Transcript:

Mark Mascia  0:00  

Others indicators may say, Well, or other people who have less money may say, Well, I’ll do that work myself all that the 10 sponsors that I’m going to invest $50,000 with. And that gets me the diversity. And that’s why I say, it’s a little nebulous this term of family office, because  really anybody could be their own family office.

Taylor   0:18  

Welcome to passive wealth strategies for busy professionals. Thank you for tuning in today. I’m really excited about this one. Today, we have Mark Mascia from Mascia development. This is a wide ranging conversation, we’re going to talk with you about how to establish a family office, what a family offices, why you should establish your family office when you hit that level. And then we also get into some of his specific experiences around running and building his real estate, businesses, real estate development and investment business. 

This is a lot of fun, a very fun conversation marks a super nice guy, I met him a couple years ago at a conference and you’re going to really enjoy this one. If you’re interested in talking with him. Certainly reach out to him again, he’s a really nice guy. And his family office concept is very fascinating  for the folks that are hitting that level. And we talked about what that level is when you should consider starting a family office. When you hit hitting that level, reach out to mark and talk with him. Once again, is a great conversation. Without any further ado, here’s Mark Mascia. 

Thank you for joining us today. Thank you. Thanks for having me. So today, we’re going to talk about how and why to set up your family office once you hit that level of wealth where a family office makes sense. But before we get into that, Mark, could you fill our listeners in on your background? And what you’re up to today?

Mark Mascia  1:48  

Sure, yeah, great, thanks. Um, so I started my career working for large developers in the DC metro area, and have worked up the ranks and project size  from a couple hundred million dollars to about half a billion when I left and started working for our stone, which was previously a large publicly traded read in the s&p 500. 

And was doing another half a billion dollar project for them on the west side of Manhattan plus a bunch of other stuff. So kind of got my institutional  teeth cut through all those worked with Lehman Brothers for a while as a capital partner, until that exploded, so got to see kind of like a ton of really interesting stuff  before the crisis, and then in 2006, started my own company. 

So whatever that’s been 13 years roughly been doing, started my own company and been doing our own deals. And predominantly, what we have done is basically been outsourced family offices. So what that really means is, it’s a fancy way of saying  we meet a bunch of rich people that want to do deals together, or with family members are on their own, and they have enough resources to execute that strategy on their own. And we help do all the work. So basically, they say, we want to do X, Y, and Z, or we come to them and say you should do X, Y, and Z. 

Then we implement the strategy on their behalf and kind of do all the asset management, the investments, the finance the whole soup to nuts and can’t deliver them an easy product. We also do development. So it’s called Mascia development, the name of my company. And as we you know, our developers, that’s what I’ve always done. We recently returned back to doing that in the Phoenix area where we relocated the company about two years ago. So we do multifamily and retail development here in the valley. 

A nationwide basis, we invest in retail medical office properties on behalf of family offices, as well as their own syndicated deals. So that’s kind of the 30,000 foot view of where we came from and what we do.

Taylor   3:47  

Awesome. So I’m sure it gets very complicated. From there, you summed it up very nicely. And you’re you’re looking at or you’re doing multifamily and retail, and what metal metal office deals in Phoenix, specifically and then others throughout the nation, right.

Mark Mascia  4:05  

Correct. Yeah, we don’t we really only do multifamily in the Phoenix Valley. But

Mark Mascia  4:10  

yeah, the other deals we do kind of nationwide. So

Taylor   4:14  

cool. So you’ve got quite the background to teach us about and teach our listeners about how and why and when we should establish family office. So before we get into that, can you give us a quick definition of what is a family office?

Mark Mascia  4:32  

Sure, yeah, it’s a little nebulous. Like most things in real estate, there’s like 10 different ways to say the same thing. So yeah, family office, generically is is kind of a group of usually related parties that want to accomplish some investment goal together. So you know, you can think of the old  Rockefeller families or things like that, those are huge examples of this. But as of the last 10 years, this has been a real big source of capital, as there’s been a of stratified family. 

So it’s not just the multi multi billion dollar families that you think of, but also kind of  the hundreds and 10s of millions of dollars of people. And as those people have kind of concentrated their wealth around a group of like minded individuals, especially since that that wealth is generally generational in nature, it’s not usually spent all by one person. So if you have $10 million to your name, generally speaking, you’re not going to spend all 10 million before you die, you’re going to get some that to your kids. 

You kind of want to have some kind of wealth planning, some kind of  strategic investments around stocks and bonds and other things that have plans for that multi generational investment structure. So it’s really, it’s really just kind of like running a company around a person or a family, right. 

They would have other professionals that are stock and bond traders, they would have other professionals that are tax advisors, other things we would be the real estate component of their strategy and their planning for wealth.

Taylor   5:53  

Interesting. So at what point does at what level of wealth, so to speak, or network? Does it make sense for an individual or family to establish their own family office? Approximately? Yeah,

Mark Mascia  6:05  

I mean, it’s in a real estate space, it’s much more difficult than in the stock and bond space, I mean, your stocks and bonds are much more liquid at smaller increments. So there are probably better answers on a smaller basis. 

You know, for someone who’s just looking to do stocks and bonds, but in our experience  if you’re, if you have something like two to $3 million a year, that’s looking to be invested on a regular basis  for the foreseeable kind of future three to five years or something like that, that tends to be a good starting point. I mean, we obviously have families that are looking to invest hundreds of millions of dollars, and some that are looking to invest  a couple million dollars. 

It doesn’t necessarily have to be that. And let me just also be clear, like, when it’s a family office, sometimes it’s just an individual, right, sometimes it’s just the wealthy matriarch or patriarch that says, I want to set up something, my kids are too young to actually take over the family business, or whatever the case may be. 

I want to make a bunch of investable assets that produce some kind of income or give them some kind of assets to look forward to, or a business to step into at some point when they’re older. So  that’s why I say family office is kind of a generic term for just kind of family planning, family wealth planning or something like that.

Taylor   7:12  

Hmm. Ok. So now that we have a box as to or an idea as to when we should look at it and the family office being a relatively generic term, but we’ll stick with it anyway. How do we get started setting up a family office? I mean, if you don’t know if you handed me $50 million, and you certainly welcome to, I wouldn’t know the first place to get started, I don’t know, hire somebody? I don’t know. There aren’t any phone books anymore. You can’t find that person. So how do you get started with that?

Mark Mascia  7:48  

Yeah, so many of the people that we have encountered that haven’t actually even thought of themselves as a family office, they really have created one through kind of ad hoc, right, they may have had a great accountant that gave them great advice and lead them to a great lawyer who gives them great legal protection structure, because those are definitely huge increment important parts of the strategy, you can’t, you can’t really protect your wealth without legal protection and structure. 

Whether it be companies or family trusts, or whatever. And that’s  way out of my league of things that I deal with in terms of when and why to set those up, I deal with them in terms of when they are set up, and I have to work with them. And the same attacks, like I’m not a tax expert, but there are people who just plan tax strategy for multi generational wealth planning and things like that, right.

Those things will generally crop up as these things happen. And as those needs and thoughts and planning starts happening. And a lot of times, it’ll end up being also like a wealth manager from a traditional standpoint, or from a stock and bond standpoint, whether it’s  Merrill Lynch, or Goldman Sachs or even just like a local kind of company that’s in their town. 

So a lot of times, they’ll lead them too, hey, you’re, you’re pretty well diversified and maxed out in stocks and bonds, maybe you should consider alternative assets like real estate. So a lot of times your wealth managers will bring us in, and that that would that would start to make sense. But I think the other the other angle of this, that’s also we’re talking about, we don’t talk about it right now, if that’s not the right moment, but it is  while I’m saying 3 million is two to 3 million a year is kind of like where it makes sense for us to come in and strategies. 

I’m sure there’s people who do house flipping or smaller projects, where it might make sense to say, 

Hey  if I found somebody with half a million dollars that wanted to invest consistently, I could build a strategy for them. So I don’t want to discourage other you know, sponsors, or syndicators from thinking that it doesn’t make sense to craft a strategy around someone who’s a smaller investor, or the inverse right for somebody who is a smaller investor than what I just said, but wants to start thinking about this or planning for this. 

In some respects, it’s never too early. It’s just a matter of what can you effectively do. And for us, we just found out that it’s not, we can effectively do what we need to do, or smaller size than that, if that makes.

Taylor   9:58  

Yeah, I mean, if you’re really you’re a syndicators, I’m in the syndication business. If somebody that needs to place half a million dollars a year in say, syndication or whatever, this, that’s just not enough, you’re going to need a few of those guys to at least in the multifamily space, that’s fine. There’s no problem with that. 

But you’re going to need to find a few of them. And at that point, seems like you might as well, well, why stop at half a million I can take somebody that has a quarter of a million or 100,000. As long as they’re accredited, then we’re already in syndication anyway. So what’s it matter? Sure.

Mark Mascia  10:32  

Sure, right. And then it comes down to diversity. So for us, it’s you know, we find  if they have their own ability to source that diversity, so if they work with us, and 50 other sponsors, and they have a million dollars a year to place, they could probably easily get that, that diversity through those people. The problem is  we, when we do the work for our families, we vet everything. 

So it’s basically like, even if we’re not doing the deal, soup to nuts, like we may use a third party provider certain services, we’ve had that service provider, right. So it’s really like, they don’t have to do any thought, any concern, any checking, not to say that they don’t, but they don’t have to  they may choose to do certain things just because they don’t feel comfortable, one decision or another, or whatever the case may be, but they don’t have to. Whereas if you are smaller than that, I can’t help you because I can’t do all those I can’t afford to do all those things for a million dollars or half a million dollars. 

Other syndicators may say, Well, or other people who have less money may say, Well, I’ll do that work myself, all that the 10 sponsors that I’m going to invest $50,000 with. And that gets me the diversity. And that’s why I say, it’s a little nebulous, this term of family office, because  really, anybody could be their own family office. And to your point about the other side, so like, really, there’s two main differentiators. 

There’s kind of like the in house family office where it’s like a true company where I would be, let’s say  let’s say I’m My name is John D. Rockefeller, and I want to set up my own family office, I can hire my stock expert, my bond expert, my real estate expert, whatever asset class and I can think of you my employees, right can truly be people that work directly for me and do nothing else. And that’s not uncommon, right? 

A lot of the bigger families do have that. Richard Branson’s when I specifically bump into their Real Estate Group all the time. And you know, he has his own real estate company within his basically him right. And, and he’s wealthy enough to do that. Not everybody is or, and also, not everybody wants that a lot of our families end up being they have the ability and the wherewithal, they want to manage all those people, right? 

Because it’s not just me, it’s my staff and my consultants and all the people we work with. So what we provide is really what’s called the outsource family office, which is somebody who says, Look, I want to either either I have a strategy, or I want a strategy presented to me that I agreed to, and then I want somebody to implement that kind of  it’s almost going all the way back to like the single family house flip model, which is like the kind of quote unquote turnkey, where it’s like, there’s someone’s doing all the work and you’re just collecting the rent? Well, it’s that on a much larger scale, right? 

We’re doing that for institutional grade type transactions, and all they have to do is say, this is what we want to do. And we go and do it. And even on the even on the rent collection side, like they don’t deal with asset managers, they don’t deal with tenants, they don’t we do all of that.

Taylor   13:05  

Hmm, okay. As you’re filling this out, or building this family office world for me  I’m seeing so much more that’s out there, or, or the complexity of this family office world. And it makes a lot of sense that it would be complex. But think the underlying one of the underlying things that I see here, one of the underlying problems, no matter what they’re doing, is vetting people that are going to manage your money, no matter if it’s the outsource outsourced family office like you provide, or if they’re bringing on the accountants and such and building your own team, managing them absolutely. 

As a whole  canopies on its own, but finding the right people, is also a very important factor. So you know how they handle and again, is understanding to be very broad answer, but handling vetting people like yourself, or any of the people, they might be trusted with a  like you said, 3 million plus dollars a year. I mean, that’s a lot of money to trust somebody with even if you were at the hundred million dollars.

Mark Mascia  14:08  

No, yeah, it’s a great and you know, honestly, like, the most interesting part about when I started kind of navigating this world was kind of seeing that, right. Like, these are people who have  resources that I, when I was growing up, couldn’t have imagined. And I thought it would just be like, super easy, right? 

Just be like, Oh, snap your fingers and talk to the 20 people that you’re super well networked with. And they’ll tell you, the people that you should trust. In many ways, it becomes the opposite. Like most of the families that I work with are very private people. They don’t want people to know that they’re wealthy, they don’t know very many other wealthy people. 

You know, they have friends and family, but they’re kind of tight knit group, they don’t really. And a lot of times, most of them won’t even really talk business with each other. So it’s not like, I mean, literally to the extreme. And some of them don’t even know what the other people made their wealth. And they’re like, Yeah, I don’t know, I think they ran a gym or something. You’re like, I don’t go she did. But okay. Yeah, yeah, yeah. So. So it becomes this difficult problem, right? Because you, you have to build trust with people outside your sphere of influence. But how do you build trust with those people, because they’re inherently coming to you essentially looking to make money from you, right. And sometimes that’s a positive way. Sometimes it’s they want to deliver a service that’s really valuable. But other times, it’s the various right, it’s like, they just see an easy mark or wave. 

So what I find is, like, it’s the hardest part of the whole business is building that trust. And some of the families we’ve worked with, we worked with for over 15 years, and some we’ve worked with for only a few years, but I’ve been working on and working with them for 10 years, right? Meaning I’ve been trying to develop that rapport and trust, and that  confidence in me that I can do things. 

Some of it is is really just kind of doing what you need to do to build that relationship. And like I said, in a normal world that would be coming through a warm lead. But almost none of the families that we work with now, I knew each other before. So I couldn’t say, Oh, just refer me to your three friends that are also wealthy. And this would be a great party for everyone. That’s not how that played out. It would have been great. And I’m sure some people it has worked out that way. 

But for me, it was much more a long slog of like, hey, still meeting with you two years later, I’m still not a charlatan  like, you should trust me and blah, blah, blah. And then others it was also like less time intensive and more just kind of like, Look, you’re worth x, let’s try 150 millionth of x on the first deal. And if I do great, then you can continue to trust me. And if I don’t, then you never have to talk to me again, kind of thing, right? Where it’s just kind of make the barrier to entry significantly smaller. 

That’s something that has worked for us personally in the past. But yeah, I wish there was an easy answer, because the challenges both sides, right, like they want to trust, but don’t and we want them to trust but we don’t know necessarily how to get them to figure that out. So it’s an interesting problem.

Taylor   16:49  

And everybody’s got their own their own things in their mind that that relay and influence how comfortable they feel. And you know, that cycle, I’m not a psychologist at all, but psychologists tell us that we don’t even really understand our decision making processes and many decisions we make. We make them and then we try to understand why we make it right. Exactly. So we got a question here on Facebook live feed. 

Okay, so this is a very good question. So if high net worth and ultra high net worth individuals don’t talk to one another, and they don’t communicate really, then how much do service providers like yourself? Or you know, I’m sure you guys talk in the industry? How much do you worry about messaging of messing up and damaging your own reputation and the others finding out about it? And if bad news travels quickly, faster than good news, though, how much of that is a concern? I mean, none of us want to screw up. Right?

Mark Mascia  17:55  

It’s a really interesting question. Because it brings up an important point. It’s funny how that works, right? Like, I find that when things go well, most of the investors that I know, at the level that I know them, they won’t tell other people not because they don’t think highly of me, or it just it’s just not what they do. But if something went wrong, luckily, it hasn’t happened to us that I’m aware of, but you will definitely hear about it. 

For instance, I know one investor of ours who was working on import export business, like totally foreign world to me, but he was something he was doing with someone else, just because that’s what again, like a family office, they have investment strategies that you are I wouldn’t even think of and they can implement them. And so they were doing this import export business overseas. And the first, the reason he was talking about it to me is he’s like, oh, how come you can’t get returns like this guy. 

For months and months and months, I kept hearing this guy’s getting 200 300 400% of his money is this amazing thing? Well, lo and behold, a year later, he calls me up. He’s like, he’s like, talking about something else. They all have that import export, hammered by a wise like I, the guys left with $200,000 with my money, and I never heard from him again. And he’s like  they go after them, and they sue them. And they tell every single person that they know about this person. And so it’s like, somehow that ends up being the network effect, right? 

If it’s a negative, everybody somehow knows about it, it’ll hit Facebook, hit everywhere. But if it’s positive, it doesn’t seem to make quite the same effect. And I’d say also, like, that may be one of the downsides. I mean, this is kind of the lot in life that we chose, these are the kind of people in organizations and groups that we know. And so that’s what we’ve kind of honed as our expertise. 

I’d say the downside to this questioners point is  if you get somebody at 50,000 100,000, you do right by them, nine times out of 10, those people will tell 20 of their friends or family, or in that network effect is real. I mean, that’s today’s world, right? Facebook, we’re on it right now. And if they buy stuff, you’re this person made me a million dollars, you should call them, they’re amazing. 

They’re great. Like, everybody’s gonna do that. But if I’m ultra wealthy, I’m not doing that, right. I’m not getting on those same social media platforms are Whatever. I’m a very private, insular person. In fact, I want the opposite. I don’t want mark or any of my service providers, even mentioning my name that I work with them. 

Because of just the insular world that I want to live in, and we respect that privacy, I get it, but it is difficult, because it’s not it doesn’t have that same network effect of growth, but it could and the negative side to your point, yeah.

Taylor   20:19  

Yeah, I don’t know. It’s a thought for a second. You’re gonna say, and that man was Bernie Madoff? Yeah. Probably more common than we’d like to think we got to another really good question here from a friend of mine, is watching the live stream. For you do questions, lumped together? How do you hire in your business? And how have you built your team? And I think this translates well to the family office investors there to the vetting somebody like you examining your thought process? So you know, let’s get it out.

Mark Mascia  20:54  

There. Yeah. And that’s a great question. So we actually have a pretty strange team in that we built the company in New York, and all of my original hires were from the NYU real estate master’s program, which is the program that I went to and taught at. And so we hired a lot of those people based on just kind of knowing that program was good. And knowing people that went through there had a certain level of training and expertise. 

Some of those people ended up being  classmates of mine that I knew, and others just were people that went through the program. And originally, that was a really great way to get those people. Because it was kind of like a, like a standard of like knowledge base. But as we moved, we subsequently moved the company  a couple of times. And like I said, it’s in Phoenix a significantly further from the New York area that we started in. It’s been a different challenge, because we’ve kept many of those original hires, though. 

So we essentially have three, three locations where those those people are currently, including Phoenix, which is where we’re doing all the new hires. But I found that most of my hires, least have had some degree of affiliation with us from a friend of a friend or through an alma mater, or through something like that. That’s been almost all of our best hires. 

The only other way that we found that’s been good is we do kind of like an intern program where people can come in, and whether they have an interest in real estate, whether they’re real estate masters program, and it’s the summer or whatever the case may be, they want to kind of work for the experience  we pay them something, but not not obviously, what they hope to be paid when they get out of school, or when they’re done with their training. And many of those people have gone on to kind of build their own job, right. 

We give them the opportunity to basically work on something real. And at the end of that, if they’ve been successful. And sometimes it’s not always their fault, right, sometimes the project just falls flat for whatever reason, like it just turned things they couldn’t control, but, but if they were able to make that project to success, we always give them the opportunity to kind of come on as an employee, not always, we usually try to give them the opportunity to come on as an employee to run that project. 

You know, if they, if the circumstances allow that way, it gives them kind of like, well, no one knows that project better than that person that was running it. And so it’s a good opportunity for them to come up the ranks make more money, but it’s also a good opportunity for us to keep talent that was able to do something that you know, not everyone is able to do.

Taylor   23:10  

So you you develop them and bring them in early. And that’s going to be the advantage of being I don’t know, the size of your company is but it’s going to be the advantage of being a smaller company compared to you know, one of the big names on Wall Street, that’s just an enormous company. That Yeah, I mean, it might be

Mark Mascia  23:30  

developing people. Yeah, it’s true to some degree. But it’s also, I mean, I  I know, people have gone through Goldman Sachs training program. And even at our show, when I was there, I didn’t go through the program. But there were two friends of mine who essentially got picked for this, I forgot they called it like the CEO track or something like that. And essentially, they took them and they rotated them around the country through all the different divisions through all the different things that we did. So property management, development, investment, construction, all the different things that our company at our stone did was a huge publicly traded company. 

It was a lot of time, money, effort and resources that these people weren’t really, quote unquote, producing traditional work like they weren’t, like, I never thought I was always like, what do you actually do, because you kind of have touched everything, but you don’t really aren’t in charge of anything yet. But they were learning, right. And then the idea would be that they would matriculate through the arch stone system, if you will, and, and become higher level executives at some point, because they had touched all the parts of the company that really inspired me, I loved that I thought that was such a great idea. I mean, it’s, it’s a real commitment of resources and time, but I was like, That’s so cool. 

Even if those people don’t stay like they’re always going to remember that company is somebody that really took an interest in their, their well being and success. And both those people  are successful now, today. I’m not, I don’t know, I don’t keep in touch with them as much anymore. But I would, I would guess that they attribute a lot of that, to that to that level. And I’d like to think in some small way, we try to do that, too. So even if they don’t matriculate through our system, and become an employee, and they go on somewhere else, and we hope we help them in some way that kind of, because we’re very transparent company. That’s how we run with our investors. 

Part of gaining trust is we tell everyone, everything from from our investors standpoint, we never hide anything. And it’s true with our employees. Like I rarely will tell people not tell someone something, even though maybe sometimes, like a different CEO, would you know, they said, that’s not really for you to know, it’s like, I don’t really care. You know, like, that’s just, it’s open.

Taylor   25:20  

Nice. I like it. So now that you’ve moved from  primary market to, I don’t know, Phoenix is still a huge place to live. But it’s not right next to NYU anymore. What would you say is the hardest part about hiring for your business?

Mark Mascia  25:39  

Yeah, it’s a great question. Definitely, it’s changed a lot right before it was everybody wanted to be in New York. So it was easy to find talent, because everyone, every young person I could think of was trying to move there. The hardest part was truly paying them a wage that we could afford as a startup company that they could afford to live. And most of our early employees, it was like, they were sharing a one bedroom apartment, like five other friends from college or something. And it was kind of an untenable situation for any extended period of time. 

Meanwhile, that was all we could afford to pay because it was like $100,000  so it’s like that in New York is a poor person’s wage. But out here, that would be a significant salary. And so I think the inverse has happened with with affordability, everything here is much, much more affordable. And so those that live here  can live on a significantly different salary, let’s say. 

But  the talent pool is definitely different, like fewer people are looking to move here than, say, New York, or LA or San Francisco or whatever. I mean, I personally think that’s a mistake. I think there’s a lot of, I think that’s changing, I think there’s a lot of people that are realizing like, it’s not so great to be starving in New York compared to being super rich, or some other city  where there’s still a lot of great amenities and the kind of geographic arbitrage, as we were talking about earlier, makes a lot more that’s but I, I can’t change the world, I can just throw up my opinion. 

We’re lucky that we do have Arizona State University here, which is a huge school with lots of smart  good people, and they have a great real estate program that I’m just starting to become more accustomed to. Being involved with, because it wasn’t where I went to school. And you know, University of Arizona is not too far away, either. 

We’ve got it, we’ve got some good educational people that we just educated people that just have to keep here, as opposed to necessarily bringing everybody in from outside. But yeah, it’s hard. It’s definitely harder. Let’s say that right. And so that’s definitely been a challenge, as we grow is to continue to keep that same level of talent that we want.

Taylor   27:40  

Hmm. Have you started using or tried to use freelancers or virtual assistants in your business?

Mark Mascia  27:47  

Yeah, I mean, we kind of always use some form of outsourcing just because by nature, we were never looking to be like, 500 people. So from the very get go, we’ve used outsource people. The consistency and the quality is sometimes difficult  you find you find a consultant that you really like, and they do really well. I mean, we were just talking about this with web designer, right? Like, I had a really great web designer, and, and I really loved them, and they were affordable, and all this kind of great stuff. 

Then they went out of business, or, or another group that like, not a web design person, but an outsource person that we use, they went and got a job. They’re like, I just made more money working for someone else. And having my own company, I was tired of it. And it’s like, well, that’s great for you, but not so good for me, because that was the only person I was using for that particular service. Right. 

So I think that consistency becomes difficult. But yeah, it’s an amazing world out there. Like what you can get done. I mean, perfect example is the other day, we were doing an architectural rendering for a project. And when I first started literally no exaggeration, I’m I’m old, I’m not that old, that like people were like watercolor hand painting the renderings, right? And it took like, forever, like a month or whatever, I don’t know, forever, right? And it’s like, if you changed anything, literally, one time was raining and they like got ruined. It’s completely like ran on the paper. And that was the only rendering we had because it was watercolor  but now it’s like, I can talk to people in working with a group in India, we’re working with a group in Eastern Europe. 

They can turn around something in 24 hours, because they’re on a different time basis than we are with timescale, and, and you’re doing for like $15 and it’s like, it’s it looks like a photo. It’s like photorealistic. It’s perfect. Yeah. So those kind of things. It’s like, things have changed  insane, even in whatever spent 1015 years since I started doing these kind of things.

Taylor   29:34  

that’s been very similar to my experience, it’s hard to hang on to the folks that are very good and competitively priced, because they either figure that out and significantly raise their prices, sometimes outside of the range, you can really justify on occasion, when you get somebody that’s the right fit, that can handle a job and attack you can fully systematized reasonably well, then it can save you so much time and it’s worked for me. You know, and Tyler gave me a bunch of great questions he asked me to, I’ll give him a shout out. He asked me from bullpen commercial real estate analysis. 

Yeah, I gave him gave him a shout out. Nice. Awesome. So all right. Well, there you go. There you go. He’s a great guy. And he used to live in Richmond, but he has since moved, moved out west. And you know, I was going to say something about being next to ASU, you were a teacher at NYU Business School, have you considered being a teacher at ASU as a part of your employee lead generation, so to speak? Sure, no, it’s

Mark Mascia  30:48  

a great idea, actually. So I started teaching at NYU pretty much right after I graduated just because  when I graduated, I had no money. And I was trying to get back to an alma mater that I felt like gave me an immense amount. Um, so it’s kind of my way of giving back and helping them out because there’s a class that they couldn’t find any teacher to do, and I was like, are fine, I actually know a lot about this particular subject. So I’ll teach that. And I just kept doing it. And I really enjoyed it. 

The students have been amazing. And I’ve actually learned probably more than many of the students in the class just from hearing from the students that have been in the class. So really, that was the impetus was like to learn to meet people and to get back to my alma mater. And so, that wouldn’t have the same thing for Su, because I didn’t go there and whatnot. But But to your point about hiring people, yeah. It’s a great way to meet people, it’s a great way to meet potential employees, it’s just a great thing. And I do enjoy it. Hopefully, some people think I’m good at it, we’ll see. 

It’s been really hard, honestly, because it’s such a big school. Um, it’s been hard to kind of navigate to the right people and get the right opportunity to do something for them  maybe I got lucky at NYU, and that they happen to have this class that they really needed someone to teach that was part of their core curriculum that no one wanted to teach. And I just got lucky, and I never would have happened again. But it’s been hard. I am meeting with someone from ASU next week. So stay tuned. But for now, I don’t do that yet. But I hope I hope to in the future.

Taylor   32:11  

Cool. Well, I that kind of thing. You know, I can imagine take a lot of time to teach a class and you know that that’s a full job on its own, in addition to your  actual business so hard to take the time out during a day.

Mark Mascia  32:27  

So it’s like, it’s like your podcast, though. It’s like  helping people is fun. So it doesn’t really feel like work, right? I mean, doing this, I’m sure. It’s not always like you get up every day, and you think it’s the best thing ever. But if somebody calls in and says, I learned that or this was really helpful, or is it really, I mean, to me that makes it all worth it. Right? If I can help anybody that’s, that’s worth it.

Taylor   32:47  

Yeah, and you’re doing you’re you’re doing the thing that that you like to do, we’re talking about things that you like to work on and talk about. So it’s right, it is a lot of fun. I mean, I, I’ve been investing and stuff in stocks and bonds, since I had a couple of nickels to rub together. And  I knew I needed to turn it into more someday. 

It’s fun to talk to people like yourself and learn myself and help others learn and use the  little bit that I know, so definitely very rewarding. Getting back to the family office side we’ve got, we’re getting so many good questions from the Facebook Live Stream. Here. 

My friend Angel asks, Is it ultimately about liquidity when someone is starting a family office? So that sounds like from what you’re saying it comes down to their annual investable capital? So is it about liquidity or

Mark Mascia  33:38  

not? Yeah, like, as far as a definition, no, I mean, it could be net worth could be  100 million dollars, or $10 million, or whatever number you want to set, and they could they could structure their own family office. But investable tends to be what I consider because if you can’t do something with the wealth, if it’s not liquid, or movable, or  usable, it’s not, there’s not much to do, right. 

If you have 100 million dollar real estate empire that your grandfather gave you, but you can’t sell any of the buildings because its own with 50 partners that don’t want to sell  that’s great, it’s an amazing asset to you are a family office, but there’s not really many decisions, you or a service provider, like myself can add to that to actually make any valuable changes. So while it does not make a family office, it’s really kind of the only interesting component of a family office for a group like myself or or even for them, because if they own a $10 million house, that’s great. 

You’re worth $10 million. But you’re not going to do very much with that, because you live in that $10 million house. Right. So that’s not  that’s not going to be that useful in that respect, and investable. So yeah, it might be the most useful house ever. I don’t mean like that. I’m just saying,

Taylor   34:44  

hey, I’d like a $10 million house. But  I can see that perspective. And we have Richard Wilson on the show. In the past, he mentioned that the family office investors or family offices tend to think about their wealth in terms of three different buckets. 

One of those buckets was they invest in the asset class, or the investment that made them their money in the first place? if they if they started a business and then sold it, then they’ll just go invest in those businesses. And they might know that business well enough that they don’t need, like, advisement from somebody like yourself. So writing, so a lot of sense. Yeah, yeah.

Taylor   35:27  

Okay, Mark. So I’ve got three questions. I asked every guest at the end of the show. Are you ready? Very, yes, I’m ready. All right, great. First, what is the best investment you ever made?

Mark Mascia  35:40  

I think my education was definitely the best. I got two masters degrees, one from George Washington, one from NYU. And you know, they were cheap, definitely. And I paid for them. But they were, by far the best, not just what I learned, I learned a great deal. But the network has been, like I told you employees has been investors has been friends has been everything. So maybe that’s cheesy, but that’s by far, the easiest answer I have is that that was the best investment.

Taylor   36:09  

Okay, but if we were to talk in specific terms, that’s a good answer. I’m not I’m not doubting guys, but for

Mark Mascia  36:17  

real estate holding me to task or holding me the last guy like it, I’m real estate, the by far the best investment I made was in 2010, we bought a couple of single tenant net lease deals at you know, like 10 plus caps, which you know, today are selling it  five or less caps. I didn’t do anything to these assets, except collect amazing checks from amazing tenants that have high credit and didn’t go out of business. 

I didn’t do anything other than buy them at the correct time. And now we’re selling them for a humongous profit. So those deals by far, in terms of the best investment, they weren’t the best thing that I ever did, but they are the best return and kind of you know, proved out like  buy low sell high based on on buying at the right time was was easy to do.

Taylor   37:07  

Yeah, writing that cap rate decompression wave has benefited a lot of people, honestly, yeah, I thought at the right time. Yeah. Right. Right. On the other side of that, what is the worst investment you ever made?

Mark Mascia  37:21  

Yeah  there’s, there’s so many. No, just kidding. No, I probably there are actually I don’t know. I mean, the short answer, and probably the truth answer is all the deals that  we lost out for, like, negotiation reasons. So like, if I put a one hundred thousand dollar deposit, and then something gets messed up during due diligence, and either we can’t buy it, or somebody sneaks in and buys it because we missed the deadline or something. Because those are 100% loss. Now, luckily, those aren’t loss of investor dollars, but it’s still loss of my money, so it hurts more. 

Beyond that, I think the hardest investment we made, we didn’t lose any money on it. So I don’t know if it’s technically the worst investment we made, although, actually, we haven’t lost any investor money on any deals we’ve done. So I can’t use any of those. I said, we lost our own money plenty of times, but invest your money now. But the worst deal we did was our first student housing deal, we had brought an institutional capital partner and manager to deal with that for us. And they essentially quit mid mid deal. So they were just like we don’t want to do this anymore. You know. 

Not only was that really, really hard to bounce back from I mean, we figured it out in the end, like through a long, horrible transition process. But I also say, from my own standpoint, it was early in my career is early in the deal. And I really handled that very poorly. Like I got very angry and kind of like  didn’t handle that transition. Well, let’s say this the company, if they hear my name, probably just say that the worst things about me and I think I look back, like that was probably the worst thing. 

That’s not how I am 99% of the time, but they kind of caught me at the worst possible point in my career on the worst possible  thing and just side side blinded me. So, yeah, take it on, that one has the most pain for sure.

Taylor   39:09  

Fair enough. We’ve all had days like that, or we’re not being honest, if we say we haven’t had a day like that. So at least you know, in terms of not representing representing ourselves, well. days like that, so Exactly, yeah. Okay. And then the last question, it’s my favorite one, what is the most important lesson you’ve learned in investing?

Mark Mascia  39:37  

It’s the constant balance between believing your gut, which I believe to be an immensely important thing, but not blindly. So I think a lot of times people do stuff. And  they feel like it’s the right thing. And so they don’t really fact check it, or they don’t really question it. And so I think that constant struggle, that balance to me is probably the most important thing. It’s the I’m not saying I’ve learned it, like, I know that I’m perfect at it. That’s not at all the case. But I think I know it to be a thing that I need to be aware of. 

That was one of the biggest aha moments in my investing career. Because before it was, doubt, doubt doubt, don’t trust your gut until you have facts and then go forward, and you miss a lot of opportunities that way, or sometimes make the wrong conclusion, because you’re too cautious. But the opposite isn’t also not true. Right? You don’t want to just be like, yep, I know it in my gut. So it’s definitely true. And who cares about facts? Right? So it’s like, and those are obviously the two extremes. And the gray area in the middle is the hardest part where it’s usually living, right? It’s like, Am I really sure? 

Or is this just me wanting this? To be sure, right, in my gut, um, I think that balance is, is immensely difficult to struggle through every single day, but just being aware of it has been hugely beneficial to me just to be like  or, or even having a partner like I have a great partner who will constantly gut check me and say, like, are you sure you are just pulling this out of your body?

Taylor   40:58  

It sounds like, though, from what you said that you might have had that realization about the importance of your gut feeling at a specific time, like there was some event that catalyze you to say, my gut had the right answer, a month ago, or something like that. Is that right?

Mark Mascia  41:15  

Yeah, I mean, that there’s, there’s been tons of those that should have hit me over the head. Lynn said, like, this is the time and then it was really kind of looking back on many of those situations. So I can’t necessarily say like, it was last week, and this is what happened. It was more like, when I look back  we did a 10 year planning. 

Look back recently, when I looked back, I said, and here’s all those things where like, gut was truly right. And I knew it was right. And I still just doubted myself and didn’t happen or the other way where I was like, man, how did we get into that deal? Because I was just like, yep, just trust me, guys. It’s gonna be great. my guts tell me right, and so it’s kind of like realizing that both times with those things went terribly was because I let one lead too much and not the other pay attention at all. And

Taylor   41:54  

I’m finding that that sweet spot? calibrating?

Mark Mascia  42:00  

Yeah, I mean, it’s part of the fun, right? I mean, it’s not it’s not it’s life, it’s a journey. But at least to me being aware of it is is difficult, because I find or is helpful. Rather, I find that, especially if you’re younger entrepreneur or syndicate or whatever. I’m usually one of those drivers. So usually, it’s like I meet a person who’s just starting doing deals know, like, every deal I do is the deal we have to do, and they’re great. 

That’s like their gut saying, like, everything is good, because you’re smart and hungry, and you’ll just make it work. And it’s like, there’s great value in that. And that’s great optimism. And I that’s the only way you’re going to eventually get deals done. But they also see people on the other end where it’s like  but that’s also where you die. By the way, if you do every single deal you do happens to be the deal. 

That’s exactly how you just don’t survive, because you do the worst deal ever first  or whatever. So there’s a balance there that’s needed. But the other way is also true, like analysis paralysis, like I meet 20 people a day, they’re, like, 100 times smarter than me and could do way better. And they just doubt themselves, and I can’t get them across the goal line to be like  this is a good deal. You know, you could do this, just do it. You know, it’s like, they don’t and it’s it’s disappointing. And it’s it’s unfortunate, but it just kind of is the human condition in some respects. Right.

Taylor   43:08  

Yeah, I think that’s right. I mean, a lot of newer investors who are thinking about getting into real estate, just sit on the sidelines and don’t do anything. And I mean, I’ve definitely, especially the beginning, I’ve I certainly felt prey to analysis paralysis. And I try not to now, but it’s a little easier because I’m aware of it. But I’m more of a shiny object syndrome kind of guy. That’s really my thing. Yeah, I gotta stay. Yeah.

Mark Mascia  43:36  

You’re an entrepreneur, man. That’s like, that’s, that’s everybody that if you’re in the entrepreneurial space, you are the king or queen of shiny object for sure.

Taylor   43:44  

Oh, this thing? Yeah, yeah. Yeah. Yeah, that’s Yeah, that’s a whole topic on its own. So Mark, thanks for everything today. Where can folks get in touch with you if they want to learn more and talk about family offices or any investments that you’re working on?

Mark Mascia  43:59  

Yeah, mean? So all the social media platforms, it’s MasciaDev. And you can also email me at Mark@mascia Dev. com or go to our website, www.masciaDev.com . So that’s kind of the best way but yeah, sure. Put all that in the show notes. Because my name is not always easiest to spell. So

Taylor   44:16  

yeah, that’s a MASCIA. Correct. Thank you. Yes, yes, yes, very correct. Perfect. You know, we had to rehearse my pronunciation of it before the show.

Mark Mascia  44:26  

Now you did great. You did great. Great.

Taylor   44:30  

Great. Well, thank you for joining us today. Once again. I certainly appreciate all the time and knowledge and taking time to have a conversation with us today.

Mark Mascia 44:39  

Yeah, no, thank you for having me.

Taylor   44:41  

My pleasure to everybody out there. Thank you for joining us, as well. Thank you for tuning into passive wealth strategies for busy professionals. I hope you enjoyed the conversation. 

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If you know somebody that could use a little bit more passive wealth and their lives, please share the show with them and bring him into our tribe. And we’ll get them along that path to generating their passive wealth and starting their passive wealth strategy. hope y’all have a great rest of your day. Great week and we will talk to you on the next one. Take care