Life Portals: Moments & Mentors Part II. (A Closer Look at the Provenance Plot)
By Jesse Sung, Founder & Mentor at ZEYDRA.com
Self Reflection
With a visual diagram of people and events, it makes it a whole lot easier to reflect back upon how you got to where you are today.
We all have our origin tales and portal plots thereafter. Mine in a shell casing could begin with an only child of two immigrant housekeepers living in Berkeley California. I blindly spent my late teens and early 20s discarding my business degree from San Jose State and banking on the entrepreneurial route. After years of failed ventures spanning from club promotions to refurbishing sneakers on Ebay, I undoubtedly found myself treading water, alone on my 27th birthday and a very hollow social graph to boot.
In 2009, a few turning point occurrences led me professionally into full time careers in the magical city of San Francisco. This move alone was one of my key life portals.
Inspired by the contrarian verses of John Paulson and Nassim Taleb, I was fascinated by the fortunes created and wiped out by the collapse of the economy during this time. Fresh off the financial crisis I threw sensibility out the window and decided to jump into two industries that had the biggest open wounds.
I hit the books and became both a FINRA licensed investment advisor and CA real estate broker, working New York hours in the mornings while running my own brokerage boutique at 580 California Street in the afternoons.
So the timing was way-off beat as markets and investors were still suffering from the economic shock and trauma, but I had a small savings from an e-commerce site I built which sold Bay Area Hip Hop oriented clothing and CDs, SF office space was dirt cheap and I was incredibly naive. Business was slow for everyone. So the idle time was spent conversing and learning from senior investment professionals, many of them didn’t mind taking time away from watching flat charts and nagging clients to story tell about the “good ol’ days”.
The daily correspondence with these guys really helped fast track my investment game. When you interact with people “above” your pay grade, but don’t want to be excused from the table, you learn to learn pretty damn quickly. More importantly you figure out where you can add-value as best as possible.
Having both industry licenses helped open dialogues with special asset divisions of numerous commercial and regional banks. For many of the ad-hoc VPs, they wanted all the dry powder they could find to sell the delinquent collateral to and my connections through the securities firm focused on foreign investors looking to posit cash (some capital flight) in anything other than stocks or the box spring.
With overall demand for real estate still at nadir levels, I was able to access these pipelines of distressed assets with little competition. I learned to evaluate if properties or their debt were selling for below construction costs and I soon realized that people who lost their properties still had to put roofs over their heads, ergo rentals would survive. This would prove to be my hidden goldmine in cultivating a private investor client book over the coming years which alone changed my life forever.
But if you were to ask me what was the true ignition behind San Francisco? I would have to whisper that a woman made me do it. Yes, I had an unyielding crush on a female best friend at the time, that was the culprit. This friend had landed a property management job at the world’s largest commercial real estate firm CBRE in San Francisco. We both lived in the East Bay, 20 minutes outside of the city. When she relocated, I had to chase after her. Suggestively it was her own ambitions of a bigger career that influenced me to enter the portal of “white-collar” world in a bigger city and up my game. The rest is history.
I’m going to save you from the cringe details but no, I did not end up getting the girl. However that decision alone opened up a whole new realm of people and opportunities for me. Aside from swapping durags, Girbaud shuttle jeans for windsor ties and dockers, my goal posts had shifted indefinitely for the decade to come. Thank you Maryann.
Another life portal moment came several years later, the decision to both invest and relocate to Los Angeles. Two sequential but independent conversations with individuals in San Francisco lit the match. One was with a real estate mentor I met through the Urban Land Institute, Tomas Schoenberg. He is the senior vice president of acquisitions for a large family-office (The Swig Company). The other conversation was with the founder of Soylent (the meal replacement drink) Rob Rhinehart.
One evening in 2014, I met Tomas at a newly opened tapas restaurant in downtown Berkeley CA, where he informed me that Swig was putting over 300,000 square feet of class B SF office buildings in disposition.
In my mind, any office building in downtown SF would be categorized as a “trophy” asset, you don’t sell those things typically unless you were forced to. The Swig Company owned over 8 million square feet of commercial real estate and did not have to sell, so I had to understand the reasoning for that.
“Culver City and Pasadena” was the answer I got. I knew LA, but I was still a young tunnel visioned Bay Area kid, so I rebutted with a partial beer buzz coming on with “what the hell is a Culver City?”.
Tomas explained that several tech giants had recently made moves into the region just south east of Venice Beach and Santa Monica. This region of West LA that would come to be known as Silicon Beach, home to SnapChat, Tinder, RiotGames, and Google, Facebook, Buzzfeed, Salesforce (LA annexes). The main takeaways from the conversation was “There’s much more upside potential outside of the Bay Area.” He was talking about equity appreciation and rental rates.
This really stuck with me. “What the hell is a Culver City?”.
One of several LA buildings they acquired was recently sold for about a $19 million or 92% profit (appreciation) in less than 6 years, pretty astounding for a property of that price range and definitely a better return vs re-investing back into San Francisco.
During this same period of time, I was actively helping the startup Soylent with a new headquarters. A fresh Y Combinator graduate, Rob had taken some interim industrial space from a warehouse of ours in downtown Oakland CA. So technically, our building was Soylent’s very first “headquarters”.
We were targeting Dog Patch, Potrero Hill neighborhoods of San Francisco. Soylent had just successfully raised an additional $1.5M from Andreesen Horowitz and needed new space fast. After touring several industrial buildings and submitting LOIs, I received a call one day from Rob to have lunch with him and John Coogan one of Soylent’s other co-founders.
“We’re moving Soylent to LA.” I don’t know why but I remember hearing those words and immediately envisioning Tomas’s face back inside the restaurant in Berkeley.
San Francisco was crowned the most expensive city in America during this time and it’s hockey stick of economic prosperity off the back of Silicon Valley seemed unstoppable, so why would two independent, rather accomplished, non-correlated business entities tell me the same thing? Los Angeles was in the cross hairs.
For brevity sake, basically Rob had justified the move based off several factors but the one that stuck to me was in explaining that although the company could now afford 15,000 square feet in SF, it was the difficulty of employees managing to afford living close to work that was the issue. I remember thinking “wow”maybe this was the tip of the iceberg.
Over the years since transporting to San Francisco, I managed to take ownership of a 7 unit apartment complex in El Cerrito CA and sweat equity amongst several other rental properties.
Fast forward a bit, I did the homework and pulled the trigger in selling the real estate I owned in the Bay Area while relocating my business to LA. I even had a stint of sleeping on my friend Andreas’s couch in Miracle Mile while becoming familiar with the sprawl of Los Angeles (I met Andreas back in SF through my friend and former co-founder Robbie). I eventually redeployed the capital in both LA and Las Vegas. The first investment was two condos via short sales in none other than Fox Hills, Culver City. If you are wondering, there have been zero regrets in stepping through that life portal. Thank you Tomas, Rob and Andreas.
Mentorships Matter
In thinking back, I realize just how many of the clients and friendships made in San Francisco served as informal mentorships to me, all of which had some positive contribution in my path of discovery. From the expedited self-learnings, to expanding my purview of real estate investments and the early exposure to technology ventures. The most prized cross over being a first taste of a startup exit (Hackbright Academy), eventually that curiosity for tech lead to a profound early investment into Ethereum. Thank you David & Robbie. Many others to thank too including Joey for wisdom and the second office space and Behzad for several key introductions!
Now let’s not forget the other factors in the general equation of “success”; such as your health and meaningful companionship. Career driven or entrepreneurial paths often make for very lonely lifestyles which is why having the right person by your side can really make a hell of a difference. This goes for both mentor and mentee roles.
Today, I find myself no longer strictly a life mentee, but more often than not I am able to wear the mentor cap for other aspiring entrepreneurs. I have also been fortunate enough to find someone special on a more intimate level. Because we have a shared interest in business and industries, it makes the time spent together feel extra productive and enjoyable. I’d be lying if I were to say she doesn’t borrow the mentor cap from time to time, and I find it fascinating.
Mentorships in whichever instance or form all help you better navigate new terrains, avoiding pitfalls and unleashing dormant curiosity and capabilities from within. The right people provide the right information that eventually provide the right opportunity for progress; the wrong people typically will result in the opposite directions. The most dangerous situations are masked by leisure and laughter, attrition over time is a hell of a price to pay.
At the root of it all, a short poignant set of questions to ask yourself would be:
• Are you truly enjoying the time spent with this person, these people?
• Are you experiencing real progress towards your general goals, well being and happiness?
• Is there truly value-add in the time and energy exchanged?
If the answers are perpetually no in most of those categories, then you should be reassessing your surroundings and making real adjustments. This is never easy or comfortable to distance yourself from particular people or places but it maybe necessary if you want the change you are truly looking for.
Mentorships work no matter how interim or long term they may be. It’s even more ideal if two people happen to enjoy each other’s companionship on a more personable level. Today’s world is hyper-active and attention disorderly, but we believe these type of productive and value-add relationships can still be established, it’s the very reason why we decided to start the ZEYDRA project.
