HEATHER EWING: The CRE RUNdown
Are you intrigued by Commercial Real Estate? Join Heather Ewing, CCIM each week as she dives into CRE trends, Deals, and Developments throughout Madison, WI. Learn the crucial role of Mindset in CRE and Marathons! Success leaves Clues.
HEATHER EWING: The CRE RUNdown
Ep. 48 John Wijtenburg - Navigating Financial Crises to Hotel Acquisitions and Entrepreneurial Excellence
Discover how John Wijtenburg transformed his career from navigating the tumultuous waters at Fannie Mae during the financial crisis to thriving in the world of hotel acquisitions and investment management. With a unique approach as a fractional chief investment officer, John shares his insights on the importance of flexibility and choosing the best partners for each project. Inspired by Dan Martell's philosophy from "Buy Back Your Time," he discusses how focusing on what you love and delegating the rest can lead to greater satisfaction and success in the ever-evolving landscape of entrepreneurship.
Join us as we explore the power of consistency in daily actions over chasing numerical goals, particularly in capital raising and pipeline building. Learn about the transformative role of AI in real estate, enhancing tenant experiences and streamlining operations. We also delve into the art of being fully present in both your professional and personal life, with valuable insights from John Wijtenburg on maintaining meaningful connections. Whether you're striving for balance or seeking to optimize your performance, this episode offers a roadmap to achieving both personal growth and business excellence.
Welcome to Heather Ewing, the CRE Rundown. I am your host, Heather Ewing, and today I have an exquisite guest for you. He is none other than John Wittenberg of LXK Group, John welcome.
Speaker 2:Thank you for having me, Heather, Definitely. So we've connected more recently through LinkedIn, so it's really nice for one for me to get to know you more fully, but also my audience, so tell them a little bit more about you. Economist at Fannie Mae. Back in the great financial crisis, we were building the models that determined who qualified for a mortgage modification and what that modification looked like.
Speaker 2:And eventually, in 2011, I moved back to Florida. I contacted every single broker or every single developer in the area you know what do we have? How can I work for you? All these things? And they said, well, you know nothing's doing it bottom of the market and you know nothing's happening, and so maybe you should try a brokerage. And so from there, I jumped into brokerage eventually, which recruited into hotel acquisitions for large hotels across the country, eventually did acquisitions, asset management, capital markets, business strategy and then the whole world collapsed again in 2020 and moved on from that and eventually went into building a portfolio of eight extended stay economy scale hotels over the past four years. And then you know that kind of softened a bit, exited that portfolio in May of this year and started doing fractional chief investment officer work, and so I help real estate entrepreneurs that are not quite big enough to have a full-time chief investment officer, and I come in part-time and help them with financial modeling, underwriting, due diligence, coordination, raising capital, capital strategies all those different things.
Speaker 1:Which is terrific, because I think, more now than ever and I expect this trend to continue people are really beginning to understand the value of coaches, mentors, consultants, and so what you're offering is unique and I see that, like I said, gaining momentum. Is there a particular aspect of it that you enjoy most?
Speaker 2:Yeah, you know I had a lot of challenges through my career and just building these portfolios and marrying the difference between running an investment management business and an operations business. One of the things that I say about myself and the way that I invest is that I'm proudly disintegrated, because I think that there's great value in being able to select the right partners for the job for each investment. And when you have a vertically integrated platform that has operations, construction and investment management all in one platform, sometimes it limits your ability to choose the best partner for the deal. And so one of the areas that I really love is is that business formation, that that institutional design and building your strategy around where you're where you get the most joy and then also where you're most effective, and so if you're really great at investment management, let's double down there and go find partners to do the other things, similarly with construction or property operations. So that's where I find the most joy in helping people.
Speaker 1:Right, and I couldn't agree with you more. You know, vertically integrated is nice if you didn't have all those different contacts, the referrals, and it's really like you're saying of hand selecting the best of the best, no matter where they're at in the country for whichever project you're working on. So I agree with you fully. It's 200% or don't bother, right, right, right. So how would you say that mindset also plays into this right, when you're pulling in all of these greats from each of the niches, the different arenas, how does mindset play into that and how does it help or hinder?
Speaker 2:So mindset is critical. I read a book recently called Buy Back your Time by Dan Martell and I think it's kind of caught fire lately and everybody's reading it now. But the thing that really stuck out to me there is having the ability to identify what it is that you really love doing in your work. Because, as entrepreneurs, what we often do is we end up taking all the hard stuff, the stuff that's really hard and not enjoyable for us, because we don't want to put that burden on somebody else, and what we need to do is shift our mindset to say there are people who really enjoy doing this work. Why don't we find those people? And then they can do what they love and we can do what we love at the same time.
Speaker 2:And so you know, if you, if you think you know, bookkeeping is a drag, but you do it because you feel like you're the only one who can do it, then you're setting yourself up for failure, because it's not in the area where you're going to have the most impact. And so being able to identify those things that you love and then offloading the things that you don't love is so important, especially as you're a growing platform. I think once you get to a certain level, you start to see that a little bit differently and a little bit better. But certainly, as you're a growing platform, you know three, five, 10 assets. You try to take too much onto yourself and so having the mindset to be able to, you know, say, okay, I'm going to make a small investment here, but it's going to have just a tremendous return outside return is so critical.
Speaker 1:Definitely, and I more recently came into Dan Martell too, and more during his book. So kudos to you on bringing that up and it really does make sense. I think a lot of it, when you look of in the 90s and much earlier than that too, of it was always focused on your weaknesses versus strengths, but I agree with you that it makes so much more sense to focus on our zone of genius. We're going to enjoy it more and that's going to help you, whether the the challenges throughout your business Because, as we know, especially in this environment, entrepreneurship is not for the faint of heart and you're going to have to dig in at various levels throughout your journey and at different times. So really honing in on those skills is a benefit. Would you say that it might be challenging for people if they haven't uncovered almost like a permission from themselves to actually live a life that they love.
Speaker 2:I think it is a challenge.
Speaker 2:You know, the permission piece is such an important piece reframe because often we look at our lives and we look at the sunk cost of all the experience that we've already put into what we're doing.
Speaker 2:For me, for example, I thought for so long that in order to be a great hotelier, I have to have the operational experience, and so I discounted all of the investment, asset management, acquisitions, capital raising experience that I had and looked at. You know, I need to be an operator to get the respect of the people in my industry and I was looking for permission that wasn't there. And then when I would go and talk to all these operators and explain what I do, they would say, oh my gosh, I need somebody to help me raise money, I need somebody to help me underwrite a deal, I need somebody who can help me structure and find lenders and vet lenders and partners and all these different things. And I, at that point I realized, you know, everything that I've done leading up to this point is way more valuable than just being an operator or or you know, not just being up being an operator who doesn't have that passion right, because you can always find an operator who has that passion.
Speaker 2:You can't always find an investment professional who understands the nuances and all those different things.
Speaker 1:Which is a clear differentiator and I think to your point also, when you go into these different companies, obviously they know who you are at that point and all of the value that you bring. But until that point, if you were to give them a piece of paper and a pen and say, craft your ideal, they're probably going to have difficulty because it's not a title that you typically hear of and it's a really great culmination of all these different areas that typically people don't have, and I think that's one of the really neat aspects of what you do. What would you say is an area that people struggle with the most when you do come into their businesses, their operations.
Speaker 2:I mean across the board I've yet to meet. No, let me take a step back. I know people who love raising money, but I have yet to meet people who are in operations who think that it's an enjoyable or easy task. Everybody thinks that raising money is just so difficult. It's impossible to get in front of investors, it's impossible to convince them, pitch them, get the meeting, all these things, and it is hard. It's hard just like any other sales job, but at the same time, if you don't commit to it, you don't get results.
Speaker 2:And so I think a lot of the sponsors that I talk to look at it more as a burden, and that perspective limits their ability to go out and raise the capital that they need. The other side of it is that they don't know how to identify an ideal investor profile. They have a certain type of deal that they like and they go out and they take all the advice from the gurus out there who are telling them go after health care workers, go after tech engineers, all these various people, entrepreneurs who are nearing an exit, all these different kind of simple avatars to put on, avatars to put on, and. And they don't think like, okay, well, maybe I should just go out and make a bunch of friends.
Speaker 2:You know and then get referred around, or you know, often, often they think that, okay, the only way to syndicate a deal is through fifty thousand dollar, hundred thousand dollar checks and they don't think like, oh well, if I just add in a zero to that, then I can go from private capital to the middle market. You know, and it's just a matter of targeting RAAs and private, you know, family offices and that type of crowd instead of healthcare workers and the engineers.
Speaker 1:And to your point, if their mindset isn't where it needs to be and if they don't have a clear vision, good luck, right Talk about a recipe for a lot of challenging times and heartbreak with that. What's a trick of the trade for you in helping to get people motivated and to get some of those particular items that are needed to get those lined up, and what's a rough time frame for something like that?
Speaker 2:So in terms of raising capital and building a pipeline, I mean first of all it's all about consistency. I mean you have to have a clear mission to go out there every single day. And so when I look at goal setting, I put less emphasis on the number, so I'm not going to look at, you know, raise 10 million, raise 20 million by a certain time. That's really important that you kind of keep an eye on it.
Speaker 2:But the more important goals there are. What are the things that I can do daily to reach that goal? And so it's how many phone calls did you make, how many emails did you send, how many prospects did you identify? How many meetings did you have lined up for the week, for the month? And so that looking at those key performance drivers are what's going to set you up for getting the particular key performance indicators.
Speaker 2:And so this is like basic stuff from four disciplines of execution or whatever framework, okrs, all those different execution frameworks, from there, from that consistency piece. Having the vision is so important because it allows you to really dial in who you're talking to, and when you identify the right people to talk to, magic really happens, because you're speaking a different language. With a more advanced investment professional, you're not teaching them about the investments. You're teaching about your strategy and why your strategy is better or different or whatever it is. With a more entry level investor, there's a whole education about why you should be investing in real estate. You skip all of that when you get to a different level, and so you just need to be prepared in a different way.
Speaker 1:Which makes complete sense. How would you say AI will affect this arena, between what you do and also real estate?
Speaker 2:So, you see, ai show up a lot, especially the gen AI content that's out there and there's just, I think, what we're seeing across all platforms is that all content is way more verbose, because AI tends to be verbose and it almost feels like a signal that you put more thought into it, but then, when you read through it, it's very vapid, it's a superficial kind of concept, and so you're starting to see that.
Speaker 2:I think, where you'll start to see more concentrated, concise messaging emerge, because people are tired of reading a lot of that AI content you know, right, right. I think where AI is really helpful, though, is in creating these custom GPTs that have instruction sets that let you do faster underwriting, faster evaluations. Does it fit my portfolio strategy? Does it fit the allocation that I have for this Kind of a quick review that usually would fall onto an entry-level analyst or an entry-level acquisitions or originations analysts, and so I think that's something that we'll start to see. And then, in the built environment and operations, I think AI is going to be huge in the next 10 years in terms of connecting the tenant experience with the maintenance requirements and so being able to plan your preventive maintenance better, being able to connect reviews to the various things that are going on in your environment, whether it's humidity levels or smells, or contaminants or temperature, all these different things. That's where I think it's going to be really exciting to see all the sensors kind of come together.
Speaker 1:Definitely and to your point. I think you know who wants to do, some of those brass tacks, things that are very important, but it also allows us to use our higher faculties for having the communications, building the relationships, identifying fears, you know, identifying upside, upside, all of those really important things that we, as humans, excel at so if you take a step back. If you were to look back into your career, let's say five to ten years, john, what is a piece of advice you would have given yourself, knowing what you know now?
Speaker 2:I think the biggest thing I would do is, you know, I would give the advice of just make that call. You know, just make the call, send the email, post the content. Whatever it is that you need to do, just do it. Because the one thing that I realized is nobody cares until they do Right. So nobody's watching you. You have yourself under this microscope because it's all you, but people care a lot about themselves and they don't really care about people who are not really making a lot of smoke or fire.
Speaker 2:So just get the reps in and just do it, because until you do, you don't know what people want or what they think is important.
Speaker 1:And I think that's a prevalent message lately of like, really, you know people, don't be so hard on yourselves. No one else is really watching and, to your point, unless you're Elon Musk, right.
Speaker 2:Or someone of that stature. People really don't care.
Speaker 1:But here's our final hard-hitting question for you what does living fully mean?
Speaker 2:to you. Oh, wow, I love this question. So living fully is a huge part of my life and one of my values personally. So living fully to me means being 100% in everything that you're doing. So if I'm at work, I'm 100% at work. My wife knows that. My kids know that this is where I am, this is what I'm doing. But on the other side, if I'm at the baseball game on the sidelines, I'm 100% there. I'm not sending emails, I'm not surfing the internet or scrolling through social media I'm 100% there cheering on my kids. And same with if I'm at faith or community situation I'm all in. So I think that's so critical, especially in this world where we're connected 24-7 is to understand who we are and who's looking at us and expecting certain things from us, and just being fully there for them. Because, if not, just stay where you're, where your mind is.
Speaker 1:Exactly, and I would say that is perfectly said. So, john, thank you so much for joining me today and please share with our audience where they can find you for joining me today and please share with our audience where they can find you.
Speaker 2:Thank you, yeah, so the best place to find me is on LinkedIn. My name is spelled a little funny it's W-I-J-T-E-N-B-U-R-G. Or you can visit my website, lxkgroupcom. I have a newsletter there called the Hard Corner, so lxkgroupcom slash newsletter to sign up.
Speaker 1:Perfect. Thanks again, john, thank you.