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MIKE & KARA | TWISTS TURNS & LESSONS LEARNED

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Hosted by
Mike Ayala

Today on Investing for Freedom, Mike Ayala takes on a different approach than usual. Pulling back the curtain on his life, Mike shares an interview that joined with his wife Kara, was given on another podcast recently.

On Zack Hamm’s show Twist Turns and Lessons Learned, Mike and Kara Ayala discuss the background behind being married entrepreneurs, business owners, and more. Mike, and Kara discuss how they started and continue to grow in the real estate investment world with properties all across the nation. They also explain the importance of changing mentors as you advance through life and some advice for the listeners!

“The gurus always tell us about what we need to do that’s based on what they are currently doing and where they’re at. What they don’t talk about is where they started, and how they got there.”

HIGHLIGHTS:

  • [0:01] Introducing the Interview 
  • [0:49] Start of the Interview  
  • [1:05] Introducing the Guests 
  • [2:45] What Businesses Do You Own and Operate Right Now? 
  • [4:45] Gender Struggles in the Financial World 
  • [5:39] What Makes a Successful Partnership? 
  • [7:40] High School Days Dreaming of the Future 
  • [9:48] Did You Ever Feel in Over Your Head? 
  • [11:31] From the Outside Looking in 
  • [13:51] Selling a Company Featured in Inc. Magazine 
  • [17:44] Things to Look for in a Mentor 
  • [18:42] Outgrowing a Mentor 
  • [20:19] What Motivates You to Continue to Grow? 
  • [25:53] Enjoying the Process and Experience
  • [30:19] Does it Get Easier? 
  • [32:15] Do You Think You Will Reach a Time You Don’t Want to Do This?
  • [34:12] Born with an Entrepreneurial Spirit or Can it be Created Over Time? 
  • [38:12] Thought Process Behind Selling a Company 
  • [44:11] What’s the Biggest False Perception on Retirement? 
  • [49:50] Surround Yourself with the Right People 
  • [52:09] Stumbling into a Real Estate Niche 
  • [54:52] What Types of Properties Are You Invested in? 
  • [55:30] Increasing Knowledge in the Field of Real Estate 
  • [1:02:35] Goals for the Future 
  • [1:04:35] Advice for the Listeners 
  • [1:07:14] The Mainstreet Foundation 
  • [1:15:50] Connect with Mike and Kara 
  • [1:17:59] Outro 

RESOURCES:

Want to Listen to the Twists Turns and Lessons Learned Podcast?
Website | [https://twistturnsandlessonslearned.libsyn.com/] The Original Episode | [https://twistturnsandlessonslearned.libsyn.com/twists-turns-lessons-learned-019-four-peaks-capital-partners-mike-and-kara-ayala] Four Peaks Partners | [https://www.fourpeakspartners.com/]

Contact us! | [team@investingforfreedom.co]

FULL TRANSCRIPTION:

Mike Ayala: Today on the investing for freedom podcast, we’re going to take a little different approach than what we’re used to. My wife, Kara and I were on a podcast with Zack Hamm a while back called twists turns and lessons learned. And we just had such a fun time there. He got into our background and yeah, being entrepreneurs, married entrepreneurs and having business and family together and just our journey and everything that we’ve done and how we got here. So I just thought it would be interesting, maybe to pull back the curtain on mine and Kara’s life a little bit, and rather than just having us come on here and talk through it, I thought I’d just share this recording from Zach Hamm’s podcast. So I hope you enjoy it. And I hope you get to know us a little better. It was fun doing it. And I always enjoy being able to do podcasts with my wife or anytime we get to collaborate. So yeah, hopefully you enjoyed as much as I did.

[Intro] This is twists turns and lessons learned

[Music]

Zack Hamm: Thank you for joining us today, Twists turns, and lessons learned. I’m really excited to have two guests here on today’s show. This is the first time that I’ve actually ever been able to do this, and they just happen to be high school sweethearts at times, as they say, and husband and wife, they’ve been married since they were 19 and 20 years old, and they’ve been running and selling businesses throughout their marriage. One actually being one that they ran for 10 years, and it was even featured on Inc Magazine’s fastest growing companies in America. Mike Ayala is currently involved as a managing partner at four peaks capital partners, a private equity firm focused on helping high net worth individuals create passive income through real estate investing. And Kara is currently developing a business around her passion, helping women to create passive income, have fantastic marriages, be a mom who empowers her kids, be super fit and live a happy life. So please welcome Mike and Kara Ayala.

Mike Ayala: Zach it’s so great to be here. Thanks for having us. Zack Hamm: Yeah, absolutely.
Kara Ayala: Thank you so much.

Zack Hamm: Absolutely. I know Mike, you have some experience coming on podcasts, but Kara, this is your first one.

Kara Ayala: This is my first one.

Zack Hamm: And to give people a little bit of background of how I met this couple, I actually just met Kara. And that was at an all-women’s event that as you guys know, I tend to show up to, and it was called own your money, honey. And she happened to be a panelist talking about how she, her and Mike have created wealth through real estate investing and pretty much making smart decisions throughout their financial career together. So I want to give you guys a little bit of time to share a little bit about the businesses that you guys are owned and operating right now.

Mike Ayala: So currently I’m involved in, obviously Kara is a partner. We do everything together, but I’m a managing partner at four peaks capital partners, as you said. We’re heavily invested right now in an asset class that most people don’t really know a whole lot about. Most people have seen it, but we invest in manufactured home communities. We’re currently in 13 States as of this next week, we’ll have 35 properties probably totaling around 2,500 total pads and units combined. So that’s our primary asset class. It’s really broken up into several different business units. We have our private equity firm, four peaks capital partners, and then we’ve got a construction company called park place communities and then a property management company called park place communities management.

Zack Hamm: Wow. You got your hands full.
Mike Ayala: Yeah, we got a lot going on a lot of good people. Zack Hamm: And what about you Kara?

Kara Ayala: Right now I’m currently trying to develop like a mastermind for women. It’s going to be very limited. I’m going to launch it in 2020. So it’s going to be only 12 people max that can join it. And it’s going to be for people that want to grow, want to be vulnerable and want to grow a passive income, but want to be show up as our best self and have that accountability within a group of women that have likeminded people.

Zack Hamm: Very neat. And why just women?

Kara Ayala: Because I feel that’s where I have my giftings is for women to help women from my background of the businesses that we’ve been in. And I feel like women sometimes, if they’re involved in their home life a lot, they get pushed kind to the side. And then later on in life, they feel like they haven’t accomplished something. So I want to empower women that they are so beneficial and their family dynamic and businesses, and so that they can provide that for their family and be a support system to their family and grow as a person as well.

Zack Hamm: I feel like Mike, and you have, from what I can see have a pretty great relationship and you guys seem to communicate really well as well. Do you think that a lot of these women are struggling in more the financial realm because of their partner being a little bit more of the dominator?

Kara Ayala: Yes. I do think that that can happen and also maybe not like inserting themselves into learning a little bit more. I think that it is a woman’s responsibility to know like what is going on with their finances and how to actually make money. Like not just rely on a man to provide that for her, or, if he ended up leaving you at some point in your life or he dies, what are you going to do? You need to be prepared for that as a woman.

Mike Ayala: Or you leave him. Kara Ayala: Exactly. Exactly.

Zack Hamm: Exactly. And to give our audience a little bit of background, when I heard you on that panelist, you’re probably one of the brightest women that I’ve been able to hear speak. And obviously when you go into those kinds of events, you never know what to expect from the guest or the panelist who’s on. I didn’t know much about you before you were speaking there, but I have to and give you props that you definitely seem like you don’t just talk the talk, but you also walk the walk. I understood that you’re very educated when it comes to finances. And it seems like Mike, and you have a really good understanding and communication again, of being, or acting as a team and not necessarily as solo individuals when it comes to that.

Mike Ayala: I have a mentor who always says that if two partners have the same gift and abilities, one of theme’s not needed. And I don’t think that necessarily applies in marriage, but I think the takeaway for that with marriage is, understanding where your giftings are and aren’t, and what you really want, and then being able to communicate and pull that together. It’s not just in business

partnerships, that’s what he was referring to. But I think a successful marriage looks at the same thing. I mean, Kara was adamant back when we were high school sweethearts. Her desire was to always have a strong family unit and she wanted to be the best mom she could possibly be. And that’s huge in a partnership. But I think the thing, the reason why the world needs Kara’s message is because a lot of times, and she already said this, but women get lost in that, right? It’s not one or the other. You can be a great mom and you can be a great father and you can be a great wife and a great husband and still be a partner in that marriage and understand what’s going on in the business. And you owe it to yourself as a woman or a man, by the way, she does our personal finances. We owe it to each other in that relationship to know what’s going on. And it’s the same thing as a partnership in business, my partner is really good at things that I’m not right, and we need to create a dashboard or a score. He can’t tell me everything he does every day. So it’s how you approach that. I mean, she doesn’t, she doesn’t dig in, she’s not jabbing at me. She just wants to know the information and getting on the same page as extremely important.

Zack Hamm: Well said. Definitely. But I do want to jump back to high school days and kind of start from the beginning. I mean, it’s pretty unique that one, a couple has been together for that long, high school sweethearts and too that you guys almost run businesses or do run businesses together. Cause I know that’s not an easy task, especially being able to divide your home life from your business life as well. So when did that, I guess whole idea of let’s be entrepreneurs, let’s be small business owners, or let’s start with an investment? Where did that all stem from?

Mike Ayala: So I was and again, our goal from the beginning, Kara and I, when we were dating, we’d stay on the phone till three o’clock in the morning and just talk about our future. We were always, we were always visioning our future, right? And so after we got married, we knew that we wanted to keep our family a priority and your kids a priority. And you actually discussed that stuff. But I ended up through a series of events, I ended up working out of town with the company that I was working. I was a plumber by trade. So I ended up working out of town for, well, it was the whole time that she was pregnant with our third child. I was working 90 to a 100 hours a week. I was running a huge job. I was super stressed out, she’s pregnant. It was, we didn’t want to have happen in our life and marriage. I never really had, I shouldn’t say I didn’t have a desire, but we were not actively thinking about running our own business. But through that series of events, it’s kind of like, well, if you’re going to be gone and miss your child’s entire pregnancy and you’re going to be working 90 to a 100 hours a week, I might as well go do this

for myself. And so there through a series of events, which we probably don’t need to get into the details. We ended up leaving that company and starting another company with a partner. And so, I don’t know. I mean, to some degree, it wasn’t necessarily a lot of thought and process and planning. It was kind of fly by the seat of our pants and this is a better option for us. And so that’s how we started our first company.

Zack Hamm: And what age were you guys when that happened? Kara Ayala: I was 23.
Mike Ayala: And I was 24.
Zack Hamm: Wow. So you guys were still fairly young.

Kara Ayala: Yes. We didn’t know any better.
Zack Hamm: Were there times at that age where you guys were like, one, how

come there’s nobody else our age doing this? And two, are we in a way?

Kara Ayala: I mean, honestly, I think you probably felt in over your head at times you can go into that, but I think we were so young, and we didn’t really have anything to lose. So I mean, we weren’t making a ton of money or anything, so I mean, we could always go back and get another job. So I think that was an advantage that we had being young is that we didn’t have anything to lose. We didn’t have anything.

Mike Ayala: Yeah. And that’s a really good point. I was in over my head and I knew it from the beginning. And I think one of the lessons that I learned early on is, you don’t have to be the smartest guy in the room. You just got to know the guy that is, or the girl for that matter. But yeah, I don’t think we spend a whole lot of time thinking about it and Kara already said this, but I actually told myself many times and actually with the partner, when we were getting ready to leave, we said, we can always, plumbers are in need. So we could, if this fails, like we can always go back to the technical. You don’t lose that. You don’t lose that. And so the one thing I will say on that though, is the desire and the drive has to be stronger than all the other stuff that’s going to come at you because, contrary to popular belief, running a business is not easy. You’re going to have bad days and they’re never going to, and you’re always going to hit another ceiling as your business grows and you get more healthy, you’re in a different place in your life. It never ends. It

doesn’t get easier. It gets more complicated if that business is growing. And it’s just liked a body of the day that it stops growing is the day it begins dying. And so it doesn’t get easier.

Zack Hamm: So do you think that some people look at your guys’ success and where you are now and think, Oh, you know, they’ve made it, it’s a lot easier for them because of whether that’s the income that you have coming in, the family and the relationships that you’ve built.

Mike Ayala: I think it’s easy from the outside looking in to not see all the blood, sweat, and tears that goes into that on a daily basis.

Kara Ayala: Yeah, for sure.

Mike Ayala: And I think the real question that anybody has to ask at any given time is what do you really want? Are you really wanting money or are you really wanting success, or is there something deeper driving you? And so on the outside, people see money and success and that you can go do all these things and whatever we put out on Instagram, right? That’s the glorious life. Nobody puts their bad stuff out on Instagram. I’ve said this for a long time. The gurus always tell us about what we need to do that’s based on what they’re currently doing and where they’re at, what they don’t talk about is where they started and how they got there. You’ve got these guys that are out there saying, Hey, don’t put debt on properties, buy rental properties, cash free, or debt-free. And, and I’m not saying that’s bad advice, but at the same time, I guarantee you the first 10, 15, 20 years of building their portfolio, if they have anything of scale, they use debt. They just got to a point they don’t need it anymore. And so they, I don’t mean to get on a debt soap box.

Zack Hamm: No, I mean, I think that’s a good point for everyone to be able to understand it. And I think there’s a big difference, people hear debt and they don’t quite understand the difference between good debt that appreciates and bad debt that will never appreciate and depreciates. And obviously there are times where people with money, they didn’t always have, most people with money didn’t have the opportunity to where that money was inherited. It’s something that they had to build. And in order to build it, you obviously have to take risks and taking risks means most likely borrowing money that’s not yours.

Mike Ayala: Yeah. It makes a lot of sense.

Zack Hamm: But to that also doing your due diligence and making sure that the investment in what you’re putting that money into is hopefully going to provide you with a good return on your investment.

Mike Ayala: And that’s why I think it’s so valuable to that. Any one of us share our mistakes and the bad times along with the good, because we learned so much through those. We’ve had some businesses go South. We’ve had some real estate deals go South. So, everybody wants to talk about the good stuff, but we learned from the bad stuff. And that’s what we should be sharing with everybody else too, is the bad lessons teach us more.

Zack Hamm: Absolutely. So let’s talk about that company that you guys ended up selling and making it on Inc magazine. What did that entail?

Mike Ayala: So that’s the one that we decided to start. It was crazy. I’ve said this several times and I’ve been corrected by many mentors. I always say it was timing and luck and everything was just perfect, and stars lined up right. Well, that’s never actually the case. No, because you’ve got to, again, the blood, sweat, tears, you got to persevere through that stuff. But we started that in 2004, I was 24, she she’s 23. Just year over year, just crazy growth, $800,000 in year one, we started in June and we’re like at $800,000 by the end of year one. And then we get to like 1.6 next year, and then it’s like 2.7 and then we’re at a 4.8. It was just this roller coaster. I don’t know anything about business. I call Kara the Navy seal of our business because whenever things are really bad or we’re in a really tough spot, like, we’d be like, bring her in. I remember literally in that business, like we went to office max and we bought QuickBooks. Cause we didn’t know anything about bookkeeping and accounting, and she became our first accountant and I’d be like, I need you to do this. And she’s like, I don’t think it does that. And I’m like, it has to do that. It’s QuickBooks for contractors. Like we didn’t know even how to communicate through any of that. So we’re just like, we’re fumbling through everything. So we don’t know anything about accounting. I didn’t go to college. She didn’t go to college.

Kara Ayala: That was our college. Mike Ayala: That was, yeah…. Zack Hamm: Trial and error.

Mike Ayala: Yeah. So, and not only that, obviously with those kinds of sales, it’s a plumbing and heating company, which requires technical skills. And so we’re hiring employees left and right. And I remember one of my first mentors, I’m like, Hey, I need to buy 10 more trucks, but I don’t have any credit. I don’t have any business credit. And so those are the things that a lot of people don’t think about in business, but as you’re growing, yeah. Everybody wants to talk about the sales doubling every year, but that means your trucks are doubling. That means your tools are doubling. That means your marketing budgets doubling, your employees are doubling. And those are those ceilings in business that you hit. And the thing that I want to encourage everybody is find a mentor. Find a coach like don’t skimp on, every step of the way we brought in a consultant, probably six months in that we couldn’t afford, but we knew we couldn’t afford not to bring them in. And they helped us structure our accounting system. And they looked at operations that we didn’t understand. They helped us with ABC elementary stuff that we think is elementary now. But at that point in time, it was just mind blowing. So don’t go cheap on your consultants and your coaches and mentors in life. Make sure you invest in that. Because at every stage, when I look backwards, if we hadn’t done certain things, which again, we couldn’t afford. But if we hadn’t invested in that, I don’t know that we would have made it, double digit growth every year. There’s a lot of inner workings in that. And so to kind of pull this together, that’s what brought us to the Inc fastest growing companies in America list, that was in 2009 roller coaster ride in itself. And there was some bad things that happened along the way too, that we can get into. Again, I’m not just here to talk about the good stuff. We had a lot of situations through that time that were challenging on us, individually, our marriage, our children. But yeah, then, fast forwarding and I don’t know what details you want to go into, but we ended up selling that business in 2014. So 10 years in.

Kara Ayala: I want to add on the mentorship and coaches, I think this is a big point is when you are hiring a mentor or a coach, a lot of mentors are actually free. There’s a lot of people that want to give back. So if you can find somebody that’s doing what you want to do, you can, ask them for help. But also make sure the person that you’re asking for advice from knows what they’re talking about, because there are so many coaches out there and programs that are just overpriced and don’t really offer any value. So be cautious when you’re hiring that coach, like it’s really important to have a coach, but at the same time, like make sure it’s somebody that knows what they’re talking about.

Zack Hamm: What are some things that people should look for when they are looking for a mentor or a coach?

Kara Ayala: I would say proof. Proof that they’ve actually done what you’re wanting to do. Like there has to be some kind of proof have they actually done this? Cause some people are just good talkers and can sell and so they’re just selling a program to you, but have they actually run a business? Do they even know how to run a business?

Zack Hamm: Is it important that you find a mentor, a coach that’s run and operated a business that’s similar to the one in which you’re trying to run and operate?

Kara Ayala: I believe so. I mean, I think you can gain insight from other people in different industries, obviously. Like there’s basic business principles, but if there’s something you’re really wanting to dive into, I think you need somebody. Whatever the skill you’re trying to learn. I mean, if it’s like your accounting, obviously, like how we hired that business consultant, he worked with all business types. So something like that, is going to work for every business.

Zack Hamm: And you guys have had a lot of mentors and you continue to hire new mentors. When do you get to that point where like, I feel like I’ve outgrown this individual?

Mike Ayala: That’s such a great question. I think, so, I want to circle back to answer that, but Kara said that a lot of times mentors are free. Probably the guy that’s taught me the most in my life. He’s probably 80, 85 years old now. And not only is he taught me a ton. He’s gotten me out of a pickle more times than I even want to say. I’ve had to borrow money from him, which is part of his business, so that’s fine. But he’s never, he’s never charged me a penny for any of his wisdom, so that my number one mentor ever has always been free. But the point, I think when you outgrow that mentor is when they no longer, like this particular individual will always be a mentor of mine because he’s a mentor in all areas of my life, but I’ve had certain mentors. A good example, after we sold our business in 2014, I joined a mentorship group, which was pretty expensive, but I knew that’s what I needed to do to get to the next level in my business. And I was with them for two years and they’re still friends and I could still call them. And it’s not like I wouldn’t take wisdom away from them, but they’re no longer actively mentoring me in my life and my career at this point in time because I’ve taken what I learned from them and implemented that. And again, we’re still friends. I can still talk to them, but they’re no longer actively mentors in my life on a daily, weekly, monthly basis. So I think when you grow to a point that you need a different skillset, you’ve hit a

certain ceiling in your life. You have to be looking at somebody who’s, to Kara’s point further along, and they’ve already proved out what you’re looking for.

Zack Hamm: Absolutely. And you talk about the next level in business and I’m sure you guys have hit multiple ceilings.

Kara Ayala: And continue to.

Zack Hamm: And continue to. What motivates you to continue to break through those ceilings and want more. I mean, what is it about running businesses or making money that you guys enjoy?

Mike Ayala: What’s on the other side of that wall, like what’s on the other side of that ceiling. You always have a choice to accept where you’re at in your growth level. And I said this earlier, I think businesses are the same as people, the day you begin, or the day you stop growing as the day you begin dying. And so that’s what keeps me motivated is like, what’s on the other side of growth and we’re affecting and helping so many other people along the way whether it’s employees or whether it’s people that we’re buying properties from, or whether it’s the investors that invest with us or in Kara’s case the women that she’s going to help change their life and help them understand that, the highest calling for a woman could be motherhood. I’m not saying it is or has to be, but it’s okay to have that and have your own life and your own calling outside of that as well. So that’s what drives me to get what’s on the other side of that ceiling, what’s on the other side of that wall and its growth. And I don’t know what that looks like always, but that’s what keeps me motivated.

Kara Ayala: Yeah. And just to add to that, like, I think when we started a business, it wasn’t about, I mean, I don’t think that we ever were like, we’re going to be, make such and such amount of money. That was never really the goal. The goal was…

Zack Hamm: You guys had to have talked about making money and what that can maybe free up for you to do with children and things like that?

Kara Ayala: In the beginning, honestly, I don’t think that we even thought really like that. Like, I mean, as we’ve grown yes, because you have to continually grow that income larger than what you had in the previous year. We are goal setters, but I think what drives both of us is the building of it, the building of something and

seeing what comes out of it and the relationships that you create with it and pushing ourselves to new places. I don’t know. There’s just something about when you build a business and you see, and you put in all the hard work and all the sweat and tears, and then you see it unfold to something beautiful. And sometimes it doesn’t, there’s been, like, we’ve said a couple that have not been very beautiful and you just kind of push those aside.

Mike Ayala: Is that ugly thing my child?

Kara Ayala: Did, we create that, but I mean, they’re like Mike said, what’s on the other side of that. Like, I couldn’t have even imagined the place that we’re at right now in our younger years, I would have never even thought of the place that we’re at.

Mike Ayala: Just kind of compounding on that a little bit. I don’t think we ever really looked at, in fact up until a couple years ago, like anytime, whether it was for a financial statement for a bank, or I was applying for a loan or anything, I’d have to call Kara and be like, how much money do I make? Like, so you obviously have to pay attention to money. And as Kara said, the older, the more wise we’ve got, and the more wise we’ve got, we start correlating a lot of this back to monetary goals, but I don’t want to forget where we came from either or what the core thing is there because everybody needs money. You need money to survive in this world, it’s definitely a tool. And I think the thing that Kara I always thought about was what do we want? And we never really looked at money. First. We looked at, Hey, we want to take, so one of our goals is to take two international trips a year with our children. I had an early mentor that had this rule called seven, seven, seven, every seven days they’d have family time, every, like a family day, every seven weeks they’d have a mini vacation. And then every seven months they’d have a large vacation. So that’s the goal. And of course you need money to do that. But money was kind of a byproduct. I think you set the goal out there and you come after that goal and the money will come. If you’re seeking, money’s not going to just show up in a mailbox. So I’m not saying mailbox money in any way, shape or form. But if you’re just passionate about whatever it is inside of you, Kara’s got this thing she wants to launch with women.

She’s not worried about how much money she’s going to make. She’s not even worried about how much money it’s going to cost her. She’s worried about what is the mission. What do I want to do here? And I think that’s, what’s backwards in the world today. You’ve got so many people that are, I am going to be an influencer. I’m going to represent this brand and Kara and I were just talking about this last night. They don’t even like the product. And it’s, so it’s all about the money. That’s

where we’re broken and that’s what’s wrong. And so I don’t want to say that Kara, I never think about money because we’ve had good money days and we’ve had bad money days. Everybody does, but it’s really more about the bigger purpose and passion and what are you really going after. And the money will follow that if you’re doing things right.

Zack Hamm: Absolutely. I couldn’t agree more. And you’re right. I think it is something that’s lost in today’s day and age. So many people are chasing what building a business will provide them instead of enjoying what the business is going to provide others sort of speak.

Mike Ayala: And you touched on something too. You said the process too, right? We can’t forget that. Because I’ll be honest with you right now, we’re having some, we’re at a ceiling in our current business. Like I’m having some growing pains. I’m struggling a little bit, that’s okay. Because it’s part of the process. Right. And what gets me through that? You asked about, what makes you push through that ceiling, man, there’s people that have, they’ve gone through much bigger challenges and problems and they’ve solved it. And that’s what, to me is a win it’s the process. And you said that earlier, enjoying that process. You don’t enjoy the bad times of that process.

Zack Hamm: Cause that’s something that I’ve definitely struggled with is building my practice. And it’s something that my dad has even said, enjoy the process and plenty of podcasts that I’ve listened to, it’s like, enjoy the process, enjoy that experience. But sometimes that’s difficult. How do you guys do it?

Kara Ayala: I think that is like the most difficult. And when you’re actually in it, you’re probably not thinking this is fun ever, but I think it’s a mindset. And if you have your mindset right, and working on that, like that’s like your biggest skill you can learn is developing that mindset of like the positive thinking positive and thinking, I can make it through this. I mean, it’s like a tough workout or if you’re on a long run, you know that there’s going to be a finish line like that you’re not going to die. It feels like you’re going to die. It feels like you’re going to die when you’re in the middle of that. But knowing that like at the end that you made it through that, the feeling is like amazing because you pushed through on the hardest times. And I think that’s a learned skill. I don’t think it’s just; you just are a business owner and you get it. I think it’s through pushing through those times realizing I survived, I’ll survive next time, like pushing through and knowing that there’s going to be rewards on the other side of that. Like Mike said, what’s on the other side of that. Like you can’t even imagine from today what next year is going to

look like. I mean, even if you look at your own life, I’m sure a year ago today, you would not picture where you are now. So like so much can change in a year’s time. And if we’re just keep pushing through those tough times,

Mike Ayala: I think it’s also important to really understand why you’re doing what you’re doing, because we’ve gotten into, every business that we’ve failed or just wasn’t successful too, cause some of them were just like, okay, we’re done with this. When you say yes to one thing, you’re saying no to something else. And so we’ve had certain businesses that, the one in particular, which I won’t go into the weeds on, but I was like, Hey, should we do this? And she’s like, she was kind of like, it wasn’t like a hard, no, but it was like, you do whatever you want. But I don’t know if that’s a good idea. She didn’t come right out and say that. But and then, a year and a half later, it’s like, I’m sitting here spending all this time, money and energy on this business. You make these decisions to close a business down for whatever reason that is a real indicator on the backside. And if we can just learn the indicator on the front side and make life so much easier, but getting through that process, how do you stay positive? And that is the real question and it’s the why behind what you’re doing in that business. Really understanding why did I launch it, if you’re getting into a business just to make money, you’re not going to make it through that wall. You’re not going to make it through that ceiling. Cause if it’s just about money, the only question that you’re really going to ask is how much money is on the other side of that wall. And if it’s not enough to push through it and it’s not a passion project, and it’s not part of your big why, or you don’t have some bigger reason, I’ll tell you right now, when I look around, we’ve got residents, we’re in the affordable housing space. So when we look at our residents, a lot of these people, if they can’t afford the homes that we’re providing for them, our mission is to provide safe, clean, affordable housing in communities where families want to live. If I just bag it one day, because I’m having a bad day, I’ve got 2,500 families that are potentially counting on me and my team. When I look around the office, my employees are not just my employees, they are people, they are relationships, like you’re in it. You’ve got a responsibility to them as well. I look around to our family and it’s one decision. If you decide to close a business down and that’s your decision, there’s big impacts on that. My first mentor always said, as entrepreneurs we’re doing the best work that there is in the world because we’re providing jobs, we’re providing incomes, we’re providing the American dream for every family. How do you survive without money? So that’s when you have these bad days, like that’s, Kara was talking about being on a run or at the gym. You just want to quit while on the other side of that, you got to start looking at the negative things that happen too if you quit right now. And it’s not just a

monetary decision, that’s the last, Oh, if I quit right now, I’m going to lose the a $100,000 or $500,000 or whatever that, that’s kind of not the bigger issue.

Kara Ayala: Yeah. And I think too, like looking at the bigger picture of when you are a business owner, it’s not just about you. It is about those employees. So you have to think, you have to think about other people and who you’re affecting. And so sometimes it’s like, you don’t have a choice, but to push through.

Zack Hamm: Does it ever get easier?

Kara Ayala: No. Yes and no.

Zack Hamm: Because I mean, as your business and you guys have really big goals and you guys have done a lot of amazing things. But that also means the decisions that you make ultimately have a bigger impact. So obviously maybe it’s easier to make the kind of lower end decisions that you used to make that used to think were big decisions, but now these bigger decisions does that get easier ever, or they just continue to get bigger and bigger.

Mike Ayala: I think it’s a good question. And I think it depends on the individual and where they’re really going with their business. Because there’s a lot of businesses out there, I’ve got many friends I’m rattling through my brain right now that are at a place in their business where they’re not even involved in the day to day business anymore. And do they still have decisions and meetings they have to go through and everything else? Yes. But they’ve built this amazing team. This is the leverage concept, right? So they’ve got people in place that are making those tough decisions that you were talking about. Yeah, it was a tough decision for you six years ago. But now today you’re just on a bigger plane and maybe that business is coasting, and you’re not really interested in going through more ceilings. So if you’re not interested in growing, that business is either going to stabilize or begin to go backwards at some point in time. And maybe that gets easier. You’ve got no debt. You’re just living on the cash flow and things are cruising along. You’re not gaining employees. You’re not losing employees. You’re not gaining vendors or customers. So maybe it does get easier, but we’re still in a growth trajectory. So I don’t see it getting easier for us.

Kara Ayala: Yeah. I think anytime you’re growing anything or building something, it’s never going to get easier. Because there’s always going to be obstacles in the way. But like Mike said, if you get to a place where you’re, you

have a stabilized business that you’re no longer there in the day to day stuff, then I’m sure it would get easier.

Zack Hamm: I mean, you guys are still very young. Do you ever see yourself getting to a point where like, Mike, I’m done, like I’m out? I don’t want to do this anymore.

Mike Ayala: I have a friend that’s actually working for me currently and he doesn’t need to he’s got multiple businesses on his own that are stabilized, and they operate on a day to day basis themselves. And he works for me and he’s worked for me several times. He’s a real estate investor too, but we’ve been having this conversation for 12 years now probably, when’s enough. And finally, I realized a while back that it’s the wrong question because I was asking the question, when is enough enough, meaning, “I don’t want to grow more businesses. I don’t want to make more money. I don’t want to…” well, for me, it’s I was asking the wrong question because it’s not so much, it gets back to the thing that you were asking earlier. For me, it’s about the process. It’s about the outcome. It’s about certain things that we want in our life. One of Kara and mine, our big goal is travel. So once our kids are graduated, we want to take the summers off. That doesn’t mean that I have to stop growing businesses. And it doesn’t mean that I have to scale my business backwards. It means that two years from now, three years from now, when we’re ready to do that, I just need to have the right team in place in order to make sure that that carries on. And in this day and age, there’s no excuse whatsoever to not take three months or a month or three weeks of time off, or a week, if that’s all you can’t get away from your business and spend some time with your family. If you can’t do that, then that’s because you haven’t put the right systems and processes in place. So, when are we going to stop? I don’t see that anytime in the near future, I don’t know when that’s going to be.

Kara Ayala: Yeah. And I mean, even if we stopped growing businesses, I think we will always contribute something back even to younger entrepreneurs because we needed that when we were young and I feel like that’s the responsibility of an entrepreneur to get that back to the younger generations and just, I think you have to be giving something to the world to, you have to have purpose. We all have to have purpose.

Zack Hamm: Do you think the entrepreneurial spirit that you guys have is something that you were born with or was that created over time?

Kara Ayala: I would say created over time. I never saw myself as an entrepreneur growing up. I mean, it wasn’t modeled for me, so I don’t know if that is why I never saw it.

Zack Hamm: When you say modeled for you, like with your upbringing, as far as….

Kara Ayala: My parents were not, they both had just jobs, regular jobs, they weren’t business owners or really investors or anything. When I was younger, now they invest in real estate and stuff. But when I was younger, it was just never modeled for me.

Mike Ayala: I think that it takes a certain personality type to push through the grit and that process. I’m not saying that every single individual on the planet couldn’t be an entrepreneur, but I do think that it is hardwired in your DNA. I think that the grit and determination and the stubbornness at times, and the things that you’ve got to do to push through that are a personality trait. But I also think that there’s a learned side of that too. To Kara’s point, she said that entrepreneurship wasn’t modeled for her, but what I do know now later in life seeing her parents now, they do have, are, they have some things that maybe are hardwired in where they’re Uber conservative and they don’t want to like take risks maybe, but also I see a lot of stuff in like her mom that is entrepreneurial. And so it wasn’t modeled per se when she was younger. So I think there’s a personality type, but then I think also with mentoring, education coaching, all that kind of stuff that you need to marry those two things. So just because you have the right personality type, or it potentially could be in your DNA as a family doesn’t necessarily mean that you’re going to make a great entrepreneur. You got to put in that time, energy, effort, the grit, the tenacity to push through that stuff and really want to be educated.

Zack Hamm: And Mike, what about your background? Did your parents have any kind of small business expertise or anything that they ever shared with?

Mike Ayala: No. In fact, without getting too far into the weeds, my dad who is no longer in my life and was kind of a, that was a good thing. We struggled growing up, but I didn’t know any different. I had a happy childhood, like everything was great. So no, there was no entrepreneurship at all growing up. In fact, I think my parents probably didn’t know how they were going to feed us next week, half the time. So then my dad left, and my mom ended up marrying my stepdad. Who’s

probably one of the greatest people in the world. Probably when I was eight or nine. So then anyway, they both worked. I mean, they worked their tail off through, as I was going through high school, my mom was going to college to be a nurse and she’s working full time. And my dad’s out of town half the time, which kind of led me down this crazy journey, which we won’t go into right now. But now my parents are both entrepreneurs. So that’s where I’ll say…

Zack Hamm: Have you guys influenced that.

Mike Ayala: Yeah, yeah, yeah. Big time. But I think it is in their DNA. My mom definitely has the personality for it. She just, it’s a journey. So just because you have the personality and the drive in that DNA doesn’t mean you’re going to become an entrepreneur. You got to fight through that process.

Zack Hamm: And I think that brings up a good point because so many people have such great ideas, but the great idea is only an idea without implementation and the implementation is 90% of the work. And I guess that’s something that I think is becoming harder and harder for people to understand with social media, as you mentioned. Because we are seeing a lot of the positive sides of being able to express what it is that we’re doing in our lives. But at the same time, obviously, as you guys know, comparison is something that is destroying and dividing people as well.

Mike Ayala: It’s such a great point.
Zack Hamm: I want to touch a little bit on the sale of your company too. I mean,

what was the decision and the thought process behind that?

Mike Ayala: Really to sum it up it was kind of a multiyear process and what it really came down to is, I’m a proponent of partnerships for the same reason of what you just said. You might have the greatest idea in the world, but not be able to go out and implement that because, again, one of my mentors says, it’s not how it’s who, and so I’m a proponent of partnerships. I’m not saying that you have to have a partner, but strong marriages are partnerships, strong businesses or partnerships. If

you’ve got this great idea and you’re a visionary and you need somebody that has a skillset that you don’t have, you might need to partner up and form partnership in order to scale through that. So anyway, that being said, Kara came to me in 2012 and she said, when our kids graduate, I want to take a year off, which our goals have kind of changed since then. But I was like, okay. Yeah, that sounds great. That’d be fun.

Zack Hamm: When you said that, I mean, was that something you kind of said to [39:22 inaudible] each, that’s great. It’s possible, but I don’t know if I’d necessarily want to do it.

Mike Ayala: Yeah. And we’ve got 14 years to think about that. But after that marinating, I’m a high, quick start on Colby and by the way, Kara is too. So, I’m just like, yeah, that sounds great. Move on. And then I’m thinking about it for a few days, “I’m like, wait, are you serious?” And this might’ve actually been a couple months or maybe it was two minutes. I don’t remember. But she was adamant like she was serious about this. She wanted to regroup; we’ve been working our tails off. So I started really looking around and thinking, okay, well, the way that my business is structured and the way that my partner then thought, and I came out of that business exit with a philosophy of, it’s not right, it’s not wrong. It’s just different. We all look at things different. And the key is alignment. So same in marriage. Same in business. His way of thinking, here’s the thought behind that. So I was looking at the business and I’m like, there’s no way when I fast forward 12 years from now, or whatever that timeline was that I’m going to be able to take a year off because of the way my partner thinks. And again, it wasn’t right. It wasn’t wrong. It was just different. I’m the kind of person, I buy into the who not how strategy. So I want to do nothing Zack in my business, but be able to see the heartbeat, the pulse, know my people, know where we’re going. I want to be the visionary behind that business. And the only way that you can accomplish that is by leveraging other people’s time, talent, energies, etc. My partner was the complete opposite. He loves turning wrenches. He loves being in the field. And so I’m fast forwarding. And I’m like, well, if I leave for a year, who’s going to run this business. We’ve got a hundred employees or whatever the number was at that point in time, like, how are we going to do this? So I started having conversations with him. I’m like, we need to bring in a general manager because, you know, two years, five years, 10 years down the road, you don’t want to be doing this. I’m like trying to lead him into mine. And so we went down that road a couple of times where we like tried to identify a general manager and we just couldn’t, it just didn’t work.

And we were also going through without, I don’t want to get too far in the weeds on this, but we were going through, it was really important for Kara and me for to go through the trust planning, and all that kind of stuff. And in order to do that, we needed X amount of life insurance for the buy, sell agreement, all that stuff. We could never, this is how simple it was. So our accountants and attorneys said, you guys need to agree on a formula that you guys can just use every year in case one of you guys dies, we can just use that formula to evaluate what’s the current value of the business. And we just analyze that every year and have X amount of life insurance, etc., which all of your audience needs to be thinking about all that stuff. That’s extremely important. You work so hard. And the last thing that you want to have happen is, Kara and I get hit by a bus and we left nothing for our children. So extremely important conversation, but we could never get our partner to agree on a formula. It was that like, so I started, behind the scenes, we’re thinking like, how would we ever even exit this business? Like, what does this look like? Well, then this big company comes up out of nowhere. And again, not to spend a lot of time with it. We went through a six-month process. They wanted to buy half of our company, which was a mining division.

Zack Hamm: They just wanted half?

Mike Ayala: They just wanted half. Because we had a residential division. We had a commercial division. And then we had an industrial division that did a bunch of work at goldmines in the market that we were in. It was probably more than half of our business, but that’s what they were interested in. They were a huge $8 billion company out of Finland. So they wanted that portion of our business. And through that process, me and my partner sitting on the same side of the table, we’re aligned, we’re negotiating against this behemoth. And so through that process, we get evaluation now because we’re sitting on the same side of the table, we get evaluation of what 50% of our business is worth. Well, that whole thing fell apart because we were a million, million and a half apart. But then on the backside of that, all of a sudden, I realized, okay, now we’ve got evaluation. And we had, we had accumulated a bunch of real estate and stuff together too. So again, without getting too far in the weeds, I basically said, Hey, here’s seed A, here is Seed B, whoever’s in A, takes the business. Whoever’s in B takes the real estate. And then there’s a buyout additional because the business was more than the real estate. And so he picked his seat and he bought us out. So that’s how we exited the company. I want to say this, cause this is really important. This goes back to the other side of the wall and all that stuff. So 2014, Kara and I are done, we’re retired. We’ve

achieved this. I’m 34, she’s 33. We achieved the American dream. We didn’t need to work again if we didn’t want to. And that was probably the best and worst day of my life. So back to your question about when’s enough enough, and what does this look like? I’ve been there once, and I actually got myself into trouble. I bought back, I bought back the old business, like division that we had sold and because you get bored. And so back to the purpose and the passion and all that, like you just really got to keep that first.

Kara Ayala: And once you’re a creator, you’re always a creator. And you have to continue to create.

Zack Hamm: What do you think the biggest false perception about retirement is?

Kara Ayala: That’s a really good question. That you’re just going to live happily and go to the beach. I don’t know. I mean, that’s what I would picture a retirement would be. But I mean, who wants this? I mean, it’s nice for a week to sit on a beach and have drinks, but then you’re pretty bored.

Mike Ayala: Putting a little different spin on that. So many times like Kara and I have traveled and we’re like, Oh, we want to live here. Right. Everywhere we go we wanted to live. And what I realized one day is because you want to live there because you’re in that vacation moment, you’re in that recreation. Which is what vacation in that time away is all about, and that’s why it’s so important. But we really don’t want to live there. We really don’t want to live on a beach. It cuts back to like, I always ask people, you know, what do you want? And I go through this with my employees and everything else. It’s always, it’s funny because you ask people what they want and then you ask them again, four weeks later after you’ve had some chance to really think about why you want that, which is a whole other process. But when it’s back to the retirement question, I think we’ve been sold a bill of goods. You go to school; you get good grades. You go to college, you get a job, you work for the man for 60 years. And then when you’re 65 or 70, here’s a really good example. The guy that I told you is a mentor of mine. That’s 80, 85 years old. He went to Italy like this was probably three years ago. And he said, I can’t, I’ll never be able to do that again. He can barely sit on a plane now to fly from where he’s at a four-hour plane ride just to get to the East coast. And he’s 85 years old and he had a good life, but he’s at that point where he wants to retire, and he wants to

spend time with his wife. And he told me, he said, I can’t sit on a plane for more than two and a half, three hours. That’s retirement. Like, that’s this whole golden dream that we’ve been thinking about. I want to retire today, not in the sense that I don’t want to do anything, what are we really looking for in retirement? We’re looking for that time away with our families or friends, beautiful connections, places we want to see the world. You can do that every day. You can retire today. You can have what you have in retirement. What we really want is those experiences and connection Like I was talking about.

Zack Hamm: And freedom, I think people have this perception that I’m not going to be free until I stopped working. But as you guys see, there’s plenty of opportunity out there to create a business work for somebody who allows you to have that flexibility, who has that freedom, who creates this culture that you want to be a part of, and that you’re driven to walk into work every day and work for. I think that’s the biggest misconception is that they think they have to be miserable for so long working for someone else who that company or those goals don’t align with what it is that they want to accomplish life. And that’s just life until they get to retirement. And it doesn’t have to be that way.

Kara Ayala: But unfortunately, I think it is that way, most of the time if you’re working for somebody else.

Mike Ayala: Absolutely. But, like 3% to 5% of the population is really has the grit and the tenacity and the push to be an entrepreneur. So I think we have to be careful too in, and I don’t think anybody here at the table saying this, but so often like lately that’s been a big conversation in the last couple of years about, entrepreneurship and be your own person and freedom. Well, again, it gets back to the same question. What do you really want? Because some people don’t want what comes along with entrepreneurship. And by the way, if everybody was an entrepreneur…

Zack Hamm: It would make our jobs harder.

Mike Ayala: Yeah, It sure would. But really, it’s getting clarity on what you really want out of life. And you can have that as an entrepreneur, you can have that as an

employee, you can have that as an independent contractor, you can have that in so many different arenas. It’s just really, I think I would just encourage anyone that I ever talked to you to just really figure out what it is you really want. And the one thing I do think we all know for sure is we don’t want to wait till we’re 65 or 70 to get that, we might not be here.

Zack Hamm: Well, and I think another point too, is that we obviously get the sense of fulfillment working and doing what it is that we enjoy. And it just happens to be that we’re fortunate. And we have that kind of personality that we want to take ownership and be involved and be a leader in that space and own our own businesses. And maybe that isn’t for everyone. But that doesn’t mean that you can’t find that sense of fulfillment outside of work that still allows you to enjoy life.

Mike Ayala: And the one, the thing that I would encourage us as entrepreneurs, I was just introduced to this recently by a mentor, but there’s a leadership triangle. And at the basis of that triangle is skills and technical. But really in order to be a great entrepreneur, you need to take your people from skills and technical, into hiring and training and ultimately to leadership. So the more that you can look at the people that are with you and train them to be leaders and get fulfilled out of their purpose in the job, they’re there. They can have a purpose and a passion at their job as well.

Kara Ayala: Yeah. Empower them.

Mike Ayala: Yeah. Most people go to college. We were talking about my son who wants to be a musician. Like I don’t care if he’s an entrepreneur. I don’t care if he runs his own business. I really, I don’t care what he does. I want him to be fulfilled and happy. So if he comes to work for, some kind of recording school or studio or something, and he’s got a job every day, that doesn’t mean he’s not, I’m happy for him. I don’t care what he does. So it’s just, if you’re not fulfilled in your job, look at what’s going on. Like it’s something to do with you. You’re either in the wrong place or you’re in, you don’t know exactly what you want out of life either.

Zack Hamm: And what about surrounding your guys itself with the right people? Cause I mean, let’s take it back to that scenario where your son was just going to

work for an audio engineering school or a studio and doing that and he’s passionate about, and he loves it and it fills him up and allows him to express his more creative side. Do you think it’s important that he then surrounds his people himself with people that are similar? I mean, would it be difficult for him to surround himself with individuals like you guys who are more entrepreneurially, I don’t know if that’s a word driven. Do you know what I’m saying? Like, I think a lot of things that I see is that I want to be around business owners because I like talking business. I like learning from it. I have big goals for myself. Do you think it’s important that you surround yourself with people who want the same things as you?

Mike Ayala: Yes. I think the key to that is that want the same things as you, and you’ve got to really figure out what that is. Jim Rohn said, you’re the average of the five people you spend the most time with. So really, it’s what do you really want. You want to spend your time around entrepreneurs, as you just said, and it’s probably people that will push you and you can learn from, because that’s what you really want. That’s what you want out of life. And so you’re trying to average up.

Zack Hamm: Absolutely.

Mike Ayala: So yeah, the real question, I think back to the question it’s, yes, I think you need to, number one, get real clarity on what you want out of life, who you want to become, and then find those average people that, I don’t mean average, but become the average of the five. So you got to really identify what do you want first and then who can level me up.

Kara Ayala: Yeah. And also like with businesses, like, you were saying like finding that fulfillment in a job, like our business by mobile home parks, it’s not, we don’t get like, super excited, I mean, I remember the first time we drove through a mobile home park and I was like, Oh, we’re going to pay money for this. Like, Oh my gosh. So it’s not about, it’s about the people that you’re around. So you can find fulfillment in any situation.

Mike Ayala: That was a really tough turnaround, which is the business we’re in. We take, manufactured home communities and get them turned around. So just for clarity.

Kara Ayala: Our first mobile home park.
Zack Hamm: That’s a pretty unique investment to be in or business for you guys

to be in. How did you stumble upon that? Kara Ayala: Go ahead.

Mike Ayala: So we were doing a bunch of work and again, I just want to try to condense this story, but we were the first company that we were involved with was doing a bunch of work, underground piping utilities, furnaces, all this stuff in this manufactured home community, which was listed for sell for 1.2 million. We were heavily buying real estate at that point in time, really quick, one of our goals had become to buy two income producing properties a year for 10 years. That was one of mine and Kara’s early goals, probably in 2006, 2007, something like that. We just figured back to the retirement conversation that if we bought two income producing properties a year for 10 years, you fast forward to 65, 70 years old, which we were kind of bought into the retirement conversation at that point in time, we would have these rentals paid for, and they would be providing passive income for us. So after we established that goal, we got two single family homes through a different process, which we’ll talk about a different day, but then this particular mobile home park, we were doing a bunch of work in, and again, it was listed for 1.2 million, which it wasn’t worth at that point in time. And the owner was in some financial trouble. And so long story short, she had a first position to know on a private loan holder for 390, and then she needed $80,000 cash like in 15 days. And I’m scared to death because we don’t know anything about owning mobile home parks. And so we go from, I went and saw that mentor that I keep talking about. And I’m like, Hey, I’ve got this deal. He said, it’s a good thing you’re a friend of mine. Cause I would steal this deal from you. And he kind of worked me through that process, he owned mobile home parks too. And so Kara and I ended up, we ended up closing on that deal. It’s kind of funny because we didn’t have the $80,000 cash at that point in time either. We were just scaling this company and its eating up all of our cashflow. And so I borrowed the $80,000

from that guy. The note in second position was three 390, so we’re $480,000 or $470,000 into this park that was for sale for 1.2 million. And he told me, he said, if anything goes wrong, I’ll buy it from you. He’s like, this is such a good deal. I’ll buy it from you. So you really go into this with no risk, no money down like and that stuff still happens. So I’ll just throw that out there for your real estate investor people. So that’s how we got into it. And the funny thing is we wanted two income producing properties a year for 10 years, we got the two and then in year two we bought this 72-space mobile home park. So, by the end of year two, we’ve got 74 individual residents paying us rent. Yeah, kind of crazy.

Zack Hamm: And how many different property types do you guys own now?

Mike Ayala: We’ve exited a lot of our stuff that we bought back in the day. Our main asset class now is manufactured home communities, but we still have some commercial buildings. We still have some single families, triplexes, duplex, we’ve got some vacant land, just, you know, that was a long-term 20-year play that’s between these two communities that were just 550 acres. We got a couple other lots it’s just land holding that it’s kind of like a bank account if it ever sells otherwise it was a bad investment.

Zack Hamm: That’s so funny. Investing is something that I think a lot of people put the trust in other people’s hands for them to do. And I’m coming from a space where, I mean, my clients expect that of me, that they’re putting their money in the hands of someone that they can trust. But also a big passion of mine is making sure that they’re educated on why it is that we’re making those decisions for them so that they understand them too and not just making them blindly sort of speak. How do you guys, or how have you guys constantly increased your education in that investment field of real estate? Is it just trial by error?

Mike Ayala: Yeah, well, yeah, obviously. And I say this a lot to people that ask me, whether they’re getting into investing, meaning that they’re going to operate and buy real estate on their own, or they’re going to raise capital from other people, any of that, we learned with our own money. And that doesn’t mean we didn’t have debt and we didn’t have people lending money to us, but we didn’t bring investors in for the first 10 or 12 years of our real estate career. So yeah, school of hard knocks, I’ve said this multiple times when I’m talking to investors, when we bought our first mobile home park, we made mistakes with our own money. We learned the hard way, a quick story I bought, we bought that, we closed that in July and that winter we’re getting phone calls, people don’t have water. I’m like, what the heck? Well, the previous owner had basically whenever there was a water leak,

they dug down and they attached a garden hose and then they buried a garden hose, four inches, six inches deep. So we spent that entire winter chasing garden hoses, right? Like that’s stuff that we learned along the way. So yes to answer your question. Yeah, we didn’t go to school for real estate. We didn’t really understand it.

Kara Ayala: But we always have mentors. Listen to lots of podcasts and read lots of books. Rich dad, poor dad was huge for us.

Zack Hamm: But now it’s obviously become a space that you guys are more comfortable in. And do you think it’s almost a requirement when you are first looking, when people are first looking into starting to invest that they focus on using their own money first instead of someone else’s?

Mike Ayala: Well, here’s the thing. I don’t think it’s a requirement because you could go to work for, we’ve got a friend, Kenny McElroy ABC’s of real estate investing. He’s part of the rich dad series. You can go to work for Kenny. You could come to work for us for three years, four years. This is rich Dad’s whole premise. I mean, you can learn while work, you can learn while getting paid. So that’s one option. Yeah, but to answer your question directly, I don’t think that you should just wake up one day and be like, Hey, I’m going to start a private equity real estate firm, and I’m going to start raising a bunch of money and go invest in an asset class that I know nothing about. That’s a big fiduciary, no. So to directly answer your question, no, you should not learn with other people’s money. But it doesn’t have to be your money either. You could go get paid a paycheck, and work for a property management company or an investment firm. You see them little yellow signs on the side of the road. You can do that too. I’m not recommending

it.

Zack Hamm: That’s funny. One of the other things that we’ve talked about too, is one of your oldest or your oldest child Dylan, he’s kind of fell into a small business space of his own and is kind of creating his own name for himself. Is that something that you guys, you think you’ve had a big influence on?

Kara Ayala: Yeah, I would say so. I mean, we’ve always talk to our, I mean, still to this day, we still have two kids at home. Talk about following their passions and creating a life that they want to live, not worrying about what the money part of it is, but creating something, adding value to the world and providing a service for somebody you can get paid, doing what you love.

Zack Hamm: Absolutely. I think it’s one of, one of my biggest frustrations that I see is a lack of education when, or maybe it’s a lack of communication from, to children when it comes to talking about finances and having those, I guess, more difficult, vulnerable type of conversations. Have you guys tried to bring your kids into, at least seeing the kind of decisions that you’ve made and how they’ve kind of impacted you in a positive way or a negative way so that they can learn from those as well?

Mike Ayala: I think that, I’ve always been, and I don’t know that we’ve actually talked about this, but I’ve always been really careful. I don’t want to stress my kids out. So when we’re in those areas of time, which again, every business is going to get there. So don’t feel like you’re alone. If you’re struggling or you’re having financial issues or anything else, that’s why banks exist and that’s why investors exist and everything else I’ve never wanted to stress my children out. So I think when we have had, major problems in a business, or we had to turn things around, I don’t want them really thinking about our money problems per se. But that being said, we’ve never really, we’ve never really put a lid on our communication. We’re driving down the road on a family vacation, I’m having phone calls. I don’t really, we didn’t isolate them from it. Wasn’t our business. And then our family, like our business is our family and our family is our business. So I wouldn’t say we directly like involve them in a lot of the communication, but we didn’t hold it back from them either. So, you said this earlier, think you did. Kids learn by example. So I think maybe one thing, I’ve just been thinking about this lately, and I don’t know if I’ve said it out loud either, but I kind of wish that we would have maybe made them get a little bit more involved in the businesses earlier. But also, I don’t want to force them to either, I’m seeing Dylan right now, his business is flourishing and he’s the artist, he’s really growing, but then there’s some backside of the business stuff too, that he’s learning through. But maybe if he had worked in the business a little bit, he’d have some experience there. But also again, we were really cognizant to not force our children to be in our business or work in our business. So I don’t know what’s right or wrong there.

Zack Hamm: That’s tough. Cause when you say that, it kind of relate back to kids playing sports because there’s so many parents who are like, you got to go to club baseball, that’s all you’re going to do is club baseball and the kids grow up and they’re like, I don’t want to play baseball anymore. And who knows if you would have brought Dylan in at a younger age to learn that he may have thought that, well, one, all businesses operate and are doing things similar to my parents. Maybe I don’t want to get involved in that. And maybe he would have never taken the step to put himself out there to do that.

Kara Ayala: That’s true. I think like we’ve always set goals with them. Like every year we set goals with them and help them learn how to set goals too. And we talk, like Mike said, we talk really openly, like about things going on. I mean, we might not be like, oh my God, how are we going to survive this week at times? But they hear it all. And so I think that that’s really helped them as people.

Zack Hamm: What are your guys’ goals look like going forward?

Kara Ayala: I think my goal really is, is my kids and setting them up for success. Helping them decide what they want to do and then coaching them through businesses that they might want to start or careers that they want to go to. And just being a real support system for them. That’s like one of my hugest, probably the next 10 years, I really want to set them up for success and providing them the tools that they might need or mentorship that they might need.

Mike Ayala: I want to get to a point where, and this is kind of shifting back to that leadership triangle. I want to get to a point where, I have a friend who said, he acquires businesses and they will never acquire a business if they haven’t first identified a CEO. And to me that’s huge. Cause I kind of have always gone backwards. We either acquire a business or we start a business and then you spend the next three years, five years just really grinding and getting that off the ground. And I want to kind of shift to, over the next three to five years, just shift to the point where I’m completely in a mentoring leadership role. I’ve got some other businesses and ventures that, I want to launch, which will still be associated with four peaks. But it’s just another area that I think is huge and valuable. So that’s kind of my next journey I think is kind of getting to the point where, you’re leveraging leaders versus and we’ve got an amazing staff today and we probably have 70 employees right now. So, but it’s not really about the number it’s about just changing that mindset back to the Dan Sullivan, who not how. I want to get to the point where, 90% of my job, 95% of my job is leading and managing and mentoring and not sweeping up.

Kara Ayala: In the ditch.

Zack Hamm: Right. I wouldn’t consider you guys in the ditch, but I’m sure, we all start somewhere. Definitely. With that being said, what would your advice be to people who are in a similar situation that you were in once when you guys were first getting started and thinking about creating your own business, what would that advice look like in today’s day and age?

Kara Ayala: I would say hire good business coaches and mentors. I think that is the number one thing you can do is to search out those people that are really going to help you grow and to hire proper accountants and lawyers. All those things are important. Don’t skimp on those things.

Mike Ayala: Yeah. If you want something different, and this is part of a platform that I’m kind of working on. If you want something different than what you currently have, you’ve got to leverage somebody else’s time, talent, abilities, all that kind of stuff. And so to Kara’s point, those attorneys, those accountants, all that that’s part of your team. And I would take that a little bit further too. I would take one key, just like I said, with my friend that he doesn’t start, he doesn’t buy that company without identifying a CEO. If you get that right, that’s much better than having 10 of the wrong employees. And so, I think just, I would encourage people to really take your time when you’re looking at what your first tire is, or your next hire or anything else, and make sure you get that right. Because a lot of times our employees fail and it’s because we failed them. We didn’t know exactly what we were looking for. “Hey, I’m going to hire an assistant.” Okay, well, what’s that assistant going to do for you? And do they know what they’re going to do for you? This is probably one of my weak points. So I’m really working on that. But, just making sure that those employees have real clarity on what the expectations are. Because people genuinely, if you hire the right people, they genuinely want to do a good job for you. It’s usually us that fails them. Because we’re not communicating, we’re busy, we’ve got this certain personality type. So just get that right. Get your first couple hires. Right. And don’t skimp on that. Just like Kara said with the attorneys and accountants. Don’t skimp on your employees.

Zack Hamm: So a lot of times you feel like as a business owner, you’re almost setting those employees up for failure because you haven’t clarified what exactly their role is going to entail. And if that fits them yeah.

Mike Ayala: And you take the person that’s going to work for $50,000, instead of the person that’s going to work for $60,000 and they don’t have the capacity to do the job or the experience to do the job you’re hiring for. So you think that you’re saving everybody in the company $10,000, but really six months down the road, when that person’s wasted six months of their life and you’ve wasted six months, did it really save you $10,000?

Zack Hamm: No, I couldn’t say it better. I know one of the things that I wanted to give you some time to talk about too, because I think it’s incredible is this main

street foundation that you guys are in the process of starting, or have goals to start one day and kind of what that looks like if you don’t mind sharing with our audience.

Mike Ayala: Yeah. So just kind of the market we’re in at this point in time, again at park place communities. And our mission is to provide safe, clean, affordable communities where people want to live. Back to the upbringing and Kara had kind of same thing. Her parents worked their tail off, but there was a period of time where my parents, my mom and my dad and me and my brother and sister, I’m the oldest, we lived in a one bedroom, one bath, like 1975 mobile home. And this thing was like rundown. And it was in this mobile home park community that probably had 400 spaces. I think about this a lot, because if that was, so my parents would let us have sleep. I remember having two have my friends over and my brother had like three of his friends over for a sleepover on a Friday night in. And I don’t know, how many of your audience have been inside of a mobile home, but they’re not really structurally, they move a lot. Let’s just call it that. So my parents are living in their one bedroom. And we’re living in our living room and they’d let us have sleepovers. I remember playing Mike Tyson punch out, depending on how old you are.

Zack Hamm: I remember.

Mike Ayala: Bless their hearts, because they didn’t come out once and tell us to be quiet. Like me and Kara would be having, we maybe shooting these guys with pink ball guns or something. But anyway, so that was my, and I think back to this a lot those were some of the best times in my life. I really enjoyed living in this community. I remember playing with the friends. It was like this; we could run through this neighborhood. So even though it was a I’ll call it a rundown, it was a tough park. It really was. But I think that’s probably part of, what’s brought us to where we’re at today. And so with the main street foundation Karen I’ve always wanted to be givers and give back at any stage, and it’s not really how much you give or what you give. It’s just given. I often think about it like a pond if you’ve got a pond with water flowing in, but it’s not flowing out. It gets stagnant. It gets mossy. Nothing can live in there, but as long as stuff’s flowing in and life’s flowing out, it will always continue to flow. And that pond will be beautiful. It’ll be clean. Sounds crazy.

Zack Hamm: That’s a huge, that’s a huge point. That’s not just for charity and giving, but also for business too. Cause I think there’s so many deals that we come across and we’re like, man, I was really excited about that. I thought that that was

going to go through, or I was going to be able to work with that particular client or prospect and it didn’t, but they almost float out of the pond and then new blood was brought in and you kind of start all over. And the excitement is really lit, so to speak. So I think that relates to a lot of different areas in life as well.

Mike Ayala: Yeah. That’s awesome. Yeah. So with the main street foundation, our partner, Andrew [1:10:13 inaudible], we’re partners in four peaks, we’ve decided to start this foundation and it’s, we’ve got residents who, and this is always the question I ask, we owe it to our investors to make a profit. So I can’t, we have a thing called no pay, no stay. So if you don’t pay your rent, you don’t get to stay.
But every once in a while, you get this resident that hits the regional manager’s desk and the guy’s name’s George or something, I’m making that up, but you’ve never heard about him. He’s never been on a list and George has cancer, or, one of his kids just got in a car accident. He’s always paid his rent. He hasn’t just been there one month or two months. He’s been paying his rent for three years and he’s always been, he’s a great resident. He belongs in our community. He’s part of our community. What do we do with that person? I can’t look at my investors and have 30 or 40 of those people every month, not paying their rent. So how do we solve this? And so we started thinking about it a while back, and it’s like, well, let’s start a foundation that helps with rental assistance, because if people want to donate to people that are in a challenging situation, they have to apply. They have to go through a process. And it’s not just my local manager signing off on this because they’re friends with George. But if people want to donate to the main street foundation, we’ll have this fund that, people can help George for three months or six months or whatever he can apply. And then as Kara and I started thinking about it further, just back to my story and, and even her upbringing too. We’ve committed to, and hopefully we can do more of this, but we’ve committed to donating a brand new single-wide three-bedroom, two bath home from the manufacturing facility every year. And it’s kind of a fun process. We’re going to do the first one, this November, it’s on its way. And the way that we did this, the managers are going to catch on and we got to swear them to silence. But the way we did this, first one, every manager got to nominate one person from their community that they thought was deserving and why. And so I went through this process and we involved our employees and we got a committee involved of six. And so they took all those managers.

Zack Hamm: I think at that point in time, it was 27 parks or something. So they took all those and they narrowed it down to six for us. And then of those six, we got to look at the six and read the story. We don’t know who they are. We don’t

know what park they came from. So there’s no bias in any of this, but so we got to read their stories and narrow it, and it took us what three weeks probably.

Kara Ayala: Took us a long time. And we involved our kids, which was fun too, because, we all have different perspectives of who we want to help.

Zack Hamm: Bring them into the giving process to show that that, I mean, I’m sure they already know, but to show it firsthand that’s something that you guys genuinely value.

Mike Ayala: Yeah. And so, we pick that and here’s, what’s cool about it. And again, I think the managers are going to catch on and eventually, maybe the residents too, but they think they’re getting six months of free low rent. They think that’s what the giveaway is. And we’re going to show up in November and they think that we’re giving them six months of free low rent.

Zack Hamm: Which they’re probably stoked about. A little do they know.

Mike Ayala: Yeah. So we’re going to, basically say, Hey, can we come over here? We’ve got some refreshments out. We want to, we’ve got the film crew, are you cool with that. And we’re going to go into this single-wide home, which they’re beautiful. I mean, manufactured homes today are beautiful. We buy Clayton homes. This is the largest manufacturer in the country owned by Berkshire Hathaway. They’re great homes. I mean, compared to what I lived in, in 1975, like, well, it wasn’t in 1975. It was a 1975. They’re just amazing. They’re amazing homes. And so we’re going to bring them in there and then just basically hand them the keys. Even if we just get to do one of those a year, that’s huge, but I’d like to get to the point that we can do many of those.

Zack Hamm: Absolutely. I mean, I don’t think there’s a better feeling than to give, I like to use this because everyone always thinks Christmas or whatever holiday you tend to celebrate the person receiving the gift is the one getting the true joy. But I beg to differ and that’s changed obviously as I’ve gotten older, but the one giving to see that person’s face, that joy, that’s the true feeling of happiness, I think. And you guys are going to get a lot of that.

Mike Ayala: And just to clarify, maybe I did, but just in case anybody needs a tax write offer, this is resonating. We’re not, the mainstream foundation is not paying for these. The main street foundation is there to provide rental assistance. Kara and I are going to donate, and I’m not saying that to bring attention to us, but I just, I

want to make sure that people understand if they want to donate $10, if they want to donate one month rent, which our average lot rent is 275. They can do that. And that goes to rental assistance, not buying a brand-new home. Cause some people might say, well, the rental assistance causes is much higher than the new home. And that’s the point of the mainstream foundation.

Zack Hamm: Of course. Yeah, of course.

Mike Ayala: Just wanted to clarify that.

Zack Hamm: No, I appreciate it. I think that’s important and I love what you guys are doing and I’m looking forward to seeing the video and the excitement on those new tenants faces when they get to receive the keys that you guys are going to be handing them.

Kara Ayala: It’ll be awesome.

Zack Hamm: Well, I can’t thank you guys enough for seriously taking the time on a Friday morning. I know you guys are busy. I really had a lot of fun here. It was again, my first time having a couple on here and two people to begin with. So I think it was something that, I’ll definitely remember as my first duo as a podcaster. So I can’t thank you guys enough for just kind of opening your hearts and be able to share a little bit about what your journey has looked like. And obviously not all the good, but also some of the bad and some of the challenges that you guys have faced as well. I want to make sure to include your guys’ contact information. Is there a way for people to follow that journey for them to see you handing keys out through social media, through website, if they want to get in contact with you about the private equity or maybe there are women looking to become more empowered and are looking for advice from either one of you, is there a way for them to get in contact with it? I can include in the show notes as well. So that way we can make sure that any of those questions are addressed and answered.

Kara Ayala: Yeah, you can find me on Instagram, Kara_ ayala and then our, for the mainstream, just probably through park place.

Mike Ayala: I would actually just direct everyone to four, it’s www.fourpeakspartners.com. We’ll be pushing a lot of stuff through there, but also specifically to the main street foundation. I think probably the best way for now, we haven’t launched our website there. So probably the best way there is Instagram, which she already gave you or mine is at the Mike Ayala.

Kara Ayala: We will be sharing all that.

Zack Hamm: Perfect. And I’ll again, I’ll make sure to include all the links for all our listeners so that they can go directly to those business websites, as well as your personal sites. And again, for everyone listening, as you’ve seen and heard, I continue to have the opportunity to have incredible guests who are people who are successful in our community, who are willing to take the time and come in and share what their journey has looked like. Please, if there’s anyone that’s on your mind, who you feel like could be a great guest is a great example of what to do and what good business means, but also has a really good backstory of what it looks like to make those kind of deeper sacrifices that we can all learn from feel free to reach out to me. You can always email me at zacharycole44@gmail.com. Let’s see if we can get them on the show and explore again what their pathway to success has looked like. With that said, I appreciate you guys coming on. I appreciate everyone for listening. I hope that we can all stay focused, keep grinding, please share comment, rate this session and thank you for listening until next time.

If you found value in this episode and you know someone who’s wanting to start or move further along in their journey toward investing for freedom, I would be forever grateful if you would share this show with them and help me get this message out to more listeners. Also, if you enjoy what you’ve heard, I would appreciate it if you’d take 30 seconds and leave me a five-star review and share this with your friends and until the next episode, cheers to moving further along in your journey of investing for freedom.

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