167. Matt Maurice on Owning your Real Estate and Becoming the Walgreens of Coworking in Suburban Milwaukee

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167. Matt Maurice on Owning your Real Estate and Becoming the Walgreens of Coworking in Suburban Milwaukee

00:00:01 Welcome to the everything coworking podcast, where you learn what you need to know about how the world wants to work. And now your host coworking space owner and trend expert, Jamie Russo, Welcome to the everything coworking podcast. This is your host. Jamie Russo today's episode is important if you're starting a coworking space or looking to expand your existing business. And you've been thinking about whether or not you should consider buying a building that would house your coworking business.

00:00:46 Roughly half of my coworking startup school students are building owners that already had a building and decided that it's best to use was to house a coworking space, or they wanted to start a coworking space. And one of the benefits that come along with also owning the building when COVID happened, many of my building owners were among my most resilient students because they own their buildings and had to negotiate with their mortgage lender.

00:01:10 But didn't have to deal with the landlord that wouldn't, or couldn't afford to give them some rent relief as too many members canceled their contracts. So I've had a lot of folks talk about the possibility of buying commercial real estate to use, to open their coworking space and whether that's a good approach, what that looks like, how it works. So since Matt is a coworking startup school alum and served as my sort of real estate expert on our Q and a calls,

00:01:41 he was always super willing to share. He has had a bit of a challenging experience. He opened almost a year after he thought he would, and he share some of those lessons learned in our discussion and he opened, um, during a pandemic and during the birth of his third child. So it's been a busy few months for Matt and his team,

00:02:03 but he took time today to walk us through his experience, buying commercial real estate and creating a coworking business. That would be the only tenant for that space. So I think you're really going to enjoy the conversation. It's a bit of a longer episode. I think it's totally worth it. Matt is a great resource and shares a lot of lessons learned for hit the coworking business.

00:02:24 He just opened and then gives us a real estate one Oh one lesson. If you're thinking about buying a building, speaking of starting a coworking space tomorrow, when this comes out. So if it's after the day, this comes out, um, you can still go to this link and get the I'm registered for the next masterclass that we have. But tomorrow we have a free masterclass.

00:02:53 For those of you starting a coworking space, three behind the scenes secrets to a coworking space. If you are working on starting a coworking space, I want to share three decisions that successful operators make when they're creating their coworking business. It's totally free. It's about an hour. We'll do some Q and a join me tomorrow. Register at www dot everything,

00:03:15 coworking.com forward slash masterclass. If it's after tomorrow, check the link for the next available session. I also want to mention that this week again, closing tomorrow, Thursday, if you're listening to this, um, I have opened community manager university. So, um, you should have those emails in your inbox. If you're not on the email list, get on the email list or send us an email.

00:03:39 If you're interested at team at everything, coworking.com program is perfect. If you're hiring a new community manager and need a one stop source for training on operations, community, building, marketing, and sales, finance, and leadership, it's also important to support your more experienced community managers. We hear frequently that community managers are struggling right now. As many of your spaces are recovering from managing through COVID.

00:04:05 Our managers are less busy with fewer members in this space and feel like they're making less of an impact, but I can tell you, we, the community that the group is building is phenomenal. We've started the group last December. It's grown over time and we had one of our calls today, actually in the middle of my podcast recordings. And the group is just phenomenal.

00:04:27 They share, they support each other. They encourage each other and it's a community for them. We do a training every single month on a business building topic. Anyway, I won't go too much more into it. If you're interested, make sure you get the emails with all the details. Um, you can opt in@everythingcoworking.com forward slash community managers, or send us an email@teamateverythingcoworking.com.

00:04:50 If you want to make sure you get registered during this open enrollment period. And without further ado, let's jump into my conversation with Matt. Thank you for joining me today. I have a special guest, Matt Maurice from outside of Milwaukee, Wisconsin, a Midwesterner, you know, I favor Midwesterners. Matt is the co founder of MKE. Co-work in West Allis,

00:05:20 Wisconsin, and he is a serial entrepreneur. And so I'm excited to have him share his background, his business endeavors, and how he wound up owning a building and running a coworking space to be fair to Matt. Matt just opened in August, which is very recent and added a new son to the family son. Right. Did I get that right?

00:05:44 Daughter daughter. Okay. So he is now a father of three. So he, uh, lots going on in Matt's life and opened his, his space during a pandemic. So I asked Matt to join me because he owns his building and he and I have chatted about real estate and he's done some real estate, one Oh one for me. And I said,

00:06:06 you know, I think my audience is getting more and more interested in at least understanding what it looks like to own space. So while Matt just opened, it is not going to call himself a coworking expert quite yet. Um, I asked him to come share his story and do a little real estate, one Oh one for us. So Matt, thank you for joining me today.

00:06:25 All right. So great to be here. Thank you. So Matt sitting in his newly finished space, we were just talking about, you know, doing all the judging with acoustics and whatnot, getting into the space and actually using it, but, uh, congrats on finally being open. So tell us, um, a little bit about your background,

00:06:46 personal business, your coworking story, all the good things. And then I'll, I'll hit you with some, some detailed questions. Yeah, absolutely. So, um, as you mentioned, August 1st, uh, baby Reagan is her name came into this world and originally, and we'll get it kind of into the construction woes of owning your own building at some point,

00:07:05 I think in this interview, but, um, with the coordinators was supposed to be open far before she came into the world. So we were Planning to do both at once. Yeah, It was supposed to be done. This wasn't going to overlap whatsoever. Uh, and that didn't exactly happen the way that we planned. So now when we did launch,

00:07:22 uh, I was actually bringing my twin two year old boys to this space and I stuck them in a private office while we were getting everything else staged and ready and finished. And, and that last week is always the We're on the wall kids. Yeah. Uh, don't don't break anything. And it turned out there was a box of a bunch of promos that they got into and threw all over the place.

00:07:43 So it's, uh, it was 99% successful having them here. It was a little bit of a struggle, but it all turned out great. It's basically Belgrade and, uh, you know, kids are doing well. So, uh, yeah, so data three, um, wife does phenomenal. She takes care of him most of the time, so I can venture out into the coworking.

00:08:01 Right. You can hide out in your coworking space. Yeah. And, and, you know, try to try to build this business as much as I can. Um, so yeah. So tell us about your kind of professional background and how you wound up owning a coworking space and a building. That journey was, um, a little bit accidental,

00:08:20 I guess, if you will. So I'm a real estate investor, uh, have been, uh, quite literally since I turned 18, actually. So my family, uh, dad was an entrepreneur, although my sister and I never went away, he was thought he was a mechanic. He just went to an auto shop every day. It turns out that he owned the auto shop,

00:08:36 which we never knew. Um, but I was lucky enough to have a college fund. I, you know, my parents were going to pay for me to go to college. I was signed up and then my mom's credit, she came to me one day and said, Hey, do you want to go? Well, I kind of, I want to be a business owner.

00:08:51 I want to do what dad did. And at the time I was, I was running stores for a automotive company. And there's really no reason why we should pay to go to school when, what I want to learn, somebody would pay me to be taught. Um, so I was lucky enough to have that college phone and then I use that right away to buy a rental property.

00:09:09 So I bought a duplex. Uh, I was a landlord at age 18 had not having any clue what I was doing, You know, that you wanted to invest in real estate at the age of 18. Um, Looking back, I didn't know it was A mom and dad did it. It seemed to work out okay. Well for them. Uh,

00:09:28 so, uh, you know, rinse, wash, repeat Apple doesn't fall that far from the tree, I suppose, as the primary answer. But, uh, you know, now looking back, I wouldn't have done it unless it was the family exposure. I don't think, uh, you know, I think as a kid, I always had a little bit of an entrepreneurial spirit.

00:09:43 You know, I was the kid that was out cutting grass to save up money for video games or car or whatever else. But I don't know that I would have necessarily got into real estate if it wasn't for them. Um, but then with that exposure, so that first property saved up some money and then I bought another property a year or so afterwards.

00:10:00 And then I lived into it, fixed it up. Uh, they call it a house hacking. Now it wasn't called that back then, but basically we're using a super low down payment by the place. You can fix it up rent the other half. So your mortgage payment is either partially or completely covered by your other tenant. And you're quote unquote,

00:10:15 living for free. Um, you still obviously have maintenance and different different costs that built up, but your actual mortgage payment, it gets covered by your tenant. Um, so I did that for several years, built up a real estate portfolio, um, eventually left the automotive world to get involved in a district different aspect of real estate. So I'm a licensed real estate broker.

00:10:35 Uh, I opened up a property management business in 2014, um, and then sort of fell back into owning my own auto shop now, not for a corporate entity, just cause it was a business I was very comfortable with and the property management business at the time wasn't quite paying the bills. Um, so I dove back into an opportunity that kind of fell in my lap.

00:10:54 Um, so it was able to grow both of those businesses pretty well by just putting the right people in place. Um, I'd say if anything, that's, you know, hopefully other people would agree. One of my strong suits of being able to find, uh, great talent and then let them run with their ideas and be able to figure out how to create something from nothing.

00:11:13 So then the coworking business, um, you know, so the real estate investor side of me saw the building that we purchased. Uh, it was in a downtown area, it had retail frontage, it had parking behind, um, a hundred plus year old building was a huge renovation and I looked at it and I went, man, someone's, someone's got to buy this thing and do something cool with it.

00:11:33 And it's cheap. Uh, how hard could it be? And at that point in time, I had never really done much in the commercial world. Everything that I had done was residential, but you know, naive going into it to say, well, how different could it be? Um, for, for the audience out there, it's different. It's very different.

00:11:50 Yeah. You know, I, listen, I, you mentioned the bigger pockets podcast to me and I listened to it a couple of times. And recently I listened to somebody who was in commercial real estate and they were mentioning like they almost always cover residential and how different commercial is and people don't do a lot of crossover. It's, uh, you know,

00:12:13 it's the same, but it's not like it's, so it's brick and mortar. It's building out a roof. Uh, you know, the economics generally are similar. Um, but the vendors, the way that you write performance, the vacancy periods, primarily, uh, all of those things are drastically, drastically different. Um, you know, one of the benefits of residential is you just have a high demand product.

00:12:33 So if you have a residential unit empty for more than a month or two, you're doing something very wrong, um, versus commercial property, you know, consent years until you find that right tenant. And they're more complicated processes as well. There's tenant improvements. And you know, all the things that you've talked about over the years on the podcast of how you find,

00:12:51 and you can negotiate with a landlord and those timelines, and it's just very much more difficult versus you want to rent a lower duplex, you sign a lease and you move in. It's quite simple. So you saw the building, you thought somebody needs to buy it. And then how did you decide what you were going to do with it? Um,

00:13:13 so I bought it actually not knowing what I was going to do with it, honestly. Um, and then You can tell us that hopefully don't tell your wife that She might know that actually I, I'm pretty honest, I think with most of my blenders, uh, so the day we closed on it, I walked upstairs and the roof is just pouring water,

00:13:34 just absolutely leaking like a sieve, Welcome to commercial real estate. Yeah. That should have been an immediate sign to go. This was, this was a bad idea. Um, then, you know, so exploratory, once again, rental guy, the original plan originally, which was written up in the paper that we were going down the road was we were going to do Airbnb studios.

00:13:54 So we're going to pull out three Airbnb units for the upstairs. Was it, it was zoned for commercial or residential Office. And then, um, mercantile is what they call it here. And so we would have had to go through a change of use process and actually ultimately that's what put us way too way too far over the budget to make it economically just work out.

00:14:18 Cause once we decided to do residential upstairs, but still hold commercial downstairs, it triggered a lot of different fire suppression issues. Namely, we were going to have to sprinkle the building, which would have been a six figure line item on the budget that it just wasn't reasonable. It didn't make sense. So pulled back on the Airbnb idea and then eventually,

00:14:40 so a friend of ours is first time I became aware of frankly of coworking. So I ask everybody now, if they've heard of coworking, I'm always surprised particularly here in Milwaukee, in a smaller market, very few people have heard of coworking and I'm so involved in it now, but just three years ago, I had never heard of it. Either.

00:15:00 A friend of ours opened up a small space. It's got a, like a two for two to four person meeting room. And then the rest is just open member area. So the whole space is probably 14, 1500 square feet. So it's not, um, certainly not more of a traditional larger space model. Um, but it was the first time that my business partner and I were ever exposed to coworking.

00:15:21 And we're kind of looking at this thing going, this is pretty cool. Uh, so when we started our businesses back in 2014, I worked from home. Um, I'm horrible at working from home, uh Know with three small children, I have that excuse, right? Like back then, it was just, the laundry was always done. The dishes were always done.

00:15:41 I'd check the fridge six times to see if the milk moved. I just, I found every reason I could to leave my desk and do something else. You know, the dog loved it. We went on walks all the time. Um, I just, I'm not a person that can work from home. So when I was exposed to what this was,

00:15:58 I was like, man, if I knew about this, I would have been instantly a member at whatever the closest coworking space was cause I needed to get out. Um, and that really, I think, was the inspiration for our space. It, you know, we've always wanted to have that tie into the entrepreneurs. Um, so not to say that folks that aren't specifically an entrepreneur can't use our space.

00:16:19 Um, but a lot of the program when we do is built around entrepreneurship, um, you know, a lot of our taglines that our marketing is built really for that small business owner and make it approachable for somebody to start a business, have, you know, access to amenities. They wouldn't otherwise have access. And you know, our goal as a business is to graduate you out of our business.

00:16:37 You know? So you, you grow so big, you need to get your own office space or move to a bigger space. Cause you know, we've got, uh, you know, a handful of private offices and team rooms, but our space is 4,400 square feet excluding our exterior garage area. So we're on the smaller end of the spectrum. Um,

00:16:52 so yeah, So, um, okay, so you primarily serve, tell me about West Allis. You are, how far from Milwaukee. So one of the big benefits, uh, geographically, the location of why coworking, we felt made sense to us. Uh, we're about essentially located as you can be. So we're five minutes West of Milwaukee.

00:17:14 So we're basically the first suburb West of the main Milwaukee proper we're still in Milwaukee County. Um, but from where we're located, you're 10, 15 minutes anywhere in town. We're right off the freeway. Um, we're also, so serendipity labs opened up a location North of us, but them and us are the furthest West option. So for anybody that does live in any of the Western suburbs,

00:17:36 um, we were hoping to be the first option for any of those that needed a coworking space or wanted one. And the early on struggle that we're finding out similar to me years ago is, well, nobody knows nobody in the suburbs knows what a coworking space and we've had to go a little bit more on the offensive for our sales tax to get out in front of people to say,

00:17:56 Hey, this is what it is. Have you heard of it before? Would you want a free coffee to stop out and check out the space? And we're having some pretty good results with it. Once we get people in the space and exposed to the idea, but we're not seeing the organic search traffic, you know, we had a couple of different people actually do a,

00:18:14 uh, an analysis for a Google pay per click campaign. And they basically came back and they said, well, good news, bad news, good news is, it'd be super cheap to do this bad news is nobody's searching for this term, which is why it's cheap. So I mean, it, it's so interesting because you're so close to Milwaukee,

00:18:35 which is a real city, right? So you think to your point, you're like swimming in coworking now, how can anybody not know? And yet your closest target market really doesn't know. And now layer on top of that, all the people who are at home, who aren't even business owners, so who, you know, maybe had come across it from a networking event or something like really don't know.

00:19:01 And I'm curious about, you know, if somebody had, had told you, given you the results of that Google search, um, how you might, it would that have changed your decision to put the space in, but now you're finding you have to be really proactive, which is, I think helpful for folks to know, because I, in particular talk all the time about your Google,

00:19:21 my business listing. And it's like, well, if people aren't, if they're not aware, it doesn't in, um, James is doing, or whoever's handling your Google, my business listings, doing a great job with photos and got all the things go in, but he had to get people there. So you had shared, you know, you found a list and James is James,

00:19:39 is your community manager making some phone calls, which I also love because you found somebody who aligns with your culture have in your mindset of, okay, if they aren't showing up the door at the door, we have to go find them, which is important because you know, he's wearing, you know, much more of a business development hat versus only a I'll close them if they show up.

00:20:02 Yeah, very much so. And frankly, he was doing all the marketing and everything. So we've recently split that. So we brought on somebody to do a lot of the marketing pieces, cause that was taking up a lot of his time. And largely because I think his, his strength is reaching out, making those connections and handling a little bit more of the sales side of things he actually used to do.

00:20:22 Um, uh, basically like the, the Sam's called person where you'd come in and they talk to you about direct TV and, you know, try to strike up a conversation. So he's not afraid of rejection, which is such an awesome quality in life. And it takes a lot of rejection to get comfortable with it. But when you can get over that fear of,

00:20:41 well, this, the worst thing this person can tell me is no, well, that's not so bad. You know, they can, me, I'm a horrible human being, I guess, cause I called them, but they might be having a bad day. Uh, so yeah, the, the idea of creating the list, we went out about five miles.

00:20:55 We started with, uh, businesses under $2 million in revenue and under 12 employees. Um, and then geographically, we just started working away from our location, calling people and really leading with just questions about, do you know a coworker that is, have you ever heard of it? Uh, what's your current office space situation? Do you ever need small event space or meeting space?

00:21:16 Those types of questions is really just market research, get an idea of what people need, but then of course, as well, if you'd like to come down and check out our space, we'd happy to buy you a coffee, walk you through and see if it's something that you'd be interested in utilizing. Even if you just have a meeting in town and you want to pop in.

00:21:32 And for us really the key is just that exposure. It's, you know, once we get people in this space, they go, man, this, this is cool. This is nice. I get the vibes I could work from here. But if all they see is the pictures or the videos or the online pieces, it just, it doesn't have that same impact.

00:21:48 Um, so really going on the offense I think has been successful and not to say all this stuff we're doing on Google definitely is reaping its benefits. We've got, uh, you know, our first customer actually was from Illinois and it was somebody that they work from a coworking spot down there. So they called and it's it's, it's so fascinating to me.

00:22:06 When you talk to somebody who understands coworking, it's like, all right, I need a dedicated desk. What are your amenities? Where are you located? Cool. I'll schedule the tour for this time. And when you're talking to somebody who has no idea what coworking is, that sales process is significantly longer because you have to sell every single piece of it and why somebody would want all the different things And even right.

00:22:27 Explain how it works. What is a dedicated desk? Um, so I'm curious if you could go back in time and sit down with Matt of 2019 or, you know, whatever you kind of made the big decision to do the project. What are sort of the key things you would, you would warn him against or get him prepared for Plan better?

00:22:52 I think would be, uh, you know, by and large, the number one thing. So one of the bad habits of doing residential stuff for so long is you can always figure stuff out. And residential contractors are generally pretty available. Materials are available. You don't necessarily have to go all the way through with a plan before you start building stuff that you can kind of plan as you go,

00:23:16 um, you know, build a parachute. Once you've jumped out of the plane type of a thing. Well, that's not how commercial works, uh, commercial. You really need to execute the plan. You need to know, this is the type of flooring we're going to use. There's tile on the wall here, or this is just sheet rock,

00:23:32 or these are where the outlets and the lights are going to go. And, and you can make small modifications as you go through the process, but every change is expensive. And, uh, depending on the change you want to do, for instance, at one point in time, we were going to do hardwood floors and then we changed it to a LVP.

00:23:50 Well, that's a, like a three, a seven inch different in thickness, which changes your, your underlayment on your floor. Because if your stairs, your rise on your stairs is more than three, seven inch off. You're not going to pass inspection. So what to me was such a that's months down the road on a decision I need to make was a decision that should have been made right away,

00:24:12 right in the rough construction phases. And that just wasn't something I was, I was used to from running projects. So the advice to myself back then was a general contractor is probably worth their money. Don't be overconfident in my abilities to run a project of this scale that I've never done before. Um, and if I am going to bite it off myself,

00:24:32 execute the plan, knowing exactly what it is you're building, because then building it becomes significantly easier. So I'm curious about, um, your sort of how you're looking at your decision to hire your community manager. Now that you're you're into it and he's already so busy that he needs help because you were initially thinking, Hey, I got this, I can do this.

00:24:59 Yep. So our, our initial financial model didn't even have a community manager and it, it was a, it was a member managed space, um, which thankfully, uh, we were gently nudged and suggested that that might not work, um, by, by somebody. And, uh, and, and I'm glad we went that route. I think,

00:25:16 you know, it's easy as business owners to go, well, how busy could this person be? And I know one of the podcasts he did about that, just breaking down and you, and you, once you break it down, you go, well, of course this person can't do X, Y, Z. Like when you actually figure out what the day looks like,

00:25:34 there's no time to do these other things, especially when you, you want that higher level of community manager, you want that person offering the experience, you know, doing those, you know, those serendipity moments of, Hey, have you met this person? So if you're allowing for time for that, then you can't give them 10 hours of work to do in an eight hour day,

00:25:52 it's just not going work. Um, so we're glad that we went down the road of hiring somebody. So James, uh, is actually working for our property management company. So we did put out some ads. We interviewed some people we didn't, we didn't get the right feel from anybody we talked to. And we had talked to James about kind of structuring them part time in both spots.

00:26:12 So we still didn't commit like full, full time to a community manager. He kinda handles both. And I would anticipate at some point in time, one's probably going to win over the other and we'll have to sit down and talk with them and figure out which business he's more interested in being part of. He's a real estate investor too. He just bought a place in Bayview,

00:26:31 which is one of the more popular neighborhoods here in Milwaukee. So he's, he's learning the landlord game while also learning the community manager games. So he's a, he's busy. Yeah. He talking, speaking of all the, all the hats that they were well, I wonder, and we'll get into the real estate one Oh one, but since you're fresh,

00:26:48 um, upon opening and typically that's when we're, you know, sort of, uh, remembering the things that are helpful to others that are going down the journey. Can you talk a little bit, you mentioned managing a construction project, which I know you did on your own and said, maybe it'd be worth investing in a general contractor. Um, you had some construction delays.

00:27:09 Can you share just a couple of lessons learned around it? You shared already a couple of construction, but construction pre-selling like just kind of some of those things that might help others sort of set expectations as they're going through this. And, you know, I don't think it's, um, any business owner, we always think we can do things better and we can do it cheaper.

00:27:29 And that was really one of our mistakes early on. We did have somebody, he wasn't a general contractor, but he was running construction. Uh, and it really falls into the trust, but verify category of the budgets he put forth in the information he put forth, uh, we were overly assuming that, uh, he knew what he was doing and he didn't.

00:27:46 So we didn't follow through with the verify stage. Uh, and I think, uh, one of the most extreme examples, we let him do the budget for literally everything. I think he had six or $7,000 on the budget for furniture. Um, Oh boy, bigger eyes got there for anybody watching our video. So now knowing what we know well,

00:28:09 yeah, that, that should have been, uh, the most obvious red flag in the world. But at the time we were so engulfed with everything else, we didn't look that closer into it. The guy seemed wildly competent. So we didn't question it. And then shortly thereafter, a few months down is when we unfortunately let that person go and then kind of start the process over.

00:28:28 So originally this would have been summer of last year, we thought we were going to be open in November of 2019. Um, and we didn't open until August of 2020. So definitely some construction delays. Um, and you know, I go back to once again, the biggest thing would have been the appropriate plan, having a commercial architect, not a residential architect or not the plans.

00:28:50 So we've got a, we've got a staircase. It's my, uh, my hat trick staircase. Cause it got built three times before it was right. Um, one being a contractor issue, the second being the architect issue and the third being the ones that are actually there now. Um, so really vetting the vendors that you're going to be using,

00:29:08 making sure that you have the expert that you need. You know, the Jack of all trades can get you through, you know, your, your handyman stuff, your home, your residential properties, but your commercial is still a different world. There's different codes. There's things that are only applied to the commercial world that don't in the residential world. And if you're trying to overlap those vendors,

00:29:28 you might end up with those staircase. That's not doing correctly. And when the vendor built it to the plan, but the plan's wrong, the only person caught holding the bag at the end is the investor, the owner. Um, there's really no recourse to anybody else that we can go after. Um, so I'd say that was definitely a, the big learning curve for the one-on-one on the construction piece was really just spending more time on the plan and spending more time,

00:29:52 making sure to vet the vendors, you know, in the beginning, of course it was a, it was a budget conscious decision not to go with the general contractor. I think, you know, their upfront budget was a 40 or $50,000, uh, markup for their services, which now looking back, I would have gladly paid that to get through this project.

00:30:10 Um, but at the time it was like, Oh, I can, I can make some phone calls and do some coordination for 40, $50,000. Right. I'll take that paycheck. Yeah. That's crazy amounts of money. And now looking back, it's not, it would have been pretty reasonable. And then pre-selling, I don't think went super well for you.

00:30:32 And partly it was because you opened during a pandemic. So, but I think it's always good to, I think people get into their head, like they'll open, full, you know, even in quote unquote normal times, which is not always the case, even when you make the effort and you had photos and renderings and you want to talk just a little bit about that.

00:30:53 Anything, any advice you would share or, Well, I will say so we did a very poor job of it. And I would say almost all of that, if not all of that falls on my shoulders and there became a place where I was so intimately close to the construction project and all the problems and, you know, to effectively pre-sell. So when you start doing hardhat tours and bringing people through the first question,

00:31:16 everybody asks is, is great. When can I use it? When are you going to be done? And I had lost all of my confidence on offering that date. Um, you know, cause it was, you know, June or it was, you know, April then made in June and, you know, we changed our website three or four times of when our open day was going to be.

00:31:35 So when we started getting to that presale standpoint and trying to schedule tours, I don't think we ever really put it a hundred percent in front of mine and effort because we just didn't have the confidence to know when it was actually going to be open. And I don't like committing to something and then having to back up and say, well, sorry, we,

00:31:54 you know, we couldn't deliver here's your next time when you can actually use the desk that we promise. Um, so, and like I said, I think that falls completely on me. And I think, you know, during all of those delays of those construction projects, cause I was the one running it, um, I think saying it was kind of a dark place as is not the right dramatic.

00:32:13 It wasn't, it wasn't, it wasn't quite there. Um, but certainly it was the bane of my existence. It was every day dealing with vendors that didn't show up on time and you know, it's very much adult babysitting, so I Right to switch that hat and like get out your champagne and hardhat and oversell And there's great place. You're going to love it.

00:32:37 Even though I just got done yelling at a Mason, um, it just, it just wasn't there. So we did not do a good job with it. And we started getting the marketing pieces, you know, that's when we got James on board. So he started working a lot of our Google stuff and you know, he's coming in with a fresh set of eyes and he goes,

00:32:51 this place is awesome energy, totally fresh energy. Um, and then, you know, once we, uh, we're basically knocking on the doors of open furniture was here, the place looked great. That's when we really started our marketing efforts. So, uh, we didn't, you know, we did the friends and family let's get butts in seats.

00:33:10 Anybody we know can have a free membership and please just work from this space. So there's, there becomes some of that energy for sure. Little mojo. And so we got our occupancy August 17th. And uh, so remember we're recording this late September and I would say, we're, we're really hitting the stride now. So I think that five, six week period of time had we been really heavy marketing before we were open,

00:33:36 we might be hitting some of that stride right when we opened. So we had a little bit of a delay, but given the unknowns of the construction piece of this particular project, I'm pretty uncomfortable with that. And I think, you know, on the plan side of things for the business of the coworking side of things, what we did do a good job of is doing a real conservative outlay on our performer on how long it's actually going to take to get to occupancy,

00:33:59 you know, making sure that we had cash in the bank to cover what our rent obligation was for a period of time. And you know, it is nice being both the landlord and the tenants. So we had to go back and renegotiate our lease, um, which, you know, with our, um, we, we do have a, we do have a silent partner on the coworking business piece that he's not part of the building.

00:34:19 So there was a little bit of a conversation that needed to be had, um, as far as how we were going to Peter Paul, a few different things to make it work for both ends. Um, but yeah, it's, it's a pretty streamlined negotiation when you're 80% of both sides. But I think I bring that up not to get you to confess about pre-selling,

00:34:37 but more just, you know, the reality of right, managing a construction project takes up a lot of time. You're making a lot of decisions. You're doing a lot of babysitting and finding the time and the head space for all the pre-marketing plus you open during a pandemic can be challenging. And so I think it it's like a superhero effort to get all the pieces to fall into place.

00:35:00 But if you're, you know, if you're paying rent on day one, hopefully you're not, hopefully you've negotiated with your landlord or with your, with yourself, but which is another super important point though, the real estate deal matters a lot. And that ramp up time, you know, matters a lot. Even your community manager decision, I think part of you was picturing the space full,

00:35:22 right? Like, Oh, it can be a self managed space when it's full, but there's this like, well, who's selling, who's filling it. And so going through that, that process. So, and again, I'm not, I think lots of people go through these decisions especially mean I'm probably a little bit like your profile. I'll just do it chronic DIY.

00:35:41 Totally. Over-confident that like, that won't take long. Why would I pay 50 grand to have somebody else do it? So I think there are lots of us out there. So that's, I'm not picking on you. I'm, I'm bringing it up. And Matt, I know, so Matt's one of my coworking startup school students and James is now in the community manager university.

00:35:59 So I got to spend time with Matt. I think we went through a couple of staircases together, so Yeah. Yeah. I think that was during that same period of time. And to your point a is for me, it wasn't the time cause I was here anyways. Right. I was running the construction project so I could have done it was the Headspace speed.

00:36:16 It was, I couldn't be the person that people wanted to come greet and meet and do a fun tour with because I just couldn't be there. Uh, and I'm, uh, I'm a very, uh, even keel optimist, uh, I can put on the good face and I even struggled with the ability to wear those two hats. Um, and then they really just needed to be separated,

00:36:37 which is why when we did bring James on it worked out significantly better. Awesome. Okay. So let's dive into a little bit of real estate one Oh one. I realize we're well into this. So I'll keep us moving here. Um, so I'll let you kind of go through some of this in the order. I drafted some questions that I thought might be helpful.

00:36:57 First of all, not everybody should buy commercial real estate, but who should think about that? And I frame it this way, because I mentioned to you, um, when we were kind of pre chatting, any operator that's lived through COVID, you know, is paranoid about control. Um, you know, not having gotten relief from a landlord, you know,

00:37:18 having to pay rent and sort of looking at the economics. And also I think put folks who have any sort of tied to the real estate world, start to think, Hmm, there are there going to be some opportunities that I should be looking at to own, you know, versus versus signing a lease. So I'm kind of, I'm curious about your perspective on all of this,

00:37:38 but maybe start with, you know, who should think about buying commercial real estate or who should turn this off and go, you know, watch a baseball game. Sure. There's a lot to unpack in that question. That was a big one. Yeah. That's okay. I guess where I'll start is one of the big distinctions I have is if you're a business owner that doesn't mean you're necessarily a landlord and vice versa,

00:37:59 right? So a lot of real estate investors, traditional ones, anyways, that aren't out there finding off market deals and hustling and doing it full time. You know, they're investing in real estate for anywhere from a four to a 12% return. A cap rate is what they call it in real estate. Um, if you're opening up a business and you're only looking for somewhere in that realm of a return,

00:38:19 um, you gotta look at a different business. Yeah. Combining the two, you know, I actually am generally of the opinion that business owners shouldn't own their real estate. So if you own a retail shop or an office, whatever it might be business, you operate, you're better off using that money to reinvest in that business and grow that business because it's going to give you a significantly higher return.

00:38:41 Um, you know, right now I'm kind of dabbling with looking at purchasing small businesses as a business opportunity. And a lot of times you're, you're buying these businesses off of multiples, right? So it's, you know, two to five years EBITDA is what you're going to be paying for a lot of smaller cap businesses. Well, if you look at,

00:38:59 I'm going to give you a four years EBITDA for your business, that means if I buy it and nothing changes, I'm going to get that investment back and four years, well, that's a 25% return. So if I'm sitting on a stack of capital and I can buy a building and get a six to 10% return, I'd be far better off just reinvesting back in my business.

00:39:19 Now, all of that being said, we started this whole thing with real estate investor. This is what I've done for a long time where coworking becomes interesting as the product is, is directly tied in with the real estate. You can't have a coworking space without brick and mortar. Um, so when you have a business that is so inherently inter mingled with the real estate piece is when you start to need to consider it.

00:39:44 And I think what I hear a lot of folks saying that, you know, the landlords are the ones making all the money in the deal. Like I still fall back to unless they bought it, frankly, it's still a six to 10% return. Real estate is expensive and markets are driven by those prices. Um, but when they're saying that, I think what they really mean is I want to have control of my destiny.

00:40:05 And if you don't have a good working relationship with a landlord, um, that can become very troublesome markets change. I mean, as you've, uh, been open and sharing your space doubled in rent at the end of your lease, which has made it economically impossible to continue your business there. Um, so being really smart on the front end to have a great relationship with that landlord do,

00:40:26 I'm a, I'm a big fan of working with smaller landlords. You work with, uh, some of these REITs or these national players or these larger broker represented deals. And they're going to be very market driven. There is no relationship at the end of your lease. That's going to be the new market rate. If you want to renew. And vacancy is just another number on a spreadsheet for them.

00:40:44 So they don't, they're not really motivated to keep you, whereas that small landlord that maybe owns a couple different buildings, you can develop that relationship with them. You can, you know, sit at their dinner table, you can have a drink with them and you can develop that long lasting relationship when your lease is up, you get a fair negotiation,

00:41:02 maybe there's a slight increase, but not a, you know, a double, not a 40 to 80 square foot, a bump up that just makes your business completely infeasible. Um, so who's the right person to buy the real estate. Certainly I think if you've got the financial capacity to do it and the coworking business, it makes a lot of sense to me because they are so intertwined.

00:41:22 Um, but even, you know, if you're looking at maybe multiple locations or a larger space, the arts are space. Uh, you know, I said, it's about 4,500 square feet. Uh, if I was looking at a 10 or 15 or 20,000 square foot space, we probably wouldn't have had the financial capacity to purchase the real estate and do the build out and do the coworking business where we would have been looking to engage with a landlord and,

00:41:47 and maybe do a lease option. So maybe have the flexibility to purchase the real estate down the road if we, uh, things were working out and we wanted that ability, but certainly on the front end on a speculation standpoint, it's far more appealing. You know, it's, it's, it's kind of what we talk about in the coworking place. Why sign a five year lease when you can rent from me on a year,

00:42:05 a month, a month basis, we'll buy, why buy the building for 30 years? If you don't even know if your business is going to last three years? Um, so sometimes those lease options are really great ways to structure a short term lease and then a predetermined option to purchase it for a price today to buy tomorrow, I think is a great way to structure a deal.

00:42:25 So speaking of structure, can you walk us through a little bit about how commercial real estate purchases look? What type of investment required? You know, again, kind of one Oh one Oh one. If somebody is thinking about, uh, getting thinking, they may want to buy a building. Sure. Uh, you know, it's, it's really,

00:42:46 um, this is going to sound like a dance around answer it's quite complex and it depends, right? Like that's the favorite attorney answer? Well, it depends. Um, but it really does. And I think that's one of the challenges of the commercial real estate is. So when you look at residential, you can go on Zillow, you can go on Trulia,

00:43:02 you know, you, as a consumer can figure out a pretty good idea of market value of what's out there. Uh, quality commercial. You've got, uh, you know, manufacturing, industrial retail office space and coworking for a long time has lived in a lot of those weird spaces that nobody knew what else to do with it. Um, so are you looking at,

00:43:19 you know, the back corner of an old building or are you looking for retail frontage and then what that level of build out's going to be if you're looking at purchasing the building and then what your banking relationship is to, right. So, you know, a lot of these, we are talking larger build outs to get coworking spaces, to the level of product that we need.

00:43:37 You know, we're looking for high end modern office space in most cases, um, which is not going to be a cheap build-out. Now, if you can run across a situation where maybe it's the next generation space, somebody else already built it out and no longer needs it, and then you can pick it up and it's relatively turnkey. That'd be a great opportunity to look for what becomes challenging in the commercial world is it's very much,

00:44:00 I call it the old gentleman's club, right? So residential used to be controlled by brokers, but now access to information is pretty readily available. Commercial is surprisingly restricted still. So if I want to buy or lease a 5,000 square foot space, it's still really hard for me to find that information without a commercial real estate broker that can guide me through that process.

00:44:22 And the good deals will get scooped up before you ever even know about them, because the person that listed it knows the other broker that has a company they're an all cash, quick, close, no hassle and agents work on commission. So the quicker they can get to the closing table with less hassle is how they're going to be motivated. So to bring in a new investor that maybe isn't as savvy with,

00:44:45 uh, you know, the, the commercial world and get into the closing table that looks like a lot more work. And the deals that then present yourself are kind of the ones that have been sitting around for a while and everybody else has passed on, uh, all the more serious buyers. So like our building, as an example, was listed for two and a half years,

00:45:04 it was a huge renovation project. I mean, we took the thing down to the bricks and back. So the reason that we were able to scoop it up was literally nobody else wanted this thing. We were the only ones silly enough to take on a renovation. Um, so it kind of fell into our lap. And in the beginning it made sense.

00:45:21 But if this was a, you know, second generation space, it was turnkey ready to go. They go quick, they get grouped up really quick. How does financing work? Do people generally, um, are you looking, I mean, you're gonna tell me it depends, but what's, what's sort of the framework for approaching a commercial investment. I don't think that is much different than financing with anything else,

00:45:49 uh, you know, depending on the bank. So you're kind of leaving the Franny, uh, Freddie Mac, Fannie Bay world of fixed rate financing. You're typically moving into more of a commercial loan product. Cause it's a business personally, we use a local portfolio bank that we've got a great relationship with, um, which is always my advice to folks.

00:46:09 You know, the difference in a couple of couple of basis points it's not gonna make or break your financials, but just the ability to underwrite and get deals through the system will, uh, and you know, the commercial welder is very large off of the underwriting of your experience and ability to do it. And then what the business metrics are going to look at.

00:46:27 So they portfolio banks start to move away from your credit score and your personal debt to income ratios. You know, that's the matters, but it doesn't matter as much as the underlying metrics of the business you're proposing. What is your experience level and running a coworking space, doing this level of build out. Cause when they lend the money, they're doing it from their own banks,

00:46:49 their own funds, essentially it sits on their balance sheet. Whereas you go get a mortgage on your home and that gets sold off to the, the third party markets. Um, so having those relationships built ahead of time is incredibly beneficial. That was one thing I was able to do just from all the residential projects. I had done a lot of projects with this bank and every project kept getting a little bit bigger.

00:47:12 So when I proposed this one to them, it wasn't completely out of the blue. Uh, you know, it wasn't like I walked in the door and said, Hey, I'm looking for a loan this size. They were a little bit prepped for it. Um, And they had experience with you. And you're honest with me and you know, certainly in the area And I think the larger the bank you get,

00:47:31 the more tape there is to get through. Um, and the harder that approval process is going to be because they don't understand the local market. And so did you, again, framework wise, are you financing the buildout along with the purchase of the building? Yeah. So typically that's how we would have done it. This one ended up being a little bit different just because,

00:47:53 um, I go back to the plan when you do construction financing, you're, you're doing your original plan, here's your budget. And then at different milestones, when you need a draw out a pay your contractor cases. Um, so let's say it's a half million dollar build out and you're going to do five draws throughout the process. Well, when that first a hundred thousand needs to get paid to the contractor,

00:48:16 your bank or your title company will send somebody out to do an inspection, see some level of completion, cause they don't want to release the funds unless they know that work has actually progressed on the building. And then they typically release those funds, direct to the contractor to pay off whatever invoice they have. And you do these multiple draws throughout the construction project.

00:48:34 Uh, in our particular case, we kind of threw that away early on because our budget was so far off that we didn't have the appropriate draw schedule. Uh, and we learned very quick, but that just wasn't going to work, which admittedly should have been a huge red flag. Uh, these protections are in place to make you, uh, not do what we did to make sure that you do have a plan and that you are doing things correct,

00:48:59 and that you aren't going to run out of money. Cause that's the last thing the bank wants is, Hey, we've, you know, we've sent out a half, a million dollars and now you've got a, they've got a lien on a building that's still not done and you need another two, $300,000 to fix the project. So that should have been a huge red flag in our process.

00:49:16 So we ended up, self-funding a lot of the build out a lot of the construction piece. And then at the end of the project, we got to reappraise them. We just basically financed ourselves pack out of it. Um, so we had the ability to do that, but you know, once again, this was in the grand scheme of things,

00:49:30 a smaller project. If this was a 10 to 15,000 square foot project, we weren't going to be self funding that size of a project. Um, which coincidentally would've meant. We would've had to have a better plan on the front end to execute it. And I think it would've worked out better, frankly, but yeah. In terms of your bank being willing to lend,

00:49:53 one of the things we hear about in the, you know, sort of flex office space is that lenders still don't like the short term nature of the contracts in place. And I know we've talked about this on our startup school calls, cause I've always been so curious about this, you talk about it being mostly relationship based, but can you just talk about that a little bit since I think people may run into that barrier.

00:50:16 So even I've got a great relationship with this bank, it still came up. Um, it, they didn't know what coworking was just like most people in our city that don't know what it is and you know, for a bank exactly, to your point, they came back and they said, all right, well, people are signing a 12 month agreement to rent this office.

00:50:32 And I went, well, no, um, you know, maybe if we can get it done, but you know, we're month to month. Uh, and that, that did cause some concern with them cause they want to see longterm commitments and make sure the revenue is there to support the debt payments. Um, so it was a conversation certainly to educate them on what the model is,

00:50:53 what the appeal of the flexibility is, why we're offering it and not putting people into a longer term contract. And I think, you know, certainly through the relationship, but through a couple of different conversations with, um, uh, inciting some other examples of bigger players. So, you know, in our market, we did have serendipity labs coming in,

00:51:11 uh, novel, just came in. Uh, we have a couple of smaller Regis spots, so it's not like what we're doing is brand new. So even though that they weren't aware, they didn't have a lot of knowledge about the space. There was other people in town already doing it, which I think also put a little bit of ease on their shoulders.

00:51:27 Um, but, uh, yeah, I think if it wasn't for the fact that I had the relationship with them, those conversations would have been significantly more difficult than maybe went to a standstill. And I think what's difficult about the banking piece is we tend to put the banks in the power position. Um, we're the bank's customers, the banks should be fighting for our ability.

00:51:50 Cause at the end of the day, I still have to make money on lending money. That's how they're in business. Um, you know, having two or three banks that you have relationships with that can compete for your business, uh, is always a smart business decision. And frankly, when you're starting those relationships, sometimes just talking to them and you know,

00:52:05 asking what types of loans do you guys want to be doing or, you know, are you in, in lending in the commercial real estate or small business world and some banks will say, yeah, that's absolutely where we want to be in. And some won't and then you can move on to the next one and develop that relationship with the bank. That's going to make sense for a win win on both sides.

00:52:24 So I'm curious, you mentioned sort of the, the, uh, old, old boys club nature of it, you know, commercial and office real estate, and the reality for you that you got this building cause nobody else wanted it. Do you think that given kind of what's happening with office in particular, um, as a class and the demand for that we think falling demand for longer term office space,

00:52:49 do you think there will be deals out there for, for, for people who are listening or, you know, kind of what's your outlook? Yes, I definitely do. Um, I I'm big time optimistic on the coworking model and as a whole, as the business model, I mean there's ton of reports and I know you guys put out a ton of information to say the trends and wherever things are going and you know,

00:53:12 so I'm drinking the Koolaid, just like everybody else. I see the trends that I see it going that way. Um, what becomes, uh, the, the opportunity I suppose, for folks is if you're in the market for that, you can't do it yourself. You need to talk to brokers, you need to talk to agents. You need to develop relationships with those folks that are going to be the ones that have these deals.

00:53:33 They need to very clearly know what you're looking for and they need to know how serious you are and that you can close. Uh, once again, for them, it's all about getting somebody to the closing tables, the only time that they get paid. And, you know, everybody talks a big game on the front end. So when you reach out to these folks,

00:53:51 having a very clear vision of what you're looking for, size, you know, demographics area of town, types of building of financial capacity, all of those things prepared for them. When you have that initial conversation immediately lets them know, Hey, I've got somebody that's serious. They're looking for a space right now. They're going to be able to close and then you can start to get those opportunities when they show up.

00:54:15 Because if they just have somebody that's kind of a looky loo that, Hey, maybe they'd be interested in this. Well, your third on the email list, you're not first on the email list when a space comes up and it's, you know, there's usually three to five main brokers in the commercial world and every town, you always have your national ones and then you've got more of your local ones and a lot of them have different niches.

00:54:35 So some do industrial manufacturing, some do office, some do downtown, some do suburbs. So it's, you know, it's kind of just making some phone calls and figuring out who's the person that you need to know for the area that you want and then buy them a cup of coffee. If you're still going out and doing in person meetings or grab a zoom virtual coffee with them,

00:54:52 um, you know, kill them with kindness and started working on that relationship. So when the deals show up, they can come to your inbox. I think that's super helpful perspective. Good brokers will be busy, right? And to your point, like if they only have so much time, they're trying to close deals with that time. And so they're going to give the attention to people who can do that.

00:55:13 So I think that's super important. So it's almost, it's challenging, I suppose, to be new at this and to sort of be competent to move, you know, quickly and kind of get your ducks ducks in a row and probably have those conversations with your lender, like know that you can get the financing and kind of take all the steps when you find what you want.

00:55:35 Well, and I think there's a, you know, there's some, some truth to just not being the expert, if you aren't. Uh, so you know, the fake it till you make it statement, I've never been a big fan of, um, so don't, don't, uh, don't lead with confidence if you're just wildly lying, cause they're going to see through that,

00:55:51 right? Yeah. A good broker is going to go, all right, this person doesn't know what they're talking about. So you can still ask the questions where there's there's gaps in knowledge. Um, but I think just coming together with a plan and an idea of what you're looking for, that's the piece that they want to see. They want to see that exactly.

00:56:06 You know, what you're looking for and it's not this well, I'll take a 15th floor, I'll take a first floor parking may or may not matter. And what's your budget. Well, I'm kinda up for whatever. Alright. You have no clue what you're looking for. Then I'm not going to spend my time. Even you're leasing. You should Know the answers to all those questions.

00:56:26 Yeah. Yeah. You're in trouble if you're, if you're that unclear. So I know you've been doing this for a long time for somebody who's new. Is there a podcast or a book or resource that you would recommend to somebody who wants to learn more about commercial and in particular office? So, uh, not, not off the top of my head on the commercial side of things.

00:56:50 Uh, so I know the bigger pockets podcast is, uh, they they're real estate investors, largely residential. They dabble in a lot of different niches of commercial real estate. Uh, I've never heard anything about coworking on their podcast, certainly. Um, and you know, they bring in a lot of big hitter guests. Um, so you know,

00:57:07 a lot of very well known authors names, investors, um, and everybody's got a little bit of a different opinion. You know, what the interesting thing about real estate is you could talk to 10 people and those 10 people have very different ways as to how they make their money within real estate. And they're all passionate that theirs is the best way and there's this the right way.

00:57:26 Um, so you can slice it up a bunch of different ways as to what you're going to find your niche. Um, but that's a great resource to just start understanding a lot of the financial metrics too. A lot of the mindset, a lot of the search processes and hear stories about how other people. So even if it's not specifically coworker, specifically commercial,

00:57:45 most of real estate investment fundamentals go throughout both spaces. And then it's just using those techniques to apply them to what you're doing. Um, and they also have a, a business podcast and a money podcast as part of their platform as well. Um, which are pretty good content. I, I listened to them on a fairly regular basis and you know,

00:58:04 it keeps me entertained. Yeah, I N so I haven't listened to the, the two other ones I've listened to the bigger pockets, real estate one, and happened to catch the commercial one. Although I think the guy wasn't, I can't freeze doing office, he was laundromat. What's one of his, you learn a lot about, you know, what's happening out there and how people are thinking and you know,

00:58:26 how, how the investments work. So, um, anything else before we wrap up here that you would share with folks kind of on, on the journey to coworking or, and, or purchasing a building to run a coworking space out of? Yeah. You know, I think real estate, the beauty of real estate it's, it's, it's hyper local,

00:58:46 right? So while there's a lot of people that want to do business across the country, excuse me, um, the first place that you should start as always in your backyard, nobody knows the market in your backyard as well as you can. And if you become a hyper expert on understanding the buildings available in, uh, you know, maybe a three mile radius,

00:59:06 or maybe, you know, one town. So, you know, there's Milwaukee, we're in West Alice. We do a lot of business here, uh, depending on the size of the municipality. Maybe not even looking at it entire town, maybe just looking at one section of a talent or a downtown area. So you can be the absolute expert in that area.

00:59:21 And that's where, especially when you're gonna start investing in real estate, you just have to exercise the muscle. You have to evaluate deals. You have to see what's out there because to understand what a good deal is, you have to know what a bad deal is. And you have to have looked at enough to know, Hey, when this hits the market for this price or whatever,

00:59:40 uh, the, the economics of the building are, if you don't know, that's a good deal and somebody else does, you're going to miss it. Um, so you want to be able to be the expert in a small geographical area. So you can jump on something really, really quick on the real estate side of things. Certainly. Perfect.

00:59:58 Yes, flex the muscle learn and, and, uh, give yourself time to learn and, and understand what looks good and what doesn't Matt, thank you for. I've kept you on for quite some time covering coworking and real estate. So I appreciate you spending the time and sharing your story and giving us a real estate one Oh one. So, um,

01:00:20 thank you very much. And, um, we'll have to stay in touch and have you back on when you're a little further in and well, I should ask what's next. Uh, so what's next. Uh, we are looking once we can get to our breakeven on MK co-work. So, you know, our model was originally going to be essentially the Walgreens of coworking space.

01:00:41 So we want to try to figure out the 5,000 square foot, every corner suburb, coworking market, um, which we're early finding out is going to be a challenge. Cause nobody where we want to put these on every corner knows what they are. Um, but we've got some pretty aggressive plans. You know, we want to get to breakeven. We want to prove the model in this one location.

01:01:01 And then we want to have six to eight locations here in the greater Milwaukee area in a pretty short period of time. So once, once we can prove the model and, uh, we can get to at least break even on this first one, hopefully our pandemic starts to loosen up and then we're going to start scouting out for the next one. And I can take you right through the journey of building the second one and I'll let you know which general contractor I hired.

01:01:22 Cause next time it's not going to be me. Totally. And you need at least another location to apply all these lessons learned for sure. Awesome. Thank you, Matt. Thanks so much.

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