In the 65th episode of Cash Flow Pro, we talk with Michael Flight, a real estate entrepreneur whose focus is on retail real estate. His 34 years of experience and more than $600 million worth of real estate transactions make him the perfect candidate...
In the 65th episode of Cash Flow Pro, we talk with Michael Flight, a real estate entrepreneur whose focus is on retail real estate. His 34 years of experience and more than $600 million worth of real estate transactions make him the perfect candidate to tell us about the future of commercial real estate, specifically retail real estate.
Michael’s mission is to help investors create a diverse, long-term portfolio through his companies: Liberty Real Estate Fund and Blockchain Real Estate Summit.
In this episode, we discuss:
If you are interested in learning about theories on how real estate will develop in the future, make sure to tune in to this episode to find out more!
Find your flow,
Resources mentioned in this podcast:
Unknown Speaker 0:06
Hey there, and welcome to today's episode of cash flow Pro, your daily real estate investing podcast and YouTube channel. I'm here today with Michael flight of blockchain real estate Summit. He is also with Liberty Real Estate Fund. And Michael is going to, I guess it's Mike or Michael, whichever one we'll find out what he likes to be called here in a minute. I am. So alright, cool. That sounds good to meet, you know, even Hey, stupid or something like that.
Unknown Speaker 0:40
And so when my wife yells, I answered, even worse than that, right? So. But one thing that this real estate business in general is kind of,
Unknown Speaker 0:52
I feel like we are all sitting here kind of waiting for somebody to say, Hey, I figured it out. I figured out how to do real estate and but I figured out how to make the real estate and the blockchain come together. And I'm interested to see what your take is on a few of the different principles that are involved. Maybe explain to the listeners a little bit about what blockchain is for the few that may be out there that don't necessarily understand. But take it away my Sure. The thing we should probably start with is what is blockchain and blockchain the read started a little bit with who you are, where you're from what you got
Unknown Speaker 1:32
that just so just so the listeners have some context to what you
Unknown Speaker 1:38
Michael flight. I've been in the real estate business commercial real estate business since 1986. Primarily, working with shopping centers, retail, real estate and Net Lease properties. We founded Concordia Realty in 1990, and have been in business with Concordia Realty since 1990. What we did through the 90s, and through the 2000s, was invest together and partner with large institutions, investing in shopping centers, malls, were some of the first people that actually de mauled, which was decommission them all and redevelop it into other things. And we did three of those. So that's, you know, where I came from the real estate side, I've always been interested in the technology side, because when we founded our company in 1990,
Unknown Speaker 2:38
I had a friend from high school who founded a
Unknown Speaker 2:43
technology and software company at the same time, so we shared space together. And these guys were literally in 1990, building out the internet. So we had access to the internet and everything else.
Unknown Speaker 2:58
In 1990, which was way before most people had even heard of the internet, or, you know, if anybody's seen the you know, Good Morning America thing, I think it was 1994 or something they're saying, what's the internet and what is email?
Unknown Speaker 3:14
So, so that's, you know, kind of I, you know, I've been around and I know what, you know, the stuff does, there's no way I could do anything with programming or anything like that. But then, in probably 2014, you know, very smart guys around me started talking about Bitcoin. And then it turned into blockchain. And I told my kids in 2015, or 16, somewhere around there, I said, I don't know what this thing called blockchain is. But you need to figure it out. Because all these insanely smart guys that are around me keep mentioning and talking about blockchain. So you need to figure it out and do some, they never did listen to me, which is what kids you know, do. But fast forward to 2017.
Unknown Speaker 4:05
I really got into talking with some of these guys trying to understand, you know, Bitcoin and what blockchain is, and I couldn't make the jump to say, well, this seems to me like it's just the same as any other currency.
Unknown Speaker 4:22
But I don't understand the math behind it. So why wouldn't you just tie what you're trying to do to something like gold if you want real money, or tie it to real estate, if you want real money? And so I went about trying to see how you could take this technology and tie it to real estate, which would make real estate not only tradable, but theoretically you could also have a currency that's backed by real estate. And the reason why I was always fascinated by that is because when they were arguing about what the currency should be backed by when they were doing the
Unknown Speaker 5:00
The US Constitution. Ben Franklin, who everybody knows was an insanely smart guy, and probably one of the smartest founders, in terms of, you know, just everything that he was doing. He wanted to tie the dollar to land. And so he had this thing called land land coin.
Unknown Speaker 5:18
So I had always been interested. It's like, how do you do that. And so with this technology, which we will now jump into, which is blockchain technology.
Unknown Speaker 5:29
Blockchain allows you just like the internet allows instantaneous worldwide communications, so that Casey and I can have this video and everything is up and running. And you never think twice about it. But when I was in 1990, our you know, large way of communication was by fax.
Unknown Speaker 5:50
So that was, you know, instantaneous communication, you could send an email, you could do this, blockchain technology takes that technology, but you can send money, you can send an asset, or you can send value instantaneously, anywhere in the world. And so that's why blockchain technology people should listen to, because all the major banks, all the major companies and everything, you hear all this stuff about NF T's, and it's just like the stupid monkeys, and you hear about all this stuff, but it's the guts of this technology, that is the rails of the new financial system. So if you could take real estate, and connect that to blockchain, then you can actually take pieces of real estate or an entire real estate, like a house or something, and transfer it anywhere in the world so that that ownership can track anywhere in the world. Yeah. And
Unknown Speaker 6:53
there's a couple of things that I want to bring up about this that really make the this whole discussion and I've had this discussion with myself many times in my own head.
Unknown Speaker 7:07
Best discussions because No, yeah, yeah, they can be but they can also be if you don't have an answer, don't know an answer, they can also be the most discouraging or frustrating, rather.
Unknown Speaker 7:19
But the first is, I feel like initially, we had a surge in and I feel like a lot of this can be tracked through Bitcoin price, the price of Bitcoin period. Now we know the technology behind bitcoin is, is beginning to become a little like it's there's better technologies that are coming out, there's more energy efficient technologies that are coming out. It the, the thought process, behind bitcoin in general is you're trading something of value for something of value. And that was, that was the hardest part, for some for some of the folks that I've tried to explain it to, for them to get over. Well, what gives it value? Well, it gives $1 value, the only thing that gives dollar value is the fact that somebody is willing to give you something for that dollar. And it's the same scenario, it's just, it's just handled differently, you know, your dollar has a serial number on it. Your Bitcoin has a as a journal entry number, right. And so, but the other part of this was
Unknown Speaker 8:29
getting people to overly education up, and I feel like when you start tracking the bitcoin price, and you've seen that it's gone up and up, and up and up, and up and up, now it's on its way back down. But I feel like there that that graph almost identically matches an education curve, if you will, like you have people that understand that understand that understand, they're investing, they're learning, they're investing, they're learning and then all sudden, you can't grow anymore, because you've run out of the people that understand what it is and then the rest of the people that are left to give it demand are like I'm out, I'm out I want I want something I can put in my hands. And can I address that part? And then also so the Bitcoin maximalists don't, you know immediately trash us? So number one, with the Bitcoin network.
Unknown Speaker 9:21
It's a proof of work network. So you have to expend energy. But you know, we can also point to the US dollar the US dollar, by far waste the most energy that anybody has ever seen. And why I say that is because we have aircraft carriers, we have, you know, airplanes we have, you know, this giant military that supports the US dollar and then so that wastes a tremendous amount of energy but you know, that also protects and allows free trade with the rest of the world and the rest of the world can do free trade because they know the US
Unknown Speaker 10:00
Supply is that security? Number two, the US banking system, you know, wastes a ton of, you know, energy and electricity. So when you actually look at how much energy Bitcoin, you know, takes up to secure the network, it's really, you know, an insignificant amount of energy argument when I hadn't really one that I hadn't really heard when, you know, the anti Bitcoin folks don't jump into that energy train of well, what does it take to actually print and make and destroy $1? through its lifecycle? Well and defend the dollar? I mean, the biggest thing is, you know, the US military defense.
Unknown Speaker 10:41
Unknown Speaker 10:42
That's what makes everything else the, you know, the, the, the US dollar, the standard, you know,
Unknown Speaker 10:51
form of money in the world. So anyway, that is one thing, the next thing that I think we should probably address is the fact that,
Unknown Speaker 11:04
you know, the value portion of it in the adoption curve, it's not only the adoption curve from the learning, but it's also I think it's called Metcalf law, I forget what the law is, you know, there's Moore's law, which you know, is computing power. But Matt Cass law is network effects. And the more people that adopt the network, the more exponential the network grows. So you are going to see not only, you know, the price of Bitcoin going up, because there's only a certain amount of Bitcoins that are ever going to be produced. But you're also going to see it going up as more people adopt it. And more people, even even more people just buying into the blockchain technology, they're going to be, you know, say, Oh, this is another asset class, and perhaps I should invest in it. Sure. And then the next thing I like to say is, I believe that, you know, one bitcoin probably is going to go to one to $2 million per Bitcoin. And the reason why I say that is the total total market cap, probably bitcoin is going down to like 800 million or 600 million right now. But at one point, it was like a billion dollar market cap. But if you take a look at Gold, gold is a $26 trillion dollar market cap. So if everybody or at least a significant amount of institutions and everything else, which are piling into the space
Unknown Speaker 12:33
takes at least 1% to 5%, and puts it into bitcoin as digital gold or digital storage of value, you can easily reach, you know, a $26 trillion market cap or more. Now, does the correct me if I'm wrong, but does China does China allow Bitcoin people make coin?
Unknown Speaker 12:54
Theoretically, no, but I, I try not to get into the middle of you know what happens, but I can't tell you the people that are adopting Bitcoin the most, and there was just this,
Unknown Speaker 13:07
this week, a meeting down in El Salvador with most of the South American countries, looking at how they go about putting their money onto that. And then the largest adoption by far is in Africa. The reason I ask and again, use as somebody that has a very firm understanding, I'm more of like a, hey, it was cool to own Bitcoin. So I bought some, you know, whatever.
Unknown Speaker 13:38
And I got my NF Ts, the ones that I liked, I just, you know, whatever, again, whatever. It was just something fun, I went off on to try to learn and I bought, you know, basically burned $1,000 just buying Bitcoin and then figuring out that the gas was this and that, and then buying the nfts through rOpenSci, whatever. So I did all of that as an education process for myself. But the reason I asked about whether it's legal or illegal in China is not necessarily specifically for China not to get political at all, because I don't want to but the thought of a global some type of a global currency,
Unknown Speaker 14:17
Unknown Speaker 14:21
could potentially have the effect on governments that they don't want. It could potentially intrude on, basically the one thing that the government has that that we all know they have, and that's the ability to print, what gives value to people. Okay, because, essentially, the government, if you think about it time is people that say time is money. Obviously, there's a guy that says, people don't understand the value of time because time is infinitely more valuable than money. But the fact of the matter is, is that, that it's the only thing that can basically increase the time that people spend doing it.
Unknown Speaker 15:00
what they're supposed to be spending doing is the printing of money. And if you don't have that, and it rests on a blockchain somewhere, I mean, that's, that could that's a pretty pivotal moment is in the society as a whole. And all right? Well, arguably, they not only have the monopoly on printing money, but they also have the monopoly on violence. So if you don't pay your taxes, they're going to come to your door, and they're going to come to your door with guns, if they don't like what you're saying, they're going to come to your door, and they're going to come to your door with guns, okay, so they, the monopoly on money and the monopoly on violence kind of go together. So, and this can circle us back to real estate, because the not only can Bitcoin be a thing that's liberating and so that you have your assets outside the banking system, and you're on cancelable. But if you also tie money, some form of money, there's gonna be a lot of countries out there, if you tie it to real estate, it's gonna be a lot of countries out there very interested in that, because, you know, there's complications with the the Bitcoin thing that I'm sorry, the Bitcoin network, and certain things like that, that, you know, what if somebody wants to fork it, there's all these different things out there. But so I look at Bitcoin as part of your exit strategy. There's certain people out there that say, Bitcoin is everything, I don't believe that, I think, you know, you should have a diversified basket of assets. Because if one thing goes down, but you have some of your money in, you know, tradable real estate, and let's say you're from Turkey, or let's say you're from Venezuela, or what say you're from Argentina, or any number of these, you know, countries, including Ukraine, that don't have a stable currency, well, I can put some of my money into Bitcoin, and I can also put some of my money into a land coin that's, you know, invested in us real estate or invested in European real estate, or, you know, it's distributed somewhere. And or that, you know, opening this up, allows people in Africa In South America to actually issue
Unknown Speaker 17:28
and intake debt out and do things with all their money that's locked up in land, which they can't, you know, raise any money. Now all sudden, they can put that on the blockchain and use that as collateral. So it actually becomes capital that they can use. So that's why I'm really excited about real estate, because real estate is the $280 trillion opportunity, not the $26 trillion opportunity that Bitcoin might be, even though I'm, you know, a firm supporter of Bitcoin. Sure, sure. Yeah. And I am as well, I guess I look at, I look at things sometimes through the lens of devil's advocate, and just say, hey, you know, what are these? What are these specific items that potentially need to be looked at or talked about, or just even, again, talked about amongst my audience, because I know that there's things that we're bringing up that everybody has kind of discussed or thought about one point or other, but, um, so how do you specifically see, since I've run this scenario, through my mind 1000 different times, and I've oftentimes wondered about, like, for instance, we have a courthouse here where I live, the courthouse houses, the deeds and records, the deeds and records contain multiple property descriptions, meet some of them metes and bounds, some of it section, you know, whatever the case is, as far as the way property is described, and, and held a title held to,
Unknown Speaker 19:00
and I guess part of me is saying, okay, hey, do we do we overlay a map like like, kind of like the Denon Metaverse or, you know, the, the, where you can buy the digital land, and then and so on? Do we lay that over the country and then try to piece it out from there? Or do you how do you envision land or real property as we call it, being attached to a specific, I guess, what do you want to call it a journal entry number? I mean, I don't know. Sure. And so I should probably address this. So I am primarily most of my experience is around security tokens and issuing securities and raising money to invest in commercial real estate. But I have and you know, discussed with a no
Unknown Speaker 20:00
Both people. So a security token is a fungible thing. It's just like one Bitcoin, it's just like $1. It's just like, one share of a company, or it's just like one share of a syndication of real estate. They're all the same. So they're, you know, and so whether they're valued at $1 a share, or whether they're valued at $50,000, a share. If you and I invest together, and we raise the money, and we do a syndication, my shares are interchangeable with your shares. So that's what a security token is. And that's why they're allowed to trade.
Unknown Speaker 20:39
And then you get into the non fungible tokens, which is, each individual property can be its own NF t. So each individual house on your block, could at some point, sometime, and you won't call them NF T's, it'll just be, you know, it'll just be running in the background. But at some point, all that stuff will be counted on a blockchain. So that, right now the title process, it takes like two or three days to do, it's what we're what that's, uh, that's the exact process that I was saying, hey, this basically, like, almost cuts real estate attorneys, and just like, puts them on the side, you know, but the main problem is, is that the title companies, the real estate attorneys, the brokers and everybody else are not gonna go away, they're gonna stay there, you know, and they're gonna say, this is, you know, my piece, I want this piece of the pie. So
Unknown Speaker 21:38
I think the hardest part is going to be, you know, putting all this stuff on a blockchain and on title, and, you know, mixing that because at some point,
Unknown Speaker 21:51
you know, the way this could go, is that, let's say you have a house there in Kentucky, and you know, it's a beautiful area and everything else, and you want to even sell, sell it as a timeshare or an Airbnb, you could actually rent the time from that token, and this, this, this creates all kinds of layering, which you could do, you could actually put up your house, instead of going to a bank, you could put it into, you know, what they call defy, which is decentralized finance. And you could put up that as collateral, and you could borrow against that to buy bitcoin, or you could borrow against that, you know, to start a company or something like that, it's going to open up all new horizons. But the major problem to implementing all this is regulation. So in regulation, a lot of it is there to protect the consumer, a lot of it is there to protect the existing, you know, people that are running it, whether, you know, it's the drug companies running the FDA, or if it's the real estate brokers and I can say this, because I've been a real estate broker since 1986, in Illinois, and I've never sold a house. But it's the real estate brokers that force you to take these classes every three years. So that, you know, they weed out a lot of people that, you know, don't want to continue to do that. And, you know, weeds out. And so it's it's just like I say there's, there's a lot of incumbency that has to get through. I think, for a leader, we have to we have the technological infrastructure to handle all of that. I mean, I guess, logic every the technology can do everything right now. Okay. Okay. It's the regulator's in the income statement, you know, industries that are going to, and then it's, you're going to have to go state by state, county by county. And so I've talked with, you know, what, I was advising a startup that said, Oh, we're going to disintermediate, the title industry, I'm like, I don't think you're going to do that. What I think you should do is build the best possible thing, set it up, show it can be done. And then go, you know, to some of the largest title companies out there and say, we've built this technology, we want to partner with you. And that's your exit strategy. You know, you sell it to the large title company, who can then take this and say, Alright, now we're doing this. Correct. Everybody wants to start out by saying we're going to everybody wants to start out like Steve Jobs and say, we're going to take out the all these people, but they don't, you know, for some reason, they don't think those people are going to fight back. Well, there's much smarter people out there than me. So there might be somebody that figures out how to thread the needle and get it done. But right now, what I'm most interested in, because I think that's a great idea, because especially if you could take that we already have title and we've got it's slow and it's cumbersome and all that
Unknown Speaker 25:00
Most of it, but the United States, the UK, in Europe, and you know, to a certain extent Japan all have, you know, really good title processes, so they can create capital. And but it's, you know, different, less developed countries like in South America, like in Africa, like in Eastern Europe that do not have those processes down. Sure. And so they're the ones that, you know, if you could get the title, if you could, like skip, like most of Africa, and most of eastern Europe, now has way better cell phone service than we do. Because they just skip the wiring part, and then just went right to that. And so
Unknown Speaker 25:41
and so I'm thinking, if they could just skip, you know, the whole, we're going to do this, you know, written down and stuff and go right to, you know, title on the blockchain.
Unknown Speaker 25:52
I think you're gonna see the biggest
Unknown Speaker 25:57
increases in personal wealth and Personal Capital, and, you know, just general human flourishing. Sure, sure. Yeah. And then, of course, then then, when the government gets involved in the course, from a regulation standpoint, obviously, they have to figure out a way to get their cut. Well, yeah, that's, that's the the biggest. And that's why it was much easier to you know, innovate crypto, or, you know, do an Uber, and just build it out as fast as possible. And then, you know, go back and say, Oh, I guess we forgot to ask you for permission. Yeah, we needed to do this. It's asking for forgiveness rather than permission. Sometimes it's easier. So right to talk to us a little bit about, we're kind of running out of time here. But I'd like to hear a little bit about your real estate business and, and the real estate investing part of, of maybe Liberty real estate, Liberty Real Estate Fund, yeah, a real estate fund invest in single tenant Triple Net Properties. But what we found out through trying to put together Liberty Real Estate Fund is that they're still not all the onramps to get to fully tradable private real estate. So that's why and not enough people understand how to do it. That's why we created the blockchain real estate Summit. So first time we did it was last September, and we put the summit together as to what does somebody needs to issue a legal security token in the United States? And also, what should an investor look for, if they're looking to invest in a security token? So we started out with the attorneys, the accountants, and we worked our way into, you know, sponsors that, you know, we're doing it. And then, you know, in the afternoon, we worked into how these things trade. And so that is all in place, all that technology is there, the biggest problem to adoption right now is that it's not user friendly. And what in so I can go today and say, you know, you come to me and say, Mike, I want to, you know, tokenize, this particular fund I have or I want to tokenize, this particular property, how do I do it, I can refer you to five or six or seven different tokenization platforms in the world that are world class that can tokenize it. The problem is, is that you are getting your investors to actually figure out how to onboard, and you're getting it so that it trades, you know, seamlessly nobody has done that yet. So we're working on a solution right now. So that
Unknown Speaker 28:42
if your investors come to you and say, I'm interested in investing in one of your vehicles, you just say, okay, hey, we've got this multifamily building, or we've got this, you know, self storage property. And it's here in Kentucky, we think it's going to be, you know, winner and here's what the returns on, they sign up for. They onboard. There's no messing around with what's called a wallet, there's no messing around with. I need to figure out how to do this. They just onboard they have an account, and it trades like Robin Hood or Fidelity or Vanguard. Sure. Man, that's awesome. I mean, that's, that's definitely it's the wave of the future. I mean, and that's what I tried to tell people. And anyway, it's, it's, it's the way of the future. And so, again, I don't know enough about I know enough about it to be dangerous. And it's very difficult to to I just want to point out that you're probably further ahead than, you know, 95 to 98% of everybody out there. Well. Yep. Good. Well, that's great. So Well, listen, Mike, we've got a few questions that we ask every guest that comes on the show.
Unknown Speaker 29:50
And there's no right or wrong answer and just tell us what you think and we'll go on. So what is the best book that you have recently read or are currently
Unknown Speaker 30:00
Unknown Speaker 30:03
the best book that I that's a hard one because I read about 50 to 70 books a year. You know, I, I usually go back and say that a mentor of mine gave me a book by Bob Buford. It's an older book. And it it's called halftime. And it's how do you take your life from success to significance? And so that really changed my mind frame of, you know, I'm going out there, I'm trying to, like, you know, make as much money as possible. And what can I do now to make the world a better place? And so that's, you know, really one that I've, I've really, you know, enjoyed. And then like I said, I enjoy reading history. I enjoy reading biographies. And I definitely enjoy reading how people have built businesses. Yep. I absolutely agree. And it's always fun to hear.
Unknown Speaker 31:04
Especially some of the old businesses, some of the some of the businesses that were kind of more along the lines of the beginnings of our country type businesses, chewing gum businesses, and, and serial businesses and that kind of stuff. So I agree. 100%. So, all right, what is what's a dream vacation you have either taken or hoped to take?
Unknown Speaker 31:25
I've got a lot of dream vacations, I want to I was in Dubai, by myself in 2020, I want to get back there with my wife. I've never been to Hawaii, and I've got a speaking engagement at the millionaire blueprint mindset conference coming up in July. So I will be doing that. God willing. And, you know, I, there's just a bunch of other places that I want to either go back to or have never been to.
Unknown Speaker 32:01
I'm really a huge fan of Europe. But it's, you know, with COVID. It's made it difficult to get in and around over there. So those are some of the places that come to mind immediately. Oh, and you know, I big on on the thing is to get to Thailand to Oh, awesome. Awesome. Yeah. Well, good. Well tell the listeners if they've heard something that's resonated with them, or if they want to learn more about what you've got going on or reach out to you some kind of way. What's the best way for somebody to get a hold of you? Sure. Well, they're interested in the blockchain real estate Summit, that's blockchain real estate summit.com, Blockchain real estate summit.com. That's coming up this year, again, in September, September 23, and 24th 2022.
Unknown Speaker 32:48
If they're interested in getting more information about not only tokenization, but also a lot of great information on investing in Triple Net Properties and retail real estate, they can go to Liberty fund.io Liberty fund.io. And there's two things I would recommend we have a special report on blockchain real estate. And so if they go there, they can get the free report, which kind of explains a lot more about, you know, what the problems with real estate are and how blockchain is going to solve those problems here. And then one additional thing is, if they're interested in learning more about Triple Net Properties, we do the nothing but net, net, net net podcast. Nothing good. net. Net net. Yes. Awesome, man. That's great. Well, good deal. Well, listen, Mike, thank you so much for taking the time to be with us. I know it's a busy life and, and especially if you're off speaking and traveling and doing things like that, you know, we just, we can't thank you enough for taking the time out of your day to be with us. So thanks again. Well, Casey, I really appreciate you inviting me and I'm taking that since I did this, you've invited me down to Bourbon County and we're gonna go hit the trail. We can hit the trail whenever you're ready. So you give me a call and we'll be ready to go. So
Unknown Speaker 34:08
thanks, Mike. Bye now. See you
Transcribed by https://otter.ai