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Investing Like a Family Office – feat. Josh McCallen

 If you’ve listened to our other podcasts on retail real estate, you probably don’t believe that retail is dead, despite what the media headlines purport. In this week’s episode, Bob Fraser and Ben Fraser interview returning guest, Parker Webb, of FTW Investments. They revisit the retail real estate sector and discuss what’s been happening in today’s market, if the positive trends are continuing and ultimately, how these types of assets may perform if our economy goes into recession.

Watch the Episode here

Investing Like a Family Office – feat. Josh McCallen

E64 with Josh McCallen

Ben Fraser

Hello, Future Billionaires! Welcome back to another episode. We’ve got a great one today with our good friend Josh McCallan of Accountable Equity. Ad today, uh, we’re talking about how to think differently in your investment philosophy and invest like a family office. Now, what’s a family office? Well, you gotta listen to the episode to, to hear more about it and how they actually invest differently.n

Um, but there’s a couple things that are pretty distinct than a lot of kinda retail, traditional just investors. So be sure to check this out. We hit on family office. We also talk a little bit at the end of the episode about resort investing,

Bob Fraser

Is hospitality dead? Is it dead or is there some niches that can make you some real money?

Ben Fraser

So, yes, and as always, we have to give a disclaimer for anyone that we bring on this podcast who is, uh, raising Capital has opened, uh, opportunities for investment. Please do your own due diligence. Uh, this is not our way to promote them. Uh, we have no business relationship with them. So do your own due diligence and, uh, hope you enjoy this episode.

This is the Invest Like a Billionaire podcast, where we uncover the alternative investments and strategies that billionaires use to grow wealth. The tools and tactics you’ll learn from this podcast will make you a better investor and help you build legacy wealth. Join us as we dive into the world of alternative investments, uncover strategies of the ultra wealthy, discuss economics and interview successful investors.

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Welcome back to another episode of Invest Like a Billionaire. I am your co-host Ben Fraser, joined by fellow co-host Bob Fraser, and today we have an awesome guest, a friend of ours, uh, that we know from afar and, and super periodically, Josh McCallen and just super excited to have him on today. So, uh, he runs a really cool podcast called Capital Hacking.

If you’ve not, uh, heard that or seen that, and is a c CEO of, uh, Viva Viva. , make sure I say that right. Hospitality. Um, and has really carved out a cool niche in, um, the hospitality resort, uh, investing space. And so I wanted to bring him on, talk a little bit about that. And then also been talking recently about his kind of personal investing philosophy and strategy and, um, really investing like a family office.

Um, a lot of these families think differently than the average investor, and it really aligns with a lot of our, um, you know, thoughts around investing like a billionaire. So Josh. Thanks so much for

Josh McCallen

coming on. I’m so glad to be here because you guys have one of the best branded shows on Apple Podcast. Uh, the Invest like a Billionaire show is dominant.

Man. Congratulations. You guys are doing a great job,

Bob Fraser

. Hey, thanks. And, and what is capital hacking? That’s kind of cool. So, so what does it mean?

Josh McCallen

So, you know, there’s like, I dissertations, I’m writing a book on it, but generally I like to think of it as a couple ways. One, human capital meets financial capital.

Really we gotta invest in the people and they’re, you know, I always talk about human capital meets financial capital and that’s, that’s really, uh, the whole idea of capital hacking. But I also love the double wins. You know, you kill two birds of one stone. So a lot of times when we make an investment or build a company, I, I call it capital hacking because one domino knocks over the next, which you see a lot as you get momentum in business.

But if you’re intentional about it, you can line up more than one domino. I can explain that some time. That’s so cool. and then we get alternative. It’s really an alternative investment mastermind. That’s what we, that’s what capital hacking is because you gotta find assets that are outside the norm, uh, because then they come with two benefits, right?

Yield and sometimes great tax strategy. That’s a good capital hack, right? Or how about yield? Tax strategy and fun. That’s another great triple. That’s a triple

Bob Fraser

bird. Okay, we’re into

Ben Fraser

that. Well just tell us some of your story. For those that don’t, don’t know. You don’t know your story, and how did you get into this alternative investing world and space and in the particular niche you’re in?


Josh McCallen

Yep. And I, and I appreciate Aspen Funds and teaching me a lot. I’ve watched you guys at all the conferences and, uh, we share a lot of, uh, similar values. So our, our journey began as a blue collar guy. Uh, my mom, uh, was handicapped and so we kind of grew up really poor welfare for a long time. But I loved to work.

Right, and this is that human capital part of our show is like, uh, you wanna surround yourself with people like Jim Rome said that are, that are gonna be the average of what you wanna be. I always was working, so I ended up getting to the right rooms and it just was a hustling, everything from paperboy to pizza guy, but um, journey from that to wanting to do ministry.

So I ended up getting a theology degree and a history degree and I. And from there I realized I was supposed to go into business . I was supposed to go into business, so my wife’s like, well, if you’re gonna go into business, you better get an MBA for free by going to work at a university. So there’s another capital hack, right?

You don’t have to pay for that mba. So that, that journey got us back into university, and from there we got a crazy opportunity to live in Europe. So our journey is kind of weird, right? It goes from this heart for others to let’s make sure we’re making enough money to have a family to somebody offered me a chance to live in Europe for four years and run a, a property in a campus and a hotel, and Melanie and I jumped on it when we were in our twenties, and that really profoundly kind of changed our trajectory and, uh, a passion for beauty, a passion.

Others, uh, and bringing that kind of, um, the qualities of what? We lived in Europe. We lived in the Alps in a village. Oh wow. Sel and Gretel style. I mean, it was awesome. . It was like baskets. People carried wicker baskets to go grocery shopping. I mean, and I’m not kidding. It was just that good a babbling brook right down our road and.

It’s so good. As a matter of fact, a lot of the cool things we do at the resorts now are inspired by our time in outside of Munich and in Italy, and we would do a lot of trips. So, uh, we brought a lot of that kind of community culture to our resorts. Man,

Bob Fraser

I’m going got, tell me you’d love it, by the way.

Ben Fraser

I can’t really see you hauling a wicker basket around, but maybe

Josh McCallen

I, I’ll tell you, I’m not sure it’s as good as it was when we were there 20 years ago, because back then it felt like idyllic and then that, sadly, those countries became extremely authoritarian under the Covid. So I’m not even sure I wanna go back, but, but when we were there, it was like hundreds of years ago, it just felt like you could walk to everything.

You walked to a restaurant, you walked, and we brought that kind of walking garden nest kind of thing to our resorts. But fast forward, end up having a lot of kids. . And so from that is also necessity is the mother of invention, right? . So we’re always working on building things. We started working for a family office.

As we were just talk, you and I were talking to before this show, I ended up stumbling into an opportunity because of, you know, being hustling and working, uh, to work for a gentleman who had just had a major liquidity, you know, major liquidity, which he then turned into a family office. I had never heard these terms.

This is like 15 years ago. And his idea was to build flip houses. About 5 million, 10 million flip houses. And at the time I was passionate about that idea, had not yet built a house. And so he assigned me to be the project manager, uh, you know, to manage the family office’s assets in construction. And from that became quite, Adept at building because back in the boom of oh 6, 0 7 there, the contractors who said they were coming never came, and then other contractors came, and then your GC didn’t show up.

So if you’re the project manager, you’re the ones holding the plans, you end up just teaching the guys how to build because. It was, it was like the wild west back then. So I ended up building a bunch of beautiful, legendary properties and then later that same skill became how to get us out of a hole. He had bought a few hotels and they were upside down financially, and it was 2010, 11, it was still a recession.

And he said, what should we do? And I said, why don’t we restore ’em and become hotel flippers? And therein lies the beginning of a long journey that got us here 10, 12 years later. Talk a little

Ben Fraser

bit about your experience in the family office cuz. Alluded to that at the beginning of the show of how they think differently.

Right? So a lot of times for those that don’t know what a family office is, it’s generally a family member or a, a family has some type of liquidity event, either usually from a sale of a business, um, or an inheritance or something, and they have large sum of money and. , they have to go and invest that. And hopefully that will last for many generations.

And so, so talk a little bit about your experience there. How did that maybe change or form your perception of investing That’s different than, you know, the real estate entrepreneur is just trying to make a buck, doing a, doing a flip or two, you know. What, what’s the difference?

Josh McCallen

Thanks for asking. Thanks for asking.

Um, great experience there. Spent 12 years actually ended becoming their partner in some projects that they owned. The, the way that mindset can work for there, every family office has probably built a little differently. You guys probably know Richard Wilson from the Family Office Club. Mm-hmm. , I’m sure he knows Aspen Funds.

Uh, he just spoke at an event. Last week, so I got to hear his explanation of a family office and he talked about you’re gonna put a lawyer on your team that makes sure you, you sign the right kind of contracts, you’re gonna put a deal generator, somebody goes out and finds assets to buy, and then you’re gonna put a financial planner that makes sure you get my point.

You’re gonna really be planning out through cycles, not typically flips. And so that general thought of, I guess two things. 1, 1, 1 was that we, we felt that we could asset. and direct manage some projects. I think I learned that from the family office. Uh, you know that you could actually be operators of some asset managers of several, and I know you guys have that experience too.

You have deep expertise in some of the businesses you own and run, and then you also asset manage other things. You guys do that really well. In a way, you’re performing the functions of a family office. For people that join your group at Aspen Funds. Right. You know, they can utilize you as, as a sense of like a plugin for a part of their a, uh, needs.

Um, we do the same with our accountable equity group. So I think Horizon is one of the bigger things, horizon of, of yield meaning not just. Pick up 50% right now, let’s pick up double digits for the long term. And then the second big thing was security. Let’s make sure it’s capitalized, not skim, not thinly capitalized, but firmly capitalized so that there’s enough working cash flow, working, operating, uh, investment so that we can, weather struggles, we can build out something.

I think the other thing entrepreneurs forget is that early on in any business, You don’t throw off cash that month. You don’t throw cash that two months. I mean, unless you’re buying something that’s completely done growing. So say you jump right into a big asset that is already done, it’s reached its peak.

You’re paying full price for it, but you are getting a check that month. That is one way to invest. Another way to invest is to buy something that needs to grow. You might buy at a reasonable price. Mm-hmm. , but the growth period needs capital and it needs to be patient capital. And that’s. Hallmark of family office thinking is generational

Bob Fraser

wealth building.

Right? So long term, long-term thinking, long-term planning, uh, not focusing on short-term cash flow and, um, protecting

Josh McCallen

those are capital, satellite, and keeping capital in it for a period of time. Yep. Yeah.

Ben Fraser

I mean, a lot of what I think people get caught up in, especially in this kind of private equity, alternative investing world, is they’re just chasing the biggest return that they see Right.

Marketed and oh, 25% IRR projected, you know, and it’s right. It’s okay, well, what, what is, you know, comprising the assumptions of Correct. Of that, of that return. Exactly. And how much risk are you taking to generate that return? Exactly right. The, the number one rule of investing according to Warren Buffet, don’t lose.

Yeah. And number two rule is don’t forget rule

Bob Fraser

number one, right? as guys who sponsor a lot of deals. I mean, you realize those headline return numbers. I mean, they’re just entries in a spreadsheet. Oh yeah. With backed by assumptions and. . And so it really matters who’s, who’s generating that, that, you know, who’s designing that project.

And, you know, we we’re, when we are putting together deals, we, we look at, we look at, you know, all the risk profile, which the debt stack is a huge component of that. And, and, and, you know, and there’s lots of other things. We’re looking at a deal, you know, development deal, not entitled, well, huge risk around not getting entitlements for, you know, great returns.

But it’s like, well, you know, not entitle. , you could, you could end up with that. , you know, 200% return, or you could end up with a zero, you know, a, a wipe, right. , you know, uh, face, plant, and, you know, so yeah. Underwriting is, is, is a big deal. And, and so, so, so basically taking, really doing a good job with the risk side is something that, you know Yeah, we, we do and we do for our clients.

It’s something that few retail investors, I think, think a lot about and, and the family offices are gonna, are gonna obviously think that way. So

Ben Fraser

I think another point to your, to your comment on the horizon is you get to take advantage of the eighth wonder of the world. Right? Which compound interest, according to Albert Einstein is, is the eighth wonder of the world.

And compound interest is actually pretty boring, right? And it takes a long time to. Be meaningful and Right. You know, and so doing those maybe more boring returns, but the longer time horizon compounding, protecting capital, growing, you know, using those, those points of leverage in the business or the, or the real estate or the strategy to continue to generate more income.

You know, all those things add up and over time are very, very,

Bob Fraser

So, so it’s, it’s, I think a lot of, I are chasing the short term buck. Right. And, and the truth is, okay, and here’s a guy who’s been around a while, right? And I, you know, I think, you know, this is my like fourth cycle now, , you know, and the truth is the real money is made.

and when you’re buying at the bottom of a cycle, right? Yeah. And it takes a lot of courage, right? It takes a lot of courage. So every you, when everybody’s terrified, right? As JP Morgan put it, you know, when be greedy, when there’s blood in the streets, . Now that’s, you know, kind of visceral, but. . Literally when people can’t dump their assets fast enough, when it’s, you know, everybody’s terrified and literally you invest and all your friends look at you and say, you’re an idiot, you know you’re gonna lose.

That’s, that’s when you make the money. Right When there is. No, no. Good news. Nothing’s working. It’s all going bad. And you’re buying and, and you know, and, and now we’re, you, we’re, we’re seeing, you know, kind of clouds on the horizon. And to me, this is, this is a time to start generating, you know, getting some liquidity and to, to begin.

Looking at opportunistic buying, cuz that is where the real money is made, right? Yeah. And, uh, buying at the, buying at the bottoms. And it’s hard to do, you know, investing is emotional, whether you want to think it is or not. It’s an emotional thing. And prices are emotional, right? So, you know, so I, I was talking about Amazon, you know, back in 2000.

You know, I can’t, I can’t remember, I think Amazon was like 50 bucks a share, dropped to 30 cents a share a year later. Same. Same company, same market. You know what happened? It’s pure emotion, it’s pure sentiment, pure emotion. Everybody was sure that the internet was a crock, right? And well, it’s not, and 30 cents a share, you know?

So buying Amazon at 30 cents a share is a sure way to get, to make, to, to get money. You know, what is it now? You know, I don’t even know. But, but, uh, you know, so, so having a long time horizon is really one of the keys to true wealth creation, right? And, uh, you know, . Good stuff, man. So very

Josh McCallen

billionaire. Very billionaire.

Thinking on your part there. All right, I

Ben Fraser

have a question. So Josh, how do you implement these kind of philosophies in your own business? Right, because Sure. As sponsors doing deals, there’s always this inherent tension of, well, one, you wanna show a good return to get people excited about a deal, and then two, It’s really hard to sell people on a long time horizon, right?

Yep. You know, if you see a deal with a 10 year time horizon, PE people. Wrap their head around that, what, what am I gonna be doing In Taylor, we, we had a deal. Right now we’re we’re, you know, targeting a five to seven year time horizon and, you know, that’s a little bit of stretch for some, some of our investors.

And one guy we were talking with, he was like, well, I’ll be, I’ll be dead by then. So I don’t even, I can’t invest in that deal. And it’s, you know, he’s being kind of tongue in cheek, but it, it is inherently, Difficult, I feel like, for people to think long term. So how do you kind of, how do you implement these strategies in your own business plans, and then how do you get investors to kind of understand the, you know,

Josh McCallen


I mean, benefits of that. Thank God you guys are, you’re asking the toughest questions. I want to share with you some thoughts we’ve come across over, over the last few years. So originally our philosophy was a five year, B r r r, those burr things where we’re, we’re gonna pull the money back out and have it back into the investor’s hands.

We always envisioned keeping our partner investors in for the infinite returns after that. And we always, uh, planned on making their preference payments. Meanwhile. So our initial business plan was, was good and it allowed for nice high. Annual preference payments, which we’ve always honored. And then if the, uh, economy hadn’t switched so much, we would’ve done a normal cash out refi probably next year.

Right. That would’ve been the horizon for some of our assets. We just gave a talk about legacy asset investing as a strategy, and what we’re finding is when a business is still growing on a hockey stick, we, we love being transparent with our investors. We say, Hey, if we were to execute the strategy of just pull all the cash back.

What cash and capital would be used to pick up another 20% growth the next year. And the next year we’re, um, uh, you know, that that’s a philosophy. We’re, we’re encouraging all of us to go on a journey. So now we’re talking to a lot of investors and we just did a presentation on this that we, we, we, we see.

We see that it’s important to let investors be their own natural selves, and some investors want liquidity. Others actually do not want their capital back as long as it’s producing great yield in a great asset. That is a mind bender. So if you’re listening to this show and you’ve never raised a dollar, the epiphany that I’ve had we’ve had over the last four years is not all investors are cut from the same cloth.

There is definitely the investor who sees 20 plus percent i r r and thinks it’s the truth or thinks it’s do. In any market turn, right? Maybe it would’ve been doable in a peak, peak market, but probably not gonna be doable in a downturn. But they see that and they say, that’s what I want. And then there’s others that say, I want cash flow annually.

And then I’ve come to realize there’s other that want peace of mind with their sponsor. Right? And that’s, and we’re, we have a blend of all of them. We’ve hundreds and hundreds of active investors, all accredited. We’re honored and blessed to have thousands of 3000 plus people read the emails. 330 have written checks and invested.

So what we’ve learned, we’ve, I. So some of our investors, we say to ’em, would you like to join us for the long term? Buy the equity, please. We will make our annual preference payments. Of course, if there’s any downturn, we’ll pause, but we’ve always made ’em. Then we say to others, we also have a capitalization model where you can put debt on on our property.

In, in a, in a collateralized debt fund, which has liquidity calls. You can call on that liquidity, similar to you guys. You do something like that. And then we have another asset class we created years ago where we build a private leasing. Called an Efficient Income Fund, and it allows investors to benefit from the, uh, the accelerated depreciation program.

So instead of us borrowing to buy anything that makes our businesses work, remember we have golf courses, we have tractors, we have kitchen equipment, things. Instead of letting Bank of America take a lease on us and make double digit yield, why not give that yield to our investors? , but then also design it so they get full depreciation.

So we do those types of models. I worked with some great CPAs, um, to build that. So those people, what are they getting? They’re getting monthly checks at very high amortized levels, and they’re paid out and, and their preferences fully paid, plus their yield back. Their principal back in like three and a half years.

So they’re big cash people. They want, I want a lot of money every month and I want the tax strategy. The debt people are a nice check every month and then the equity people are the long haul. By designing that. I think what we’ve done is it’s speak to the different needs. I have some investors that buy a little bit of each and it’s probably cuz of where, where they need their money to do some business.

So then we go. Now our core business today at the Accountable Equity Group, which is a long term, it’s kind of like an Aspen funds it, it does look at other partnerships and joint joint ventures eventually, but today it primarily, uh, does its core skill, which is this resort turnaround, which we’re, we’re buying them well below replacement, like a third to a quarter of what we buy in, in the value, uh, in replacement.

That’s what we pay. We’re spending the money. We’re building them so that they’re premium and then we’re filling them with wedding contracts. I know for us on invest like a billionaire, we’re talking about the bolts of a of a, of what we do. That is not the fancy stuff. Right. I’m not saying how pretty things, I’m just saying charge charge a lot.

Fill it up with wedding contracts. Gives us an 18 month contractual revenue cash flow, and then we can weather all the, the ups and downs we’ve weathered, of course we did it during the pandemic and now we’ve weathered this new inflationary period. Um, and we’re weathering, uh, whatever in, uh, recessionary risks we have cuz we’ve already sold into 2024.

I love it because it helps people realize they’re buying a generational cash flow. But they already can kind of see next year’s budget. Um, I want to go back to family office for a minute and then I’ll answer any question you want. The other thing I saw about family office, this, this took a few years of working with that gentleman.

So I worked with this gentleman. He had sold a massive company and he said, I’m never gonna have an operating company again. Right? I wanted to just buy. Flips or things that don’t have staff. About six, seven years into building his family office, he realized I need an operating business and I need also real estate passive, and I need real estate active.

So he kind of ended up building a portfolio and I watched him and what I love about, I’m excited about what, what we’re in the middle of our niche at Viva May Hospitality is. Heavy duty real estate, hundreds and hundreds of acres under management. Each property averages 200 acres. Land development rights are not in the proforma, but they all have land development rights.

So I love having those little Easter eggs for the future, but they’re robust operating companies. So what does a robust operating company, why do family offices put those in there? That’s where you can design your tax strategies really. Hmm. And so what we do is we take all the generating tax strategies, annual depreciation, anytime we buy something, build something, we, we rapidly depreciate it for the investors there.

But we also have, like I said, the leasing company we’re, we basically took all, we stripped out piece by piece each of the great benefits of family office once out of an operating company that has real estate bases. And we, we parsed, pared, portioned it off into these. I, I think I explained that okay. For you guys, you probably see what I’m saying.

Basically, we harvested out the best parts of everything, collateralization, depreciation, all these pieces, and, and the investor who needs whichever piece, we designed a way for them to have it, and then the rest of us, equity people got the remaining balance of that. So really tax efficient. ongoing business.

And that’s kind of the, the summary. Now you and I are talking like investors, like a billionaire, . If you, and if you and I were on a different show, I’d tell you all about how pretty things are and how we sell really well. But here I wanted to just give you the brass tack of how we do do things.

Ben Fraser

I, I love that point.

I think, you know, we’ve talked about this a little bit on the show and other episodes, but you know, operating companies, You know, especially in kind of this investing podcast world, they’re not talked about a whole lot and we’ve, we, we’ve tried to talk a lot about venture capital investing, private equity investing, which are into businesses, not just real estate, right?

Because most of these family offices, most of these ultra wealthy have become so, Because of operating businesses? Correct. And you know, you’re looking at a cap rate on a multi-family property. Say you’re at, you know, 5% cap rate, that’s a a 20 x, you know, net income multiplier. Well, for an operating business, if you buy a mom and pop, you could sometimes get.

A three or a four x, so that’s, you know, what, a 25 or 33% cap rate. And so you’re taking more risk. You a lot of times don’t have the same collateral, but it’s, it’s a way to generate value. And if, if you’re buying these properties that, you know, have levers where you can kind of push, push the top line, you can, you know, make them more efficient.

That’s ex, that’s extremely powerful. Totally.

Bob Fraser

Right. Yeah. I mean, you, you know, people don’t think about Warren Buffet, but Warren Buffet has made all of his money by buying operating companies, right. and. And the returns, they are better. I mean, you know, you know, it’s not, you know, most businesses are generating 15 to 20%.

Cash flows and profits on their, on their, their value and, uh, you know, so it’s, it’s much better than just assets, you know, he doesn’t own just piles of assets. Okay. And, uh, so the returns are better. Yeah. It’s, it’s riskier and yeah. You have, you have this ugly, ugly thing called people involved, you know? Uh, but that hurts, you know?

Yeah. You know, people, but are, are they really ugly? Right? I mean, that’s, that’s tongue in cheek. It’s a lot of work to manage people, but if you’re good at it, you, you can, you can make outsize returns and. You know, so, so it, it’s, it’s definitely something that, you know, key, key strategy for deploying capital, especially as you, as you’re growing.


Josh McCallen

may I share something about that, Bob? Um, you said it right on point and, you know, at the, at the, the, the onset of this show, I guess I was extremely enthralled with the idea of, of how intellectual your group is, how deeply you’ve thought about the future of how America America’s gonna increase in manufacturing and inflation has a, a strong foothold.

I mean, I’ve been following your. But I want to just go back to one other thing that’s important to us people, and that’s our heart, you know? And, um, there’s also something to the fact about people and jobs and purpose in life. Uh, we find it beautiful, right? And so at the end of the day, uh, you know, somebody laughs at my, my LinkedIn page, but it says I’m investing in real people and real assets.

That’s pretty much all we can people that want to be honest with themselves and with others. We say, so what we’re doing at our company that might, might help color that word people is we’re seeing them as something to someone to be invested in, and it begins for us. If I could just opine, Ben, I think you’ve probably heard me share my, our, our real heart of what we’re doing with our operating companies is we are building them on something called Viva May, which is a stylized French word that means reviving the.

And we just believe that us as people have a spiritual dimension. We, we were not just the skin. I mean, there’s a little more to this baby. Uh, we all know it. It’s in the side of our heart. And, uh, and uh, we want to respect that and love that in our teammates. And we think the, the ripple effect is powerful.

So what we do, which we, at our team, and this is why we have so many staff, thankfully, and we haven’t had staff shortages. Everybody makes more, that is part of inflation. But everybody keeps coming back to our companies because we start with three virtue. And we say, Hey, if you wanna work with us as an investor, even just be aware.

This is how we run our companies. We have three virtues. They’re called the Viva May virtues. They think they’re for the soul. We say, we don’t want anybody on the team. It’s a, it’s a way to say, please attract the right people, not the wrong people. Do you seek to serve with joy? Whatever your role is, joy of service, part of what you want to grow in.

Two, do you want to grow in Humil? Because humility is the identification that everyone has infinite dignity and worth. And we’re gonna treat people that way. We’re gonna demand things, right? We’re not pushovers here. We’re gonna demand that we do our jobs, but we believe that they have that same dignity that you have.

And I have two. And then the third one’s a unique one that we’ve been working on for years. It’s called ministry. And, um, we ask everybody, do you want to grow in the virtue of ministry? And, uh, no matter where they come from, their background, have never heard the word before, we describe it in a very simple way.

And we use Thanksgiving as a good example cuz everybody kind of likes Thanksgiving. And we say ministry for us is the i the ability. And you have to work on this to take the normal task you were gonna do anyway, right? You were gonna get up every this today and you were gonna make a podcast. Or I, I was gonna get up today and serve someone a cup of coffee and take the same work and do it for someone’s spiritual good.

And the simplest spiritual good is so they know they are loved. And so can we do this? Delivery of a, of a delicious meal. Not just because we were told to deliver the food to the table, but can we do it so when we give it to them, they know they are loved by us. Higher

Bob Fraser

add purpose, adding a dimension of higher purpose, adding a dimension onto your work.

That’s, I love it. It’s so powerful.

Ben Fraser

No, it’s so cool. I mean, you know, going back to the operating company piece of this, It’s a way to actually have impact, right? Because you’re providing jobs, you know, and impact investing is something that, you know, doesn’t always pencil. Cuz you know, if you’re giving up something or doing something that maybe is not purely for the bottom line, you know, there has to be another, another.

uh, reason for it. But it’s, it’s a cool thing to do. If you have an operating company and it’s growing, you have the ability to provide jobs, and you have the ability to create a culture and to create a place Correct. That people have purpose and can come and enjoy what they’re doing. And, you know, so there’s, there’s the pros and cons that you have to wanna do that.

Right? That’s, that’s, uh, that’s a lot of work energy. That’s, it’s a lot of energy. But it, it’s a powerful thing. So I’m

Bob Fraser

going back to your family office guy who said, Hey, I want to invest, but I just don’t want to have people involved. Right. No staff. Right. , that’s his original idea. That was his original idea.

And I get that because people are a lot of work, right. But people also generate a lot of value, or they can’t, they can also generate a lot of problems. Right? It, and it’s really up to your skills. So, so for us as leaders, it’s, let’s throw ourselves out at that, right? And let’s become great at managing and leading, leading people, and you do get outsized re, re returns, you know, you know, I, I think it’s especially challenging in this environment, you know, and we’re, we’re seeing, you know, demographic changes across the planet.

You know, I’ve been, I’ve been highlighting, you know, I, I think in the next 30. , you know, 45% of Chinese population will be retired, right? It’s the fastest Wow. Fastest retirement and fastest aging population ever in history. And uh, so that means you got one person working for two people, consuming, you know?

Mm-hmm. , one person working for two people, you know, going to restaurants in hotels. And so we are going to be. enhanced worker shortages over the next generation. Right. And, and it’s in every industry and it’s in every country. It’s, it’s actually not as bad in America Right. As it is in, in virtually any other, any other country.

But worker shortages gonna be a part of the equation. And, and what’s more, you’ve got this demographic also the demographic changes where, You know, automation is removing the lower, the lower end jobs and, and they have to be, but you’ve got, you know, so, so you’ve got this really weird system where there’s lots of, lots of, uh, worker shortages coming, but especially knowledge workers, right?

Uh, because so, so the lower end is just not gonna be, you know, people are not, there’s not gonna be a lot of workers and there’s not gonna be as many jobs. And, uh, so, so very, very interesting to solve the people problems for a business is really the people who can do that are gonna be the ones that, that make a lot of money and have out outsized returns.

So, you know, good, good on you. For, for, we gotta pioneer

Josh McCallen

something. You even said it though, even at the knowledge level. You’re right. Most of our teammates get to actually work with their hands. Um, not everybody, of course, but even at the knowledge level, you know, Bob and Ben, it seems to me just as a.

Simple view of the world that one of the struggles today is people don’t feel that there’s a purpose. Right? And so we’re, we just, we’re making a small dent in that , you know, uh, even when, if you’re a guest at one of our resorts, you know, the expression on the, on the on, uh, the lips of everybody as you walk in is welcome home.

Because so few people have connection in this world. So, so we’re trying to be in each little way we can intentional about that. And, and I think it’s kind of a, the more you can do that in your own companies, whichever company it is, Uh, the more you’ll stand out and we’re, we’re, we’re gonna fight that fight.


Bob Fraser

You know, let’s talk about hospitality space for, for, for just a minute. So you have three large resort properties. Mm-hmm. . And, and it sounds like your growth is just accelerating. And, and, you know, I, I’ve not been necessarily bullish on hospitality. In fact, staying away from it, you know, Pretty, uh, pretty clearly.

So, so, blow me up. Why, why am I wrong? You know? Yeah. You’re, you’re, it, it, it looks to me like, you know, everything’s been, you know, COVID definitely made hiring hard, made staffing hard. It was, it’s kind of a, a feast or famine in the, in the. In the world. So some of these, some of the hotels are doing super poorly and some are doing super well.

And, uh, and then it’s, it’s staffing related, which is, which is correct. Really a problem. So, so, mm-hmm. , I, I’m telling everybody stay, stay, stay out of hospitality. So blow me up. Tell me, tell me why I’m, why I’m wrong. Yeah. I mean, there’s, there’s, and why are you guys making it so good

Josh McCallen

there? There’s truth in what you’re saying.

Uh, we always came up with this. Years ago we started building. The Beach Hotels was the ones we started with 12 years ago. And Beach hotels in the Northeast kick butt for three months outta the year, like unbelievable amounts of Ru money . And then they suck wind for nine months outta the . So, uh, you know, some people do all these crazy ways to try to operate that.

And we came up with a philosophy that we wanted to invest in the people to stick around. So we created nine months of active. Three months of taking the gravy train and nine months, you know, you know, uh, of, of working your butts off. Okay? So that discipline for 12 years now has made us a juggernaut. I think we’re kind of in a, a very powerful sector of hospitality where we fill our own book, and that’s different than what you might be familiar with.

So most host hotels depend on Expedia or they depend on, you can’t book a room at our hotel for the next 18 months. Okay, so we’re sold out for 23, uh, at a price that’s doubled to triple the average rate of all of our neighboring hotels because we’re not in a city, we’re in a rural setting and we sell contractual weddings.

Now you think, oh, everybody sells weddings. So we sold 300, we performed 364 weddings at one property this year, and we perf on top of that, did a total of 1000 events at this property, catered contractual money in advance. So there’s just a different way we do it. We fill our. Pipeline. And we do it through great marketing, really focused on sales.

And we have the best problems rooms, event related. Yep. So it’s hard to grasp our sale. It’s

Bob Fraser

really an event business. It it, it’s versus a classic hotel business.

Josh McCallen

Yeah. Yeah. And actually that’s actually a funny, uh, I find that to be a massive positive, but you’re right. When people try to book. Put us in a box.

They’re like, well, you’re not just a hotel. So to give you a great synopsis of the company, I just told you how strong we are at catering. This year we’ll do 21 million. In our first full second full year, we budgeted to do 10 million. This year we’ll do 21. And that was just a two year turnaround from what we thought we could have done this year.

And the way we did it though, was 12 million came in from catering. So you’re like, well, where the heck did the rest of the money come from? Right? There’s a waterfall effect, a capital hacking effect. Whereas once we have Uncle Louie and and Aunt Sally here for the wedding, they’re probably gonna buy some things in our cafe.

We have a Parisian cafe. They’re probably gonna buy some things that they’re probably gonna play golf. So this waterfall effect is so powerful. and then each one of the waterfalls, hotel restaurants, we have multiple, um, the scale is hard for you, anybody to grasp. You’d have to look it up. It’s called Reno Winery.

It’s a resort, it’s an East coast legend. Um, it’s, it’s hard to believe how big it is. Five ballrooms, 12 other meeting spaces. And it’s been open for 158 years straight. That’s another cool thing that’s very legacy esque. So bottom line is all those waterfalls filled up because we sold out the building, and that’s the difference between us and traditional hospitality.

I think most hospitalities, relatively transient and very vulnerable, and so we’re not built on the two major problems, transient tours and business. Now we love business travel, but we don’t have it in the budget. We have. So anytime we get a co a corporate conference, it’s all a creative profit. So there’s, there’s no recession basically, right?

There’s no recession in weddings.

Bob Fraser

People are gonna be getting, getting married and having babies regardless of what the economy is doing. And maybe ironic, more moderate in the budgets. And so, so it, it’s very interesting you’ve. You know, I do like events and uh, and it seems like there is a massive shortage of event spaces.

Josh McCallen

Yes. And uh, apparently there is. Thank the good lord. To give you an example, we have 4,000 inquiries for next year already for weddings. So we sold 300 of them and when I say we sold 300 of those 4,000, I’m talking about premium, very expensive contracts. And what’s cool, sorry, this is for the geeks who are into business.

We have the contract already for next year. We took 25% of the cash for next year, and we put it, it’s non-refundable. They’re called contractual fees. They’re not, they’re not just deposits and uh, they’re pretty premium. They’re like 37 to 40. $5,000 a contract just for the food and beverage, has nothing to do with anything else.

No hotel rooms on top of that. So what we’ve designed here is a juggernaut model so that we can continue to build a portfolio in all, in all economies. So

Bob Fraser

why, what is the, you know, I haven’t really done a lot of research, market research on events. Why are they booming so much and is this common two answers?

Is this gonna.

Josh McCallen

two answers, so I’ll give you, these are very good billionaire questions. Um, in the year 2018, we bought this big resort, and that year in our market, 47,000 weddings happened in this market that we pull from. So pretty good, right? Then in 2020, almost none because of the covid and the lockdowns.

Then there became a boom, a backlog in 21. So 55,000 happen in 21. Going forward, the average is now going to be 50,000 a year. , it’s gonna come down off the boom and it’s gonna level out a whole, at a whole new plateau. And the basic theory is weddings are different than even generations. When you and I got married for you and I, it was the formation of a household

Mm-hmm. today it is an Instagram party. I’m sorry to say that. And to be, to be rough about it, , but it, it’s very much unbelievably glamorous and uh, and for whatever it’s worth, the more social media grows, the more weddings the way we do them, we’ll grow. I mean if you look at our weddings, they look like they’re on a movie.

Yeah. They’re beautiful. Need

Ben Fraser

to make sure My, my daughters never hear this episode cause I, I have four girls and, uh, I’m already a little nervous about

Josh McCallen

. You should be. It gets ridiculous. And we, we’ve sold a hundred and $150,000 wedding. So we don’t try to sell those, meaning that’s not what we build our model on.

We build our model actually on like closer to 30,000, and then we average 37 than we try to beat our models.

Bob Fraser

I, I love the event space. I do think it’s, it’s unique and I think resorts, you know, as people, as wealth increases, which it is, people are looking for better experiences, put it somewhere and, uh, and, uh, people, people wanna spend for the experiences.

And as you point out, you know, the, I.

Josh McCallen

Fast and we’re, we’re relatively close to Manhattan. You know, 80% of our brides come from the metropolitan New York area, which, you know, I always say there’s District one is Washington dc The Hunger Games told me they’re always gonna be rich, so we have a hu, we have a beautiful, like absolute, absolutely gorgeous waterfront venue.

45 minutes from the. 45 minutes from downtown DC I should say. So we are always gonna be able to sell that wedding venue forever. And up here in New Yorkers, as long as there’s a centralized money finance center in New York, we’re gonna be able to, they consider us cheap. The New Yorkers, I always crack up because, you know, I grew up very humble.

Our wedding costs $4,000 I think, to do so. , I, I’m not ex a consumer of what. Of this exactly at this level. But, uh, but we are very good at performing

Ben Fraser

so Good. Well, Josh, what’s the best way for, uh, folks to, you know, follow you podcast website, if they wanna book a wedding? I mean, what, what’s the best

Josh McCallen

way to You’ll have to get, you’ll have to call me personally to see if you can get in, cuz I don’t know if I have any more, but good.

But let me, let me show, I got my, I got my jersey on, I wear my jersey, my accountable equity jersey. Uh, that’s one great way. Just accountable And then of course you, Ben Fraser was just on the world famous Capital Hacking Podcast, episode 2 52. That’s right. You did a great job, Ben. You did a great job.

That was fun. That was fun. And you have open investments? Uh, we, we always try to keep something open. Uh, we have a debt fund. We’re, um, adding capital to the growth of these resorts. Land development options, things like that are coming. So right this minute, yes. When you listen to the show, there will be options.

You just hit the website. You do need to be accredited.

Ben Fraser

Super. Great. Josh, thanks so much. Always fun to connect. Appreciate

Josh McCallen

you’re the best. I can’t wait to see you at the next conference,

Ben Fraser

. All right, man. See ya. Perfect. . Good stuff. You’ve done that a few times, guys before I think. Yeah. Fantastic

Bob Fraser


Josh McCallen

Thank you very much, Bob.

I’m glad you asked the tough questions, cuz without a doubt I would, I would probably stay away from hospitality as a generic as well. Um, I feel good about what we do. My personal guarantees on everything and we’re gonna fight like a dog every day. Uh, you know. Hello, love. That’s the way we do it. Awesome.

Yeah. God bless you guys. Have a great day. All right. You too, man. All right.

Ben Fraser

See you, Josh.


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