't work for somebody who's flipping in and out as well. But somebody like us who doesn't sell, I like to buy in that environment. So I don't think interest rates are headed down. I don't see why they would. I mean, I think we're kind of where we should be. Yeah. I think they were artificial for a while. um you know when they were down and Treasury was at nothing, you know, I mean it was just that was all part of the economy and part of a black swan event that happened and I I don't know that that's going to happen again. I mean it could there could be another black swan event of course but um
Paul Julian
other than that I think this I think we're going to truck along pretty well here. I actually think you know we we have this lack of supply that's going to be hitting in the next couple years because you know construction loans have been so expensive, costs have been so high that there hasn't really been a lot of new construction lately. Um, things are selling for so much farther below replacement costs right now that wouldn't make sense to go build something. I mean, there's always people that are going to build. I mean, in Orange County, you have Don Brand, you have the Irvine Company that can build through anything.
Taylor Avakian
Yeah.
Paul Julian
Savage, you know, and and they're they they're brilliant. You know, they do it when costs are low is when they build, right? Because he can. So, you're going to have that supply come on the market. And there's a couple other, you know, billionaire type builders down there that can do that up in LA as well. Yeah. So other than that though, there's not a ton of supply coming.
Taylor Avakian
So I think it's a good time. Do you feel like right now is a great time to be a buyer? Like are you are you uh bullish on the actual acquisitions of properties right now? Does it feel like be fearful when others are greedy and greedy when others are fearful right now?
Paul Julian
I love that Warren Buffett quote. Uh absolutely. Like I said, I mean in 2020 everyone was fearful, we were greedy. Yeah. 2023 the same thing, you know, and so I still think that exists right now. I think it's a terrific time. You know, there's still liquidity. The spreads on the agencies are pretty low right now. They're trying to get their money out, you know, Fanny and Freddy. So, if you're doing those kind of loans, it's it's a terrific time to take on that debt. Yeah. I mean, it's not what it was before it I think we had a loan at you during that time period that was 2.44% 10year interest only fixed rate. Just it's free money. Third, right? Yeah. You're not getting that, of course. But, you know, we just did a a portfolio of loans that a little over $und00 million portfolio that were
Paul Julian
at 5.39% 10ear fixed interest only. That's not that's not bad. Feels pretty good with that, right? You positive leverage with that 100%. Um, so yeah, I think it I think it's a good time still. Do you um although let me caveat the economy, I think is bumpy. You know, I do think tenants are at their max. I don't think there's some huge rent increases that are to be had right
Taylor Avakian
now. The market's the rental market is for sure flat. I mean, we've seen it the last two years, it's been about 2 to 3% rent increase, which for LA is is low, I would say standardly. So, it feels like to me in vacancies are staying longer, more concessions on a lot of things we have. And the average that we're seeing is around 8 weeks for a lot of these new construction buildings, which is a lot. um and they're structuring it uniquely, but it feels like the rental market's pretty flat to me, which is an overall indicator for the economy and and the macro of owner or renters are feeling it. They're feeling what's happening and so they're not moving as much combined with rent control, right, specifically. It's a it's a very weird situation when it comes to the city wanting to
Taylor Avakian
provide more affordable housing, but all everything else all the headwinds make it almost impossible to actually build something like that. So, I'm interested to follow what some of these state bills are going to be doing from an affordable perspective if they're going to be allocating certain bond funds. And I mean, they have what 20 they they spent $24 billion on homeless housing, which I don't know where that went. Um, so there's money to be had, right? So I'm curious, uh, because there's so many conspiracies that, um, we just, you know, talk about within the office and among brokers. I think what's interesting, and I'm I'm curious to know your thoughts on this. So they started requiring you to um, submit your your rent roles every year to the city of LA, right? So they know what all the rents are, right? They know all the rents.
Taylor Avakian
Why would you want to know what the rents are, right? because you want to understand where the values are, where your property taxes are. You you want to calculate basically the money that you're going to be getting from all of the the tax revenues that
Paul Julian
you're getting.
Taylor Avakian
It feels like to me that they're gearing up to be a landlord. Um, do you think that that conspiracy theory holds weight or do you think that that the city and the state wants to have state and city and a a bunch of this, you know, housing that they own to have almost this um I can't think of a better word, but and it's going to sound crass, but like a socialist almost regime from
Paul Julian
that perspective. I wouldn't put it past them. And and you know there's other cities where that's been proven. I mean I was in Vienna a couple years ago and almost all of Vienna is public housing, you know, and a lot of the Scandinavian countries have that and uh so it it's been around a long time and people have been doing it in other places. Um to do it in LA would be pretty wild. I mean we have uh such a robust landlord community. Yeah. Such a variety. Be it' be really interesting to see if that happens. So that's it's the first time I've heard that conspiracy theory. So I'll have to think that one through.
Taylor Avakian
But I think I was talking to some owner, some uh some old owner. He goes in on this story in this rant. I'm just listening and he brings it up and I'm like, "Huh, that's interesting." Yeah, I let me let me think about that a little bit.
Paul Julian
It' be interesting to see if they did it like we do it. If they if they buy older existing
40:00–50:00
Paul Julian
properties and renovate them versus spending 650,000 a unit to build brand new a million a unit, right? But the housing I remember I think it was like 650 or 500 I forget what it was the skid road they built. Um you know why does it have to be that expensive? Why can't you take you know an old motel that you buy or you know I am on on a board of a a charity homeless charity and um called Mercy House that you know it it's pretty cool. I mean they're they're doing for homeless sheltering. They're taking old hotels and renovating and, you know, putting people in there and then they move from there to an apartment building that they've renovated. You know, it just it moves up and puts people from the street to a shelter to a hotel to
Paul Julian
an apartment building and gets them back on their feet through life. And you why not do it that way? You know, why does it have to be, you know, so expensive to build brand new, you know, high-rise type one construction for for a homeless
Taylor Avakian
shelter? It's it's interesting. you you mentioned that because I had um I had Jeff Mowen in here who's the president or or leads um acquisitions and development for Hackla which is the it's actually not the city of LA it's a separate entity that uses government funds nonprofits to buy things and what he was saying to me was that there's a because they're a nonprofit and there's some government tithes there's a lot of regulations from union labor and um lawsuits actually so I don't I just saw an article that came out that the city of LA has been uh sued and they've given out settlements like 5x from what it was a few years ago. And it it's it just brings up a bunch of questions as to why it's happening and if they're trying to cover their ass with some of these like, well, we spent all this money and
Taylor Avakian
and doing this, right? This is brand new product or, you know, it's kind of this buffer zone. Um, which is which is interesting to me. I don't agree with it in terms of economics. Like why why wouldn't you just do what everyone else or do a p public private partnership like have people like you say, "Hey, we're going to give you a specific return on your investment, right?
Paul Julian
Or for your investors.
Taylor Avakian
Um, we're going to buy the property for you at a set value, right? And maybe it's a little bit above market because, you know, they want to, but it's it's going to be significantly less than if we were the ones trying to do this or doing RFPs for developers who are going to, you know, have to charge $650,000 or $700,000 or a million dollars per unit to build these things. So, I think I think there's a workaround and there's a way. I'm I'm excited. Uh I would love have to have Rick Caruso on here and and see his vision. I'm I'm I love business people and I love I think you can solve a lot of problems with creativity when you're forced to do so and it doesn't feel like there's um uh there's not motivation for them to try to figure to solve this out. That that's the problem.
Paul Julian
There's no incentive. Yeah, that's it. You know, as business people, you got to keep your cost low, right? Uh there's a cool program that we we were part of many years ago or for a few years. I think we're still doing it that the United Way uh does where they actually, you know, it it's almost like a section 8, but they have a case worker with the it's a formal formerly homeless person who's kind of gone through the system who wants to get back on their feet who who wants to get a job. They'll put them in your apartment building. They'll pay the rent. They'll pay market rent. They'll furnish the property, you know, the unit for this person. They'll have a case worker there and nobody on the property knows that this person was formerly homeless. Yeah. you know, they're they're integrated back in and it's it's
Paul Julian
an inexpensive way. I mean, we're not talking about, you know, gold-plated furniture. They're just putting the basics in. They're getting them into a property that's, you know, probably a a garden style, you know, cheaper property. Um, the rents, you know, just working, you know, workingass rent, uh, you know, workforce housing type rent. Go that route. It doesn't it doesn't have to be, like you said. I mean, I I see why they're trying to, you know, ca on the thing, right? They don't want to get sued, but you know, everyone else is living in in workforce housing and it's been just fine.
Taylor Avakian
So, there's private individuals figuring it out. So, I think the government can figure it out, too. Exactly. Um, can you talk to me? We talked about it earlier, this this uh vertical integration cabinet stuff, like why did you guys do that? And what are the benefits, the pros, the cons? Walk me through this um vertical
Paul Julian
integration. Yeah, it it started about 20 years ago when the the market was on fire in ' 05ish, you know, six and the condos were being built everywhere, houses were being built everywhere and we realized that we were having a hard time getting subs to come renovate our property. So, we'd have a, you know, a unit that's ready to be renovated and we're sitting there waiting, you know, three or four days for a cabinet guy that was supposed to show up that didn't show up and every day we're losing revenue on that unit, right? It's it's not producing revenue. So our guys started saying, "Hey, you know, we can we can make some, you know, give us some saws and stuff. We can start making our own cabinets. We can figure this out." Yeah. So we took the wreck room of one of our properties in Anaheim and turned it
Paul Julian
into a little facility where we had guys literally gave them saws and they were cutting and making contaminants and uh and they were, you know, we had guys that were maintenance guys that, you know, learned how to do some plumbing and they can replplum and you electricians and kind of grassrooted the thing. Uh-huh. Um, and it it turned into something and leased a a big building in Anaheim warehouse down there to kind of, you know, run it out of. And and you know, my my dad started the the company back in the day and immediately after he started it, you know, he's he's the GP. He's buying the properties and he's going, I'm not going to be able to to to spend the time to to property manage and renovate. So, he teamed up with a friend of his to kind of take on that part.
Paul Julian
So, so their family still runs the the day-to-day of the u property management and the construction. and they do a great job and and so they kind of assembled that and and you know his partner was kind of the one that did the logistics to figure out okay let's let's get a CNC machine you know so we're going to do this more efficiently and and uh and over the years it's just progressed it's turned into something and then uh in 2013 we wanted to combine force so they were up in Anaheim we had in South Orange County we had an office and so I had found a building in Irvine that had that unique zoning where we have the corporate so we put us all together in one roof and been a lot of efficiency since then of doing it. And when you're holding a property forever, you
Paul Julian
look differently at what you put into the property. So, I I've been using cabinets as example, taking cabinets, you know, that's something where if you have these cheap pressboard cabinets, every couple years you're having to replace them or fix them, and so your repair maintenance cost is a lot higher. Mhm. We said, "Let's put in really high quality cabinets." You know, let's get 3/4 in plywood boxes and and so we put it in to last so it'll last 304. I mean, multiple multiple turns and it keeps our repair maintenance cost down. So, we're seeing that on the bottom line on the properties by putting in good costs a little more upfront. Sure. But it's incremental when you're doing we do 50 units a month every single month of full renovations. Wow. Wow. So, I mean, we have constant volume going through because we'll
Paul Julian
buy like the the 714 units we bought in Costa Mesa a couple years ago. I mean, when you're renovating every single unit on that, adding washers and dryers, full gut of the interiors of every single unit, you know, plus the common areas. Sure. That'll keep you busy at 50 units a month for a long time. So, we're always feeding our system with new acquisitions to keep it going. So, it makes sense for us, you know, that that that the cost savings, the time savings, and the quality, I think, might even be the biggest part of what we're putting
Taylor Avakian
in. What um do you know the actual spread of if you were to do this from a vendor versus in-house? Is there a big difference in terms of the cost or is it more of an efficiency time thing?
Paul Julian
It's probably more efficiency time. I think there are some it's hard to compare because we're putting in a higher quality than the vendors that are doing it would put in. So, our costs for that might be a little bit higher, but because we're buying in bulk, we're keeping it down. So, I mean, we did a study a long time ago where we we were seeing that if you added in the time and everything, it's maybe a 30% savings. Okay. I mean, that's still significant across 12,000 a unit. Absolutely. So, I mean, our investors benefit from it. It's not a big cost center for us. put in a, you know, 5% profit in it. We're most contract 15% profit. So, it's not, we're not doing it as a cost center. We're doing it as helping the bottom line for our
Taylor Avakian
investments. Got it. No, that makes sense. It makes sense. Um, what are some lessons that you've learned over uh the last decade in terms of maybe stuff that you've changed your mind on or that you would have done differently that looking back now you can see and make sense?
Paul Julian
I probably we wouldn't have gotten to these 20-year development projects that take forever. That's number one. You know, stick with stick with apartments. You know, it's it's funny when you're when you're in it for a long time. Every day across your desk, you get a bunch of deals. And sometimes you get these development projects come across, they're too good to be true. They're so exciting because the location it's at. You know, we we developed a property in Newport Beach uh starting in two another it took 20 years from when we tied it up to when we delivered the condos. Really high-end. 20 years. Yeah. It's a special property that has, you know, it has a private beach and boat docks and these condos with the best views and wow, you know, just 5,000 foot condos we built. Just unbelievable property. Um, and it was fun and we learned a lot.
Paul Julian
But, you know, you're dealing with the coastal commission, you're dealing with wealthy neighbors that can sue and hold things up and, you know, a city that is very meticulous. And so I mean, you know, it's 10 years, 15 years of probably 10 years of entitlements and then, you know, eight years of construction or something like that and then sell selling them out. I mean, stuff like that. That one's great, you know,
50:00–1:00:00
Paul Julian
because, you know, it was it's it's kind of trophy, but but I mean, I would say just stick with what we know, apartments. I mean, we did one time we during the uh 2008, we had an SNL that we were dealing with, savings loan that we knew really well. We knew the chairman and he goes, "Listen, we we took back all these REO properties." It was 2008 and uh they were taking these, they called them tapes back
Taylor Avakian
then, okay?
Paul Julian
And the tape was a a list of properties of ARO that they took back, single family houses. And he goes, "Listen, we'll we'll we'll sell these all to you. We have like 250 of these homes and we'll carry 80% financing on it and we'll give you a 20% discount on the value of them." So, we're like, "God, that's a no-brainer." So, we started looking at all these properties and we're driving all over Southern California. We had real estate agents in each market that was looking at us from Santa Barbara to San Diego and out to Palm Springs and and we would agree on, you know, a hundred of them. Okay, we've agreed on the price with you guys. Let's take that tunch down. We had raised all the money for it and we took the first hundred down and then the next 150 we're doing the diligence.
Paul Julian
All a sudden this SNL gets taken over by the FDI and the deal's off and we've already raised this money and we're going, "Oh man, what do we do now?" So, so I remembered I had a good buddy from college who he would go to the county courthouse steps every day and buy houses. That was his business and flip them. And he had his sister would be driving around looking at him. And my other college buddy would be on the computer and information didn't flow as good. This is back, you know, a long time ago. And and so he'd be on the phone and the sister would make sure the house hadn't burned down before they bought at the auction that he's doing the comps, his friends doing the comps. Like so I knew he had this system.
Paul Julian
So, okay, why don't I work with him and you know, we'll give him something for doing it, but let him buy because we got to deploy the rest of us and get and it was a great time to buy houses. Yeah. And so, we did that and we ended up buying another uh I think 57 houses that way. G. And so, we had 157 houses and it was great and I think our investors enjoyed the process and they they made money. It was, you know, we made money. But looking back, I go, if we would have just bought a 157 unit apartment building, it' be a lot more efficient. Yeah. Because when you when you have a a plumbing issue out in Ontario, you need a plumber in Ontario. And you have one down in San Diego, you need somebody there and a real estate agent to
Paul Julian
sell that house up there. It's all these different people. It's not efficient like an apartment building where you're all in one place.
Taylor Avakian
The logistics of it just become an incredible nightmare. Which I think I know the answer, but I'm curious. Are you guys going to stay in apartments or do you ever get the itch to to go do industrial, to go do retail, to go do shopping centers, to go do these other sexy, you know, at the time uh investments? Have you ever dabbled in those or would you ever dabble in those?
Paul Julian
No. You know, it's it has been tempting through the years, but it just as I started I think this podcast with the sentence, everyone needs a place to live. Yeah. I keep going back to that, especially nowadays. I look at you know what what AI's done you know and what uh what co taught us that you know people don't always have to work in an office right they don't always you know robotics is changing the industrial market a little bit you know the the tariffs are changing the industrial they're they're a little bit behovven to that to those things uh retail obviously changed dramatically when people were living at home and you know the Amazon effect and everything um whereas people you just need a roof over your head you know keep it based sick uh stay in our market that works.
Paul Julian
Like I said, there's so many more buildings we can buy here. It's not like we're running out of space. And so, I think the answer is yeah, we're sticking with what we
Taylor Avakian
know. Do uh you mentioned AI. Um I'm nerdy about AI right now just cuz it's it is sexy and it just like makes a ton of sense to me because there's so many pain points that are repetitive tasks that I do on a constant basis that I'm
Paul Julian
like this should be automated.
Taylor Avakian
Like come on, we got to figure this out. at the scale you guys are at 12,000 like a 1% improvement is a significant amount 2% you're like holy [bleep] we are you know thank goodness our investors going to be really happy are you guys looking into any specific AI technology or ways to improve or optimize the current portfolio with new technology right
Paul Julian
now we are I I it's funny because the other day I was at a presentation an AI presentation and what the guy talked about is the most important part when you're approaching AI within your company is is data. Data, he goes, is the new oil. He goes, if you know, if right there, um, you know, over in the corner an oil well sprung up and you had a bunch of crude oil that came out, it's great. You have, you know, you made money, you got all this oil that pops out of the ground, but what do you
Taylor Avakian
do with it?
Paul Julian
You put it in barrels. It doesn't do anything for you right now until you refine it, right? So, he said, you got to refine the data. So collect the data, refine the data, and then you can utilize the data. Like I said, the new oil. So um we with 12,000 units and this many you know people living in the properties, we do have a lot of data and you know we need to start figuring out how to collect and refine that data to use it. Mhm. Uh we do use, you know, some AI in the fact that, you know, we do have the, you know, the chat bots and we have um the scheduling, you know, it's really improved our our touring uh because, you know, Lisa is our agent and and she could take appointments all night long,
Paul Julian
you know, while while the rest of the the leasing people are sleeping, they wake up the next morning, they look at their calendar and they've got all these tours lined up. Yeah. So, it was very helpful in that regard. uh on our side of the business on the investment side you know that's property management but on investment side you know how do we use it I don't know yet you know it's it's it's tough to see how we're going to use it I mean obviously um you know Brian our acquisition director came with me over here in the corner and he you know he analyzes property all the you know a lot of his day is is running numbers and grinding that out and I think that's going to hopefully be able to be automated don't worry you won't be out of a job by
Taylor Avakian
we got plenty of other stuff you're doing way more way more deals. I'm I'm curious to know because so the way that I think about it from you, right? I'm like, okay, they have 12,000 data points. You know, pretty much market rents in a lot of those places, especially because you guys are efficient and you're trying to push rents. I would I would build the algorithm, right? I take the data, refine it, figure out, okay, where you could basically be very very accurate in terms of where you think values are going to be, right? and then potentially identify certain opportunities and almost it's like a go or no-go based upon all the data in the back end, right? So you the the system could effectively submit or come up with a price that makes sense based upon
Taylor Avakian
your numbers almost immediately that because you guys have the data that no one else does. You can even be more confident in those assumptions that you're making and all the renovations that you're doing. So you can take into account, okay, it's costing us, you know, three bucks a foot to do the flooring. it's going to cost us another 10 bucks a foot to do this and that and that and then where the market rates rents are because they're going to get rid of um like the real page and and all those AI leasing things that's going to be gone but it they can't tell you internally not to be able to do that with your 12,000 units. So you can build a system internally and nowadays you can whip that up and you know not that very long if you have someone technical.
Taylor Avakian
So, you're going to be able to build this this acquisition AI machine with all this data that will give you the efficiencies of of being able to scale and move faster than a
Paul Julian
lot of other people.
Taylor Avakian
And I think that's super interesting to me when it comes to the capabilities of AI. Like there was um you know, they say there's going to be a billion dollar comp uh company with one person. And I was like, is there going to be a billion dollar owner uh or syndicator or fund with one person? like are are they going to need property management or are they you know is there gonna is AI going to be so good that it can be do the property management all this stuff is just like it it that's what I think of when I when I stay up at
Paul Julian
night it's fascinating and and I agree with you um we can definitely build that and I think I think the advantages are density of ownership in a specific market too you know you really can look at um you know we have a lot of stuff up to 605 core or in kind of that Lakewood, Bellflower, you know, Norwok, that area. Yeah, we have so many of the comps are our own. And actually, that's what we ran up against. That's why we never really used an LRO system is sometimes you're kind of hurting yourself with the LRO because you're using your own comps. Yeah. But I I see what you're saying. I totally agree that you can use that to your own value even if they get rid of LRO's and you just make your own system internally.
Taylor Avakian
Why wouldn't you? Why wouldn't you?
Paul Julian
Exactly.
Taylor Avakian
I I think it's that's our future, you What's the biggest pain point that you guys come across in your business? What's the biggest thing where you what keeps you up at night?
Paul Julian
It's funny because I I think if you asked our, you know, our partners that are running the property management, it would be the the other night we at 3:00 in the morning, somebody set fire to uh a car. These these kids were mischievous and they were in a carport and they set fire to somebody's car and it burned 20 cars in an entire carport in one of our properties. you know, how do you control that? Right? We have it all on camera, but nobody's at three in the morning. We have a security guard. I mean, we do what we can, right, to But sometimes those things happen. You know, we've had, you know, u you know, we've actually had homicide, you know, that not because of the type of properties. Actually, one of our nicer properties, but it was a a dispute, right?
Paul Julian
It was something out of your control that that happens. And you know, those things can happen. you know, obviously the big earthquakes and the fires and all the things that that we've all dealt with, but you know, you ensure around it the best you can. You know, that gives you some peace of mind. Uh on our side of the business, I think on the investments, it's like, you know, get that long-term fixed rate debt. Don't don't be don't be in that situation where I think a lot of people are going to be where they
1:00:00–1:10:00
Paul Julian
put, you know, they put the debt fund loan on in 2022 and they got 3% financing and it's, you know, leveraged up to 85% of the time and and it's three years fixed and then it goes floating, right? Well, that was 2022 and now it's 2025 and those things are starting to flip and all of a sudden their mortgage payment is double and they thought they'd be in and out by then and values didn't go up enough for them to be able to exit in three years. And that's that's a pain point. I remember this was where the experience of my dad, you know, being older and gone gone through so many cycles. I remember at the time in 2022, we're losing out deals to all these new, you know, younger syndicators that are buying these deals and uh they're not having to come up with much equity.
Paul Julian
I'm going, "Dad, why aren't we putting these debt fund deal?" I mean, he goes, "No, stick with the long-term fix rate. You want to be able to sleep at night. You know, you to to last." He had the foresight just the time, you know. And you know, the more discipline, it does. It takes a lot of discipline, you know, and that's why this business is funny in real estate. It's not this isn't your get-richquick tech company business. It it really isn't. The the more deals you go through, the more you learn. You need experience. You need to be in this business for a long time to know that, to have gone through those cycles and felt it, you
Taylor Avakian
know. What is uh what's next? What's the next uh business model? What's the next fund structure? what's the next uh you know like what is next for for you guys?
Paul Julian
Yeah, you know, we're we're we're always tweaking. I mean, I think you know, our next fund, we've already thought of a a way to tweak the prep structures. Uh you know, the X fund, there's little things we're tweaking on each fund that we we drop. So, I don't know that there's something, you know, I say that now and then
Taylor Avakian
some Sure.
Paul Julian
Yeah. You know, my my my dad that this crazy mind will come up with something in the middle of the night, I'm sure. And he he and I are funny. I mean, we we're always working. We're we're we're you know, he I'm on the computer every night till 12:30. I mean, I just in the morning, right on it. Yeah. I just I on the weekends, I mean, that's how he and I are. We're we're intertwined. It's a family business. We're intertwined into the whole thing. Our investors are our friends. And you know, we're all in it together. And so, he'll send me an email sometimes at 2:30 in the morning. And I'll reply right back. And he'll reply right back. We're going, "What are we doing?" you know, we're both awake thinking of something. It's just it just becomes your life.
Paul Julian
And so so I can't say there's nothing new because I'm sure we'll come up with with a new structure scene. But uh but I think just stick with what you do, right? Get try to be a an inch deep and a mile or sorry an inch wide and a mile deep, you know, so you can really hone your skill on what you do.
Taylor Avakian
How do you hone your craft? How do you constantly cuz a lot of things are changing and um I think there is real estate's an interesting business where you have to have alpha as I like to call it like there's an edge you know to to differentiate yourself at a certain point there's a lot of money everywhere and there's a lot of people who have the skills to be able to do it but to really start to grow something to be 12,000 units you kind of have to have an edge so how do you continuously try to improve yourself to have an edge in what you
Paul Julian
do I I think staying up on new tax laws, you know, things like that. You talk about alpha and edge. And I remember my dad told me many years ago, he goes, "You can't control what interest rates are going to do. You can't control control the economy. You can't control, you know, many things. The one thing you do know that's for sure is there's always going to be taxes. You know, that's something there's death in taxes, right? Inevitable. And so if you can figure out how to be efficient in the tax world and really help your investors in that way, you know, you're you're going to be you're going to have that edge. You know, a lot of people go, I I don't care about the after tax. I just want to know how much cash I'm getting now or or I'll just sell and pay the tax and whatever.
Paul Julian
Well, that's that's real money you're giving away in a way that you don't need to. That you know, these tax laws are created to help in, you know, inspire housing and so utilize them, right? utilize them to, you know, to spread your money as far as it can go. And so, so, you know, I'm always keeping up on that stuff, always reading, listening to stuff and and, um, uh, you know, I'm involved in a lot of different boards and things and so I stay really tight in the industry with ULI and um, always be, you know, talking and socializing with people in the industry. I love it. You know, it's we have such a fun industry for sure. People are are good people, fun people and I like being part of it, you know.
Taylor Avakian
I completely agreeing it in my life. Yeah. The the networking power of of um of what we do is really really that's what's surprised me the most is just I get in rooms with people like yourself that I probably shouldn't be in, right? Uh if we're just looking at it from from a status perspective, but there's value that can be shared on every level. And I think it's super cool to that it is almost like this this even playing field when it comes to every little piece because it is kind of opaque in certain areas. like there's value to be had on every if someone finds a new efficient way to do property management, like that's value to to the big dogs, too. They want to know it. Or if I have this new AI tool that helps with uh leasing, right? Like that is alpha to these people.
Taylor Avakian
And so I think it's really cool to have it democratized from that perspective and and be able to share this knowledge from, you know, your father down to to you down to, you know, people in college and kids and all this stuff. It's it's um it's fun to be a part of and and have that be entrenched in the actual fundamentals of what real estate is, right?
Paul Julian
Um and we're usually real estate's usually a a dinosaur when it comes to technology. You know, our business is not on top of things, but I think we're going to get there because I think a lot of people have realized it's a great investment, right? It's equities are scary to go jump into the stock market and try to make your money that way. Yeah. you know, as a a normal working person, you we talked about their retirement funds, right? So, what are their options with their retirement funds? Go to a mutual fund, go into equities, go into bonds, you start dissecting all those different options, and you realize, gosh, real estate's a pretty good one. And then within real estate, apartments, and then within apartments, Southern California, you dial it back to this and you go, well, other people are going to jump into this and figure that out.
Paul Julian
people and they have, you know, there's the Blackstones of the world, a lot of people that have jumped in that are going to have the technology and and help drive the rest of us forward, which is kind of fun to
Taylor Avakian
watch. Paul, what does your day look like? You said you stay up late and do all this stuff like in in your current role, right? What what does a typical day look like for you? Are you raising money? Are you making sure that the properties are running smoothly? Like what is your specific day at this point look like?
Paul Julian
Yeah, it's uh what's fun is every day is different. You know, there's there's a million things coming at you. And uh I uh in any family business, you wear a lot of hats, right? And so I've really been focused um and we have family. I mean, I my brother-in-law works with us and and he's great and he has a very different skill set than me and it's been perfect because he really focuses on asset management, you know, so he's looking and he's a detail guy and whereas my my dad and I are kind of very similar to each other where we're we're deal guys and and we're constantly, you know, raising money, buying properties, you know, I do a lot in the marketing front. Um, get in front of people like this like we're doing now. And and so there's a lot of that in my day.
Paul Julian
There's a lot of broker interactions in my day. You know, I start usually in the mornings. I try to, you know, do some stuff from home where I can get stuff done before I get to the office and get the deluge of, you know, everybody coming in and you're signing stuff and talking to people and and uh and so I try to get a lot done there. And then, you know, in in the office, it's uh and I try to, you know, in the in the mornings get all my meetings uh done before I go in the office. If I'm going to go meet a broker or meet or go to buy a property, you know, I'll go buy at one of our properties. I still like to get involved in the design part of our properties. Um, I probably shouldn't, you know, I probably shouldn't be spending time
Paul Julian
on that, but I'm actually a huge proponent proponent of design. I actually think um I think a lot of people live where they live because of the vibe and the design of that property and I think it's it was an easy lowhanging fruit when I first came over here uh to work with with our family. I haven't always worked here. talk about that if you want. But um when I came, that's one of the things I think I brought is, you know, I looked around and said, you know, younger people, they don't want to live in the same Yeah. stucco box that's the same color as every other Stuckco box. Like, let's do something cool. And so I got really involved in in the design. And, you know, I'll still pick, you know, paint colors on our properties. You know, we're painting uh
Paul Julian
Canvas LA, the deal we bought on the 110 freeway here in downtown LA. You'll start seeing some pretty cool painting design we came up with for that. um celebrating some Dodger blue at the Dodger Stadium right up the street.
Taylor Avakian
So I'm excited.
Paul Julian
Um so I I like to get involved with that. So there's a million things, but with a thousand investors, so much of it is investor interaction. Yeah. You know, and um and a lot of it's acquisitions, you know. I I like to go touch and feel the buildings before we make an offer on them as much as possible. So with because we're not having to fly out of state to look at properties, I can drive up and look at every single deal. We'll make, you know, we'll make over 100 offers a year on property. Wow. And and full an, you know, analysis, do the whole thing. And with that, we get, you know, a handful of properties that we actually buy. So, I mean, the the hit ratio is really low. Yeah. Because we want a good deal, you know, but we, you know,
Paul Julian
but for the brokers out there, they know we pay market, too, and we close, you know, and so, um, so I'll go look at every property that that we'll make an offer on as much as I can and really understand it. Uh, I love the real estate part. I love kicking the tires of the actual real
Taylor Avakian
estate. What makes a really good um investor relationship? What like what do you think raising money, right, is a skill you have to be able to do it. There's certain people who are better at it than others. Um, investor relations are are something similar.
1:10:00–1:20:00
Taylor Avakian
Like from a you could take either angle, money raising or investor relations, like what's the secret to being really good at it? Unfortunately, it's just being in it a long time, right?
Paul Julian
I mean, the track record's number one. You got to have a good track record. And the longer you're in it, the more people that know about you, the more words spread. We have not been good at marketing. We've never really had to market. You know, it hasn't been about raising money for us. It's been about finding the deal. We've been always, we've always been able to raise enough money. It's how do we find enough deals, you know, that are good deals that we're confident to put our investors in for that amount of money we raise. And so, um, it just the reason we went to the fund structures, we were buying these one-off deals and all of a sudden, you know, it was kind of a sellers market at the time and and we were having to come up with like 30 million, $50 million
Paul Julian
on a raise and, you know, they give you such a short time they they stick it to you. So, you you got 60 days to do this entire thing. Yeah. And we, my dad and I, you know, we're losing sleep just just getting the paperwork and people in to sign up and people had to sell their stocks and to have the liquidity to invest you with a thousand investors. It was wild. And so during the pandemic, you know, in 2020, we're working from home and he and I would spend many nights where we're on the phone together just going, "Okay, how do we how do we create a fund?" And we we had a a great attorney and accountant and they'd get on the phone with us and we put together our fund document and really got it into a
Paul Julian
fund structure and that was gamechanging and I don't think we'll ever go back to one-off. I mean, it'll always be funds from now on. It's so much better for the investor. The money's raised up front. They know they're getting a better deal. The brokers love it. The sellers love it because we're discretionary.
Taylor Avakian
You know, we can we can go buy right now. What are you doing to improve the marketing?
Paul Julian
We're we're finally, you know, getting a marketing company involved and and, you know, doing some cool graphics and videos. We're trying to do an animation that that AB structure I explained. It's it's a very difficult thing for somebody who's never heard it before to try to grasp. And so, we put together an animation that will hope hopefully, you know, solve that. And I think it'll be interesting AI to see how much we can use AI for marketing in the future as well. But, you know, with our investor base, they're they're a little bit older. They're not quite into, you know, they're not looking at Tik Tok, Instagram as much. So, it's not like we're super huge on social media yet. I think it'll get there. You know, our model is kind of a democra democratization, I think, of of buying into institutional size assets.
Paul Julian
You can be, you know, we have a lot of guys that are, you know, firemen, teacher, you know, workforce housing type people that have these retirement funds that have built up. They have, you know, a million bucks sitting in their retirement fund. They they can make a nice big chunk investment with us. Yeah. So, we need to reach out to to them, you know, we need to reach out to everybody. It's not just these aren't just high net worth people.
Taylor Avakian
Our investor base is everybody. Totally. So, it's more marketing on the fund side than than the deal side or is it both? Like are you trying to get brokers educated on this from the marketing? Are you directly to the owners? So, hey, put your property in this fund, is it the investors? Like where what specifically on the marketing side?
Paul Julian
Yeah, I I think it's both. Um I think we need to get brokers educated on what we have to offer, what the X fund really is. Um and then I think, you know, the sellers, we need to get them educated on it. I think investors, we need them to understand our opportunity fund side. Mhm. So, between the two funds, yeah, we hit sellers, brokers, and and
Taylor Avakian
investors. Before we wrap up, I like to ask people this question. Um, because a lot of people are younger. I'm still I I just turned 29, so I feel like I'm still in the book. If you were like 22 years old, right, and you had all the knowledge that you had today, but you had to start from zero, scratch, nothing, right? What advice would you give yourself or how would you approach to build something that you guys have been able to build today? or would you try to do what you're doing today?
Paul Julian
22 years old. Yeah, it it's funny because I I go back and forth. I I love our business. I love our model. Um it's a big animal. It's a big machine. You know, there's a lot of guys that are younger that come out and go, you know what? I'm going to outsource everything. I'm gonna have a very skeleton crew and keep my, you know, my costs low, my my headaches low and, you know, raise money and and maybe raise it from an institution where I have one check, you know, not a bunch of investors. I don't have a bunch of property management employees, you know, 600 employees and I don't have, you know, all these construction. I I just outsource all that thing, you know, all that stuff. And that's appealing, trust me. I mean, it's you think about that a lot. Um I do think our model uh
Paul Julian
is better on many fronts as far as it's hard you put up with a lot more headaches but I think the result is you know you do have that discretion versus being you behoving to a beholden to a investment committee or something like that on that on that side and and also you know being able to control the property management and the construction and the quality and be so hands-on there is some benefit to that. M so I don't know that I'd change much. I I think I think I would continue that now. It's hard to be a young guy starting out though and get a thousand investors. You're not, you know, I mean I I'm I'm lucky in that, you know, a lot of them are from, you know, all the majority are older guys that my dad started with.
Paul Julian
They've told people and now, you know, I've started my own group of investors and they've told people and it's expanded that way. But as a young guy, how do you raise money? I mean, I think you do have to probably start with smaller deals and then trade up to get into bigger deals. You're not going to be able to buy a 300 unit apartment building in Southern California with no track record. Yeah. You know, nowadays, as you know, when when they're selling a deal, they interview you, right? I mean, there's not only the best and final process, but then the last three people go to full interviews, you know, and you have to interview to buy their building. You know, it's a funny concept that people outside of our business probably scratch their head at. They interview to buy the building. You're showing them you have the money,
Paul Julian
but they want to know you can close. They want to know you're not going to retrade. They want to know you can handle the renovation. You're not going to be surprised by things that you see. Y So, as a young guy, yeah, you probably have to trade and trade and trade up. Mhm. But do things like you're doing. I mean, you're setting yourself apart. You know, you're there's a lot of brokers, not many of them have pulled this off. This is a pretty incredible deal and you know, you're natural at doing it and you've figured it out and it's it's given you name recognition. It's given you access to a lot of people and I I think it's terrific.
Taylor Avakian
Thank you very much. I appreciate it. It's been a a a surprise that I did not expect like of course I would have loved it to be the what it is today and of course I've always shoot shot to to be you know and growing like it is but it was something that I enjoyed and I think what you're saying too for what you guys like to do apartments in SoCal like you enjoy it
Paul Julian
and it's fun and it doesn't some days it doesn't feel like work. Yeah, you're right. And I'm I'm I'm going to go real quick go back to your 22-year-old comment because I thought of something else. I I think it's important to to learn from others first. I mean, everybody wants to jump in and buy their own deals and be a principal. Yeah. You know, I when I got out of college, uh I I had worked I I started as a kid, I would drive around with my dad since I was 10 years old going to look at apartments on the weekends. And that's what we did. We we I had the Thomas Guide to my lap, which you might not know what a Thomas is. I don't. There was a a book everybody used. It was sacros. It was this book of maps
Paul Julian
and even the broker packages would say, you know, it would page 6 A4 where the property was. That's how you knew, you know, so the night before he and I would get our stack of all the deals we're going to look at and we'd have the Tom's guide and I learned the freeway system because it'd be on my lap and I'd have to tell him, "Hey, we're turning here." I'd navigate for him. Wow. And we go look at properties on the weekend, you know, and I did it all through grade school. And then in, you know, in high school, I would I'd work at our properties. cuz I worked in construction, started at the very bottom and you I'd be ripping out toilets in the hot sun in in the summertime in Anaheim or something, you know, renovating units and then, you know, got into leasing
Paul Julian
in college and you kind of got into that saw every aspect of the business and then college came around. I graduated from college and my dad said, "Go get a job, you know, and and and I wanted to actually I I kind of was glad he said that. I was thinking it anyway of I want to go get experience, you know, and I want to go work for somebody big. I want to see. So, I went straight to the biggest commercial real estate company, CBRE, right? And worked there for five years and got insane experience, you know, and and deal flow and and I think you need that and you need to be the small fish in the big pond. Yeah. And and be, you know, get get tossed around and bossed around and and have to scrap and cold call.
Paul Julian
I mean, I literally cold called for the whole 5 years I was there. It was Let's go. It it was it was tough. Got hung up on by everyone and I was working in downtown LA and and uh I was doing actually tenant rep office. It was a totally different business, but I was in real estate, right? And so I learned the business and then I wanted to get into more the property side of it. So I wanted to get hired at by Rob Magcguire. If you know Rob Magcguire, Magguire Properties, you know, he built Bunker Hill basically, West Bank Tower and Wells Fargo Center. He was he was the guy. and I looked up to them so much I wanted to go work over there. And so they only had a leasing opening. So I was like, I want to do development, but I'm going to get
Paul Julian
in through leasing. And within the first day I was there, I figured out how to get over to the development side. Yeah. Got myself hired over there and learned a ton from them. And Rob was a a force of nature.
Taylor Avakian
Yeah.
Paul Julian
He's passed away now, but he was incredible guy. And so I got and I was there for a long time. And then while I was working there all day, I was getting my master's degree at USC at night, you know, um, you know, so I was learning in real estate development. So what I was learning at night, I was employing during the day and um, it was a really busy time. I had no life. I had no any, you know, it's just grind central, grinding, grind central. And so if I had to give advice to the 22, go work for somebody, you know, go learn from other people and uh especially, you know,
1:20:00–1:30:00
Paul Julian
family business like ours, you know, go do it and then bring that experience to the company. Yeah. You know, and bring and you get respect and all that stuff by by doing that and coming in with something, you know, and and I think uh if you're a young guy,
Taylor Avakian
go to the big company first. There's so many different ways to make money. There's so many different ways to buy buildings. There's so many different ways to raise capital, right? And so if you don't if you haven't been experienced that or you haven't actually seen it in those different verticals, then you're not learning the whole gamut and you might have a hole in your game. And so when you can observe a bunch of different opportunities, I told my brother the same thing. He's 22 or something like that. I'm like, dude, right now you're not trying to become a billionaire. You want to go learn as many different things. Figure out what you like, what you love, what you're really good at. And once you do that and you have all these skills and you're also building relationships, then you can go and say, "Okay, I found it.
Taylor Avakian
Here's what I want or at least I think this is what it is. I'm gonna go full force." So, I think it it sounds like you did something similar and have been able to bring that to the
Paul Julian
family business and and grow it and continue to do it. Exactly. CBRE when I started, they had this great thing called the wheel program where for the first year you were there, you made nothing. I mean minimum wage it was and you would go for every three months through the year you had four different wheels they called them you'd go get trained on and you'd be like okay I'm going to go do office at the you know office landlord rep at the Beverly Hills office so the next time you're in Ontario doing industrial for the next three months then you're doing retail in Newport Beach then you're doing and so all these graduates got to see not only the different property types and not only the different deal flows from each but also the different personal alities with the brokers and the sellers and the buyers in those different markets.
Paul Julian
So, you got to learn and then the second year you kind of teamed up with one that liked you and one that you liked and you became their runner for the next year and still weren't making any but you were grinding, right? And then but when you after those two years you had a book of business, you were making some good money out of that because you know you you knew that system and you took the good parts from this broker that you worked for and the good parts from that broker and you created your own persona.
Taylor Avakian
Totally.
Paul Julian
And uh it was it was a great program. I it was I really enjoyed they did tons of training there. You know, they would do retreats and it was cool.
Taylor Avakian
Man, I uh this has been awesome. Thank you very much, Paul, for coming on here. And uh I think the way that you guys do business is very unique and I'm fascinated by it just because I love Alpha. I love finding something new, right? Um and so it's really cool. I appreciate you sharing that and uh hopefully people some took took away a few things and go implement it in their business.
Paul Julian
So I thank you very much. I appreciate you having me. It was fun. Thanks Bat. Take care.