Making Money in The Metaverse and The Future Of Digital Real Estate

David:
This is the BiggerPockets Podcast, show 616.

Ryan:
I’m still buying houses today. I’m still buying apartments and all this stuff, because those things are 100% going to make you wealthy in the long run. There’s no safer investments than buying real world real estate and getting all the benefits that BiggerPockets talks about all these episodes.
The reason I’m bringing up digital real estate and adapting is because it’s going to happen, and there’s just nothing you can really do about it. You have to be prepared that this is going to happen in the coming years. And it doesn’t mean you got to go pivot and do it today, like I’m doing it. You could focus on real world, but also have your toes dipped in this other thing.

David:
What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast. I’m joined today by my co-host Rob Abasolo and a very special guest. Rob, how’s it going today?

Rob:
Good man. Feeling a little threatened, if I’m being honest, a little nervous because typically I walk into the room and my hair takes the spotlight. But in today’s episode, we’re talking to Ryan Pineda who is a … We’re going to have a bit of a quaff off, if you will.

David:
That is hilarious. Have you ever said that word before? Quaff off.

Rob:
Just to him. Just to him.

David:
Okay.

Rob:
I say that we’re going to shoot a YouTube video one day, like a collab, and I’m like, we’ll call it the quaff off, the ultimate quaff off.

David:
And can you explain what a quaff is for most of the people that have no idea what you’re talking about?

Rob:
Everyone’s like, “Why does he keep saying that word? I don’t think he knows what that word means.” It’s like the poof on top of my head, the pompadour, if you will. He’s like my brompadour.

David:
Yes, there you go. If you don’t know what he is talking about, check us out on YouTube, watch our videos there, and you can see, not only Rob’s handsome face, but also his amazing hair, and my lack of.
In today’s show, we get into it with Ryan Pineda, a very cool guy who we originally interviewed way back on episode 292 of the podcast where Brandon Turner and I interviewed him and he talked about flipping couches. He then built a business of flipping houses. He then scaled that into a whole bunch of other stuff. And in today’s show, we get into the future of real estate. We’re talking digital real estate. We’re talking blockchain. We’re talking how NFTs are going to be integrated into syndications. It was some really cool stuff. Rob, what was some of your favorite things?

Rob:
Yeah, man, this is definitely one of those … I’m sure you’re probably immune to this, having done the podcast for so long, but I’m still getting used to this where someone is just so engaging and so knowledgeable at a very niche and specific type of information where you forget that you’re part of like … I’m like, oh, that’s right. I have to ask questions now, because I’m just listening, I don’t know, to the knowledge bombs, if you will.
Ryan’s going to be talking to us a lot about, well A, how he flips a hundred homes every year. I mean, that’s a really big part of this episode, but then we move over to the metaverse, what an NFT is, how digital real estate is the next multi-billion, multi-trillion dollar industry.
And it’s really exciting. I mean, it’s very new and typically this type of information can be very dry and very boring, but I feel like he presented it with a lot of charisma. He made it fun. So I’m really excited for us to go and buy our first piece of land in Decentraland right after this.

David:
Yeah. This actually was a very fun show and Ryan’s easy to talk to. And so are you to be fair. So this is one that you want to listen all the way to the end because we get into what you can expect in the future.
So we talk a lot about what people could be doing right now to make money in real estate, but in the end we get into, a lot of what we’re talking about isn’t super relevant today, but it will be in a couple years. And it’s good to get ahead of the curve. You want to try to move ahead of where everybody else is at so that you’re there waiting when the wave hits you.
All right, today’s quick tip is brought to you by Rob Abasolo.

Rob:
Ooh. Oh, I’m nervous. This is my first quick tip. All right. Quick tip here. If you’re looking to learn more about digital real estate or NFTs or the metaverse get plugged in with relevant Discords. I mean, there are thousands of Discords that can teach you about this stuff. But even more than that, get into the BiggerPockets forums, connect with other people that are investing in the metaverse. I guarantee you, I mean, we have millions of loyal subscribers that are all probably very interested in this very same topic. So get plugged in with the community over at biggerpockets.com.
And then also, if you like this type of information at all, if NFTs and the impact of the blockchain on real estate is something that interests you, please let us know. Drop a comment on YouTube. And if this is something that you want to hear more about, we’ll bring on more, I don’t know, educators to come and teach us about this new, new world that they’re calling the metaverse. How’d I do?

David:
That was great.

Rob:
Wow.

David:
It was awesome. Especially for your first time. Way to go, my man. I don’t hate what you just did.

Rob:
Ooh. That’s a callback right there that people will understand in about 45 minutes.

David:
That’s it. Listen to the show, if you want to hear the comment that I just made. Okay, without any more ado, let’s bring in Ryan. Ryan Pineda, welcome back to the BiggerPockets Podcast.

Ryan:
What’s up, David? It’s good to be here.

David:
Yes. It’s nice to see you again. So we first met on episode 292, where we talked about couch flipping. Then we had you on episode 407, where we talked about how your career had really exploded. And now I don’t even know if there’s an adjective bigger than exploded to describe what’s been happening, but you and that amazing haircut are everywhere.

Ryan:
I love it.

Rob:
It’s right. It gives my haircut, the run for the money. We often go back and forth on who has the better hair. I think the jury’s still out though, personally.

David:
I’m sure that’s what you think. Ryan, what do you think about that?

Ryan:
The first time I became aware of Rob was because he talked about my hair in a video and someone sent it to me. I said, “Who is this? Why does this guy even think he’s on my level with hair?” But I’ll entertain it.

David:
I’m sure that’s something you have to deal with a lot in your world, Ryan, everybody thinking that they’re on your level. If you guys are not watching this on YouTube, you need to be because they have very, very similar hairstyles, but the way that it’s set up right now, they’re both going in opposite directions.
So what I’m thinking is we need to get you guys sitting on the other side of each other, so your hair looks like it’s moving towards each other. And it would be doing that Dragon Ball Z thing, where it’s coming to touch. And then when it does and your powers combine, you two would be an unstoppable real estate force.

Ryan:
Yeah, if we did fusion, it would be really legit.

David:
That’s what I was trying to say.

Rob:
Right.

David:
Thank you. Dragon Ball Z was a little after my time. My little brothers were into it. I never got into it. It was fusion, that’s right.

Ryan:
Yeah, I got some little Dragon Ball Z characters behind me right now, actually.

David:
Do you really?

Ryan:
Yeah.

David:
Can you just grab one and put it on there? Do you have one of them doing fusion?

Ryan:
No, I don’t.

David:
All right. I’m going to see if I can get bobblehead dolls made of each of you in Dragon Ball Z garb. That would be pretty fun.

Ryan:
Oh, that would be sick. I’m with it.

Rob:
This is the greatest BiggerPockets intro that has ever been recorded by the way.

David:
All right. So Ryan, for those that are living underneath a rock, don’t have social media, or are just now getting introduced to the world of real estate, can you tell people a little bit about who you are, what you do?

Ryan:
Yeah. The two second version is born and raised here in Vegas. We’ve been flipping about a hundred plus houses a year for the past five years straight. That was when I first came on BP. It was the first time I flipped over a hundred in a year. Since then, we’ve scaled into a bunch of other companies. We’ve got education, E-commerce, I’ve got a CPA firm, and we’ve recently started buying apartment buildings. In the last about eight months, we’ve bought 460 units. Social media, over million and a half followers I think across all the platforms. And a whole bunch of other stuff I’m probably forgetting. But yeah, a lot of things going on.

David:
Now, when you say we, is this you and your wife, or is this you and business partners?

Ryan:
Well, I guess everything is me and my wife, because she owns half of everything I own, but my wife isn’t active in any of the businesses. She prefers to stay at home and let me just go out and play with my friends and then I can come home and be a dad and a husband. So when I say we, I just include everybody. Some businesses I own fully, just me, others I’ve got partners in. So definitely can’t do it on my own, that’s for sure.

David:
Awesome. Rob, you look like you’re chomping at the bit to say something here and I want to take the reins off and let you go. What are you thinking?

Rob:
No, man, it seems like you’ve had monumental success really in everything that you do. Every company you start is really, really great. So I’m curious when you’re starting a company here, I’ll give an example, I know you do flipping, but then you also have Truebooks, which is a small plug for you. You didn’t pay me to say this, but Truebooks is my CPA firm and I love it. And when you’re starting these companies, is it usually because you have the itch to start a company or is it to just fulfill a need from one of your other companies?

Ryan:
Yeah, so I think when I first started companies, it was to fill a need. So like Truebooks you mentioned, a lot of people were asking me at the time before Truebooks was a thing like, “Hey, who’s your CPA? Who’s your CPA?” Because I was like, “Yeah dude, I love my CPA, Matt. He’s great.” And then sure enough, I started to refer all these people and I’m like, “Matt, why don’t we just start a company ourselves? Why don’t you just quit your job with these other guys?” And he’s like, “All right.” And so we started Truebooks and now we’ve got hundreds of clients across the country.
But I wouldn’t say I wanted to start a tax company. For me tax is something we have to do as Americans, but it was something that was just obviously in demand for the people around me and so we started it. And I think most of the things were like that.
We started a brokerage. We had about 200 agents before we actually shut it down and switched them over to real. But yeah, I would say most of them were just out of an opportunity. And then some of them later on, as my social media following got bigger and as more partners and different things started to come to me, I started to realize I’m only going after bigger opportunities.
And so getting into E-commerce, getting into big funds and multifamily, getting into NFTs and crypto, which we can talk about later. I’m only pursuing things that are much bigger now.

Rob:
Sure. And you’ve mentioned too, you … Is your average deal amount for flipping about a hundred per year? Has that always been consistent, about a hundred?

Ryan:
Yeah. So in 2018 it was the first year we did over a hundred. And since then yeah, it’s been about over a hundred a year. And we haven’t really tried to scale that too hard until this year where we’re trying to do over 200.

Rob:
Yeah, and that’s what I was going to ask. Is there a reason that you’re staying at a hundred or are you being more selective about which 100? Because it seems like scaling, it’s possible that you just stay at a hundred, but you’re just going after maybe juicier deals, more luxury flips for example, which it seems like you’re doing a lot more of that out there too, right?

Ryan:
Yeah, a hundred percent. So like last year, even though we did, I think less deals than the year before, we made twice as much. And the reason was we did some luxury flips, like you said, but also just the market. We just got really lucky with the market appreciating so much. So deals we were saying we’re going to make 30 grand on made 60 or 70. And that happened like every deal, it was nuts. So yeah.

David:
I’m noticing in this market, it’s harder to get in, but when you’re in the deals end up way better than they were. So I’ll hear a lot of people say, “It doesn’t work. It’s too hard to get fixer upper properties.” And it’s true, it is way harder to get fixer upper properties than what it was. But when you get one, your ARV ends up way higher than you thought because the market is out of hand and the same with flipping.
And I’ve noticed that a lot of people are complaining about that, but when it was 2010, and there was tons of deals to buy, everybody was complaining because they thought the margins were too small. It took too long to sell the house, there wasn’t enough people to buy them. So it was easy in, but it was hard on the back end.
And one thing I’ve learned about life and about business is you don’t get both. If it’s going to be easy on the front, it’s hard on the back. And if it’s easy on the back, it’ll be harder on the front. Have you noticed this same trend in the different businesses that you’re running?

Ryan:
Yeah, a hundred percent. There’s no perfect business or else everyone would be there, it’d be so easy. But I will say even with the current market state is just the craziest market ever these last couple of years. For us on the front end, your strategy just needs to change to adapt.
So it’s like, I remember when I first started watching BP, the big thing they talked about was the 70% rule. You only buy flips at 70% of ARV minus repairs. And that was how I grew up learning. It’s like, dude, you’ll never find a deal like that now. And so you have to adapt because things change.
And so, for the longest time I was 80% of ARV minus repairs. And then all of a sudden hedge funds and all these people start coming in and they’re paying market value for homes, and so you start getting more creative with these deals where it’s like there are times where we can pay 90% or more because we know we have a hedge fund on the backside, who’s going to buy it and we’ll still make a lot of money. And so it’s like, you have to adapt on the front end is the point.

David:
I agree completely. And that’s where a lot of the frustration comes from. This is good we’re getting into this because I think probably 80% of our listeners are just pissed because everything they learned about how to understand real estate has changed when the fed started printing all this money, when institutional capital got involved, when wholesalers got involved.
All this education gets spread and now stuff that used to get to the MLS and guys like you or me would be the first people to go after it, it doesn’t even get that far upstream anymore. People pick it off before it gets there. So getting these deals under the parameters that we originally learned to understand real estate from doesn’t work. So you have to adapt, but if you don’t adapt wisely, you end up losing money and there’s risk involved. Are you seeing this in your community? The frustration levels from people that are like, “This isn’t the way it used to be. And now I don’t know what to do.”

Ryan:
Yeah, a hundred percent. And I’ve been in real estate since 2010. So when I got in 2010, I saw that. They’re like, “Man, prices are so low and it used to be so easy to qualify buyers in this,” and whatever, right? And then we just see it progress these last 12 years and you just … There’s always a complaint. There’s always someone who thinks the market’s going to crash. There’s always the naysayers yet, the great investors always make money. It doesn’t matter what’s going on. They always find a way to make money in any market.
And so I’ll share with you, my strategy. Rob asked me this earlier of why not try to scale more? And even though we doubled our revenue, with the same strategy, it was just the market basically doubled our revenue for us, our goal this year is to actually not scale flipping, but scale wholesaling.
I’ve always been a big proponent of flipping because that’s how you maximize profits, but also at the same time, I’ve realized flipping once you reach a certain level, has a cap because to go and try and flip 300 houses is really hard with contractors, with materials, with raising money, but to go wholesale 300 houses, I don’t want to say it’s not hard, because it is hard, but it’s easier.

David:
Especially with institutional capital stepping in and paying the prices they’re paying.

Ryan:
Exactly. And so we’re seeing that now where it’s like, man, there are deals where these guys are paying so much that we might make pretty close or the same as we were, if we flipped it and we can go wholesale to them direct. So instead of taking on all this risk with borrowing hard money and all this stuff, why not just put all that money towards marketing and just try and get a ton of deals. Like let’s go double or triple our marketing budget instead.

David:
I’m glad to hear you saying this, because you’re clearly successful at what you’re doing and it’s because you’re adapting. I think a lot of anger in our community comes from someone saying that house is not worth that much money. Somebody paid that much money, therefore a bubble should be about to burst, a correction should be happening, because people are overpaying. And from my perspective, a house is worth what someone’s willing to pay for it.
If that hedge fund has a 10 year horizon or 20 year horizon, if they can borrow money at 1.5%, but you got to borrow it at six and a half percent, it is worth that to that person. Now that’s what’s changing how much real estate is valued. Are you seeing that as well in the Nevada markets where you’re operating?

Ryan:
A hundred percent, dude. Hedge funds have been here for a while. They love Las Vegas because the homes are newer, we’re growing. It’s just a great market. One thing I’ll say about the hedge funds and I did a YouTube video about this is I’ve been watching them since 2010. I remember watching Blackstone come to the foreclosure auctions and pay market value on every house.
Everyone’s like, “Those guys are idiots, what are they doing?” I was one of those dumb idiots calling them idiots. And sure enough, they knew. They’re like, “This is the best opportunity ever. We’re buying every house imaginable that we can get our hands on.” And so they did it.
And then you see it still today, these hedge funds are all buying, they’re paying over everyone else, cash. They’re so dumb. It’s like, no, these guys are not dumb. These are the smartest people in the world. They know things that we just can’t even understand. And they have a different business model, like you said.
But the one thing I’ll say that’s different this time around than 2008, is that because the hedge funds own so much real estate, not only just single family, but apartments and other things, these guys ain’t liquidating their properties. They don’t have to.
So whenever people talk about rates being raised and all this stuff, I’m like, I get that, it’s going to slow it down, but the only way you go into a recession in real estate is when just there’s this massive amount of supply and no demand.

David:
And not enough demand.

Ryan:
And where’s the supply going to come from? The hedge funds aren’t selling. The moment a hedge fund buys a property, just pretend that property’s gone forever because it’s not hitting the open market anymore. And if it ever does change hands, it’s just selling to another hedge fund and they’re self dealing.

Rob:
Yeah. It’s the more likely scenario, right?

Ryan:
Yeah.

David:
I’m so glad you’re saying this because on our podcast I’ve been spending more time talking about macroeconomic trends, like what the fed is doing with money. So you mentioned that your revenues have doubled, even though your work was the same. The problem is what that money’s worth is definitely not the same. So you probably didn’t double the actual purchasing power, you’re just trying to stay ahead of inflation.
And that’s something that institutional capital hedge funds understand. They look at the big picture, they see how much money our country is printing and they say, “That’s going to force real estate values up. If we can buy real estate, even though we don’t do it as precise as the mom and pop investor that really analyzes that deal specifically,” they just go in there and buy it sloppy. But those macroeconomic wins at their back are so big that it makes it make sense.
And I’ve sort of adapted my strategy based on what I see them doing. Obviously I can’t do it at the rate that they’re doing it at, but instead of saying, all right, I’m buying this property based on what it’s going to perform like in year one, I’m saying, okay, if I own a property for 10 years, what’s going to make it make sense?
Now the area starts to matter a whole lot more than just whatever the spreadsheet showed right away. Hedge funds have a lot of money in reserves. They’re not short on capital. Okay, so if something happened and values went down, like you said, they’ll never have to sell that home because they have so much money. Are we all keeping money in reserves to weather this storm?
You’ve got to adapt what you’re doing. And maybe that’ll be the theme of today’s show is how to adapt, because you’ve got it down. And I loved hearing your perspective on the ways that you’re adapting. And one of them, like you’re describing, is getting into things that are not just real estate. You talk about digital real estate. So how did you get interested in that concept?

Ryan:
Yeah. So I got into crypto back in 2018 on that first hype train where Bitcoin hit 20 grand. I was like, dude, I’m buying some of this. I don’t even know what I’m buying and I bought it at 20 K to watch it crash right after. And then the next couple years I said, dude, crypto’s stupid. It’s just a hype thing, whatever, because I got burned.
Well, around 2020 when the pandemic happened, I started looking closer into it because I started to see more people talk about it again and why it was important with the government printing all this money. And I started just learning about how the federal reserve worked and all of the issues with it, and how we print all this money. And this was before we printed all the money, by the way. Tons of books I read were predicting that this money printing was going to happen based on our current supply.
And so short story, you see it, Bitcoin skyrocketed and Ethereum and all these things skyrocketed and you start seeing all these other companies taking it seriously now, financial advisors. And people like Chase saying, “This stuff is a scam, it’s stupid too. Yeah, we’re now opening it up only for our richest people.” And so I’m like, okay, cryptocurrency is going to happen and it’s going to play a big role.
But then what I didn’t realize was man, there’s this whole other side of the coin, that’s actual utility beyond just being a currency. There are these things for blockchain and for NFTs where real estate is going to be dramatically affected. And the more I started researching it, the more I was like, this is the future. I’m a hundred percent convinced that real estate is going to change so fast in the next five years with blockchain and crypto. There’s no doubt about it in my mind.

Rob:
So for the people at home, could you give us a very … Just explain like I’m five, what the blockchain is. And then maybe we can start talking about some of the applications of that to real estate.

Ryan:
Yeah. So without getting too technical, the blockchain is just really a way of keeping account of who owns what. So right now, the way we keep account of the money in the bank is the bank has their little ledger of all our credits and debits, just like we see. And we basically pay the bank to do that for us, whether we know it or not. They’re making money by providing that service.
And so when we want to go give money, if I want to send you money, Rob, I send it to your bank and your bank tells my bank that, hey, we agree, this happened. Ryan sent Rob money. And the banks are the ones who do all of these transactions for us. Now there are a lot of issues with this. One is the bank can shut our accounts down or freeze them at any moment, we have no control. Two, we can’t wire after one o’clock. It’s the dumbest thing ever. We can’t receive a wire after three o’clock. We can’t wire on weekends. And it’s just this whole deal of everything the bank restricts us with is just something we’ve been doing forever.
Well, blockchain solves that issue plus so many others. Instead of needing a bank to verify that things are happening, the blockchain can do it publicly. And essentially, without getting too deep down the weeds, the public is the one verifying. Imagine that a hundred people are watching Ryan and Rob transact this deal. And they see that Ryan gave Rob a thousand dollars and they all record that on the blockchain. They verify it. They know that yeah, okay, Rob now has a thousand dollars more, Ryan has a thousand less. We verify this and it’s done. And this happens 24/7. You don’t need banks. You don’t need anything.
And guess what? Nobody can shut down my wallet or my money. I own it, 100%. The government can’t take it. I can send Rob money at midnight if I want and he’ll get it really fast and people will verify it. So the blockchain is great for that. And this is why we call it decentralization because you don’t need any central authority to verify these things. And so once you understand that concept, it opens up the door to do these types of transactions in all the ways we can think of with real estate. So it’s really exciting.

Rob:
Yeah. Well, I agree with everything you said. I was going to say that, but you said it pretty good, so I won’t even expand on it.

David:
Let me ask you this. Here’s a question I would have. Venmo seems to operate the way you’re describing, but that’s because Venmo is still tied to a bank account, right? So it’s an intermediary that lets you move money through this channel. And then during banking hours, it can be moved into an account. Would blockchain be serving the same purpose, but without the intermediary?

Ryan:
Yeah, I don’t think you need either. You don’t need Venmo or the bank, because you just have your wallet and you can send direct without anyone.

Rob:
And Venmo still has its limitations too, because I sent someone 2000 bucks last week and then I had to send someone else like 2,500 and Venmo was like, “Oh, you’ve reached your limit for a week.”

David:
Yeah, that’s a good point. And they force you to use emojis, which I can’t stand. I think that’s also why Venmo exploded was they were the only app that got people using emojis versus all the other ones that were doing the same thing.

Ryan:
Yep. Yep. So they have their limitations for sure. And I mean, that’s just the most basic form of transferring money. When you start applying this concept to real estate, you realize this is the future. And so the first and easiest technology that everyone can make blockchain applicable to for real estate is the actual chain of title on a home. So right now title companies make so much money. Title companies’ margins are crazy for what they make on the title insurance they charge.
And the reason they give title insurance is because they’re basically saying that, “Yeah, if Ryan is selling this home to David, we’re verifying that Ryan’s the one signing, he’s the true owner and that this transaction’s legit. And if we screwed up by any way, David, you’ll get reimbursed in some type of way.” And that’s the ideal scenario, but I’ve had multiple title claims that never get paid. So that’s a whole nother subject. But title companies are there to do that, to prevent fraud and make sure that the deal goes smooth.
Well, on the blockchain, if a house was on the blockchain, there’s no dispute who owns it. It’s public for everyone to see. And there’s only one way to transfer that house, it’s whoever has that house in their wallet, that the ownership, basically the deed would be in your wallet. Think of it like a receipt. If I have the deed right there in my wallet, nobody can ever fraudulently do that unless they stole my wallet or something like that, which is a whole different game.
But as far as the actual transfer of title, the moment I transfer to David, everyone sees it, we know David is the true owner. So it eliminates the needs for title insurance and things like that. You’re definitely going to always have an escrow company to bring two people together, but the cost of selling a home should go down significantly with blockchain. And it’s only a matter of time before cities and different counties start adopting this.

Rob:
I mean, my city just started allowing me to pull permits online, so I’ll wait patiently first. Start with a place like LA that’s just like, their bureaucracy’s just crazy man. But I like this idea a lot. So I think my question here is theoretically, I hold the title in my wallet, good to go. And you said, unless your wallet gets stolen. So does that present any kind of … because people get hacked all the time, usually because they’re careless. Well, that’s most of the time why. So is that a concern? If you hold $20 million worth of real estate in a wallet that could burn down in your house or anything like that?

Ryan:
Yeah, great question. So to answer that question, basically as this new industry emerges, there’s going to be a ton of businesses built around this whole industry. And I’m calling digital real estate, anything that has to do with Web3 and real estate, AKA crypto and blockchain and stuff.
So there’s going to be businesses that are built for the specific purpose. Some will allow you to, basically they’ll hold your wallet for you. You don’t trust yourself, you’re like, “Hold my wallet. I’m going to pay you a monthly fee to do this.” And that business themselves will have insurance to ensure if they get hacked or they lose it, they’ll have economies of scale where it’s like, they’re holding billions or maybe even trillions of dollars of real estate in deeds that if they get hacked some way, there’s an insurance claim on it versus everyone getting insurance for this. So there’s going to be a business that pops up for that.
But one point to think about with the title company is, I know, like 10 years ago, when I first got into real estate, to record the deed at the title company, they had to literally run the deed to the public recorder and give it to them physically. It was crazy. That was 10 years ago. And then five years ago or something, they all of a sudden start saying, “Yeah, we can E-record now.” And so they start doing E-recording and that’s a game changer. And then in COVID they start saying, “Well, you know what? We can do virtual notaries now. We don’t have to have this whole thing in person.”
So the trend in just the last 10 years is going towards more and more tech, more and more virtual. And when you start to realize the limitations that we’ve placed on ourselves of, why can’t you sell a house on the weekends? Why doesn’t it get recorded if you missed five o’clock? It’s so dumb because it doesn’t have to be that way.

Rob:
I agree. I mean, it just is, it is the way, so we have no choice, you know what I mean? And I always say this because there are so many companies that disrupt what we’ve been used to. Forever we thought taxis were the only option, then Uber comes. Boom, on demand. Hotels were the only option. Airbnb comes along, boom, a hotel on demand at someone’s house.
This is something like that, where we only know title companies, we have to abide by the old dinosaur rules. And now effectively, what you’re saying is we’re still going to have all these different companies that are protecting and ensuring and holding, but it’s all becoming digitized and it’ll be digitized on the blockchain.

Ryan:
And it’ll be cheaper, that’s the big thing. Even though new companies will emerge, tech always makes things cheaper. If you think about a Tesla, a Tesla should be so expensive with what it is. The amount of technology that car has and how much better it is than a car 10 years ago. But you can go get a Model 3 for not that much, right? It’s crazy, but that’s how tech works. It gets cheaper and better. Cell phones are the same way, TVs, everything.

Rob:
TVs. Yeah, TVs. I remember I bought a 32 inch TV back in college for $800 and that same TV now would be like, I don’t know-

Ryan:
A hundred bucks?

David:
I say that all the time, TV’s are the only thing that gets better and cheaper over time. Other than maybe cell phones, even though-

Ryan:
Well, I’ll say David, it’s all tech. Cell phones, cars are getting better. Like I said, it’s everything about it with tech. It’s called Moore’s law as far as tech exponentially getting better.

David:
It becomes more efficient, yes. So let me ask you this, Ryan. This is a complete side note. I don’t want to detract. If you were buying a luxury Airbnb, knowing that TVs have an insane ROI in what you’re spending, would you put TVs in every bedroom to really blow away the guests?

Rob:
Oh, here we go. Here we go.

Ryan:
Well, I’m actually NFTing and Airbnbing, which we’ll talk about later. But I didn’t plan on putting TVs in every guest bedroom, no.

Rob:
Thank you.

David:
It’s not about them watching it, it’s about the impact it makes because it’s only that TVs are so cheap. I guess point goes to Rob though. Ryan sided with you.

Rob:
Yeah. We were fighting on how many rooms in our eight bedroom Airbnb needed a TV. And I was like, “Crazy idea. What if we just made people talk?”

Ryan:
Yeah.

Rob:
Nature’s television.

Ryan:
Yeah. I wouldn’t put eight TVs in, no. But hey, I’ll bring up another point. So title companies are great and that’s going to change for sure, but there’s so many other applications. I just started a fund. We recently bought 460 units and we’re going to try and buy over a thousand this year. And starting a fund is not an easy endeavor. You got to raise money.
But I’ll tell you as somebody who’s raised a lot of money, the biggest problem with starting a fund is I have to get investors to let me hold their money for the next five years, because this stuff doesn’t happen overnight, like a flip. A lot of my flip investors are like, “Yeah, it’s great. I get my money back in four to six months. It’s awesome.”
Well, with the apartments, it’s always, hey this is a five year play. We might get your money back sooner if things go well, but just know your money’s locked up for five years. So there’s a lot of investors who don’t invest in funds because they don’t like their money locked up.
Well, if you were to make your fund into an NFT and essentially create shares of your fund, I could say, hey, you know what? We’re raising 10 million for this building. I’m going to NFT it. Each share’s worth $50,000, whatever. And you now have the ability to hold that NFT and sell it at any point that you want.
That brings a whole new element to funds that is going to happen, because right now, if the market goes up this next year and all of a sudden the building we bought is worth a lot and they’re really happy about it, but maybe they have a liquidity problem, they ran out of cash for something. Or maybe they think the market’s going to crash, they don’t agree. They’re like, “Dude, I need to sell.” And I’m like, “Well, you don’t really have a say.” Well, they’re like, “Well, I do have a say, I can just go sell my own NFT.”
And it’s great because it doesn’t affect me as the fund manager, because I still have the building and the money, but they can exit out of it and get liquidity based on their own needs. And so if that $50,000 share went up to 75,000, they can cash out today and not worry about it. And somebody else can take that share and say, “Yeah, I think this is going way up. I’m super hyped you want out of this because I want in and I couldn’t get in initially.”
And that’s going to cause funds and everything else to be this whole new game, which I’m super excited about because it takes all these investors who didn’t like funds because of liquidity and now allows them to get in these deals. And it allows guys like us to create interesting deals where we could go buy whatever. You guys just did your Airbnb, we could have NFTed that and said, “How would you like to own a piece of Rob and Dave’s big $3 million thing? I’m going to sell off NFTs of this. You guys will share in the profits and we’ll do all this stuff.”
It would be so epic and that is what’s going to happen because it’s already happening. The tech is here for that. It’s already here, it’s just not mainstream. The moment it starts becoming mainstream, you will not be able to do a fund without it because your investors will demand it. And it costs you nothing as the fund manager to do it and structure it this way. So that’s going to be something that is huge.

Rob:
Yeah. I love the liquidity of this and this is something that I’ve been really following along, learning a lot from you honestly about, I don’t know, this new twist on the fund, if you will. And I guess I have a few questions on this.
So let’s say that you NFT your fund and someone goes from $50,000 in their buy in to 75,000, they buy out, great. Let’s say that it goes from 50,000 in value, let’s say market, quote, unquote, “crashes” and it goes to 25,000 and then a stream of those investors freak out they just cash out. Does that inherently hurt the value of that fund or of that property? Or is the property somewhat protected because it still has the real estate as collateral?

Ryan:
Yeah. So I mean, for me as the fund manager, obviously it sucks that the market crashed. In the real world, yes, the property lost value in that scenario, but it’s not like we get a margin call and we’re forced to sell the entire property because all these other people want to sell.
It actually is great because I still get to have this property and we get to ride it out until things get better, and we get to swap investors for people who actually believe in it. There’s going to be other investors who are like, “Dude, this is a steal. The fact that I get to get this for 25 grand, this building’s worth way more than that in the next three to five years. And I know that these investors don’t want to wait, that’s cool, but I’m happy to get into this.” So it’s just in either scenario, good or bad, it’s the right way to do a fund and raise model.

David:
You’re basically kind of turning it into a stock.

Ryan:
Yep.

David:
You’re buying a share in a company. You can sell that stock to someone else that wants to buy it. If you personally are invested in something and you’re like, man, I want to buy my own house, well, you can sell your share, use that money to go buy your house. Somebody else just sold a house and maybe they need to put their capital to use, and so they can take that five year horizon. Is this what you’re referring to when you talk about digital real estate?

Ryan:
Yeah. So it will do all of that and the fund is great as far as NFTing it goes, but when I say digital real estate, I am talking about the entire industry as a whole. This is going to be a multi-trillion dollar industry here in the coming years.
I saw an article about a week ago from Goldman Sachs and they were talking about how they’re starting to see real estate with crypto, this digital real estate become its own tradable asset class, which is what you were referring to. They’re going to trade these shares and these NFTs heavily, because it just makes real estate, which is traditionally illiquid, liquid. And you could NFT any property. That’s where the future is.
But there’s a lot of other parts to digital real estate too. So the fund is one portion. The title is one portion. The other portion of this is the whole metaverse. And that’s what most people think I’m talking about when I say digital real estate, but my first thing is like, how do we get the real world underway first? Because that’s where easily the safest and most applicable ways to do it are.
But in the metaverse that’s a whole different ballgame that’s going to be huge too, but the risk is extremely high because there’s a whole bunch of different metaverses. There’s going to be a ton that pop up. Which one’s going to work? Then it opens the question of what do I even do with all this land I’m buying in the metaverse? And we could talk about that too. That’s a whole other industry that’s going to be huge.

Rob:
Yeah, I’ll touch on that. But before we do, I wanted to ask on the fund side, because I know there’s a lot of people that are invested in funds in the BiggerPockets community, if they all own NFTs in this fund, and then you as the fund manager decide, oh, hey, the property has appreciated $7 million, can you go and sell that property if the ownership is in this like locked NFT that’s in someone’s wallet? Does that make sense?

Ryan:
Yep. Yep. So there’s a lot of third party companies right now that will set up these funds and basically tokenize them or digitize them. And so the way they’re set up is that when the fund manager does sell, those shares get paid out for whatever the principal was plus any profits and stuff like that. So it’s all written into the smart contract and all that. So they’ll still own the NFT, it just really won’t have value anymore. It will be like a certificate.
And for everyone listening, most people are still like, “I don’t even know what an NFT is.” So the way I always tell people what NFT is, is it’s not just a picture of a freaking ape or anything. An NFT is just a receipt, that’s all it is. And so the receipt that you own this house, the receipt that you own this art, the receipt that … Like Gary V, he’s got VeeCon coming up. This is your ticket to the event.
And so at the end of the day, when you go redeem that ticket at the event, theoretically, it’s lost its value because you used it for that event, but you still have the art and the NFT and that has sentimental value and collectible value too. You think about all these people who have saved tickets for concerts and sports games and things, it becomes a collectible. Imagine having every ticket of all the VeeCons you went to or any concert.
People have been doing that forever in just physical tickets. So that’s kind of what would happen with the fund. It would have a history of like, yeah dude, you want to know what I invested in? Look at my portfolio, here’s all the tickets of the NFTs.

Rob:
And I got this payout once the fund “ended,” quote, unquote.

Ryan:
Yeah.

Rob:
Okay, cool. So let’s move into the metaverse because I think that this is where it really starts to get very, very interesting, very conceptual. So can you walk us through the idea of the metaverse and then maybe some of the platforms associated with it to help make it a little more tangible?

Ryan:
Yeah. So with the metaverse I’m sure people … If you haven’t seen Ready Player One, I would say go watch that. That’s the dream of the metaverse. People literally just go there, they hang out, they play games, they do stuff. You got your own virtual land and house. We’re not quite there yet, but there’s plenty of metaverses like Sandbox, Decentraland. The Bored Apes just launched their whole metaverse called Otherside, which was the biggest NFT sale ever. I think they did $320 million of land sales in 24 hours. Freaking crazy.
But in these metaverses, the way you got to think about them is the same way you think of commercial real estate. So what gives a piece of land value in the metaverse is the same thing that gives value on land here in the real world. So the reason Las Vegas is valuable, where I’m at, versus, I don’t, know some BFE town in Midwest, I don’t know, is that Vegas has a lot of people here.
We have casinos, we’ve got wealthy people, we’ve got jobs, we’ve got pretty good weather. And the reason that houses in Detroit are worth $10,000 is because whatever, people don’t want to be there, there’s bad weather, there’s crime. That area is just not great. So the land itself is there, but people just don’t value it. And so there’s going to be a ton of other metaverses that pop up, but if there’s no one there and nobody values it, then it doesn’t have value.
And even if you look at the earth today, I think I saw a statistic that 10% of the earth is actually used as far as the land. So that means there’s 90% that’s not valuable at all. If I go drive to California from here to Vegas, I’ll see land all day, but nobody values it. Nobody lives there, there’s no proximity, but it’s there.
And so I think people need to get that out of their mind that land in the metaverse is infinite and therefore it can’t have scarcity or value. That’s just not true. The world has pretty much infinite land that we’ll never fully use.
So in the metaverse what you want to do is be in the right places where there’s the right people, the right attention, et cetera. And then when you buy these pieces of land, it’s the same way here, it’s like, how big is the plot? Who’s it next to? Is this land next to Snoop Dogg or someone else? Is it downtown where all the things are happening? What can I build on here?
There’s always going to be just like in commercial real estate, we can do different exit strategies. Are we going to build a multifamily? Are we going to build a storage? Are we going to build whatever?
And granted you’re not building that in the metaverse yet, but you can build cool buildings on there that can represent your own business right now. You could go lease the land to somebody else who has a plan to build. You could go start building for other people. You could have games in a store right there. The list goes on and on, on what you can do with a piece of land to monetize it.
And the beauty with digital real estate, at least in the metaverse is that you don’t have all the headaches that you have in the real world with maintenance and with tenants destroying property.

Rob:
Yeah, natural disasters.

Ryan:
Evictions. Dude, evicting somebody in digital land, you just kick them out, they’re done. So it becomes easier on that. But yeah, I would just say for valuing it, it’s really just the same way we value real estate out here. Just like if you go look at commercial real estate and you see all the foot traffic, they’ll tell you, “Yeah, there’s this many cars that pass it every day.” You can get that data too in these metaverses of this is how many people interact on this platform every single day, here’s how many are hanging out in this sector. And you would just learn about new developments that are happening.

Rob:
You’re investing with some obviously amount of education and hypothesis behind why you’re buying land in the metaverse, but effectively you’re hoping that where you invest becomes the it factor. It’s like an LA, a New York, a San Francisco, that’s where a lot of cool things are happening, and thus people want to buy land in that section of Decentraland or Sandbox or whatever the Bored Ape one was.

Ryan:
Yep. It’s totally speculative right now for sure on which one to buy. And look, I mean, dude, if you bought land in Cali, New York, or even Vegas, 20, 30 years ago, you killed it. And it’s not going to take 20, 30 years to figure out which ones end up being the one. Tech is happening so fast, whatever you buy today, you might hit the jackpot a year from now or a couple years from now.

David:
All right. So let me ask you a question from the perspective of the person who’s listening to this, they agree with what we’re saying. I see blockchain as a future. I see NFTs can make things more efficient. They agree with technology and they want to invest, but they don’t understand the world. That’s always where people get in trouble is they’re like, “I got to jump in and I believe in it, but I don’t know where to jump.” And so they hope that where they go is the right space. What advice do you have to the people that know they need to take action and do something, but they don’t want to go invest in what will be a barren wasteland in two years?

Ryan:
Okay. So Rob, this all ties back into what you asked me at the very beginning was how do your businesses start? And so they all start in literally the same way where there’s a problem, there’s a question, but there’s no solution. Up to this point, I’ve been a big believer in this and I’m telling people about it, but they always ask your question of where do I go to learn more about this? Who’s the go-to authority? And I’m like, “I guess I might be.” I talk about it a lot, but by no means, would I say go to me because I’m not making that much content about this and it’s such a new emerging industry.
So the more I started to think about it, the more I was like, all right, I believe in this, I want to create businesses around this, what am I going to do? And so I actually started an NFT project for my own called Tykes, T-Y-K-E-S, where it’s essentially going to be a digital real estate mastermind. If you buy the NFT, you get access to the community. It’s going to be like-minded people, like you’re talking about, David, people who’ve come from the real estate space who understand that Web3 and crypto is going to change the world and they want to get in early.
Or it’s for the crypto people who are already in this space and they want to utilize what they know for real estate, because they want exposure to real estate. And I don’t even want to get off topic, but there’s so many crypto people that have all this money in Ethereum or Bitcoin and they want exposure to real estate, but they can’t get it because they don’t want to go to US dollars or anything like that. So the fact that they can go buy an NFT that owns real estate is so important to them. I’ve heard it from so many people in Tykes already that they cannot wait for that to be more mainstream.
So essentially I’m creating this digital community where all these people are going to get together, investors and builders and business people. I want to create the businesses that are going to service this industry as it develops. I want to get the investors together to invest in startup businesses in metaverse land, in all these things that are going to happen because it’s just so new and so early that as time goes on, the people who are in early in anything always crush it.
And so for people who want to learn, I would just say join our community right now. You can go to tykes.io and we’ve got thousands of people in there already looking to go. We have not minted the NFT yet, so everything is pre mint. Everyone’s just hanging out, getting hyped, talking about stuff just like this. But once we mint here in probably early July, then things are going to get really fun, because we have a whole bunch of stuff that we’re going to be doing with real life events, courses, trainings.
I mentioned earlier, I NFTed one of my Airbnbs so that my Tykes holders can go stay at it and we’re going to go be buying sick real estate all over the country. Then I’m going to NFT it strictly for my Tykes holders and it’s going to be revolutionary.

Rob:
So can you actually walk us through how your NFTbnb, there we go, is going to work? What are some of, I guess the logistical things? I own a Tyke NFT that then gives me access to your property for a certain amount of days in the year.

Ryan:
Yeah. Okay.

Rob:
Is that around there?

Ryan:
Let’s talk about SEC versus non SEC. So when we start a fund and we attach an asset to an NFT, it becomes a security, and so now we got to do things that way and that’s fine, that’s totally cool. But when you do that, if you’re doing a 506C everyone’s got to be an accredited investor and you got to go through that kind of process.
If you do what I’m doing, it’s not actually attached to the asset in that they own the Airbnb. That’s not what’s happening. What’s happening is more so like a timeshare. They own the dates to go stay at that property. And so I’m calling it actually a Tykeshare, because I don’t know what else to call. It just doesn’t exist.

Rob:
NFTbnb?

Ryan:
You can call it that, but I’m calling it a Tykeshare. So essentially what will happen is if you mint a Tyke, you can do what’s called staking it. Essentially you would lock it up, and so that when you lock it up, that means you can’t sell it, you can’t do anything with it. It’s just like when you deposit money into a CD or something, it gets locked up and you get a return.
When you lock up a Tyke and stake it, you’re going to get a cryptocurrency native to the Tyke’s ecosystem, it’s going to be called Ty Coin. And with that Ty Coin, you’re going to be able to buy all this stuff in the Tyke’s ecosystem. You can buy tickets to our real life events. You could buy education, and courses, trainings. There’s going to be a whole bunch of things you could buy.
But one of the things you could buy is the dates to one of these Tykeshares. And so I’ve already bought a house in Las Vegas. It’s a one and a half million dollar house. I’ve already furnished it. We’ve already got it ready for this Tykeshare. All this is out of my own pocket. I haven’t even made any money with Tykes.
But the reason I’m doing this is to prove what’s possible with digital real estate, with my own skin in the game. And with this, basically what will happen is we’ll take the dates, let’s just say there’s 365 days a year, to keep math simple, let’s just say there’s 300 days that we’re going to go turn into NFTs and we break them into three day chunks. And so basically there’s a hundred NFTs that each represent three days out of the year.
And so maybe Rob, you go and get July 3rd to July 5th. You’ve got the 4th of July in yours. Your hyped to come to Vegas for 4th of July. And basically you’re going to own the rights to those dates for whatever period of time we put on the NFT, it could be one year, it could be two, it could be three years.
And you now have this NFT for the rights to stay there and you can do many things with it. You could go stay there and enjoy it. You could go sell it to somebody else and make money. But at the end of the day, it’s not a security because you don’t own the property. You’re not making cash flows from the … The property itself is actually not making money. It’s losing money because I’m letting you stay there for free with coins that we gave you for free.
So it’s a really crazy concept that’s going to be fun to do because essentially for me, as Tykes grows bigger and we get more amazing people in the community, I want to attract them with these cool things, these cool events and innovative things to show what’s possible.
And we’re going to end up doing deals together, whether it’s businesses, whether it’s funds or joint ventures or other things. I’m just trying to get a bunch of cool people together so that we can see what happens from that, because we all have been in masterminds here before.
It’s super powerful and it just doesn’t exist for digital real estate yet, but it is now with Tykes. And we’re literally doing what we’re preaching. This is not theory. This is literally we’re doing it day one, not we’re promising to do stuff.

Rob:
So I really like the idea of that. I mean, it’s very cool. And I’m curious, you’ve bought this house, did you buy this house when you NFTed it with the intention of making any sort of cash flow from it or is the house just a cost of doing business that will eventually grow into a way bigger profit machine in this industry?

Ryan:
Yeah. So the house, I actually bought it just as a normal rental for myself. I was thinking about Airbnbing it, or just making a long term rent. It was cool. I bought this before Tykes. But as it got closer to being completed and as the roadmap and game plan for Tykes started to finalize, I was like, dude, this house would be the great first Tykeshare. And so I said, you know what? Instead of making money and cashflowing on it, like I was going to, I’m going to put it as a Tykeshare.
Now with these Tykeshares, like I said, I personally lose money because I’m not making any income. People are staying there for free. When you go spend your Ty Coin to buy that NFT, we actually burn the Ty Coin. It’s just a way to control inflation, unlike the government. For us, it’s like you said, to me, it’s a cost of doing business.
But at the end of the day too, I still own all these houses, so I’m getting depreciation, I’m getting the tax benefits and all this stuff over the years. And if I own a bunch of sick houses in Tahoe and the Dominican and wherever around the world, that’s also going to benefit me, even if I’m losing money for a couple years, because I’m not making any cash flow. The amount of exposure and press that it gets Tykes and the community will far outweigh any cost of the maintenance.

David:
Yeah. And that’s a good point to bring up because I often say real estate has a personality, different assets behave differently and different human beings work better with different asset types. For instance, you might have a really intelligent high C on the DISC, numbers oriented person. They tend to love multifamily.
It’s a little bit easier to predict how that’s going to perform than residential, which is a little more, in my opinion, art than science. You don’t know what areas are going to go up in value. You don’t know what the fed’s going to do. You don’t know what rents are going to do or how many other homes are going to be built. The comparable sales model is much more difficult to predict than an income based approach model that multifamily runs on.
Well, you also have times in your life where certain assets make a ton of sense and times where they don’t make sense. So you might be a doctor making a buttload of money and you just want to put money in somebody else’s investment and make yourself a return on that, and you’re good to go.
You might be a person who’s trying to claw your way out of the W-2 job and you want to house hack a duplex and put three and a half percent down. But 10 years later that might be a terrible property for you to own, it doesn’t make sense. And so what you’re describing, Ryan, is a deal that could lose you money in one area of your ecosystem, but make you much more money in a different area of the ecosystem.
And for where you’re at, that makes total financial sense. You have other things to offer people. You’re putting these coaching programs together and you’re doing these events and you have these other businesses. So to you, this is like a lead magnet or what we might call, what’s the word that we use, a loss leader.

Ryan:
Yep.

David:
Right? But for someone who doesn’t have those opportunities, this would be a bad strategy. So I just want to highlight A, so you don’t get a lot of criticism, why is he buying a house that doesn’t make money? And B, so people don’t think we’re saying you guys should all go do the same thing. If you’re not in Ryan’s situation, then that personality of that deal doesn’t work for you.

Ryan:
No, 100%. And like I said, you defined it great, it’s a loss leader. At the end of the day, two years ago, I made the decision to go super hard at social media, just like Rob did as well. And I was just like, you know what? I’m going to dump all the money I can into social media. And so right now I spend 40 grand a month just making content. Do I make 40 grand a month from sponsors or ads? No. I lose money every month for my content, at least if you just define it to that. But I make a lot more from content because of all this other backend stuff.
And so the way I see Tykes is very similar. If I can just create a great product, regardless of if Tykes itself makes me money, I know all the things that come from Tykes will make me way more than whatever it’s costing me to acquire the right people into the ecosystem. And that’s the whole game plan.
And people don’t know this too, but with NFTs, there are royalties. So every time somebody sells a Tyke, I’ll make money. And so the hope for me is, and this is not what it’s reliant on, but the hope is that there’s enough royalties that would pay for the operational expenses of running these things. And if there is great, if there’s not whatever, it’s not going to matter either way.

Rob:
Well, yeah. And I think, are your future plans to keep minting Tykes? Or is it more to launch Tykes Two, a whole nother NFT project? Or is it always going to live under the Tykes umbrella?

Ryan:
So first thing is Tykes is so important to do well on this first launch because it opens the door for everything else. If it flops and it sucks, then there is no Tykes Two, there’s nothing else. So that’s why I’m leaning on the side of, let’s just deliver such extreme value that there’s no way it fails. That’s my whole thing with this.
But as far as what it leads to, like what’s the next phase? There’s definitely going to be other things, if Tykes is super successful with Tykes Two and creating all these other things we can do for them now, because phase one was so successful. We can go buy more houses, we can throw more events, we can do a whole bunch of things that really grow the community.
But the main thing, and I want people to understand this is that I want Tykes to be the ultimate place for the best people in digital real estate to get together so that they can do business together. And so if I get investors who want to help fund a startup business, or you get all these guys who have great ideas, but they don’t have influence or money, but now they can go partner with me or anybody else in the Tykes community, it’s like an incubator and it brings these ideas to life.
And so along with Tykes, I’m building a backend business, which I can’t really share right now because it’ll get stolen. But probably very shortly after Tykes is released, I’m going to launch this backend business, which is in my opinion, we talk about opportunity vehicles and the next big thing, I think this business is going to be like my biggest business out of all of them. I truly believe digital real estate is going to be bigger than all my other businesses combined, just because of the opportunity.
And so I’m focusing all my time and energy on building out this backend business, building out Tykes and then solving a lot of the problems that I already foresee happening in digital real estate and giving people the solutions.

David:
And when you say digital real estate could be bigger than all your other businesses, are you referring specifically to the fund that you can put together to buy real estate and let people use it? Or is there more than just that?

Ryan:
No way more than just that. I would say the business, even this first business and every other business that I end up building in the digital real estate space is going to be more valuable than everything else I have combined.
I mean, think about this, theoretically, let’s just say I’m building the next Zillow for digital real estate or Redfin or any big physical, normal real estate tech company, but building it on this digital side, because it doesn’t exist. There is no Zillow for this. Zillow’s worth, I don’t know, $12 billion. I can build a company that’s worth nine figures, and if things go right-

David:
Providing services in this space, that’s what you’re referring to?

Ryan:
Exactly. And so, if I have the community where there’s people who are passionate about this and they’re going to help me build these businesses and they’re going to get rewarded for helping me build these businesses, it just creates these win-win incentives all the way around that basically fund this Tykes ecosystem where it’s like, if you want to be in digital real estate, you better have a Tyke because that’s where things happen.

David:
Okay. So it’s 2022. You’re listening to this podcast. Ryan is very charismatic and he’s making you excited about possibilities. Rob is very handsome and also has amazing hair, so now you’re just intoxicated by the opportunity and the possibility of what we’re describing about.
But you’ve also been hearing, I’m supposed to house hack a place with an FHA loan and get started, and then by another house later, and you’re confused about what your path looks like. Is it possible for you to paint a picture or tell a story of what the person who wants to build wealth through real estate could do in practical terms, what steps they take in what order combining digital real estate and traditional real estate?

Ryan:
Yeah. So when I talk about digital real estate, I’m talking about these are things that aren’t yet here as far as being mainstream. And when I talk about it being bigger than everything else I own, that’s years from now, it’s not tomorrow. I mean, it’d be great if it was tomorrow, but probably not. I started just like what David is saying. I bought my first house with an FHA loan. I house hacked it-

David:
Well before that, you actually bought a couch.

Ryan:
That’s true.

Rob:
Hit by a couch.

Ryan:
When we first did that video or that first episode about couch flipping, it wasn’t famous yet. I set it on them like, this is what I did. It was this weird thing. And then I did a YouTube video on it and all of a sudden it became a phenomenon, which is crazy to think about in hindsight.
But yeah, I bought my first houses like that. I’m still buying houses today. I’m still buying apartments and all this stuff because those things are 100% going to make you wealthy in the long run. There’s no safer investment than buying real world real estate and getting all the benefits that BiggerPockets talks about all these episodes.
The reason I’m bringing up digital real estate and adapting is because it’s going to happen, and there’s just nothing you can really do about it. You have to be prepared that this is going to happen in the coming years. And it doesn’t mean you got to go pivot and do it today, like I’m doing it. I’m doing it because as David said, I’m in a different position where I can go try and capitalize on this thing that is going to happen here in the near future and be prepared for it and give you the services you’re going to need to use in the future.
So I would say focus on real world real estate. And if you want exposure to digital real estate, that’s cool, buy a Tyke. Just be in the community, start to understand what’s happening, just immerse yourself. Don’t go out and buy all the metaverse land because you just listened to this. I’m not saying go do that. I’m saying just start to understand what’s going to happen and start dipping your toes in it.
But don’t ever neglect your real world business. I’m not, I’m still buying a ton of houses, and I’m trying to scale that business on all fronts. So do what I’m doing. You can focus on real world, but also have your toes dipped in this other thing.

Rob:
Yeah, that’s a great answer, diversify. I mean, you can’t go all in on one thing. This is something I’ve really just been learning really over the past year is like, we know that I like Airbnbs. I have a lot of Airbnbs. I don’t have any plans on stopping, but after really just thinking about what a good investment portfolio looks like and talking to people like Codie Sanchez, who we had on, I think a couple weeks ago. I don’t know when that actually went live. But she talks about small boring businesses and car washes and this and that. I’m looking to just completely diversify. Diversify strategically into things that I’m passionate about.

Ryan:
A hundred percent, dude, a hundred percent.

David:
Well, one of the things we talked about with Codie is what you’re doing, Ryan. Now, obviously most people are not going to do this at the scale that you are. It’d be great if they did, but if we’re just being completely transparent, Ryan, at one point was a professional athlete, he has an insane work ethic. You’re very intelligent. I don’t know how you don’t look any older than the first time we interviewed you. It’s kind of pissing me off because I’ve aged about 30 years in the three years ago that we did this and you’re looking younger.
But you got that going for you, right? You’re very, very driven. You’re a focused human being that had your mind molded in this direction of, I got to work with everything I have to achieve a goal. You didn’t achieve the goal that you originally wanted to. And so now you’ve got this fire that you’re applying to your new thing.
Not everybody has that, but for those that do, this is a path that should be considered. This is just my opinion, okay. I’m not speaking for BiggerPockets. This is not me stating it as a fact. I think it is going to continue to get harder and harder and harder to find cash flowing properties in real estate. It’s not going to get easier. I don’t think we’re going to have a crash.
I think that we started the podcast saying institutional capital is going to step in. They’re going to buy up a lot of the traditionally cash flowing stuff that new investors would start with. They’re going to go in those markets with cheaper price points, with a better price to rent ratio and they’re going to look for the multifamily properties.
And it’s the training wheels that every investor traditionally learned how to operate as a real estate investor, and they’re going to be soaking those up and it’s going to get harder and harder to find them, but you still want to find a way to bring income in that isn’t just from a job. And this is a really good path, especially when there’s connections to real estate. It’s sort of in the same world. Ecosystem is a really good phrase.
So I think your model, it doesn’t have to be done at the scale you’re doing it at, or that I’m doing it at, but the principles absolutely apply for people that are trying to improve their lives. And Codie talked a lot about how you can buy businesses that are related to real estate. You can buy your CPA firm, you can buy the property management company. You can buy different pieces in your world and get income from that.

Ryan:
Yeah, no, a hundred percent agree. And I agree with you too, that it’s going to keep getting harder and harder. It’s funny, when I first came on BiggerPockets in 2018, the majority of my deals were from the MLS and wholesalers. I did over a hundred deals just from those two sources. As I go into 2022, that has gone down significantly. The MLS obviously is much harder to get deals now. Wholesalers are much smarter now. They know they can go direct to the funds and other things. And so they don’t sell me the deals they used to sell me anymore.
And so in order for my real estate business to continue to be strong, we’ve had to adapt. We had to start getting deals differently. We had to start marketing our ourselves. We had to start selling to hedge funds and building connections. And so we’ve been able to adapt and just, this has probably been going on for the last two years where things have gotten crazy.
So from two years in 2018 to 2020, my business had to change dramatically. And now in 2020 to 2022, it’s changed dramatically again. And so if we think 2022 to 2024, I agree with you, David, it becomes more and more competitive. Doesn’t mean you can’t succeed. We’re going to always find ways to succeed, but it does mean you need to also look at other ways to make money.
And it’s not always going to just be buy a duplex and house hack it. There’s a lot of other new ways to make money, especially in digital real estate that these guys are not in on yet because they’re too busy taking all the real world real estate right now. But they will be in on it, in time.

David:
Yes. You’re always trying to stay a step ahead of them, that’s why you have to adapt because they come in like Godzilla, just stomp on all the buildings that we were trying to make, so you got to go build another civilization. And this supports my unpopular opinion that the goal of real estate is not to buy three houses, quit your job, live on the beach and never think and never grow.
It’s not the way that nature intended us to live. And when you do that, you don’t see the hedge funds coming in and stealing all the properties. You don’t see the changes like we’re talking about with digital real estate. You’re just looking at the Mai Tai that’s in your hand, patting yourself on the back for three years of hard work.
We want people to get out of a job or a life they don’t like, there’s absolutely a way to improve and you’re a good example of that, Ryan, but that doesn’t mean that the goal is to just quit, retire and become a vegetable that doesn’t think anymore. If the world is changing so fast because of technology that you have to be doing more, you have to be listening to more of this content, you have to stay a step ahead of the competition. But do either of you two have a different opinion? It’s okay if you do.

Rob:
No, I don’t think so. I mean, I agree. I don’t disagree with it enough to have a firm POV to disrupt our friendship in the podcast. Overall I’m like, yeah, that sounds good.

David:
I love how Rob says this. Rob’s a big fan of saying I don’t disagree instead of saying, I agree. You never really know where he stands. He’s like the master of Switzerland.

Rob:
I don’t hate that opinion, but I also don’t love it.

David:
Ryan, can you give me a solid answer, not the politician answer that Rob did?

Ryan:
I’m not a politician. I always tell you straight how I feel. Unlike Rob who’s … We’re going to start calling Rob a coward for being an-

Rob:
Rob the coward. That’s my new Instagram handle.

David:
[email protected]

Ryan:
So no, I’m all about innovating. I mean, as you can see, just in the four years since my first BiggerPockets, we flipped, we had to change how we flipped because wholesalers weren’t sending deals the way they used to. Then in 2020, you get a pandemic everybody’s trying to pivot and adapt. And I said, you know what? I think social media is going to be what’s big. It turned out to be the right play. Two years later, everybody’s now trying to understand social media and actually use it.
And now look where’s the world in two years? A hundred percent, real estate investors are going to be in digital real estate. I don’t want to say I can guarantee it, but it’s going to happen and it’s going to keep getting more mainstream. And the sooner you get in, the better it is, because you’re a first mover. So that’s my opinion on it.

Rob:
Yeah. It’s not crowded right now. I mean, I think real estate is always like everyone flocks to this one thing, it gets super crowded and then the next person moves over and they’re like, “Oh, I’m making a lot of money, everyone.” I mean, it’s like for a long time it was multifamily and then long term rentals obviously, and then short term rentals comes along, then these dumb YouTubers open their mouth and then short term rentals become very, very popular. Now that’s the thing, right? So now returns went from being 40 to 60% to like 15 to 30%. Oh, boohoo, it’s still a pretty good return.
And the same thing now with NFTs and I could totally see this metaverse stuff being the same thing where we’re all sprinting right now. There’s a lot of space to be had right now. There’s a lot of space to play in. And then in two years it’s going to be like, all right, we’re all here, now what’s next within the metaverse?
I think with the metaverse, it seems it’s so much more expansive because it’s not real world. There’s a finite amount of space on earth, but in the metaverse it’s infinite. So it’s very interesting to see the possibilities, honestly. It’s like, I’m just barely understanding this right now, but I got to imagine it gets pretty crazy in a couple years from now.

Ryan:
In two years, you and everyone else, you’ll know so much more. You’ll be, I don’t want to say an expert, but it’ll be normal. You’ll be like yeah, okay, we have our crypto wallet and here’s how we do things. It’s pretty simple.

Rob:
Yeah. Well, you’re fighting the good fight, man. I mean, I think the hardest thing in this space and the reason I haven’t really tackled it all that much is just the education component. You know what I mean? If I’m explaining to an investor how a short term rental works and they’re like, “Wait a minute, people are going to stay in the house and we’re still going to make money?” And it’s very hard sometimes to work with an investor and teach them just Airbnb, to invest in me. I’m always like, how am I going to explain to them crypto or NFTs or the metaverse?
So you’re doing it right. You’re educating people in a very digestible way. That’s going to pay off for you big time, because after just this conversation, I’m like yeah, I feel empowered and very knowledgeable in the world of NFTs and the metaverse. I know enough now to at least understand where to start researching. And that’s always the hardest part for people I think getting into this.

Ryan:
A hundred percent. And I’ll tell you too, it’s not easy because it’s not a mainstream thing. I know if I make an Airbnb video on YouTube right now, it’s going to crush, people love Airbnb.

Rob:
Can confirm.

Ryan:
When I make videos on the metaverse and how to open up a wallet and how to buy an NFT, they flop every time on YouTube. And as you know, it sucks as a creator because you spend a lot of time, it hurts the algorithm, it may affect your other videos after that one, but I’m putting them out anyway because I just know that they need to be there. People need to understand how to do it. And then I can point them to it like, look, I already made you this playlist, look at every video. It flopped, but the information is good. If you’re serious about this, here’s how to do it.

David:
And those are the influencers that I think people should trust because I was telling people on this podcast, when shelter in place first came, I think you’re going to have a lot of inflation. I think the government’s going to print a lot of money. They’ve shown that American taxpayers don’t want to take the hit that we need to take.
They shut down the entire country and a lot of my contemporaries were screaming the sky is falling, get out of real estate, cash is king, we’ll have a huge oppression. And I was the only voice that I knew that was saying, that’s probably what should happen, but I don’t think it will. And I got a lot of heat for that. There was angry people, how could David possibly be telling people this? And lo and behold, we’ve had maybe the hottest market I’ve ever seen since that point up to now.
And so it’s often the case when people tell you what you should hear, not what you want to hear, that you don’t like it, their videos are not getting as many views, they’re not popular. But just like you said, now everybody’s looking at what you were saying back then, or what I was saying, they’re saying that makes sense. It’s the same thing with what you’re doing.
Your videos at the time will be four or five years old are going to be very popular. At least you can point back and say, I told you guys what was coming, even though it wasn’t popular. And you know the example that stands out to my mind about this is QR codes. Do you remember when QR codes were very first released?

Ryan:
I don’t remember how long it-

Rob:
Yeah.

David:
Nobody cared. It was a long time ago. It was a quick like, that’s that thing? What am I supposed to do? All right, whatever. But it never really caught on and it was just mildly annoying, but you knew about it. And then when COVID came and restaurants didn’t want to put menus on the table, QR codes exploded and everybody was using QR codes for all kinds of stuff. That happens as things evolve. This is right there, but no one needs to go to that.
We still use title companies because it’s comfortable, we’re used to it. That’s what realtors like using, that’s what loan officers like using, that’s what sellers like using. Well, there will come a shift where something happens and people say I don’t like that anymore and boom, people flock to the new thing. So I want everyone to keep that in mind as you’re saying these videos are not popular, that doesn’t mean that they’re wrong.

Ryan:
Right. A hundred percent.

Rob:
Hey man, I don’t disagree with that at all.

Ryan:
You’re a coward, dude.

Rob:
Love it.

David:
All right. Well Ryan, this has been great having you on the show. I really appreciate your time. I know we’re talking about getting me on your show. So we’ll have to do that. I’ll make a trip out to Vegas and we can record something [inaudible 01:19:08]-

Rob:
You got to respond to his text messages first.

Ryan:
Yeah.

Rob:
You can’t just ghost him.

Ryan:
Yeah, it’s true.

David:
That’s the problem we were saying with the group text messages, everyone assumes that somebody else is going to reply to it. So then nothing ever gets done.

Rob:
I’ve been keeping that thing alive for the last hour.

David:
Yeah. So anything that you want to leave our audience with Ryan before we get you out of here?

Ryan:
Yeah. I mean, if this digital real estate thing is something you want to do definitely join the Tykes community, tykes.io, T-Y-K-E-S.io. We’ll love to see you in there and let’s pioneer this new wave of digital real estate together.

Rob:
Ryan, where can people find out more about you? If they want to just get your killer TikToks and Instagram Reels and YouTube Shorts, well, where can we find you?

Ryan:
Easiest way, just ryanpineda.com. It’s got links to all my socials. We’re on every platform, so yeah.

Rob:
David, what about you?

David:
You can find me @davidgreene24, most boring name ever. You can find me on YouTube at David Greene Real Estate, where we make topics about stuff just like this. This is what I see coming. It might not be here yet, but if you want to get ahead of the curve, that’s where you can do it. And how about you, Rob?

Rob:
You can find me at Robuilt on YouTube, Robuilt on Instagram, Robuilto on TikTok. And that’s pretty much it. You can find me on those. I don’t know. Sometimes I’m on TikTok. Follow them all. It’s all good.

David:
Yes. Follow everything. Robuilto on TikTok. It never stops making me laugh every time I hear that. Ryan, what’s the channel or the medium that we’re going to put our … when we do one together, where can people follow, if they want to see that?

Ryan:
That podcast will be on YouTube. So go to Ryan Pineda on YouTube. And we’re going to cut that thing up into a ton of reels and get David’s most embarrassing things he says and make some great, great clips out of it.

David:
I trust you’ll make sure you get the most unflattering angles and comments as possible, and then blast them out into the world.

Ryan:
We’re going to definitely take them out of context for sure.

David:
Yeah, but it doesn’t scare me because I am not a coward.

Ryan:
That’s true.

David:
Rob, any last words?

Rob:
No, too scared to say anything now.

David:
All right. Well thank you guys. This has been a lot of fun. Ryan, we appreciate your time. And Rob, I just appreciate who you are as a human as always.

Rob:
Thanks man. Appreciate that.

Ryan:
Appreciate you guys having me on.

David:
This is David Greene for Rob “I don’t disagree” Abasolo signing off.

Rob:
I knew you were going to say that.