Real Estate Investing Strategy: How Elite Investors Manage Risk & Spot Opportunity

Joel Block (00:00)
And you always follow the count. Always. Whatever the count says to do, that’s what you do. And there are people in blackjack and otherwise.

Even though the count says go to the left, they go to the right. And that’s a no-no. When you when the cards tell you and the math says go to the left, and you’ve got a system that says go to the left, and you say, you know what, I just have a hunch. Because I’m gonna tell you, you know who built Las Vegas? All those people with hunches.

Scott Bursey (02:01)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host, Scott Bursey. And today we’re super excited to be joined by Joel Block from the Advantage Player Institute. Joel has built an incredible career reading risk before others even see it. Starting as a professional blackjack player and card counter before transitioning into venture capital, hedge fund management, and strategic investing, he now advises business

leaders and entrepreneurs on sharpening their strategies to gain a measurable competitive edge. So expect to walk away with some elite insights today. Joel, welcome to the show.

Joel Block (02:42)
Scott, thanks for having me back.

Scott Bursey (02:43)
It’s awesome having you here, Joel. And to help our listeners get up to speed, please give us the ninety second highlight reel of how your career ignited and where you’re pouring your fuel now.

Joel Block (02:54)
Well, you know, back in the old days when I walked to school in the snow in both directions, you know, uphill and the whole thing given around about that, but you know, I listen, I started in in school

And I got onto the CPA track and went to work at Price Waterhouse, the giant accounting firm, but I just hated it. It wasn’t for me. But one of the the last engagements that I worked on there was this giant real estate syndicator where me and an army of other guys were assigned to do the tax returns and convert the books and records into tax returns for five hundred partnerships. It was dreadful work and every day I’d read

partnership agreements and I had to do four tax returns every day. So I’d read the partnership agreements and you know, and I’d study them and then I’d turn them into into tax returns. And I thought to myself, I just don’t want to be a tax doer. I want to be a deal maker like these guys. And I quit the firm and that’s kind of how I got started. But early on, and of course you know of this, is that ⁓ when I was in college, I learned how to play blackjack and I became very good at it.

And was recruited onto one of the great teams in the world at the time and was in Vegas every single weekend. Almost quit school, by the way, because I just didn’t really like that either. ⁓ I don’t tend to like things that are highly structured and you know, that kind of constrain me a lot. But I just you know, got really, really good at it and mastered that. And really now, because of that experience, I really understand that everything in the world is a game.

Everything is a game. And there are rules, there are strategies. There are people who are better at the game than others. Wall Street is a game. Investing is a game. Syndication is a game. I mean, I don’t mean a game like funny in a joking way, but there are strategies and rhythms and plans and mechanisms that make some people better at the game than others. And if you don’t get the game, then you can’t win.

And most people don’t even know what game they’re playing. You know, maybe they don’t even know they’re even playing a game, you know. So if you don’t know what game you’re playing, how can you win? How can you accomplish anything?

Scott Bursey (05:48)
That is fascinating. Joel, you know, what really caught my attention about you was the way you’ve been able to transition from the high-stakes environment of a blackjack table to the complex world of capital structuring and venture funding. You know, building on that, curious to know, what is the core strength that helped you bridge the gap between professional gambling and institutional investing?

Joel Block (06:11)
You know, interestingly enough, most gamblers, like professional poker players and things, they start on Wall Street and then they move to Vegas. I started in Vegas and moved to Wall Street. So I kind of did it a little backwards of some other guys. But I would say that there are a lot of things. One is understanding the structure, the system, understanding what’s really going on. ⁓ I call it TSA, like at the airport.

Advantaged players, guys who can beat those unbeatable games in Las Vegas. And by the way, Wall Street is sort of an unbeatable game too for most people. And so it kind of falls in the same bucket. We think differently than other people. We see and notice what other people don’t, and we take actions that other people won’t. So think, see, and act. And those three things really are what make the difference between regular people and advantaged players.

And the skills, the same skills that made me good in Las Vegas are what have made me good in the Wall Street business, which basically is you know, I understand the game, I pay attention, I see things other people just simply do not see, they don’t notice, and they’re happening in plain view. Everything happens in plain view. The fact that you don’t see it or notice it

you know, shame on you. That’s that’s you you lack training or, you know, whatever it is, and you really need to be around people who can help you to learn better. But and then finally, you know, you got to push the chips up when when it’s time. And you gotta have the the the courage, you know, and conviction and the confidence to push the chips up at the right time. And a lot of people simply don’t have that you know built in. So you know there’s there’s a lot that is parallel between those two universes.

And you know, I would say your ability to understand and assess risk and be able to mitigate that. And here’s maybe the most important one. When you’re sitting at a blackjack table, and this happens on Wall Street too, ⁓ you make a bet, you know, and you you go up five thousand dollars, you know, real fast, and then you go down ten thousand, and then you’re back up twenty thousand, and you’re up and down and up. It’s it’s it tears out your gut. I mean, it really it’s

Most people quit the game before they get really great at it because they can’t take the swings. The same thing is true on Wall Street, you know, the the swings are unbearable. And you have to have a level of self-control that is is and it’s taught. I it wasn’t like I was born this way. I mean I learned to control myself because I kind of knew that by looking at the long the long run that what was happening in the short one would all work out.

And you know what? And you just have to kind of control yourself because if you lose control, you make mistakes. And you lose control in investing, you lose control in any kind of business, you make mistakes. And those mistakes are what end up costing because you can’t recover from those mistakes. I can recover if I go down five or ten thousand, go back up twenty thousand. I can recover from those swings, but I can’t recover if I do something stupid and lose the money.

Scott Bursey (09:14)
That’s a powerful distinction right there, Joel. And for our listeners who want to sharpen their own analytical edge, what’s the first step they should take?

Joel Block (09:22)
Wow. For well, maybe the first step is paying attention to it, is just recognizing that you need to sharpen your edge. And if you need to sharpen your edge, that’s just that alone. If you just ask the question, how can I sharpen my edge? That alone will put you on the track to sharpening your edge. And you could probably use ChatGPT and you can ask it how or wait, what are the things I could do to sharpen my edge?

And it may give you a couple of ideas. I can’t be specific for everybody who’s in the audience, but just being aware is probably half the battle.

Scott Bursey (10:32)
Fascinated to hear where do you see most investors stumbling when they try to move into more complex capital structures, Joel?

Joel Block (10:41)
Man. Most people don’t know what they don’t know. And and frankly, even if they’re pretty good, they still don’t know anything. They they just this is a complicated world. You know, here’s the thing about money is money is priced in in according to levels of risk. And those levels are called tranches. Tranches are layers.

Okay, that’s the French word for a trench or you know, layers. And so these layers are priced in different ways. And there are hundreds of different tranches or layers or types of money with risk assigned to them. And you know, most people just simply cannot fathom that there could be hundreds of things, hundreds of things. Like most people, if you just ask them, if you’re walking down the street and you go, you know,

I’m an expert in money, and they go, like, well, like what do you mean an expert? Like, it’s like I got this green paper in my pocket. How complicated could it be? It it seems on its face to be one of the simplest things, but truthfully, it’s about as complicated a thing as you can as you can imagine. I mean, let me put it like this: the guys who design rockets to send people into space don’t understand money. I mean, it’s it’s that complicated. You know, it’s just

I I’m I’m not telling you that I’m smarter than a rocket scientist because I’m not, but it’s a totally different science and and there’s a lot to know. So what I would say is, number one, is just know there’s a lot you don’t know. And if you just acknowledge that, you kind of just have the humility to say, Maybe there are people who know more about this than me, that alone will save you a lot of agony.

Scott Bursey (12:31)
Wondering where’s the biggest opportunity right now for our listeners to find advantage player returns in this shifting market?

Joel Block (12:41)
Well, I’m gonna tell you something. I mean what I’m gonna say is so obvious, but yet it it it just is so hard to hear. To me, opportunities are everywhere. They are absolutely everywhere. And you know what creates opportunities? Cash. If you have cash, you have opportunities. If you don’t have cash, you probably will struggle to find opportunities. So here’s the thing. Let’s say that you you wanna you’re like a flipper and you wanna flip something.

And you don’t have any money and you don’t have anything, it’s a little harder to find deals. But if you raise a fund, let’s say, you put together a fund or some kind of a structure and people give you money, because you say to investors, hey, look, I’m really good at finding deals and I’m gonna go out because most people don’t know how to find deals. I’m gonna go out and find deals. If you put up the money, we’ll share the profit. They go, wow, that sounds like a pretty good deal. They put up some money. Now they can’t just give you the money because they you gotta set up a structure for that.

By law and everything. It’s legal. So but if you go out into the marketplace with some cash, all of a sudden what you’re gonna find is that deals materialize because there are people who need to unload whatever it is that they’re holding on to. And if you’re the right guy at the right time with the right bag of money, somebody’s gonna unload their opportunity into your lap. And their loss is your gain and that’s how

life works.

Scott Bursey (14:46)
That is a great angle to look at things. Joel, what is the most overlooked threat to a portfolio that isn’t properly assessing risk adjusted returns?

Joel Block (14:56)
You know, I’ll tell you there’s kind of a new risk in the marketplace that didn’t exist five or ten years ago, that most companies are just starting to look at. Most investors probably are not paying a lot of attention to, and that’s geopolitical risk. And here’s the thing, you know, we’ve always looked at different kinds of risks, but we’ve really never thought about how the actions of China, North Korea, Russia.

Brazil, you know, out of the different countries affect the United States. The United States, probably more than most other countries, we’re very insulated. You know, we we look at our our country and we expect everybody to speak our language. We expect everybody to be a democracy like us. We expect we expect everybody to kind of be like us. And so we just are very insulated in a certain way. We look at our little little bubble and we say, okay, that’s us. But there’s there’s a lot of other people out there that

look at the world in a different way than we do. And they’re starting to have some impact on our country. And they’re starting to scare people. So we have a war going on. We have different things happening in our economy and they’re affecting oil prices and it it’s affecting you know people’s confidence about moving forward with certain kinds of decisions that they’re trying to make financially and otherwise so geopolitics

is taking on a role that it never had before. And I just would caution everybody to pay a little attention. And I don’t care if you like the president or you don’t like the president. Yeah. I don’t care if you like the war or you don’t like the war. You need to understand the impact of the president and the impact of the war and the impact of these things on us, because that’s really the issue. It’s not about your opinion of these things. It’s your assessment. And that’s what advantage players do.

My opinion of the cards doesn’t matter. My opinion of the dealer doesn’t matter. My opinion of the guy sitting next to me on either side doesn’t matter. What matters is the cards, and I focus on the cards and I pay attention to the cards, and that’s what makes me decide how I’m going to bet my money and what I’m going to do. Not all the noise that’s coming from the other people around me. And if I stay focused on what matters, then I succeed. And that’s something a lot of people have a hard time doing. They’re so busy.

Talking about their politics and talking about what they like and don’t like and all the different problems they have in the world, that they’re just not focused and that’s why they’re not making any money. And, you know, and that’s that’s kind of how the world works.

Scott Bursey (17:28)
It’s interesting. How much of your blackjack methodology do you still apply in today’s modern investment decisions?

Joel Block (17:35)
All of it. All of it. Every day. I mean, you know, to me, you know, I’ve already said I look at the world like a game. To me, everything that I do is a game. And every game can be beaten. And I try to look for ways to beat the game. And that’s and so I don’t think about cards, I don’t think about counting cards, I don’t think about chips and betting chip. But you know, to me, every time I place I make a decision, I’m placing a bet.

And that it it takes me right back to where I was, you know, when I was a youngster. And and so everything that I do is a game and I just have to focus. How can I beat this game? What are the rules? What are other people doing who are playing this game? How can I outsmart those people? How can I outfox, outbox and, you know, outrun and outgun these people in what they’re trying to do? You know, what can I do different? Think differently, see and notice what others don’t, and take actions others won’t.

And you put those three things together, so everything that I do comes right back to the blackjack table. And that’s that’s just how I see the world.

Scott Bursey (18:39)
It’s wild how those skills translate over. Is there one table rule that applies to real estate that people consistently ignore?

Joel Block (18:48)
Huh, that’s that’s an interesting question. Is there a rule that people ignore? You know, I mean there’s there’s one thing that comes to mind right away, and that is that you know, you’re looking at the cards and you’re counting them.

And you always follow the count. Always. Whatever the count says to do, that’s what you do. And there are people in blackjack and otherwise.

Even though the count says go to the left, they go to the right. And that’s a no-no. When you when the cards tell you and the math says go to the left, and you’ve got a system that says go to the left, and you say, you know what, I just have a hunch. Because I’m gonna tell you, you know who built Las Vegas? All those people with hunches.

People with hunches are the people who built those giant casinos. Because if you notice

nothing in that Las Vegas environment was funded by winners. Everything was funded by losers, right? You know, that’s and and and losers, you know, they all had a hunch and the hunch didn’t work out. Maybe it worked out in the short run, but it doesn’t work out in the long run. And that’s that’s why Las Vegas is what Las Vegas is. And that’s why they don’t like the counters, is because the counters follow a very systematic

very disciplined regimen of of procedure that they know exactly what to do all the time. And that’s true in real estate, is there are decisions in real estate that are better than others. And and you know what they are. You probably talk about them in the meetings that you go to and you think about them and you learn about them. And then you get there and you go, you know, I learned that you’re supposed to go to the left, but I’m gonna go to the right this one time because I just have a feeling it’s not going to work out.

It just doesn’t work out.

Scott Bursey (20:41)
What does your professional network look like right now? And more importantly, over your illustrious career, how has it played out for you, your network of people?

Joel Block (20:53)
You know, it’s it’s interesting. For about from about fifteen years back, twenty years before that. So really the whole middle of my life. Number one, people who are in corporate environments don’t network that much because they’re busy networking inside their company, which is a little bit more insular. You know, you’re kind of inside. But when you come out and maybe you’re a service provider or you’re kind of doing things on the outside.

Not inside of a single company, but you’re doing something more broadly. Most of my people were financial people, CPAs, attorneys, bankers, and lenders, the investment bankers, I mean the money people. They were all money people. That’s who I dealt with. You know, and even though I spent a lot of time in real estate, I don’t network with real estate people because real estate people, the goal is I I don’t really need to know the real estate. I can find the real estate, but I really want to stay in touch with the money.

And that’s that’s why I was the money business. Now my network, now that I’ve retired from my fund and am doing some different things and I’m working on deals and different projects. My network is much more diverse. I have a number of different people from different businesses, they’re very intellectual people, and they’re people who very successful people that you know have done very well. And

You know, and also we moved from California to Colorado along the way. And so I’ve kind of got a lot of new guys that are just part of my world that you know, a bunch of old guys that sit around solving the problems of the world. And if anybody ever asks us we could solve but no one ever does. So you know, nobody much cares about our opinion about how we would solve things. So you know, but that’s

I would say that I have a much more diverse network now and I I just find it very interesting. It’s less business oriented, but more intellectual and and more interesting.

Scott Bursey (22:43)
And I know our listeners are dying to know what is the one secret to unlocking a mathematical advantage in a real estate deal that others are completely overlooking, that they’re missing.

Joel Block (22:54)
You know, I think that you always have to be ready to read between the lines. Everybody, you know, they’re all looking at the gross multiplier or the cap rate or the vacancy rate, or they’re looking at all the KPIs, but they look at them in a very two-dimensional way. And you have to read between the lines that when these things line up, when the when the stars line up in this way.

You know, can you predict anything about what’s about to happen to this building, this community, this neighborhood? And it’s there’s more information than you think, but it doesn’t jump off the page and scream at you, here I am. It it’s a little bit more quiet than that. And so you have to you just have to kind of read between the lines and

look for what other people again see and notice what other people aren’t seeing and noticing. Is there a certain thing? It’s not always exactly the same thing. But I think to myself, what is it that other people are not noticing here? And if you just ask the question, the answer will sort of materialize. It may come to you in your sleep, I don’t know, maybe but but you have to ask the question. Because if you don’t ask the question, you don’t have any awareness about the solution.

Scott Bursey (24:08)
That is absolute gold right there, Joel. And Joel, you have provided a lot of gold here for our listeners today. But is there any final words, sentiments that you could leave with our our listeners?

Joel Block (24:23)
You know, here’s how I look at the world. You know, and this applies to companies, but it applies to people across the board, including investors, real estate investors and otherwise. Seventy five percent of the people out there, maybe eighty percent, I think they’re good. They’re they’re pretty good people. They’re they get up, they do their job, they they go to work, they they don’t try extra hard, but they but they do what they’re supposed to do. They’re they’re good.

You got about 10% of the people, this 90 to 98%, this really high level percent, they’re they’re great people. These these are really your high performers. And then the 10% below them have the potential, the your high potential to be high performers. And that leaves about one or two percent, and I call those people advantage players. Those are your elite people. And and you gotta think that there are some elite people, you may not be able to spot them.

We can spot each other. But you you know, if you’re not one of them, you may not be able to spot them. But make it your goal to be elite. Make it your goal to be the very best person that you can be. Make it your goal to learn everything that you can learn. Learn from other people. Learn everything that you need to do to be elite. You know, get out of the good bucket, get out of the high potential bucket, get into that high performing bucket because it’s the high performers, you know.

That if you make them just one or two percent better, it will change the trajectory of everything. So if you just get one or two percent better, your trajectory to take care of your family and do all the things that you want to do, it just goes off the chart. And that’s how life works. It works in companies that way, it works in investing that way. And you know, and how do you do that? You get around people who are

fantastic that are these elite people. You want to be around them as much as you can. And you know, you want to just you know be learning and studying and reading and getting better all the time. And sometimes that means making some mistakes. But you’ve got to be out there. And if you’re not out there, nothing’s happening.

Scott Bursey (26:26)
That is absolute rocket fuel right there. And Joel, for those of our listeners that want to keep this conversation moving, stay in your lane or collaborate with you on future deals, perhaps, what’s the best way for them to plug into your pipeline and reach you directly?

Joel Block (26:40)
Probably the best thing, go to my website, joelblock.com.

That’s probably the best thing.

Scott Bursey (26:44)
Joel, thank you so much for joining us today on the Real Estate Pros podcast.

Joel Block (26:48)
Happy to help. Happy to pitch him.

Scott Bursey (26:50)
This has been an absolute master class. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with a lineup of Elite Guest, just like Joel Block, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.