Building a Successful Property Management Company & Real Estate Fund

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David:

Thank you for tuning in to another episode of Loop It In. Today I have the pleasure of welcoming Neil Merin, who I met through mutual friend Daniel Sahai actually a few months ago. Neil is just one of those guys that you could speak to for hours on end as he's simply full of life, full of fun stories, wisdom and life advice. He has done literally everything you can imagine in the world of real estate from being a property manager, pressure cleaning floors, becoming a realtor broker, starting his own firm, raising money, starting a fund, and literally everything in between. Today he's the Founder and Chairman of NAI Global in West Palm Beach, Florida, which is a property management company that manages over 7 million square feet of office and retail space where he buys, leases and also sells commercial real estate investments. Neil, thank you so much again for joining us today.

Neil:

It's my pleasure, David. It's real joy to be in front of you and all your listeners.

David:

Awesome, awesome. Thank you. Neil, give everyone a bit more information about yourself, your background and stuff like that.

Neil:

Well, it goes back a longer way than I'd like to admit. I actually was thinking today. It's 40 years ago in August that I started this company that I'm in. I moved to Florida in 1976. I think I was the youngest person in all of Palm Beach County at the age of 22. An interesting, funny story on that is a boss recruited me. I was making $160 a week in New York working for Gillette Razor Blade Company. I'd been down here at Spring break. I used to go to Fort Lauderdale and Elbo Room and boom, boom's on the beach. I said, "Well, this is really cool." Spring break before I graduated, I made up resumes and left them with various real estate companies because I wanted to be in real estate. That's another story. The guy calls me in July of 1976, and he says, "Listen, my property manager, she's pregnant. She has to take time off. I'll pay you $175 a week." I said, "I'll start tomorrow." Said, "No, no, you have to come in August." I'm like, "All right. Well, I can wait."

It's because I was at 10% pay raise. It was huge. $15 a week. Think about it. August came. I borrowed my mother's station wagon. I packed everything I owned in it and I drove down. I got to Palm Beach County and all I saw were oil tankers, storage for FP&L. I started crying saying, "What did I do?" I went to Worth Avenue because it was the only place I knew about in Palm Beach, and it was closed. Literally, they closed. They had an agreement that if one store closed, they all closed in August. Everybody boarded up in August and left town. I'm like, "Oh my God." Two nights later, my new boss invites me out after work to a drink at a fern bar with TGI Fridays and it was on the water in West Palm Beach. We go there and it's like 50, 60 people. We're walking around and he goes, "This is everybody under the age of 40 who lives in Palm Beach County." I'm like-

David:

Back in the day.

Neil:

They called this area God's Waiting Room because everybody came here to die at the live. Fast-forward 50 years later, and it's like totally the opposite. I mean, everybody's coming here to live. It's a real cool turn of events.

David:

Well, you had quite a story. We spoke offline and you were telling me that you started in property management, managing like 10 units in West Palm Beach. You were knocking on doors to collect rent. I mean, you were doing everything. You were sweeping parking lots, power washing.

Neil:

It was 1976 and everything was small-time. The guy I worked for managed 10 units here, five units there. I think one was as many as 21 units. That was the size of apartment buildings. Yes, I had to sweep the parking lots. I had to collect the coins out of the laundry machines. Well, I was supposed to do that. I'll get back to that in a second. I actually remember there was an unit that was some floors. It was maybe eight units, and it was built in the '20s and it had wooden floors and people crapped it off. I undertook it on my own on a weekend to sand the floors and stain them hoping to get ahead. I mean, I'm just busting everything I can. One day I decide that I'm going to do my boss a favor and I'm going to save him the trouble of counting all the coins from the laundry machines. I go to an office supply store called Halsey Griffith, and I buy those funnels that put dimes, pennies, then you wrap-

David:

Oh, I used to have that.

Neil:

You wrap it and then take it to the bank. I did. I put it all in his desk with the deposit slips laid out. The next morning he calls me in his office and says, "What the fuck are you doing?" I go, "What do you mean?" He goes, "I count the money. You don't." I tendered my resignation by the end of that week because he was stealing the money. That's what he was doing. He actually stole more than that. He stole a lot. He ended up doing federal time like four years later. But I said, "I'm out of here." In the meantime, I'd been going to night school to get a real estate license. There were four people in my class. That's how big it was. In order to get a real estate license in Florida then, as a salesperson you had to take the course like you do now, few less hours. Then they give the test twice a year, once in Tallahassee and once in Miami atop the Holiday Inn at the Miami Airport.

I had to wait until October came around. I was done with the course in May. I had to wait until October to take the exam. Pencil. No calculators. Had to bring a pencil and show all your worksheets and everything. I passed. I got a job with a lady named Sally Burleson, who was a condo salesperson on the beach in Palm Beach. But she wasn't in Palm Beach, she was in Lake Worth. She operated out of three hotel rooms of a nine room hotel that had been abandoned by the beach, and a bank had... The other end of the unit they turned it to a drive-through, and then she had three offices. They're really cool. Each office had three desks and a shower in it. I went there and I'm sitting around and I'm twiddling thumbs. They're all these old housewives, and they had what was called uptime. Every week we'd get mimeograph sheets of the listings and you'd put them in a book and you'd wait for people to call you on them, and then you'd try and sell them. It was like Glengarry Glen Ross-

David:

Wow. Always be closing.

Neil:

ABC. I said, "When do I get uptime?" She said, "After you make some sales." I said, "How do I make sales without uptime?" She goes, "I don't know." They were open Monday through Friday. It was regular business. After about three weeks, I said, "Sally, do you mind if I open the office on Saturday or Sunday?" She goes, "Well, I'll give you the keys, but nobody's going to be here." I said, "That's fine. I'll answer the phones and I'll do it all." She said, "Okay." That week I went to a local sign maker and I had him make a sandwich board sign. I put it out on A1A, Real Estate Office Open. For the next four weeks, people would stop and they'd go, "Where's Worth Avenue? Are we in Palm Beach?" Nothing happened. But I'd close the office after four or five hours. I'd go swimming on the beach. I'd take a shower. I'd go home. It was cheap living. Then one day, a South African couple walked in on a Saturday, off the sign, and by the end of the day, they bought the most expensive condominium in all Palm Beach County, $100,000.

David:

Oh, wow. 100,000.

Neil:

It was the first six-figure sale that the office would ever make. With that, my broker came to me and said, "Listen, now you can't work Saturdays anymore. The other women wanted." I said, "Well, you have to give me two weekdays." That went on for about a year. I ended up working my way out of there and getting my own brokerage license. I actually opened up my own office then. By '78, I opened up my own office. Not the one I'm in now but a different iteration.

David:

You were quite the hustler. I love these stories. You opened your own office, but then it's my understanding that you got out of the market because everyone was becoming a realtor. Is that right? Then you went into commercial real estate.

Neil:

Yes. What happened was I was doing really well with the condo sales. I had a great gig. I was the only young single guy selling condominiums. I'd be pitching women, housewives whose husbands and them owned a condominium. I'd say, "Listen, if you have a daughter, a granddaughter, she's down here for the holidays, I'm happy to take her out." I'd get listings that way. I'd get a lot of action, some of it good, some of it really bad, but it was really amazing. But the more condos I sold, the more housewives moved here, and the more of them had nothing to do while their husbands were playing golf. They all got real estate licenses. I realized that my whole inventory was drying up. I sold myself out of the business and I said, "I got to do something different."

I went into commercial. It was an interesting time, but I was very lucky. After about a year of trying different commercial venues, I hooked up with a guy who referred me a client that turned into a gorilla. It was AT&T, the phone company. They were going through divestiture. It was 1979. The Justice Department said that they had a breakup. They were a monopoly. They were broken into Verizon and BellSouth and different things. They all had to duplicate their facilities. I ended up doing 2 million feet of leasing for them in three or four years. I was young broker in the country. It was phenomenal. That was a stroke of luck.

David:

Wow. Let me ask you, for everyone listening, you have done everything in this industry from A to Z. If you can go back and do it all again, what would you have done differently? Yeah, I'll go with that question.

Neil:

What would I have done differently? Not a lot. Looking back on the opportunities that I had, because I was in an asset market that was growing. There were some minor trips and falls. But I'm still standing and the other people aren't that I competed with. There are things I'd like to do more of. I think that's a better question. Ground up real estate development, which I got involved in from '95 to 2005, was incredibly lucrative. It really gave me the basis for buying my first big house and putting my kids through college and buying a nice car. I mean, from just making brokerage fees to actually having equity position was a phenomenal position to be in. To do it on that level was magnificent.

I actually had dinner with the... There was a client who backed me in the venture. He's about 12 years older than me. We hadn't seen each other in 20 years. We had dinner Saturday night at his place in Bureau. I had to thank him for allowing me to make literally a couple of million dollars with him. This is at a time when a couple million dollars was worth a lot. He said, believe me-

David:

Yes, worth a lot.

Neil:

Honestly, I made $5 million off of five years worth of work. He made 37 million. I didn't realize how happy he was with 37 million.

David:

Let me rephrase the question again. For people listening in, what piece of advice would you give them? What direction should they go? Should they be a realtor, property manager, commercial, start their own fund? Where do they grow?

Neil:

Interestingly, I did a bunch of business through AT&T representation with a guy who ran Trammell Crow of Orlando. This was in '79, '80, '81. He told me the program at Trammell Crow back then was if you... Everybody wanted to be a partner. But the way it worked was you had to be a leasing agent for at least two years. You had to wear out your shoe leather, knocking on doors and procuring tenants for them. Then if you found a project, you would bring it to the partners who controlled the region. They would do the first phase and you'd be the leasing agent on it. But the second phase, you'd get a little piece of equity. That would go on until by three or four years you could be a full partner and you'd have your own territory. It made me realize the value of understanding your market. Your market in all commercial real estate is your tenant. That's the market.

My license plate is actually 1-0-A-N-T-S. TENANTS. The reason for that is that people stop going, "You are an exterminator?" I say, "No, I'm a commercial real estate." The dollar starts and stops with the guy who pays you the rent. Unless you understand that, and unless you understand their business and what they do and what their needs are, you're just going to be second guessing and stumbling along. You can say, "Oh, I'm very fast with numbers. I can do mortgages and this and that and everything," but you're never going to get into a true ownership entrepreneurial understanding of the business without being able to relate to the tenant.

David:

Yeah, totally, totally agree. Let me ask you, if you can go back in time and give yourself one piece of advice, what would it be? In your twenties?

Neil:

I would've stayed closer to the tenants that I serviced so that I didn't lose them to somebody else. Because in those days, there was just so much business and there was nobody to compete with. I had to go on and service the next tenant, the next tenant, and I didn't keep track of my past tenants. I think that servicing the business that you've already done better was the advice I would've given myself.

David:

What does that mean, servicing? Just building better relationships with them?

Neil:

Right. Checking in on them after the deal. Checking in on them three years later. Having relationships with these people.

David:

Yeah, it's all about relationships. Still today. Nothing has changed too much over the years. That's good to know.

Neil:

Except we meet like this rather than in-person.

David:

Yeah. Except the number one most expensive house in Palm Beach isn't 100,000 today anymore?

Neil:

No. It's got a lot more zeros.

David:

Probably 100 million.

Neil:

I think there's a $251 million house listing in Palm Beach now. Tarpon Island. 251 million.

David:

Gosh, that's absurd. Let's see what it goes for. Right now, it's my understanding that you currently manage over 7 million square feet of commercial space. Is that correct?

Neil:

Yeah, that's probably about right. We range between six and a half and seven and a half million annually because properties go in and out of the portfolio. But yes, most of it. The bulk of it's Class A office product, but we do some industrial and some retail also. No multifamily. But that's just our choice. It's not an area we excelled in. We let other people do that.

David:

Got it. That's incredibly impressive. How did you get there and how can others achieve the same thing?

Neil:

One square foot at a time. No. It actually is a building process. I probably have 35 different clients, probably 70% of the portfolio is vested with three or four huge owners that we just do really good work for and they trust us. Those relationships came from being active in the industry, not just... This is a thing maybe I could tell your listeners. My success comes not just from doing my job every day, but being involved in my industry. Speaking at conferences. Asking other people to speak. Organizing events. Attending events. Networking, networking, networking. Being available for people. They're not your customer but they want information. Give it to them, spend the time, show you're interested. It'll all come back to you.

David:

Okay, awesome. Speaking of events, which kind of events specifically are we talking about? Like BNI networking events, CCIM?

Neil:

I am in the CCIM and I enjoy their events. I'm a SIOR, Society of Industrial Office Realtors. I really enjoy their events. BOMA. I've also participated, even though it's commercial real estate, women in CREW, NAIOP. The panoply of all the industry alphabet is all a good playing field.

David:

Got it. Okay. I always love to hear the other side. The side that no one really shows off, which is the mistakes you've made in your career. Give us one or two fun examples of the biggest mistakes you've made and how others can prevent that from happening to them.

Neil:

I don't know if, well-

David:

There were no mistakes.

Neil:

I try and forget the mistakes, but I do remember things I did on purpose or intentionally that cost me money. But I did it for my own benefit. One of the things I do is... 27 years ago, I started taking off July and August. It was a very slow time in Florida. The heat was killer. Nobody would come and look at commercial. Nobody would come and look at property. Even before that, I would actually go to the Breakers and rent a beach chair with a phone with a code on it for Thursday and Fridays because there was nothing to do. My son went to camp in the Adirondack Mountains 27 years ago. We went up for a visiting game. We took a 10-day vacation. We rented a hotel room.

About the third day there, I'm driving through these pine forests and it's 72 degrees. I turn to my wife and go, "Why are we going home?" We went home after the 10 days were up. In October when the leaves were changing, we went back up there to Bed and Breakfast and she said, "What are you going to do?" I said, "Well, I'm going to look at the stream." Then I said, "And I'm going to hire a realtor. We're going to look at houses to rent." The first house I rented for... Now normally you rented for a week at a time. That's what you did. It's been going on since the 1920s, well before VRBO or Airbnb. I rented this magnificent house. It was built in 1938. It had a glass window the size of a Mack truck overlooking a state park. The leaves were all the colors of a tricks box of all the colors. I said, "I'll take it."

We took it that summer. I'll never forget this. About two weeks in, I went to the guy's paperback library and I pulled a book out and his card fell out. This place looked like it was out of Ralph Lauren catalog. Canoes hanging from the ceiling, Navajo rugs. The guy who the house, he was the vice president of Tommy Hilfiger. Because that's why it looked that way. That started a tradition that for 27 years I would go away. I got really into it. I got a computer and I'd be online and back then it was like AOL account. I'd go on in the morning and for 30 minutes I get one email with all the phone calls like three of them.

David:

I remember that.

Neil:

Right. Then in the evening, I get the same thing from my office. Then I'd use the portable phone, not the cell phone, the portable phone, sit out on the deck and call the sender, "Sorry I missed you. I was out all day showing property." One guy insisted that I come down to do a deal with him and I couldn't. I said, "Listen, I can't help you with it." The fee was a whopping $100,000. A lot of money. I walked from it. People said to me, "Did you regret it?" At first I said, "Yeah, I really kind of regret it and everything." But in the end, I think sticking by my gumption that, "I'm on vacation. This is my time. Sorry, I'm going to give up 100,000," that maybe it was worth it. Maybe, maybe not.

David:

There's actually a book, I forgot what it's called, it's a great book of people in their deathbed. What's their biggest regret? It's not spending more time with family. Or prioritizing work and money over family. Clearly you prioritize family over money, which is a hard decision. But long term, I think you look back and you say that was the right decision to make.

Neil:

Yeah, I think my kids, they're in their thirties now, they're finally starting to appreciate me.

David:

Just starting. It sounds like you had a pretty... It sounds like you were hustling a lot in the beginning. Then as you got more successful, you had more of a work-life balance. To become super-

Neil:

I did not have a work-life balance for the first 20 of... So I've been working 45 years. For the first 25 years of it, I did not have a good work-life balance. I would be in my office at 6:30, 7:00 in the morning and I would be here until 8:00, 9:00 at night. Weekends not so much because commercial is not that busy on weekends. But five-day weeks were long. I eventually learned that I couldn't control everything and I had to stop being the total boss. I took in partners and let them run things. Now I'm at the opposite end of the spectrum where I have very senior people that do all the day-to-day decisions, all the corporate running, and basically I'm here as chairman. My job is to think about where we're going to be in a year, three years or five years, not where we're going to be this week or next week. I don't make daily decisions. I'm more of the strategic thinker and let the other guys execute. They're younger-

David:

But for those starting off that are a one-person show or even a two-person team, and they've got to roll their sleeve and do most of the hard work right now, is it needed to kill yourself 16-hour days, nights and weekends in order to become super successful?

Neil:

I don't know, because I think technology has actually cut many hours out of the workday. Now it's getting amazing with GPT Chat and stuff like that. I mean ChatGPT.

David:

ChatGPT.

Neil:

Right. I would sit there writing letters to people that I would then give to a secretary to type up and we'd lick the envelope and put stamps on it. That was time-consuming. Today, I can come in and I have computerized data that spits it out in three minutes rather than me being on the phone for four or five hours. I do think that technology is giving us much more leisure time than I had in the '80s and '90s. I think you have to work as hard, but not as long because the information gathering and the dissemination is now instantaneous. I mean, I remember we were thrilled when the fax machine came out because you could get somebody a document within an hour. Before that the easiest job was FedEx. It was overnight. I was communicating with you three seconds before we started recording this electronically.

David:

Now the world has changed. The thing is, everyone has access to the same technology, so everyone can work faster. Some people still working very hard.

Neil:

Because we all have information. We all have access to not only the same technology, we have access to the information, which is a new phenomena of the 21st century. It used to be that the information, we would keep it close to ourselves because we spent hours and days and weeks and months gathering it, and we'd make a presentation on it. Then there were groups like CoStar and LoopNet that started to glomerate the information and make it available to you. I was a very early adopter of CoStar. I said, "Look, I think we're better off if we all have the same information because then it's not a matter of who works as hard, it's who's the smartest using it." I think I used that information very smartly for the first 15 years that it's been out. It's been about 15 years that that information's been available. I think that separates the brains and the brawn in the industry.

David:

Right. You got to work hard and smart. Fast-forward until today. I believe you told me that people kept asking you to invest their money into real estate. You eventually started a fund in 2019. Is that right?

Neil:

Interestingly enough, between '95 and 2005, we were involved in... We were doing a lot of brokerage business, but we were also involved in vertical development. We were buying or building office buildings, and we did very well with it. We sold everything, my partners and I, at the end of 2005, early 2006. We actually were going to do a venture with a huge institution, but 2008 came and everything fell apart. The world actually crashed in 2008, and it was real ugly. Everybody knows how ugly it was. In 2012, I started to sense opportunity, and I tried to do a couple of deals. But my former partners and the guys who had put up money behind me weren't interested. They just didn't get it yet. Those deals were profitable.

2013, a deal came along. I was appointed the receiver, the court appointed receiver, on a building on PGA Boulevard in Palm Beach Gardens, Florida. Then I went to the building and it was 22% leased. I'm looking at the building and it was a really crappy old building, but they'd taken one floor and they'd done a great job. I said, "This is beautiful." I said, "If we did this to the whole building, it would be magnificent." I got a guy to be my partner for half of the investment and take three floors of the 10-story building as a tenant. Then I decide, "You know what? This is such a good home run. I'm going to let all my friends who are in the brokerage business participate."

I went to really high-scoring brokers and I said, "Look, give me $100,000 and invest it in the building, and you'll get two times your money back." Everybody said, "Sure." One guy didn't have the money, I let it to him. But he eventually paid me. Actually we bought the building for 5.6 million. We put about 2 million in it, and we sold it in 2017 for $19.8 million. Everybody got three and half of their investment. At that point, everybody's going, "Oh, let's go do another one."

David:

Word got out. Word got out.

Neil:

Hey, let's do some more. The building that I built with the guy from Vero, I sold it to JP Morgan. JP Morgan decided to sell the building. It was part of my management portfolio. That was a big chunk. They put it on the market. I think this was March of 2015 or something and there was a bump in the CMBS market. They originally thought they were going to get 58 or $59 million for the property based on the broker's opinion. The bids all came in at like 50 million. I built the building, I managed it for them. They called me every week and they're lamenting to me, "Oh, we're so disappointed. We only got 50 million." I'm on the phone and I go, "50 million?" "Oh, yeah got 50 million." I said, "I'll buy it for 50 million." With that, they said, "You will?" I'm like, "Oh, yeah, I will." I flew to New York. I made a deal with them. I wrote them a check for $1 million, which was every penny that I had liquid. They gave me 48 hours for it to go hard because the due diligence was all mine.

David:

Wow. You were all in, all your eggs in that basket at that time.

Neil:

It included my kids' trust funds, which came out of the first sale. Because I created trust funds with that $5 million profit. My brother who runs Cushman-

David:

I hope there's a good ending to this story.

Neil:

My brother who runs Cushman and Wakefield in New York is the signatory on their trust. I sent him the paperwork. He goes, "What's this?" I told him. He says, "I want in." We went in. Fast-forward, I sold the building last year for 81 million. We bought it for 50 and a half million, sold it for 81 million. I made it all over again.

David:

Do your kids know that you were gambling their trust away?

Neil:

Yeah, they love it. Actually started with them in car seats going past and daddy going, "You guys own that?" Said, "No, you own that." It was kind of funny. Then my brother's friends and my friends and we had more and more. We started buying some other buildings. It got to the point where I said to my brother, "Andy, I can't take 50,000 from you," because normally he wants to give me 100. I said, "Because my fiance's dermatologist wants in, so I have to split a 25,000 a piece." He goes, "That sucks." I was having to cram people down. That's when we got the idea to do a fund. The fund, we just made out and said to everybody, "Listen, you're just going to commit so much money to us. Then when we find something to buy, we're going to ask for your share of it."

David:

Capital calls.

Neil:

That way you're not fighting for 5% or 10%. You're just going to get the same share of all the deal on it. We did that as an experiment. In 2019, we decided to raise $15 million, which meant about 30 investors. We ended up with 17 and a half million. We bought a shopping center and an office building. Then COVID hit. In the middle of COVID, we bought bigger office buildings and we closed that fund out with $350 million worth of assets in it. We said, "This is really cool. Let's do another fund." A year ago this March, we set out to do a $50 million fund. We raised $25 million and we started buying properties. About this time, I started getting a sense that the market was going to change because of interest rates. I stopped taking money because it was going to be too hard to place. I was right.

We finally made the next. We bought three buildings in Boca and West Palm Beach in April and May. Then we didn't buy a building until March of this year in Tampa. Because it was just so impossible. We probably won't buy another building for a good year. The banks aren't lending, especially office buildings. The news in the rest of the country is that buildings are dinosaurs unless they're the newest ones on the block. They got to be converted to residential. There's increasing vacancy and lack of use as people work from home. I'm lucky I invest in Florida. Florida's a growth state. Even as companies shrink down their footprint here, there are new people behind them. The buildings I bought in fund two a year ago have all had positive absorption in the year that I've owned them, like significant positive absorption. It's definitely counter-cyclical in Florida for that product.

David:

Sounds like you have the Midas touch. It's an interesting story because it seems like you were hungry, aggressive, hustling, but at the same time, you knew when to hit the brakes and be patient. Like '08, '09, let's calm down for a little bit. Then when an opportunity that's too good to be true comes up, you go all in and you seize it. Does that sound fair?

Neil:

Yeah, I think the advice I would give to anybody who's looking to do this is believe in yourself and believe in what you're going to do and show people. Put your mouth where your money is and your money where your mouth is. If you don't have money, give everything else that you have. The first deal I did was the guy from Vero. I brokered some deals for him and made some money. I saved $200,000. I had a one-year-old and a three-year-old. I had expenses. He came to me. He said, "You got an opportunity." I said, "Well, there's this deal on PGA." I said, "We need $2 million to buy the land." He says, "How much have you got?" I said, "200,000." He said, "Well, okay. Put that in and I'll put in the rest to be my 10% partner." I said, "Well, what about the building?" He said, "Don't worry. I'll pay for that." Which he did.

He just wrote checks for it. When we went to sell, I got 10% of the profit and he got 90% of the profit. But he had to put in another 12 or $15 million in the deal to my measly 200,000. But the reason he did it was he knew that I had every penny, every penny that I could spare in the deal. He knew we had-

David:

Yeah, you were all in. It reminds me of watching Shark Tank. They love seeing when people are all in, "Oh, I refinanced my house for this business." They love that. To me, the five or six main keywords that stick out about you over time, is you weren't trying or maybe you were trying to get rich quick, but it takes time, obviously. You built up your expertise, your reputation, people trusted you, and you had the networking connections to make it happen at the end of the day when the bigger deals came by. It takes time.

Neil:

I started working and dreamt of being rich, but through my career, I basically wanted to be the best. The economic rewards came afterwards. I wanted to be the best broker. I wanted to run the best brokerage firm. I wanted to run the biggest brokerage firm, which I did for a while. I said this about two or three years ago. I always wanted to be relevant. In other words, I wanted people to call on me for information, to call on me for opinion, to have conversations like I'm having with you today. I think that's an important way to go through life.

If you do that, then the opportunities to make, not the money will come, but the opportunities to make money will come. If you recognize them and you won't recognize all of them, you'll miss some. Warren Buffett had a saying that business life is like a merry-go-round. About every 10 times around, a little gold ring comes out, if you grab it, you strike gold. If you miss it, you got to wait 10 more times before it comes around again if you make it to it. I've been lucky. I've grabbed the brass ring four or five times, and I'm real happy with that.

David:

Yeah, I grabbed it once in March 2020 when the whole stock market crashed by 33%. I was like, "Oh, it's coming back up. In a year, in five years it's coming back up." I went all in. Then four months later, it went to all time highs. You never know.

Neil:

You look back and go, "That was great. I don't think it'll happen again." But there'll be other opportunities like that. You don't want to live every day waiting for the ring. You want live it, creating good opportunities. When the ring comes, you just grab it.

David:

I love Warren Buffett's quote on this. It's, "When others are fearful, you be greedy." When the market's crashing, everyone's scared and panicking. The news is saying, the world is over. You know it's not over. In a few months or in a year, it's going to bounce back. America, especially, always bounces back. History repeats itself, if you don't learn lessons. Every 10 years or so, it normally happens. 2000, 2009, 2020, literally on a dime every 10 years. You just got to wait for those opportunities.

Neil:

For the markets that I play in, the commercial real estate, we have excessively high interest rates. We have the crash of regional banking system. We have a potential national default, fixed areas. That is compounded by nationally, the downturn in value of office products, which may or may not be realistic in all the other cities, but it doesn't make sense here in Florida. But I'm going to take a deep breath and sit this out and buy. I'm figuring by January, February of next year, I can be back out buying again and making deals. I'll bide my time and manage properties in the meantime. What I'm going to do in the meantime is take really ultra good care of the buildings that I own now, or that I manage. Make sure their occupancy stays up, that their toilets flush and the air conditioning is on and the buildings don't leak and the tenants are happy.

David:

I want to take this last section of the conversation to a different direction that you probably weren't expecting, with the caveat that your kids are listening or probably going to watch this after. When you're starting off and you're trying to make money, you're trying to build wealth, you obviously want to build wealth for yourself. But also long term when you have children, it changes your mentality. You want to start building wealth for children. Leave money in a trust fund, like you said. Leave some money for them. Make sure they're taken care of. Now that you've done that, do you think it's good to leave a trust fund for children? Do you see them acting any differently? Are they going to work less hard compared to what you had to do?

Neil:

No. First of all, I have an attitude that there's just so much I'm going to leave to my kids. I have this conversation. I have one brother who's very successful, and another who's not. He has more kids than his. He is so successful that I counsel him so much, "You got to take my attitude." I'm going to leave the kids X amount max. I'm going to give hopefully a minimum of this. But above that amount, it's going to charity. Because I don't want to spoil the kids. I don't spoil the kids now because they have access to the trust funds but for school. My son is buying a new house next week. He was looking at $650,000 houses because he's about to have his third kid. I said to him, "You can't buy for that. You have to spend 850, 900,000." Now he looked at the first house of 650, called me and said, "What a piece of garbage." I said, "I told you."

David:

Depends on what area.

Neil:

Convinced me that I twisted his arm to spend $200,000 more for a house, I should pick up at least half of that. You know what? I'm going to do it gladly because I can. I can't take it with me. It feels good because now I see that that money that I'm setting aside for my children is going to their children. Hopefully if it lasts, it'll go to their children's children. If it doesn't, so I gave everybody a good start. My parents paid for me to go to college. That was their gift to me. It was a great gift. They didn't give me much beyond that until my mom passed away. She did leave me an apartment in Palm Beach, which is really nice. I'm happy where I am. I'm happy for the kids. I actually wish that they had more now because they're both in their early thirties and it's time when they can really use money, but they have to work for it.

David:

Yeah, for sure. What you're saying is you're always happy to help. Most people have the same mentality, I do as well. Education, stay in school, we'll pay for that, obviously. Gigantic lifetime purchases, like a house or a wedding or stuff like that, or a children's big event and stuff like that.

Neil:

Right. It's interesting because that's about it. I paid for school. I gave them each a car when they graduated college, not high school, to be able to drive to and from work. I've helped each of them buy a house. I paid for both of their weddings. I'm going to help with the next house. I'm helping with school for their kids. That feels good. If I go broke doing it, it's worth it. Not that I'm going to. I won't have a private jet. My grandchildren will have a good education.

David:

Exactly. There's actually a great book that's called Die With Zero or Die With Nothing. I think it's Die With Zero. What it pretty much says is your kids will be fine. They'll be fine. But take care of yourself first, obviously. Make sure you never get to zero. But at the end of the day, people try to accumulate, accumulate, accumulate. Then they die and they have millions accumulated and they're like, "Now what? I didn't enjoy it. I didn't do what I wanted to do. My kids needed it the most in their twenties and thirties, and I wasn't there to help them." Now usually when you pass away, your kids are going to be sixties, probably. They don't need it in their sixties.

Neil:

I had an epiphany. Two years ago, I had a medical incident that I nearly died. I turned around and I said, "You know what? I don't have that much time left." I accumulated for 40 years. I was a save-aholic. I socked it away when I wasn't investing it. I didn't spend it. All of a sudden I turned around in the last two years, I said, "I got to spend it before I die. Also, I'm going to leave everybody too much money." I'm still in that role, but it's a good place to be.

David:

Yeah. Well, what the book is saying also is, you should be making an impact with that money today versus when you pass away and then it goes to some charity or fun. Give it to the charity or fund today. Be more involved today when you can. When you pass away, who knows what will happen. But at least right now you can control it.

Neil:

The biggest charity are my children. After they get fully funded, I'll turn to others. I have been gifting, I feel good about it. Alma maters and others have done well with what I've done for them.

David:

For those that don't know, there's actually, I don't know if you want to call it a loophole in the tax system, but it's called a step-up basis. If you invest in stocks or real estate and you and your spouse both pass away, it goes to your heirs, like your children at a step-up tax base at the current value of that stock or real estate. For example, if you bought something 50 years ago that was $1,000 and now it's worth $1 million, it goes to your kids as if they bought it yesterday for $1,000 the day you pass away. That's a great tax loophole that people don't know about.

Neil:

It's magnificent. You have to wait until a life-changing event or ending event to take advantage of it. I've tried to take advantage of transfers that I can do now at a discounted value for lack of control kind of thing. When I set up my kids' trust, they didn't have control of it. I was able to give them money at 50% valuation of what it really was kind of thing.

David:

Speak with your estate planning attorney. There's some good things you can do for sure. I mean, 1031 exchanges. You can do that forever, basically.

Neil:

As long as we have 1031 laws, right?

David:

Yeah, exactly. All right. To wrap it up, any final words of wisdoms for our listeners?

Neil:

I think just be true to your heart. Don't say things that you think people want to hear. Just tell people what you really think. I've always stood by that. For years people would say, "Oh, I'm an opinionated son of a bitch," and whatever. But five, seven years later they go, "Well, he was right and he stood by it." Play the long game and say what you mean and mean what you say.

David:

Yeah. I could tell you from just this call. Honesty, transparency, trust, reputation, that's everything to you. It's everything in success. Also, no one's going to trust you or do business with you if they don't trust you. That's awesome. How can people get in contact with you or follow you online? LinkedIn?

Neil:

LinkedIn. I have a LinkedIn account. You can email me if you want at N-M-E-R-I-N nmerin@ M-H-C-R-E-A-L.com. It's Michael Harry Charlie real.com. You can call my office 561-471-8000. I have an Instagram page-

David:

Are you accepting new investors? No more new investors.

Neil:

... but it's actually linked to my daughter because I did it when she was in college. That's not that active. Yes, I'm still accepting new investors probably I think until December of this year. Then the fund closes. It was a two-year fund.

David:

Awesome. Well, congrats on your continued success.

Neil:

Thank you.

David:

Thank you for joining us. Hopefully we'll have you on another one coming up soon.

Neil:

I appreciate it. Good luck to you and thank you to all your listeners. Let's do it again.

David:

Thank you so much again. Thank you for everyone for joining us with another Loop It In podcast. Please check us out at doorloop.com/podcast for more podcasts coming up soon. All right. That's it for today. Take care.

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