Stop Sending Money Away: Why Local Alternative Investing May Beat Wall Street

Daniel Holmlund (00:00)
So, you know, all right, this is going to be real introspective. I might get flack from my partner for mentioning this. When we were building out our AI audit report, I created a net present value module because brokers brokers really understand net present value of, you know, property. What’s the value today versus the future? What’s the discount rate? And we actually said, you know, let’s, let’s do the same thing for AI projects. Hey,

If this group is going to fund an AI project, you know, what’s the upfront cost? What’s the, monthly cost?

Quentin (02:07)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds and I am excited to be here today. I’m excited about my guests. I talk about a wealth full of knowledge, a wealth full of knowledge. I cannot wait just to get them talking. Just want to get them talking and just let all the experience and connect all the dots and let all the things come out. And so I know this is going to be a very, very profitable. ⁓

podcast for viewers. So just get your pens ready, get your note taken. I’m not sure how you taking notes, but I think you’re going to get some really, really good information today. And so I’m so excited to introduce you all to Mr. Daniel Holmlund Mr. Daniel, how are you doing today, sir?

Daniel Holmlund (02:52)
doing really well. How are you doing, Quentin?

Quentin (02:54)
man, I’m doing great. Glad to be here. Yeah, yeah. Listen, I want to tell a story for you. But of course, you know, that was going on in my head as I was saying the name. So, man, I’m so glad to have you here, sir. And listen, I’m the type I like to dive in. OK, so I would love for you to tell the people what’s your main focus these days. If you don’t mind, give us a little origin story, kind of how you got to the space that you’re in.

Daniel Holmlund (02:56)
Good job on my name by the way, when I went to Sweden they told me I said it wrong.

Quentin (03:24)
And then let them know where you are in the world. love to know where people are geographically. So, where’s your up to? Origin story, where you are? Mr. Daniel, sir, you have the floor.

Daniel Holmlund (03:31)
Yeah,

well, I’m in the suburbs of Portland, Oregon. First of all, that’s an easy one. ⁓ Origin story, who I am? Well, so my background’s actually in software engineering. ⁓ And about seven years ago, I started the Real Estate Club at Intel Corporation, where I was working as a software teacher and mentor there. And I found that there was a lot of overlap between the types of

Complex language that you need to use in order to convey a private equity investment and software They’re both kind of technical topics. They’re both topics that that are difficult to explain to people and It was something that I really enjoyed doing so we started a real estate club at Intel Corporation and we ran it internally to the company for about four years and during that time You know, I literally went into HR and I said

I see you’ve got a software company, not a software, they do have software companies. I see you have a stock club. I see you’ve got a startup club and I want to run the real estate club. And so we ran that every Friday. We run in a different speaker every Friday and grew it to a pretty good size actually. 20, 21 or so we were getting 200 plus people on a regular Friday call.

Quentin (04:30)
Yeah.

Mmm.

Daniel Holmlund (04:52)
And in 2023, ⁓ Intel actually laid off my entire team, like several adjacent teams, they were going through some downsizing.

And so what we did is we took the club and we made it external. We renamed it the alternative investing club and we started a club fund and we just kept, kept it going. So our heart there is still bringing in speakers every Friday. So people can hear different opportunities that are out there, different strategies that are out there.

Quentin (05:56)
Mm. Mm.

Daniel Holmlund (06:09)
And we, it’s not just real estate too. It’s now, ⁓ alternative investing. we’ve had, we’ve had people come in and talk about how do you invest in, ⁓ like airline airplanes, which is an interesting one. We’ve had, we’ve had other interesting topics too. ⁓ and then the other thing that I do, because I came out of, my last four years at Intel, we’re actually working in Intel’s AI area. And so we actually started. ⁓

Quentin (06:20)
Yeah, yeah.

Yeah.

Daniel Holmlund (06:36)
I started using AI in order to help me make decisions about real estate. And that spun up into a real estate consulting company. And my partner is a full-time broker and wealth manager who teaches AI for the CCIM. And then my background is I worked and developed AI and started a real estate club. So we’ve got a really good kind of balance there. And now, now we help.

Quentin (06:41)
Yeah.

Yeah.

Daniel Holmlund (07:05)
We specialize particularly in commercial real estate brokerages and investment firms that are 50 to 500 people. And we go through, we help them do audits of their company in order to determine how they can adopt AI and improve their workflows. So those are the two things that we do. They’re fairly different, but they’re kind of connected because we’re working with commercial real estate and using AI. And on the other side, we’ve got

educational speakers coming in and talking to us about real estate.

Quentin (07:39)
Thank you. Sure. Thank you for walking me through listening. As you were talking, I was actively listening, trying to keep up writing, writing, writing notes, writing notes on the side. So thank you for walking us through the journey. I’m trying to say, maybe kind of summarize some of the things you said. And I’m doing it for a reason because I want to make a statement and ask you a question. And so you started off as software engineer.

Daniel Holmlund (07:41)
you

Ha!

Quentin (08:05)
You was a software teacher. You love explaining the technical part to people. That’s something that you love to do. There you go.

Daniel Holmlund (08:11)
Yeah, they called them developer advocates, which, which meant

I was a software guy who wanted out of his cube and I just wanted to go teach people.

Quentin (08:17)
I love it. love

it. Listen, you marched into HR and was like, listen, I want to start a club. I want to start a club. ⁓ And Intel went through some layoffs, but you kept the club and you taught people within this club, not just about real estate, but how to invest in just other businesses. And then things just begin to form. met your partners and now you’re helping people with workflows and different things like that. So pretty good summer resuscitation, right?

And so, yeah, right, right? And so this is where I want to go with this because I often say destiny has no wasted moments, right? Meaning as we go through our journey, momentum is building to the people that we are now. Things start to shape out, our passions start to shape out. I love how the club started to shape out and even through layoffs, he was like, we’re going to maintain the club. Like things just start to fall in place.

Daniel Holmlund (08:49)
a lot of directions in there.

Quentin (09:15)
The longer we journey, the longer we on the journey, we just see, okay, this is where I supposed to be. And so I would love to know Mr. Daniel, throughout the journey, throughout the moments, what are some things you learned about yourself? Discipline, resilience, innovation, like what are some things that you learned about yourself through the journey?

Daniel Holmlund (09:35)
You know, one, one reason why I, ⁓ like private investment is because, and why we bring people into the club to teach us every single Friday is because, ⁓ private investment is a way of performing self-improvement. Frankly, you, you need to be in a state of perpetual and continuous learning.

when you’re doing private investment because there’s always somebody who’s doing something a little different than you, somebody who’s got an angle on what you’re doing. You may have heard the syndication story, you five billion times, but there are people that are doing it in different ways and making it work. And there are people that are not doing syndication and doing other strategies that are working. And so one of the, I have always been a lifelong learner and I found that

learning about, you know, private investment or alternative investing, or the alternative investing club, ⁓ is a way that I can continually grow and, you know, stretch myself and be a lifelong learner. The same is true with AI. AI is moving at a breakneck speed right now. ⁓ and I’m a software developer, so I really enjoy getting into all the details of that, but they’re, they’re both ways that you, I can challenge myself. And I’ll tell you one, one way that I found that I

don’t work very well. I’m not an active marketer. I really don’t like social media personally. I would rather somebody else do that. I’ve learned that I’m a numbers guy and I’m an AI guy and I like speaking too. That’s kind of the thing I like doing, but I don’t like social media. I don’t like marketing. ⁓ I’ve learned I can get a little too much into all the details of a deal.

and kind of get stuck in analysis paralysis. And I’ve had to learn how to overcome that. ⁓ And also how to find people that have complimentary skills to you. Because, you know, as much as we like to think we’re a lone wolf, most software engineers think they’re lone wolves, right? I think it’s kind of endemic to the trade. But, you know, we are, you got to work with people.

together as a team. And that’s also what private investment does. I don’t want to send my, you know, be a lone wolf and then send my money over to Wall Street. I want to have people in my local community, you know, in my town, in my church, in my synagogue or wherever I am that ⁓ can invest locally and know how to take local businesses and create, you know, a partnership or a syndication, a private equity offering.

It’s great to have people in your local community that can do that and you can support your local community rather than, you know, sending your money somewhere where, you know, it goes into the machine.

Quentin (13:07)
Yeah, yeah, yeah. Now got this big smile on my face because eventually we’re going to talk about community. That’s a word I absolutely love to talk about here on the pod. So eventually we’re going get there. But I would love to know, adversity shows its head in whatever we do, right? Nothing is always just streamlined that easy. And so I would love to know how has adversity showed its head within what you do and what have you done to…

overcome, combat, or even just embrace adversity.

Daniel Holmlund (13:39)
yeah. mean, if, if, if you’re a lifelong learner and if you have a business, you’re going to face problems. And, ⁓ a lot of the problems honestly are created by ⁓ a lone Wolfism if you try to go that way. ⁓ but I can say, so in the, the AI consulting business, it actually originally started off with, I was writing software to evaluate my own deals. And so I had some software where I can drop.

You know, offering memorandums and legal documents in, it would pull summaries for me and create these little reports that I can kind of scan at a glance. And that was great. And I, we started originally creating, ⁓ a SaaS product, which is software as a service. You know, it’s your typical webpage where you’ve got a monthly subscription. And, we started off creating that. And one thing I realized is that, you know, what works for me.

doesn’t necessarily work for another person. And so I spent over a year working on that software. ⁓ and it’s great for, you know, our club because we can evaluate deals really quickly. But as we talk to other people, the brokers, other investment groups, ⁓ you know, they had totally different workflows where it just didn’t fit together. And so what we realized is we needed to pivot from doing a single product to having a dialogue and discussion starting with.

an audit of where their business currently is and what they want to do.

And then, you know, lay out a roadmap together where they’re defining their own, you know, here’s where we need things rather than us coming to them and saying, Hey, we’ve got a solution. Do you want it? So that, that was actually really big learning. And I spent a long time working on a software product, which is now just one of the things that we offer. ⁓ and a lot of the other things that we offer are much more customized.

Quentin (16:01)
Yeah.

Daniel Holmlund (16:14)
You know, they’re, defined in the conversation with the client rather than us coming with a solution. So that was a big thing. ⁓ the market recently for commercial real estate has been rough. That’s been another big thing. ⁓ so a lot of syndications are not sending out distributions. ⁓ and so we started moving, ⁓ our fund base over to more contractually obligated payments through debt, debt funds.

Quentin (16:27)
Yeah.

Daniel Holmlund (16:44)
And so our alternative investing club fund ⁓ moved over to creating a base of debt funds where we’ve got monthly contractually obligated income coming in. And what that allowed us to do is to actually be more opportunistic when good deals came along that could add growth to the fund. And so last year we only worked on two deals, right? And that was enough. That was enough. ⁓

we had our base of income giving regular income and then you add to it things that you think are going to grow and appreciate on top of that base. So we’ve become just a lot more selective in the fund and ⁓ the club you know always gives their input we bring the sponsor in to come speak to the club and they say what they’re about we learn from them and then we can go out and basically have a conversation with the club about you

What do we think of this? Do we like this? Is this somebody that we want to pursue an investment with? And so, and that’s great thing for the people there too, because they wouldn’t get exposure to the private opportunities too. So it’s a win, win, win.

Quentin (17:56)
Yeah, yeah. Man, thank you, sir. Thank you for that reflective answer, man. I appreciate it in that in-depth answer. I know people can glean some very, very good, good, good nuggets from that. So thank you for that. What’s next for you, sir? Like, what’s the next real goal? Like, what are you looking to solve at scale next?

Daniel Holmlund (18:14)
So, you know, all right, this is going to be real introspective. I might get flack from my partner for mentioning this. When we were building out our AI audit report, I created a net present value module because brokers brokers really understand net present value of, you know, property. What’s the value today versus the future? What’s the discount rate? And we actually said, you know, let’s, let’s do the same thing for AI projects. Hey,

If this group is going to fund an AI project, you know, what’s the upfront cost? What’s the, monthly

What’s, what’s the, ⁓ what’s the value in year one? What’s the value in year two? What’s the value in year three? And, the models that I created actually showed that usually in year one, there was a negative value. Why? Because you’re putting money into it. Right. And then in year two, you’re, you’re coming up to even in year three, you’re doing better. And, ⁓

Sometimes that was one thing. It actually made us realize that for the types of projects that we wanted to take on, ⁓ when we started talking to groups, we found that a lot of people had very similar needs in terms of their AI. They needed to create an AI agent that would do lease abstraction. You know, they’d go through and you can feed, you know, triple net leases into it and it would pull all the details out and tell you when the expiration is and when the escalations are and you know,

⁓ so they, they, they needed similar type tools. And then on the other side, when we, when we had that net present value model and it showed negative value in year one, what, that meant for us as a company is we realized, Hey, you know, if we take the solution and just sell it to one person, it’s going to have like a steep funding curve. But if we find solutions that multiple groups need, you know, we can spread that cost across a number of groups. We can customize it for each group.

And that brings, you know, the costs down of that project for each group. they get, they get the return a lot faster. And, and so actually going through and doing fairly rigorous modeling on what the, you know, expense outlook was on a project led us to change our business strategy.

So a lot of people just stick AI, you know, like they just generate AI reports and there’s a lot of garbage and hallucinations and stuff like that in there. If you’re a software developer, I’m not going to dive into how you minimize that sort of stuff, but there are ways to minimize it. And a lot of reports out there are not people that know how to do that. so when I knew I was getting real information back when

Quentin (20:31)
Yeah

Daniel Holmlund (20:58)
I was generating the report and it’s like in year one, you’re going to get a negative net value. ⁓ that’s not the greatest sales pitch. So we had to figure out how to change it so that people weren’t.

Quentin (21:02)
Mm.

Yeah,

yeah. man, I love it. I love it. Now, so earlier you said something for me that’s very profound, something I kind of talk about a lot on this part. You brought up the word community and you said your local community can really, really impact you. It can really support you. So I normally say this, I normally say this part after I asked the question, but I often say,

Community is common unity. It’s people that’s doing things together to move the mission forward. I also say healing happens in community because if you have the proper community, everything becomes whole. Your mental, your financial, like things just start to add up when you have a healthy community. And so, sir, I want to hear from you, your perspective on relationship and community.

How has it impacted you? Why did you bring it up earlier? Why is this such a, seems like it’s such a core value to you.

Daniel Holmlund (22:15)
You know, one of the reasons this is core value to me is because ⁓ if you take the Myers-Briggs, I’m a software engineer. score way out on like, I like to be, I’m an introvert. I like to be by myself and I’ve realized that everyone needs community. Even the people kind of like me, I might be a typical, you know, guy that just likes to isolate himself. I work at my own home office.

Quentin (22:27)
Yep.

Daniel Holmlund (22:43)
You know, I don’t see people all day except for on zoom. ⁓ community is really, really important just on an emotional, physical, spiritual level, you know, connecting with people is even though it’s been a struggle for me because I’m not naturally that way. And so I’ve realized the detriment of that. And, and the other thing too, is that when we’re not in community, we’re not supporting community locally.

Quentin (23:01)
Yeah.

Daniel Holmlund (23:12)
Right? I think from an economic point of view in our country, we need to support local groups. And there might be more efficiency and scale in the medium-sized group, or even sending your money to Wall Street, if that’s what you want to do. But it’s healthy to have everything in between, just like you have a diverse ecological system. If ⁓ you have a diverse ecological system, it’s healthy.

If you, if you have a diverse economy where, where you can, you know, fund things locally and you have heart and participating in it, it’s not just, you know, sending your money to, to, you know, some group you don’t know about. I think that sort of personal involvement’s really, really important, ⁓ not only for the person, you know, emotionally, spiritually, physically, but it’s also important societally, you know, it’s better to have an economy where.

Quentin (24:08)
Yes.

Daniel Holmlund (24:11)
⁓ you know your local church your local synagogue. I was on a call actually, This this was actually a huge pleasure for me, ⁓ at intel I had a group of ⁓ people from the the muslim community club called me up and they said hey daniel, ⁓ we don’t participate in any investments that have interest You know, so we we don’t want to have mortgages on our properties. We don’t want to ⁓ we have

you know, regulations against doing that. How do we participate in real estate? And, you know, we get to sit down and just talk with them and say, Hey, you know, you can form a partnership, you can pay for things in cash. Here’s, know, here’s, here’s a spreadsheet model you can use in order to see. Now, admittedly, if you don’t take a mortgage, they’re going to be fewer opportunities, but you can find them if you know how to evaluate for them. ⁓ And so, you know, just

There are, you know, we’re all part of our own groups, but there are thousands of other groups out there. And I think it’s healthy to have that. ⁓ and, I want to see local involvement and local investment. The person who is down on main street and your small community, you know, if you’re in the Midwest, you’ve got a small town that’s kind of, you know, not what, what it once used to be part of getting it back is bringing in local investment. Yeah.

Quentin (25:34)
Yeah, yeah,

Daniel, man, thank you, sir. Community means so much to me. I often say it. I don’t know if I ever said this on the part, but community literally saved my life. I’m just being honest. And it comes from a spiritual principle for me. In the Bible, James 5.16, it says, your faults one to another so that you can be healed. And when I got that point,

and made it very easy. Cause I’m too an introvert. I recharge by myself. That’s how I recharge. And one of my friends told me, they said, you get scary when you get silent. And so I had to watch how silent I got because I was a prisoner of my own devices. And so I started to embrace the communicable aspect of communication, of talking about the things that’s unfavorable, you know, being honest and transparent and vulnerable.

Daniel Holmlund (26:16)
Yeah, absolutely.

and

Quentin (26:28)
And that opened up the door for people to support me in a way I never would have ever imagined. And so that’s why to me, community is so vital. And I try to talk about it here and I tell people, go outside, walk around your neighborhood. You’re going to see the local gas station probably, local grocery store. Like these are your community points. Like this is, this, this is what supports you. So I’m just trying to give them a visual of how

community can be so effective. If you need milk at the drop of a dime, you’re going to local store. You’re not going this far away to a Walmart. You’re going right there. When you need gas, if you’re almost on E, you’re going to the local gas station, right? If you need a snack so you can come back and watch your favorite show, you’re going… And so it’s just, I’m just trying to give them a simple way of your community, how it supports you and how you can support your community. And you, I mean, you sell it so eloquently just with…

Just even with the community, the Muslim community being able to reach out to you, you’re able to support the community that’s around you. And that’s, mean, to me, you just said it so eloquently and I thank you for laying the foundation of how important community is.

Daniel Holmlund (27:37)
Well,

and you go to any sort of, you know, help group, you go to AA or different groups that are working with people that are addicts. One of the common things you see, or people that engage in, you know, violence in different ways, one of the common things you see is that they’re alone people or they’re totally isolated. They’ve cut themselves off and they’ve become scary, like you said. And so community is very important. And I think that extends economically as well.

We have this club here. So we have a community of people that can vet deals together and you know, I’m constantly fascinated when I find this deal that I really like and I’ve brought it into the club and the club members are like, yeah I’m like what you you’re not you’re not excited about this. Yeah, so I

Quentin (28:23)
Right? What’s

the implications here?

Daniel Holmlund (28:28)
So, you know, sometimes I get a reality check and it’s and people in the club get that too. You know, some people are excited about some things. Some people are excited about other things. And ⁓ it’s good when you can get a reality check from people.

Quentin (28:42)
I mean, man, you’re so like, if you don’t have a healthy pushback on your thoughts or your ideology, if you don’t have a healthy pushback, it can literally become cancerous. It can become a dis-ease if you don’t have a healthy perspective on, ⁓ I didn’t even think about it like that. And so, yes, you know, so are you, so have you heard, hopefully I’m.

Hopefully it’s okay. But have you heard of the Jewish term, mitrash or mitrash? Okay. So it’s literally when two sides or community or organization, they hold detention. They talk about unfavorable things and hold the tension together. And I think, yeah. And I think a lot of us, don’t realize that’s a part of a community. Like, you how they used to have community centers when they have these community meetings. And I know

Daniel Holmlund (29:17)
I have not.

Yeah, yeah.

Quentin (29:40)
Sometimes they can go off rail when you can be yelling at each other. But the point of it was for us to hold the tension together because nothing grows without tension. When you go to the gym, if you push air, you’re not going to grow. You’re not going to get defined. But the tension helps you grow. It helps you get well-rounded and defined. so I just, again, that’s why I love community because we suppose to hold tension in community. That helps us grow. So yeah.

Daniel Holmlund (29:48)
Mmm.

Yeah,

people that think they have all the answers aren’t being challenged enough. Absolutely. So yeah, are we about at time? think we are. I don’t want to make this a, no, no, no, no, no, I’m good here. I’m just thinking that I talk a lot and so I don’t want to do that to your listeners. Okay.

Quentin (30:21)
Say what you want to say, please. Please say it.

Oh no, no, mean, we’re definitely, we’re overtime, but we’re in time at the same, you know, in

the same sense, you know. And as you can see, I think you and I probably could talk easily another 30 minutes, easily. But I do, I mean, I appreciate you, sir. If someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can they get in contact with you,

Daniel Holmlund (30:42)
Yeah, yeah.

Yeah, there’s two ways. our AI consultancy is called PropTech integrations. we work with brokerages and investment firms that are 50 to 500 people. And you can just go to [email protected]. then for the Alternative Investing Club, go to alternativeinvestingclub.com.

Quentin (31:16)
⁓ so let me say three things to you, sir. Sincerely, one, thank you for your time. You know, I take people’s time very seriously. think time is our most precious commodity. And so yes, it’s a podcast. know how to podcast works. You know, you bring somebody on, but still you gave us your time. And for me, that’s valuable. We can put a premium on our time. So I just definitely thank you for your time. secondly, thank you for your story, for your, your narrative for planting seeds. Like I greatly appreciate that.

Because I really believe that our stories plant seeds in people. We may never see the growth, but the seed is there and it could sprout up at any given time, a week from now, years from now. But just the idea that’s plantic, it really course corrects somebody. And so thank you so much for your seed. And lastly, man, thank you for your perspective, your mindset, the way you think, and bringing that mindset to this platform. I greatly appreciate you coming on, Absolutely.

Daniel Holmlund (32:11)
Thank you very much.

Quentin (32:13)
So listen, y’all heard Mr. Daniel, you got the seeds, you got the intel, you got the nuggets. So please, looking into the show notes, get in contact with him, connect with him, the information is there. But make sure you are subscribed here, because I promise you, we’re going to continue to bring up amazing people just like Mr. Daniel. So sir, I say thank you again. And everyone else, have a fantastic day.