Why Understanding Market Trends is Key: Jerry Katz Explains

Dylan Silver (00:01.1)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, it’s my pleasure to have Jerry Katz. And Jerry is a proven leader and innovator in commercial real estate and insurance with over two decades of entrepreneurial success and two eight figure exits in CRE focused companies, including mortgage and brokerage ventures. Jerry, welcome to the show.

Jerry Katz Ceo (00:28.864)
Thank you Dylan, appreciate it bud.

Dylan Silver (00:30.784)
Absolutely. know, before we hopped on here, I let you know, I always am curious how folks got into the real estate space.

Jerry Katz Ceo (00:38.944)
Well, that was fun. How did I get started? All right. I guess it started because of failure, right? So I’m an ex-Wall Street guy and right out of college, I went to Wall Street and all that fun stuff. Made a couple million bucks before I was 30. You know, I worked anything from Jordan Belfort. I worked for him for five months and then I realized I wanted to live in the city. But long story short is what Wall Street taught me was a lot about cycles.

right and ups and downs. So I made a couple million bucks before 30 and then I lost it all in the dot com bubble and I was literally wiped out in six weeks. AOL went from 110 to like zero. But along the way, one of my biggest clients was a guy named Ben Schulman who turned into a mentor for me at one point and he had made all his money in multifamily trailer parks, mostly in New Jersey and mostly in Harlem.

So he, you know, I called him up. was working at that time, I was working at Lehman Brothers and I asked him for a million dollar trade. Yeah, that’s what they taught us to do on Wall Street is to call high net worth individuals and get a million dollar trade on Intel and you know, we would make 5 % back then when it was unregulated. But I got friendly with him, right? Because I was basically, I was calling country clubs all over the country being your bookie on Wall Street, right? And everyone would brag about you, I got a guy on Wall Street. That was me.

So, but we did well. was wiped out and Ben Shulman had a Harley-Davidson. I bought a Harley-Davidson when I lived in the city and I used to drive out to his house in Sandy Hook, New Jersey. And he’s just, and what I saw, it was how he built his real estate portfolio. One afternoon we drove up to Harlem and he showed me, I don’t know about back then, it was like an eight unit brownstone around 125th and Harlem. And he showed me how he was buying it from the church next door. It was boarded it up.

He was doing a value add project and he was going to turn it into a multifamily. By the time he was done, he was going have a 12 cap. Then once it was stabilized, he would cash out, refinance it, yada, yada, yada. So after I got wiped out, literally in six weeks, I said to myself, okay, I’m done with Wall Street because yeah, at the end of the day, like I didn’t like it. I liked it because, you know, growing up in the eighties, I’m an immigrant. I used to have a

Jerry Katz Ceo (03:05.535)
one those posters in my room, they said the one with the most toys wins. I don’t know if you remember that one with the jets and the Lambos and the yachts. So that’s what happens when you’re, you know, coming from an immigrant family, don’t have a lot of money, you’re always trying to keep up with certain neighbors, people, things like that. But what I learned on Wall Street is no matter what I did, they didn’t like me. Right. So I was always focused on making money for myself, commissions and all my bosses on all every Wall Street firm would say, Jerry, you’re not an analyst.

And every time I thought I was doing the right thing, calling them up with, you home shopping network, because I think it’s good. Yeah, Martha Stewart gets in trouble. That stock goes to five. I’d call them and tell them to buy Intel. They hated me because the Disney went up higher. Like, so you felt like crap, right? And so I got caught up in the dot com boom. And then when it all came crashing down, because it was such speculation, we were using 256 K modems to run our Quotron.

And meanwhile, I’m selling a company called Webvan, right? And the stock goes from two to $100. Well, today that’s Grubhub, right? But the technology didn’t even exist. So long story, I got wiped out. I looked at my mentor, Ben. I said, I have a $60,000 margin call. Everything I’ve built is gone. But I bought a condo on the Upper East Side in 1994, 1995 for $160,000, a 600 square foot condo. I had a $60,000 margin call.

I owed to the market. So I like, I called my broker, real estate broker, and I said, how much is my condo worth? She said about 320. And I could sell it quick for around 300. Sold it, took my equity, took my 60 pay. I told Ben, I want to buy real estate. He said, go to Miami. I went to University of Miami for a semester, but it’s another story. And he goes, why? He goes, because tip. There you go.

Dylan Silver (04:53.934)
Go to my brother.

Jerry Katz Ceo (04:56.52)
Because typically speaking, what happens is the real estate, if the stock market crashes and interest rates and things like that, real estate will follow. Stock market’s an anticipatory vehicle. It’s only six months ahead. So I went to Florida and started buying multifamily apartments, whatever. And the funny thing is, is the first deal I did was a penthouse condo that I paid around $190,000 with like 5 % down and I bought it from a hard lender out of the newspaper article.

We didn’t have Zillow, we didn’t have LoopNet, didn’t have robots dialing for dollars, none of that. was, I used to call it success through leather, shoe leather, hit the street, right? And so that’s it, that’s how I got into real estate. I bought a fourplex in Miami Beach for 150,000 and that’s what started it, but with that mentor.

And I was still kind of working on Wall Street on the side to make money, but that started my career. That’s it. And at that point I learned that I’ll never be as good as my last sale, right? Like Wall Street, you’re as good as your last sale. A realtor, you’re only as good as your last sale until you build a reputation. So today, everything that I touch has recurring revenue, right? Apartment buildings, leases, insurance, because I build assets that can’t be

Dylan Silver (06:06.104)
Mm.

Dylan Silver (06:17.932)
Right.

Jerry Katz Ceo (06:23.826)
you know, wiped out overnight.

Dylan Silver (06:26.658)
What year was this that you moved down to Miami?

Jerry Katz Ceo (06:29.351)
That was 2000, December 25th, 2000. I got in the car Christmas morning and drove and went down and that was it.

Dylan Silver (06:34.564)
huh. All right. So Fort Lauderdale is my favorite place I think in the country. I haven’t been to Boca but I love Fort Lauderdale. And okay okay because I go to Santa Domingo in the Dominican Republic often and every time I come through I come back through one of the three airports in Fort Lauderdale and I’ve had the chance now several times to stay in Fort Lauderdale and I don’t know the areas right but there’s this one street where you’ve got

Jerry Katz Ceo (06:44.358)
Right. I’m in for a lot of real. Yeah.

Jerry Katz Ceo (06:51.089)
Mm-hmm.

Dylan Silver (07:03.854)
restaurants on all sides, pristine and I’m like there’s the ocean and it’s beautiful, beautiful and I’m thinking like this is the best, this is as good as America gets and so when you are moving down there what was it like in 2000?

Jerry Katz Ceo (07:19.589)
It was the same. like I moved from, was in Michigan. My dad got a job for Chrysler at the time. And I knew I wanted to get out of Michigan, you know, and I went to university in Miami, but I’ve ended up finishing in West Palm. Once you get near the ocean, it never changes. And you’re absolutely right. So I started in Miami and all that, and it was busy, but not that busy, right? And then eventually now I live in Fort Lauderdale and you’re absolutely right. We just had Tortuga this weekend. You know how many people were there? It was crazy.

hundreds of thousands of, it was like one largest country music festivals ever, on the beach, great day, I’ve got a boat, I’ve got everything. So I love it down here. But the thing is, is back then the demand was there, but we lived in what we call the snowbird state, right? Where people would come in for the winters, right? From New York, Connecticut, all the East coasts, Midwest, and then they would leave. So the good news with that is we have some of the best.

laws when it comes to eviction and property laws in the country. can evict, right? So three day notice, right? Eviction, you can get into an eviction court in two to three weeks because what happens is in a snowbird state, people come down, they rent weekly this and they don’t leave, right? So the laws became very flexible for landlords in Florida because of that whole snowbird dynamic, right? They would sign a year lease and they wouldn’t stay and things like that. So.

There was opportunity there. And what I’ve learned also is I remember on Wall Street, someone gave me the popcorn report. I think her name is Katie popcorn. So she’s a demographer and she picks trends. Right? So one of the reasons I came to Florida is because I learned from my mentor and being on Wall Street that if you follow migration patterns of people, right? Real estate goes up. right? So that’s the key meaning.

Yes, they’re going to build a Walmart plant in Ohio and yeah, there’ll be a couple hundred multifamily units that need to be occupied. But I don’t mean like that. I’m talking about when, you know, when you drop a rock into the, into a pond, it’s that ripple, right? So the migration patterns of the baby boomers back then were to Florida. The baby boomers had 50 % of the wealth in the stock market. They all were moving. Where they move comes their kids, their grandkids then.

Jerry Katz Ceo (09:46.876)
You know, you need schools, then you need services, then you need dry cleaning, then you need insurance, then you need tourism. So I’ve always been following people. And I will tell you something funny is up until December, let’s say, I assumed that Florida would be the last capitalistic state in the nation before this country went socialist. Up until then, because not tech, Texas was tech.

Dylan Silver (10:12.43)
Not Texas.

Jerry Katz Ceo (10:15.59)
Texas was falling, man. had, they got Austin, okay? Where you got Google, Facebook. I mean, Musk is there, which is a good thing. But I assumed that the entire country, the tides have turned, right? Once you start handing out checks, that’s it. It’s very difficult to turn it back, right? And we will become Europe, a socialistic country. But what was the last true holdout? Because we used to say, Arizona, Colorado.

right? Texas, right? But they were all gone. And that’s where all the immigrants were coming in to become voters, right? All that kind of things. Florida under De Santos and the conservatives and you got to remember Florida, where we’re located in Florida, you have Columbia, Panama, Venezuela, Cuba. Then you have Europe, Russia, London, everywhere. So when you today we live in, you know,

There’s nine languages spoken within a block here. Come to my office. It’s the United Nations and we all get along. But see, here’s the thing. They’re all newer immigrants in the last first generation or second generations. They come here to work their butt off. They don’t come for handouts, right? Right. So because of the Cubans and all these, they don’t want socialism. So I said to myself, just keep investing in Florida. As population grows, inflation grows, but we out.

Dylan Silver (11:18.37)
It is.

Jerry Katz Ceo (11:42.843)
pace inflation all the time. And then look what happened during COVID. My rents went up 35 % in 12 to 18 months. Thank you, Joe Biden for making me 10 more million dollars.

Dylan Silver (11:57.112)
This is the power of real estate wealth is everyone else’s inflation is real estate appreciation. And so once you start to see that it really starts to come together. Jerry backing up a bit here to that first multifamily deal you said it was one hundred forty thousand dollars. How much would that be worth today.

Jerry Katz Ceo (12:07.044)
This

Jerry Katz Ceo (12:18.203)
shit. That’s that that’s below fifths been rezoned vertical the dirt over there sells for 300 a foot. So that’s a 50 by 130 foot lot 7000 square feet 2.1 million the dirt the dirt not even the forget the four plates. No, I don’t have that one. But so I’ll tell you one thing. You know, one really big mistake.

Dylan Silver (12:33.358)
Any any chance you still have it

Jerry Katz Ceo (12:45.529)
that people make in real estate when they’re looking at investments, especially the larger ones and stuff, they’re expecting like huge returns from real estate, right? And it’s a mistake because you can’t expect, once you get over hundred units, for example, if you’re buying over a hundred thousand square foot of retail industrial, it becomes commoditized. There’s a lot of players, right? So they’re expecting, what are you, you’re expecting more than five, six, seven percent cash on cash return? No way.

It doesn’t happen. So if you want huge returns at those levels, then go take risk and buy Bitcoin by the S &P 500. But at those levels, you can’t expect, you know, more than four or five, six, 7 % cash on cash max. And usually the higher that cash on cash is just because it’s a high risk area, right? Or a high crime zone and things of that nature. So it’s it’s you’re in it for the long game. Watch it. Yeah. And watching those. But see,

Dylan Silver (13:42.243)
You are.

Jerry Katz Ceo (13:44.845)
going back to my first fourplex, I didn’t have any money, right? So what do you do then? So then I had a different approach, correct, 1031, 1031. So if you’re buying a fourplex for 10 % down, which is 14 grand plus closing, know, 17, 18 back then, and then I use credit cards and Home Depot cards to renovate it, I raised my rents, right? And then within nine months, I sold it, I don’t know, probably 170,000, right?

Dylan Silver (13:51.094)
out. Yeah.

Jerry Katz Ceo (14:14.265)
But see people like, oh, well then after commissions, yeah, after commissions, I made 20 grand, let’s say, right? But what they don’t see is my 15 down stroke or 17 turned into 40 or 50. So now look at the math, right? You know, my math, that’s how you make a 50 % gain or a hundred percent gain or a 30 % gain short term. So I did that from 2000 all the way to 2007.

Okay. And along the way, I met a couple of players like David Matlock, Wayne Blackburn. They were my seniors and they were agents realtors at remax. And they said, Hey, this guy’s a mover and a shaker. Right. So back then these guys were I’m 51 today. So they’re probably 70 today. Okay. And they were like, Jerry, you’re a mover. I’m going to find you the buildings to buy. You do your magic and then I’ll sell your buildings.

So these guys had been around for so long in Broward and Dade counties, they can pick up the phone and say, hey Stanley, you wanna sell your sixplex? I got a halfway deal. I’d get it. They were neglected rents. I would lift it up and then they would sell it. Boom, boom, boom. So with Dave Matlock and Wayne Blackmer, we did around, I can’t even remember, 50 to 60 to 70 deals. But around my fifth or sixth, seventh deal with them, as I started the 1031 in scale, they asked to be my partner.

Yeah, but see, I needed their connects, right?

Dylan Silver (15:43.438)
I love I just have to interrupt here. I love the New York energy the East Coast energy I’m in Dallas, Texas or DFW area really closer to Oklahoma than I am to DFW and so I can and to people who are watching this with a video feed as opposed to listening you can see the East Coast energy Penetrating through the screen and it reminds me of home I tell folks that only two things that I miss about New Jersey are the big two things are Italian people and Italian food and I can

Jerry Katz Ceo (16:03.064)
you

Dylan Silver (16:11.406)
You know, smell the angel hair pasta and the Grimaz slices somewhere. Just just listen to you talk here. you know, scaling. Right. So you’re you’re at 2000, 2007 market crash. I feel like Florida was hit maybe one of the harder of all places. How did you weather that? What was that like? And did you see the blood on the water and you buy up a bunch of properties at that time? What was it like?

Jerry Katz Ceo (16:12.108)
Bye!

Jerry Katz Ceo (16:35.531)
Yep, that was the biggest mistake of my life. I sold everything in 2007, except for 32 units and exited with those guys at over 30 million in equity. Biggest mistake of my life. Why? Because I had learned the hard way on Wall Street. I said, I’m not getting caught in this cycle again. I will not get wiped out. So Wayne, my partner,

At that point we had investors’ realty, old Florida mortgage, and I founded Premier Protection Insurance along the way because it made sense, right? And I’ll get into that later because insurance could derail you overnight at any time on your cap rates, which at the end of the day affects your property value or your cash out ability or even all that. In high-risk coastal states, including Texas now, insurance will destroy a real estate investor overnight. So long story short,

is we used to track the MLS. We had a girl in the front that used to do graphs that says there’s this much inventory on condos on the beach. There’s this much single family, this much multi-family. And we saw it. So Wayne was tracking it and we saw inventory going to here, closings going down there. This is at the time that every stripper was flipping condos and you can get a mortgage. This was the, yeah.

Dylan Silver (17:53.899)
a pulse.

Jerry Katz Ceo (17:55.498)
It was the GFC, what we call the GFC today, the global financial crisis. So we saw it. And meaning I saw it on Wall Street from when, you know, I’m in a cab and people are asking me which internet stock to buy from a taxi driver. You know, today, you know, let’s go back four or five years ago, the guy at Starbucks is buying crypto and like, you know, and then it crashes. It’s like, there’s always a bubble, right? Always. Today, it’s probably, probably AI is the newest bubble, right? Because there’s

There are real companies, but so on. So long story, going back to the point is we were scared to death. We were doing condo conversions. We were buying units for 40K a door, renovating for 25K and selling them for 120 because the banks were just here, here, here. We did over hundred condo conversions, right? Just because that was the easiest way to value add. It was much easier than selling the building. We were literally buying fourplexes and then converting them.

for condos, like we got it down so good. So in the middle of that, we sold everything in 2007, beginning of eight, before that cycle, we even had a 22 unit, we were in the middle of a conversion and we canceled the conversion and then I bought it from my partners as a multifamily because I started buying youth hostels. So eventually I knew that the market was gonna crash, so I had to buy properties that can convert the use, right? Because you can always convert.

So those were youth hostels. In Fort Lauderdale at that time, was crew, yacht crew, and I bought a 22 unit motel and I noticed four to five people sleeping in the rooms. So we put bunk beds and we charged 25 bucks a night. Eventually I scaled that. It was called the Chocolate Hotel. I did it in Costa Rica, this couple of countries. So I looked like a genius. Everyone, Brea, Broward County real estate investors groups and stuff, they were asking me to speak and I thought I was a genius. We exited, I paid tax.

all this stuff, right? I nailed it, right? Then I went and I started scaling these small hotels and hospitality, right? Cause it had different use. I could buy hotels and convert them to youth hostels, right? And this is before Airbnb. Now that model is destroyed because of Airbnb. And they’re all called the chocolate. There’s still one in Tamarindo. There’s still one in Panama. I got the other chapter in my life and long story is today I know

Jerry Katz Ceo (20:22.58)
I shouldn’t have done that. Meaning that the smartest investors that I deal with today and my mentors and I’m the founder of something called the South Florida Commercial Real Estate Forum, 10 high net worth investors. meet once a quarter and just help each other look at deals, analyze. Everybody I know that maintains generational wealth, they cash out refi. They just cash out refi all the time. So you get all your money out of the property.

You get it out tax free. You’re not paying the capital gains under right. It’s about the same. And then they hold the property long term. And guess what? If you’ve got a million dollars that you owe the bank, you’ve got a problem. But if you owe the bank $25 million, they have problems and they work with them all the time. And then today that $30 million in equity, if I would own all those properties today, I’d be sitting on $150 million. Easy.

because of the demographic trends of Florida continued to rise, beat inflation, yada, yada, yada, yada. So I look back and I’m like, shit.

Dylan Silver (21:27.862)
Then, for you, was the… You sold everything. At that point in time, you were, I’m sure, relieved because you didn’t have to go through what you went through on Wall Street with having to rebuild and start over from scratch. What were the next couple of years like for you as the country was reeling, having new laws all throughout the country to regulate real estate and mortgages? Were you active in this space or were you waiting it out like some people are doing now?

Jerry Katz Ceo (21:49.279)
Correct.

I No, I was. I was very active. So I got away from my partners. One of my partners was going through a nasty divorce. didn’t like he was doing some bad things like value wise and stuff. I didn’t like it. So I asked to leave that. And then in 2005, I took my insurance agent, Doug Levy, and open Premier Protection, right? And when we when I left from those partners, I said, Hey, I don’t want investors realty anymore. We sold the properties. It’s not your fault.

didn’t blame them, I blamed myself. I said, I can’t work in this big group. I’m married now, I have children, I have to make my own decisions. So I’m gonna leave the group. So I gave them Investors Realty, old Florida mortgage, and they said, you go with Doug and take Premier, the insurance agency. And Doug was loyal to me, because him and I were close buddies and things of the nature. So at that time, I moved Premier Insurance into my lawyer’s office, a title company. And I just made it rain on Premier because I knew everybody in the industry.

Marcus and Millichap, CBREs, you know, on the insurance side because we are real estate people that understand insurance. And the reason I did that is because when the storms went in in 04, right, my insurance, let’s say I was paying 100 Rand, storms come in, the market implodes, 11 carriers go out of business, your insurance used to be 100, now it’s 150,000. So your $50,000 NOI drop,

Because of insurance in a high-risk coastal state or the fires in California, it’s getting worse and worse. Well, $50,000 on a five and a half cap is like $900,000 of property value. Right? On your NLI. So that’s why I opened Premier because I didn’t want that to happen again. So at that time, you know, I still had that, but Doug was running that company. I was just, you know, sending everybody I knew there. You know, hey, you need insurance, you need insurance, great recurring revenue.

Jerry Katz Ceo (23:46.932)
beautiful another asset that you that I was building that for an exit at one time. So at that point, I also joined something called Entrepreneurs Organization in 2005. Yo, we engage leading entrepreneurs to learn and grow from each other. My competitor said, Hey, buddy, he was a Serbian guy, Gordon, because you want to beating up properties in same area. Let’s meet till we have lunch. So I had lunch with this guy. Today, this guy’s got 2100 section eight units, he never sold one.

Dylan Silver (24:16.749)
Incredible.

Jerry Katz Ceo (24:17.095)
And so him and I made a deal. You buy that one, I buy this one. Cause we were in the same market. So we became really good friends and he got me into EEO, Entrepreneurs Organization. And it was created by Steve Jobs, Michael Dell and Bernharnisch. And it’s a community of entrepreneurs with like mind that help each other, non-solicited tone tone. So it changed my life, really changed my life. And it focuses on family, community, self and business.

and we help each other. So I was active that whole time with Premier and then at the same time, that’s when I built out the chocolate hostels. So I went to Panama, I went to Columbia, I went to… señor. Yo puedo hablar en español también. Sí. Yo aprende español. Yeah, yo aprende español. I learned how to dance salsa and I scaled out, I scaled out the chocolate hotel because it was a demand for hostels.

Dylan Silver (24:58.286)
I was Spanish.

Dylan Silver (25:09.348)
Satan!

Jerry Katz Ceo (25:15.348)
Right? When I was 21, I traveled in hostels. So I knew it. So I built that out. I can, and I made a couple of million bucks in Costa Rica, just flipping properties. Cause they were, was, was, people can believe I did it. It was nuts, but I was having fun, right? Surfing. Yeah. I learned in Spanish salsa, all that stuff. But I did make another mistake. Um, in 2009, yeah, I raised $10 million for the black Marlin fund. Okay. And why?

Dylan Silver (25:29.378)
Yeah!

Jerry Katz Ceo (25:44.487)
because I thought it was time to go back in. So in Florida, there was the Washington Mutual WAMU portfolio. Chase eventually bought, think, WAMU. They had a billion dollars in real estate to liquidate from the global financial crisis. And a guy that I knew, Evan Crystal, who was the largest multifamily broker at Marcus and Millichap, right? Fort Lauderdale, he’s still around today. He was liquidating that portfolio and I had done a lot of deals with him, right? Because, listen.

You want deals, you gotta have a reputation, gotta have connections, and you gotta close. When you say you’re gonna close, that’s how you get the call before it hits the market. Things like that, and banks and lenders, everything. So I raised that money, and Holland and Knight had that portfolio, and I made some mistakes because I gave people a compound pref. So a pref, like a 7 % interest on the money they gave me. I wanted a blind fund, I didn’t wanna do deal by deal.

I took the $10 million and I couldn’t deploy the money quick enough because the assets were still in receivership. I couldn’t get it out the door. So I’m paying 7 % on a compound preferred $10 million and I was only able to deploy $2.5 million in equity. Okay? So if you start to do the math, right? And this is before I should have ran it by my EO forum. They would have flat out said, you out of your mind to do this? But I didn’t have enough mentors at that point.

Dylan Silver (27:10.412)
Yeah.

Jerry Katz Ceo (27:11.019)
and I couldn’t put out the money quick enough and the compound preferred was eating me. And I didn’t want to keep taking money from the pot to pay my investors. And I ended up folding the fund and I bought those assets back from my investors. And then I slowed down. So today I still have maybe 80 units from that, that day. And I took out my investors, I gave back the money.

I got some real estate out of it, but I deploy 10 million in equity, which was the goal was to be a lever tip 40 million, right? 30 million back then. And I never deployed it. And then I churned to the hostels and I eventually sold all those hostels. Why? Because Airbnb came in and disrupted that. So I started exiting those. I was leasing those properties in Costa Rica. And then about six years ago,

Yeah, seven years ago, Doug, who was running the insurance agency, I started getting calls from people, my friends, right? Hey, what’s up with the insurance agency? Bad service, bad this. Not everybody is an entrepreneur, okay? So Doug was the most honest, the nicest kid, the smartest guy ever. It took me two years to convince him to open an insurance agency with me, 50-50 partners. And what I learned from that is not everyone’s an entrepreneur. Doug,

Dylan Silver (28:14.072)
Yeah, yeah.

Dylan Silver (28:31.651)
Yeah.

Jerry Katz Ceo (28:36.176)
was a master insurance guy with great values, honesty, integrity, and hard work ethic. But you can’t, unless you put in systems to scale, what systems stand for? Save yourself time, energy, money. Unless you put in systems, you can’t scale. So he had this thing in his head, no one could do it as good as me. Well, he’s probably right, right? But you can’t scale a business. So we reached around.

a million in revenue, 10 million in insurance, premiums, like let’s say, and he couldn’t handle it. High turnover, he was looking at everybody, burning 80, this, all that. So I kept going in, I took him on this accelerator program for entrepreneurs to show him how to scale and all that, but at the end of the day, I came in and I had to restructure the entire company. I got rid of everybody. I gave him a plane ticket, he went to Thailand, I said, you’re done, come back in a month, you need a break. And he was married.

They went, he stayed an extra two weeks, and then by the time he came back, I put in new systems, software. I got rid of everyone except for one person. And I came back and said, Doug, all you do is new business. That’s it. You don’t do the renewals, you don’t do that. And then six months in, he said, this isn’t my place. I put in KPIs, dashboards, systems, you know. I’ve been in the, yeah, full scaling, full delegation, got my licensing. And he came in and…

Dylan Silver (29:55.95)
It was tough at the point.

Jerry Katz Ceo (30:04.037)
Hand me his resignation letter one day. He said, I can’t do it. Yeah. I said, don’t do it, dog. We’ve been friends for how long? He’s like, Jerry, I can’t. I’m burning out. I can’t do it. Nope.

Dylan Silver (30:13.742)
He’s not the entrepreneur guy. He’s he’s he’s the he’s he’s loved the business but is not the entrepreneur guy. We are coming up on time here Jerry and I think I think I could probably spend another three podcasts chopping it up with you just about your time in Latin America. Yeah yeah I’ve been to Santo Domingo now five times in the last 14 months. I may move there. We’ll see.

Jerry Katz Ceo (30:18.254)
operations.

Jerry Katz Ceo (30:23.217)
Okay.

Jerry Katz Ceo (30:31.547)
There you go. That’s a good time.

Dylan Silver (30:42.606)
But that’s how I learned Spanish.

Jerry Katz Ceo (30:43.844)
been there. Try Costa Rica, try Columbia and that mix it up a little bit. The DR is close though. It’s easy. Right? Yeah.

Dylan Silver (30:50.334)
Exactly, I know. The Spirit Airlines, I can go from here and there and back for $400. It’s crazy. But Jerry, where can folks go to get a hold of you?

Jerry Katz Ceo (30:58.48)
Yeah. So today, right. I scaled the insurance business. paid Doug for $100,000 to get out and I didn’t want him to. And I scaled the insurance business. So today you can find me at Jerry Katz CEO all over the web. Cause I’ve got my own podcast and we’re one to many, but long story short today, I deal with high net worth commercial real estate entrepreneurs and high risk coastal States. And at the end of the day, we take you through a process that I invented called Tau.

total asset optimization, and it looks at insurance as a lever to increase net operating income. My competitors are insurance people. You know, my son comes in here, he’s in insurance school, he will over insure you for everything, you have no net operating income, lower the prices, he doesn’t get it. But like, I own this building, 1957 concrete, right? I don’t have any wind insurance here, I’m not spending $28,000 a year. So why? Because the dirt.

is worth more than the structure today in Florida. So most insurance people, they don’t understand real estate. They go to risk management school, but they don’t understand what’s my risk tolerance? do I, you know, most real estate investors, let’s say 50%, they only have insurance in place like crazy because their lender requires it. So I have different levers. I can get you lenders all day long and I just pay it forward. That won’t require wind. They won’t require this. They become flexible.

So it gives you a strategic edge to buy a five and a half cap once you follow what I call the TOW process that turns into a seven cap, just with certain levers like insurance and lending. And we’re not a capital markets company, right? We were due, last month, a guy came to us with $1.1 million in insurance, 54 buildings in Palm Beach County. He was paying $160,000 a year on one industrial property for insurance.

and he only owed the bank 240. He bought it a decade ago for 2 million, but he had six fourplexes with new roofs and new hurricane windows with no mortgages. I’m like, come on, buddy. Go get these refinanced with a residential loan that’s cheap, then pay off this building, this, this, that. By the time we chopped it up and fixed it all, and 640 grand in insurance. Half a million dollar savings, which.

Jerry Katz Ceo (33:23.095)
at a half a million dollars, I just increased his portfolio by $8 million in value on a sale. Right, but see, people don’t get it. Correct, so that’s what we do now, and I’m scaling the crap out of this real estate profit boost, we really, you know, that’s why I’m on your podcast, but we interview the titans of real estate. I still have 144 units, retail, industrial, this, I still invest, all of that tax purposes now.

Dylan Silver (33:28.558)
Unbelievable. That’s a customer for life. That’s a client for life.

Jerry Katz Ceo (33:49.338)
We insure over $4 billion worth of real estate today. And I’m just scaling this business out. And I think we have something super unique because my competition, they sell you insurance for commission. My staff, if they save you money, they can charge a 15 % consulting fee. So that guy that saved $500,000, right? He saved 500 and that agent that works for me, we call them our advisors.

He charged, do the math, $65,000 consulting fee. So, but that’s only one time. Now he’s the renewal and everything because it involves a lot. was a five month process just to do what we did. But again, I don’t think there’s many people out there doing what I’m doing, right? But I love coaching, speaking, scaling. I’ve scaled many businesses. I’ve coached people to scale. I’m finally where I think is my superpower.

Dylan Silver (34:23.128)
Good for win-win. Yeah.

Dylan Silver (34:37.729)
Now.

Jerry Katz Ceo (34:47.245)
like getting here, going one to many, helping others. I don’t want to be the richest guy in the graveyard. I don’t care anymore. More faith-based, helping people, impacting others. That’s what I like. mean, what’s the purpose of money, Dylan?

Dylan Silver (35:00.952)
Just to make your life more accessible, would say buy back your time.

Jerry Katz Ceo (35:05.071)
Right, so the financial freedom, but really the purpose of money is just to make more money, right? Meaning I make money so I can invest more money. That’s all it is. All I gotta do is beat inflation all the time. But most people out there, they don’t get it, right? They think money is just to pay bills. And then when they don’t have enough money, they get a credit card and then they go buy and get more bills. When you and I know that debt is the best thing in the world, because if I can borrow at 5%, 6.5%, 7%, and I take that money, leverage it, and then make 9 %?

That’s it. I’ll leave you with one last question. What’s the purpose of a business?

Dylan Silver (35:35.598)
That’s it.

Dylan Silver (35:42.424)
generate cashflow.

Jerry Katz Ceo (35:44.43)
That’s what most people say. And I would have said the same thing. What I learned is there’s only one purpose of a business. It’s to solve problems for people. It’s to help people. And if you look at your business as helping others, the bigger the problem you solve, you get paid proportionally and it just exponentially grows. But most of America, they don’t get it. They start a business to make money, not even thinking that they’re passionate about it or what problem they’re solving for people.

So I’m solving insurance for high net worth commercial real estate investors all the way from a fourplex. One of your mastermind guys, he could get destroyed with insurance. And by the way, it’s getting worse in Texas. We just wrote 400 units in Texas. State Farm is pulling out of Texas and global climate change. They said 17 inches of water rise at the coast. I saw this report last week.

I didn’t believe it, but if you look at my Instagram under Jerry Katz CEO all over the internet and YouTube and Instagram, you’ll show a video at high tide in what we call a full moon. I have four inches of water in my street. live on the water in this. And I was like, six years ago, king tide, that’s what we call it, right? October, there was no water in the street. It’s real, dude.

Dylan Silver (37:05.07)
Jerry Jerry, thank you for coming on. We’ll have to have you back. Thank you so much for your time,

Jerry Katz Ceo (37:06.807)
That’s it. Yeah.

Jerry Katz Ceo (37:11.979)
Anytime, Dylan. All right. Good luck. God bless and make some money in real estate. Check out Costa Rica. You’ll love it. And Columbia. They’re all great. DR. All right, bud.

Dylan Silver (37:17.55)
Let’s go.