Royal Oak Conversations – Zach Harrington

Welcome to the sixth episode of Royal Oak Conversations. This discussion features Zach Harrington, Founder and Chief Investment Officer of Rise Advisors.

We're also excited to share that Royal Oak Conversations is now available on Apple Podcasts, Spotify, and Amazon Music. Please click to subscribe to the show in your favorite podcast player.

Transcript

Royal Oak Conversations is produced by Royal Oak Realty Trust for informational purposes only and does not constitute an offer to sell or a solicitation to buy any security. Investing in non-traded REITs involves risk, including potential loss of principal. Please consult your financial or tax advisor before investing.

Now onto the show.

Josh Foladare (Host): All right, welcome back everyone to another episode of our Royal Oak Conversations. This is a special one. This is a maybe "return the favor" podcast. I'm joined by the Chief Investment Officer and Founder of Rise Advisors, located here in Rochester, New York. Been an advisor for 12 years, a friend for nearly a decade, and someone I'm super excited to have here.

So Zach Harrington: Welcome to the Conversations.

Zach Harrington (Guest): It feels weird to be on this side of it. You've certainly done this for us a number of times, and I'm eager to be on this receiving end of the questions, comments, and concerns.

Josh: We're happy to have you here. So as we start, as you start, I think as all podcasts seem to start now: looking at the origin story. You've had a decade plus career in the wealth management, financial advisory space. How do you get where you sit today? What was that process? What did it look like? And how'd you find yourself more on the investment side of the world as not just a pure relationship building advisor?

Zach: A lot of it is luck to start, right? So I got very fortunate in that my wife was babysitting for a family.

Josh: As always happens.

Zach: And so this family happened to own a local RIA, and they were looking for an intern, and I had just transitioned into a finance degree path. And so they had asked what I was up to.

She had shared that I was studying finance, and they go, "Oh, we're looking for an intern." So I began my career as an intern in the early aughts, if you will, I think that's what it's called, at High Falls Advisors here in Rochester, working under a guy named Mike Ross and Jim McBride at the time. And so I had my internship and earned a full-time opportunity working under Mike and working under Mr. McBride, as well as some of the other advisors, and naturally just always flowed to that investment side of it.

I think a lot of it was my education and where I went to school and some of the student-managed investments fund stuff that we did. Then also just a general interest of not only the planning, but great, people have built all these acorns and put them into a basket. How do you make sure that they're doing the right things for people?

And so when I transitioned away from High Falls to North Landing, I assisted Rob Bradley, who ran the investments at North Landing, and then when we branched off of North Landing and started Rise six years ago, it was a natural transition at that time. I was trusted by Mark and Stephanie and Scott at the time to take over the investment side of it.

So for six years, my role as CIO has only been overseeing our models that we have at Rise Advisors, which a lot of our clients utilize, but then also doing the due diligence around private placement investments like a Royal Oak or some of the other ones that we utilize.

Josh: It makes a ton of sense. I think it's probably unique going into meetings with clients, with prospective clients, being able to speak to both sides of that world, how we're gonna work together as people-to-people relationship, but also can talk the talk and understand what we're putting you in, where it's not always the case with a lot of advisors.

Zach: Well, what we see a lot with new clients, whether they're coming from an existing advisor or they're self-managing, is a lot of times they don't really have a rhyme or reason as to why they own what they own. And that's where for us our whole business is built on financial planning first.

So making sure that we understand where people have been, where they're going, and then how do we make sure we're implementing things in the most efficient way possible, whether that's from an asset placement standpoint, from an account structure standpoint, whatever that may be. So by the time we get to even discussing investments with a prospective client, we've spent 10 or 15 hours together through planning engagements and things like that to make sure we fully understand who they are.

Josh: Well, that makes sense. I think on this conversations for most of the episodes, we've talked about being a trusted advisor and earning that trust and leading with that goal in mind. That can get jargony, and it can mean nothing sometimes. But how do you become that type of trusted person for your clients, right? Someone that they wanna go to ask questions, and that the answer they get back they trust is gonna be productive and purposeful and not just lip service to keep them involved and engaged with the firm.

Zach: It's the amount of jargon in our side of this business is crazy. I'm sure you guys have it as well. Like you sit down with a banker or an asset manager, and the words that get thrown around are just crazy.

And so I always joke, like in our business, like on the RIA side and wealth management side, it doesn't matter what you're watching. You can put an NFL game on, you can put the Masters on, you're gonna see Fisher Investments pop up, and you're going to get the, "We're a fiduciary, our fees are this or that," and it's all just jargon and nonsense. And for the most part, consumers don't know the difference.

And so when we look at that kind of, quote-unquote, trusted advisor thing, all we can do is let our actions speak for themselves, and I think that's it. So, like us as a firm, we've quadrupled in size over the last five years. We've gone from about $115 million under management to over $500 million under management.

Josh: It's huge.

Zach: And we've spent virtually $0 on marketing. It's just word of mouth and doing what we say we're gonna do. And so whether it's our receptionist or our paraplanners or our associate advisors or partner-level advisors, our whole business is structured on our core values, and we're gonna do what we say we're gonna do, and we hold all each other accountable to that, and clients notice and feel the difference. And I think you just let actions speak for themselves. Because if you're just sitting there and you're getting stuck behind jargons, like anybody can put you in a 60/40 portfolio. Anybody can do a Monte Carlo analysis. Anybody can review a tax return. Just are you doing what you say you're gonna do, and are you following through?

Josh: We obviously have a lot of conversations. I know you do, I do. And there's some meetings where you leave and I'm not sure anything actually real got said. It was just a lot of buzzwords, and you walk away and it's like, "Okay, we might have to redo that one entirely."

Zach: Dude, the amount of times I sit in wholesaler meetings, and this is always a sniff test I do when I'm doing the due diligence for a private placement.

When I'm getting acronym salad, and then I ask what an acronym is and nobody can tell me, I'm just like, "All right, this meeting's over. We can move on." But that's what it's come down to, is like people are so scared to just be real and transparent and not to start the shameful Royal or shameless Royal Oak plug, but you guys will answer the questions.

You don't dodge the questions. You have reasonable answers as to why you purchased a building or why you sold a building or where a dividend is sitting or coming in, or if there's a shareholder issue. If I have a dividend that gets misreported at the custodian, I call Rachel, she's got that thing fixed within 48 hours.

It's that stuff. It's the real people behind the scenes that aren't just being dependent on a big name like a Blackstone or a Carlyle, and it's real people providing real results, and I think that's the most important thing you can do.

Josh: I fully agree. We started our relationship probably right after I started with Royal Oak, so maybe nine or so years ago. And I think instantly, I met with your colleague Mark, and I was drawn to the fact that that's how you guys seem to operate.

And again, we're out here trying to raise money. We wanna work with as many people as possible, but there are a lot of firms that we have first meetings with, and it doesn't seem like a fit and we're not gonna pursue that. We want people who operate similarly to us.

And I think that that was what drew me to you guys originally to create that relationship and so far so good.

Zach: When I pitch Royal Oak to an investor or when we have an existing investor in Royal Oak who we're talking about you guys with, I always give the backstory of my first six months experience as an advisor with an investor in the fund.

I think you and I met each other, it would've been late '17, maybe early '18 time, that's in my head. And we talked for a good year, year and a half before we ever allocated a dollar.

And so I had this wonderful client, her name was Pat. You guys fit her investor profile perfectly. We submitted paperwork mid-November of 2019. We closed December 1st of 2019.

Four months later, the pandemic hits. And I remember sitting there, and you and I were outdoors golfing with the cups raised, standing six feet apart.

Josh: Pool noodles involved.

Zach: And I look at you and I'm just like, "What's the plan, man?" All we're hearing about is rent abatement, nobody wanting to underwrite, or nobody wants to pay rent or things like that. And you guys at the time, I think, had 24 properties. So you were small. And it mattered. If somebody wasn't paying rent, you were only one or two rents being missed before dividends were gonna start to be impacted.

And you just faced it, and you were like, "Listen, this is our plan. We have two or three people right now who need to restructure their rents. This is the plan. They're gonna forego rent for 90 days. We're gonna prorate at the back half of the year." And you guys collected 100 cents on the dollar in 2020.

In a period where you talked to any commercial, residential landlord, it didn't matter. People were struggling to collect rents. It's a testament to your underwriting standard. It's a testament to your quality of the tenant, and it's the who you are as stewards of people's money.

So you won me over. It took me a year and a half to even allocate a dollar, and then after six or seven months of some of the most trying times possible, you had me for life.

Josh: Let's double-click on that, 'cause that's what's always most interesting to me is that underwriting process for the advisor, right? For us, it's a long sales cycle, to use that term for a better one.

What does that look like for you? 'Cause you can't underwrite that a global pandemic's gonna happen and everybody's gonna be stuck inside for a year. How do you get comfortable with a private placement, something that's not a traditionally traded vehicle? And then specifically with Royal Oak, what does that process look like for you as you go through it and say, "All right. I'm ready to put client dollars that they're trusting me with in this option"?

Zach: So my first step in my due diligence is a sniff test, and it's a sniff test of the wholesaler, for lack of a better term. For those people who aren't on the wealth management seat and maybe they wanna go buy this investment direct, a wholesaler is a representative of the fund company. It's a salesperson. And a lot of times these salespeople come in, and they're just pushing a product. They have no conviction or understanding of what's actually owned.

We see it all the time. And so for me, I wanna understand how well does the person selling this to me actually understand what's taking place under the hood. So that's my first just initial sniff test.

Once we've had that initial conversation, I then want to look at some sort of benchmarking data. So I wanna understand what do they actually own in the underlying of the investment? Is it not only something that I understand? Is it something that I could explain to my 70-year-old mother? My mother's a very simple lady. If I can explain to her what the business does, it's the old Peter Lynch motto, right?

Peter Lynch for years beat the market just by buying and owning what he understood. Same thing with a Warren Buffett. And so the amount of times we get pitched on these concepts or funds where I can't even understand what they're doing under the hood, nor can the salesperson, nor if I explain it to a client. It just takes on too many layers of risk.

So we do the sniff test around the wholesaler and do they actually understand what they're selling. We do some due diligence around the core business function. And the nice thing with a Royal Oak is it's simple. We're gonna buy high quality industrial and predominantly manufacturing buildings.

We're going to collect rents, and we're gonna manage the properties, and we're gonna rinse, wash, and repeat. We're not doing development. You're not gonna be anything that you're not, but you do what you do incredibly well. And so as we're going through these layers, we start to look at fees, we look at lockup periods, we look at some of the ancillary benefits.

So in the case of a Royal Oak, the tax treatment of those dividends is a huge piece of it. Where in a world, except for the last four years from mid-2022 through now, we lived in a world where yield was hard to come by, let alone tax efficient yield. And so for our investors who are in that qualified purchaser or credit investor space to go get 6.5% for all intents and purposes, that's tax adjusted up to 10%, where else are you finding that?

And so those are the layers that we look at, and then we look at how it fits in the portfolio. And so when I look at something like a Royal Oak, you can always go buy a cheaper option, right? Like VNQ exists. You can go buy the Vanguard Real Estate Index, and if you're just trying to be passive, you can go do something like that for four basis points.

But that doesn't behave how real estate behaves. And when you're structuring a portfolio, I always look at it and say, "I'm owning real estate not because I'm looking for synthetic real estate exposure, 'cause modern portfolio theory tells me I need to. I wanna own real estate because it's a hard asset, it's diversified, it should be lower correlated. It's not as sensitive to what's going on in the stock market or in the bond market."

And that's where I think private placement real estate can really fit in a client portfolio assuming you're staying within certain liquidity thresholds, you're not putting them too overexposed into it, and it meets their risk tolerance.

Josh: We talk to a lot of advisors. Some have done private real estate, some have done private investments. A lot haven't done anything, right? It's only become en vogue for the mass audience over the last decade or so. And a lot of people will talk about why this over a publicly traded REIT, or why this over that, and we don't typically compare ourselves to other funds, 'cause I'm not positive that we fit neatly into any one bucket. But when looking at public real estate, you can look at charts and it moves how the market moves, right?

Zach: Look at VNQ from Valentine's Day 2020 through Labor Day of '22, you were trying to buy an asset class as a diversifier or a lower correlated asset. It behaved nothing like that. Nothing.

Josh: And people ask, and we went through the COVID timeframe and the price didn't move down, and people ask, "How's that possible?" And I typically respond that it behaves like the real estate fundamentals, right? The rent was coming in. The tenants were still producing and functioning profitably. Rents in the market remained relatively steady. Interest rates hadn't really moved at that point.

Nothing would indicate that this needed to be different other than the market saying things are going haywire. And so we were patient, and then things responded appropriately and we were fine.

Zach: And you didn't have the rush on the bank. So you have a dedicated investor class, and I think that's the most important piece. In a world like today where for wealth managers, you're seeing the horror stories coming out of a Blue Owl or a BREIT or things like that. And when you're dealing with these liquidity crises where you're having a lack of confidence in your investor base and you can't meet the quarterly distribution request, that's a really scary place to be.

Josh: Well, and even thinking of that as part of the question, you get through that underwriting, you trust it, you believe in it, you understand who's investing alongside you. How do you size it, right? How do you look at a specific client and say, "This is the right piece that should go to this one strategy"?

Zach: So number one, the regulators have guidance around that. So the regulators give you the starting parameters, but I always argue, and my partner Stephanie does a wonderful job of helping level set that at the organizational level.

The regulators say that you can own up to 25%, I think it is, in private placement positions amongst your liquid net worth. Off of that, their general number I think is somewhere between 15% and 20% of what you can own in a single position. We're way tighter than that. Part of that is a CYA, right? Just covering our butts. And our general rule of thumb is if we're buying a private placement, we like to start out somewhere between 3% and 5%.

It's just a dipping the toe in the water for the investor because for the average, even accredited investor, so for an accredited investor, for anybody who's listening, we're talking about basically $250 to $300,000 of household income or a million dollars of net worth.

So these are people who are in the top decile of society. These are pretty sophisticated folks, but they're entering into a level of investment where you're giving up liquidity, you're taking on complexity. There's things associated with it.

So for somebody taking that first initial step to go, "I'm gonna buy this investment. I'm investing in a partnership in which essentially there's limited liquidity. I'm locked up for a certain time period," it can be a worrisome thing for some people. So we like to start out light.

And the way we structure our portfolios, it all depends on are you in accumulation or decumulation phase? And so let's just assume that we're talking about people who are in that middle ground, right? They're in their mid to late 50s. They're still accumulating. They're getting ready to decumulate and maybe within their five-year window in which they're stuck holding Royal Oak, they may start to distribute from their portfolios.

So we always try and structure portfolios in a way where, number one, there's normally about 8 to 12% of that portfolio that's in short or limited duration fixed income. It's super liquid. It's price stable. It allows them to have two or three years of income need amongst their total portfolio. Then we take on a little bit more duration exposure because we can get better yield characteristics. We can get better risk-adjusted returns. It behaves the way we want bonds to traditionally.

And then we start to get into that alt space, that private placement space. And so with that, the starting metric of that 3 to 5%'s a good start. But we don't like to have a single client own more than 20%. And then that way, if you look at a traditional 60/40 allocation, you have 50 to 60% in stock, and I use that range 'cause some of Royal Oak behaves like a stock. Some of it behaves like a bond.

And then you have anywhere from 30 to 50% in traditional fixed income, same concept. But to me, it's the planning piece that you understand the liquidity and ensuring your investor that they're not gonna need to touch this within a five-year period.

Josh: And that's how, I think, we talk about it with advisors or individual investors is it's a solution for something in your portfolio. It's a tool to use, but there has to be other tools. And so some of that is your behavioral finance of You've gotta get people comfortable with what you're saying. How do you do that? 'Cause I'm sure there's some who are like, "What are you putting me in?" And there's also some who are like, "This looks incredible. I want half of my money with it."

Zach: And for the most part, there's no in between. And so it's like I've had conversations with prospects where they heard from a friend who's an investor in Royal Oak, they love how it behaves, they like the tax efficiency of the yield, so on and so forth, and they'll be, "Well, why wouldn't I buy more of it?"

And it's like, well, just like you wouldn't buy more of anything, everything has to serve a purpose. And so for us, it's by the time we get to making the recommendation for the investment or the allocation, we've done so much of that work on the financial planning end of understanding the cash flow, understanding the liquidities, understanding time horizons and bucketing.

And so the CFP board has this bucket approach that they utilize of how much you need in the short-term bucket, moderate-term bucket, long-term bucket, so on and so forth. So that's how we treat the Royal Oak position, is we're making sure that these are funds that likely somebody's not gonna need for a decade plus, because that's where something like Royal Oak can shine, especially in that alternative asset bucket. If we just look at where Royal Oak, in my opinion, sits in a portfolio, it's that Goldilocks investment of you're not dealing with the headache that bonds have been for the better part of the last decade, and you're not necessarily dealing with the drawdown volatility of equities.

So if we look at just AGG, like the aggregate bond index for the last decade. So if we go back to, let's say, January 1st of 2017, Trump 1.0 comes into office. You have a couple of rate cuts due to some of the Chinese trade war concerns and tariffs. You have basically the pandemic starts to hit, yields go to zero, yields don't exist, you're not getting any real adjusted return on your aggregate bond positions.

Then you have Jerome Powell and the Federal Reserve who just keep saying, "Inflation's transitory, inflation's transitory. Rates are fine where they sit." Then they panic, and they go, "Well, not only were we wrong, we need to raise rates 400 basis points in a 12-month period."

And so if you were a bond investor who bought into the aggregate bond index in January of 2017 through now, even reinvesting your dividends, your annualized return's in like the mid-threes right now for the last decade.

And that was a bumpy ride. 'Cause you have to keep in mind that your price of your bond moves based on the change in yield times the duration of the bond. So not to get too in the weeds, but if you own an aggregate bond and yields move up or down 1%, your price moves up or down 6 or 7%. So you think you're in this safe investment, but it's for the last decade been just as volatile as equity markets.

And let's just talk about equity markets for the last decade, right? So you have a tariff tantrum in 2018 where the market was basically down 18%. It took seven months for it to recover to start 2019. In 2018, the only positive asset class was cash. You have a good 2019. The start of the pandemic looked brutal.

You have massive government deficit spending throughout '20 and '21 to give the market essentially Narcan that it didn't need. Then you have 2022, where the market panics on all these growth fears as well as the oil price shocks from Russia and Ukraine.

2023, things recovered and stabilized. 2024, you have everything with the election taking place and some of the volatility there. We have the tariff tantrum in '25. You have the Iran war conflict concerns in 2026. And sure, if you had the fortitude over that decade, what a decade. But the standard deviation's way higher than historicals. So I look and I go, "If I can get six and a half percent with virtually no standard deviation, I'll take it."

Josh: No, and that hits another point we wanted to talk about, but the public versus private It makes a difference sometimes, especially when clients are looking at their balance or they're getting close to retirement and they're starting to freak out because things are tanking or things are taking off and positions are getting big and positions are getting small. It's nice to have the Ron Popeil "set it and forget it" in the portfolio.

Zach: And more importantly too, that's a double-edged sword in the private versus public, and we have this conversation with clients a lot. I think private is wonderful when you have trust in the stewards who are managing the private money. When you look at the complexity that exists in private market investments, when you look at any of these fund of funds and things like that, there's layers of complexity, and there's layers where you can hide garbage.

And so that's where going back to that due diligence side of it, I think it's super important to make sure you understand what that private manager actually knows. Do they know what they actually know, and what risks are associated with that?

Josh: So there's a lot of green flags, right? But what are the red flags when you're looking at that? How do you suss out this is a little bit sketchier than we need it to be?

Zach: Industry concentration right now is a huge one that worries us. And so right now, this is a non-quoted quote number, but it's something in the ballpark of a couple hundred AI-related startups that have above a billion-dollar valuation. And so my fear with that is you start to read the tea leaves, right? And I'm not trying to be a conspiracy theorist, but forever, for all of humanity, private equity investing and private investing has been the good old boys club, right?

You had to have a certain level of net worth. You had to know somebody to get involved in the deal, and the earlier you got in, the better the returns. And now what we're seeing is our legislators and regulators starting to get coerced by these big investment banking firms to allow for these investments to enter things like IRAs or enter 401Ks and workplace retirement plans.

My fear with that, and we saw it a little bit with the SpaceX IPO, is its exit liquidity. And so right now, my fear is if I'm getting pitched a private investment in which it is a ton of asset-backed lending with a ton of PIK, payment in kind, that worries the heck out of me. If I'm seeing a ton of tech concentration, that worries the heck out of me. I'm seeing a ton of industrial equity concentration specifically tied to AI infrastructure build-out, that worries the heck out of me.

And then also just manager tenure. The amount of wholesalers I have reach out who started a private credit fund out of Boca, Miami, or Palm Beach in the last four years, it's astonishing. To me, the beauty of it is, can I sit down face-to-face, break bread with the managers, understand the level of stewards they are, understand their background, and check those boxes?

Josh: Does it matter for you, I think we can't speak for all advisors, that we're local? Does that one degree, we're both in Rochester, we're building in the same pond, if you will, fishing in the same pond. Does that make a difference for you or for clients, or is it really

Zach: For me personally, 100%. So knowing that I could, in theory, be to your office within six minutes matters deeply. And the fact that you and I will run into each other, where we're out to dinner somewhere and you and Rachel are having dinner or Mariah and I are having dinner, we can say hello or go play a round of golf and just catch up and see where things are at. We see each other in similar circles. I'll be out at a golf outing and there's Charlie, or you're out somewhere and there's Mark or whoever it might be. That stuff matters.

And when you get to invest alongside people who are in the same community that you are, you can build that trust almost non-purposely, in a way.

How do I explain that? You all have reputations. And they're very positive. And in a community like Rochester, which as much as it is a big city, it's a small town. And everybody knows each other. And so when you start to ask around, everybody has positive things to say, whether it's from Zappia all the way up through Dan Goldstein. You guys have a wonderful reputation of doing exactly what you say you're gonna do. And that's what we do.

And so being able to have taken that year and a half before we ever allocated a dollar and meet each other and get to know each other and understand more and more of what was taking place, and it wasn't like your internal wholesaler's calling me 'cause you're gonna be traveling from Connecticut into Rochester for the week.You have a 15-minute time slot to meet with us on Tuesday. That stuff matters a lot.

Josh: Well, so double-click that. How does someone do that from Connecticut or Boca with someone who's not in that market? How do you build that trust if you're not there every day, right? 'Cause Royal Oak broadly, we have investors across the country. We have people we work with across the country. And I do wonder, are there better ways for us to build out that reputation in Milwaukee, Wisconsin when I'm not in Milwaukee, Wisconsin every day or every month?

Zach: So I can narrow down. There are realistically, I'm trying to do the mathematics. There's probably six asset managers currently that are approved on Rise's RIA that we basically say, "Hey, we trust these six private asset managers." And one of them is Royal Oak. Two of them are the biggest of the big. So we're talking Apollo. Which if Apollo has problems, we all have problems. The other is Carlyle. Once again, same thing. If Carlyle has problems, we all have problems.

And then there's two smaller asset managers that came from a trusted introduction. So one of the asset managers I met through PPB, who I met through Royal Oak. And then the other asset manager was referred to us via our Fidelity Institutional person. So it was a high-trust relationship that made the introduction, and then we built a high-trust relationship before anything could happen.

But it's a challenging exercise. I could not imagine being an internal wholesaler right now at a private shop having to pick up that phone and dial and try and set meetings. Number one, everybody thinks it's a scam or it's a robocall or it's something like that. And number two, I think that private managers need to do a better job when they're setting up and trying to build relationships in certain areas, taking the time.

Don't book three meetings back to back. Don't be like, "Hey, I'm gonna come in at 10:00, but my 9:30 went long and I forgot it was a 15-minute drive to your office. So now I'm here at 10:20, but by the way, I need to be out of here by 10:35, so what do you got for me?" Those are just instant things. It's an ick, and it's hard to overcome that.

'Cause at the end of the day, you're trying to build trust with me in which I'm going to trust to place my client's life savings with you.

Josh: No, all reasonable. To speak of icks, what are the icks people aren't seeing that they should be seeing or thinking of? What we talk a bit about here, I think it's Royal Oak's ethos. We look to see what can go wrong with an investment, and we sit and we underwrite it, and we talk about it, and we look at it, and we wanna figure out how we can say no to it. And ultimately, if we have to say yes because there's no no's, that's a good opportunity. How do you think about that for your clients or other advisors who ask your opinion? What do people miss that they really should be paying more attention to?

Zach: So those are both explicit and implicit icks, right? So on the explicit side, we talked about it a little bit. Anytime I look at a private credit fund and they have a certain percentage of rents received in payment in kind that's an instant ick. I want nothing to do with that.

Or anytime you start to see a fund to funds in which it just feels like it's a bit of a layered scheme of, they need liquidity here, so they make this sidecar, and they need liquidity here, so they make this fund to fund. That worries me as well.

The other pieces are pretty much about how the firm represents themselves. I don't have any interest in being wined and dined, so I've always joked with anybody, I don't want to be flown somewhere for a conference. I have a four and a two-year-old. I have a family. I'm running a business. People depend on me. I don't need to be flown somewhere. Just let's get down to it.

And so when you see an investment firm or an asset manager who's way too frivolous with dollars, in my head, it's lower the management fee. You don't need to be charging what you're charging. The second piece of it is who you're choosing to represent you.

So my intro into Royal Oak was you, and so from the moment I met you, we built a trusting relationship. When that person shows up and they're way overdressed and they got the jewelry on and the nine-piece suit and all these other things and they're ill-informed, they're not representing, or they're rushing from meeting to meeting. If you're not taking this serious, how do I trust that you're taking everything serious behind the scenes?

And that's the one thing I'll say, whether it is somebody like Dan taking the time to have lunch with me. We sat down and had lunch for an hour and a half. At no point is it rushed. At no point is anything, he's truly interested to be there. You meet with Charlie or you meet with Dan or anything, like I said, with Rachel. Dude, Rachel is, I would argue, the most shining star of Royal Oak.

Josh: Rachel Rules.

Zach: Whatever is needed, she not only gets it done, but she provides an explanation of what took place. And that allows us to go back to our investors. So just a peek behind the scenes: custodians always mess up the qualified dividends. Always. We've been investors for seven years. How many years do we have to call and be like, "Hey, Fidelity messed this up. Can you help us with it?" And she'll drop of a dime, gets in contact with whoever needs to get in contact to, gets it cleaned up, and we can get back to a client in a really timely fashion. It's those things that are what build the trust.

Josh: Oh, well, that's nice to hear. It's the goal. So you mentioned young family starting a firm, trying to leave a legacy of some kind in the Rochester community. What does that look like over the next five years with Royal Oak relationship-wise, broadly with the firm? What do you want the future to be for you guys?

Zach: Yeah, I don't know, man. You've known me long enough. The legacy thing I think is just so silly. I don't know. I just want to be remembered as somebody who just did what they say we're doing, cared deeply.

Josh: It's a pretty good legacy.

Zach: It is, right? But I don't know. You talk to people and they're like, "Oh, I want my name on the wing of a hospital," or something like that. I just want my kids to like me. I want my kids to grow up and want to come to mine and my wife's house for the holidays. I want those things.

I want clients to feel that like they got value for what they paid for. I want them to know that we care deeply about what we do, and we take the responsibility of this job very seriously.

When it comes to the firm itself, we have been tremendous benefactors of growth. There's been a lot of consolidation in the RIA space here in Rochester over the last 24 months. We hope to continue to capitalize on that. There's firms in the area that I've looked up to my entire career. Now, a lot of them, those guys have aged into retirement and good on them.

But that's who we see ourselves being. When you look at the Fortes of the world or the QCIs or the Cobblestones or the Alescos or those firms, we see ourselves being them 10 years down the road, five years down the road, things like that.

So we're just gonna continue to hire the right people, do the right thing by people, and see what happens there.

As far as the partnership with Royal Oak, I'm an investor myself. I think it's an investment I trust so much that I put my own money into it. And those minimums aren't light. And so I truly believe in what you guys are doing. And so it has been so cool to be along this ride for the last seven years, going from 24 properties to close to 80, being in over half of the states, buying buildings where I love nothing more than watching a football game and seeing a Ridell helmet and being like, "I own a couple tiles in that lobby of that building."

It's cool to be a part of. And I'm eager to see how you guys continue to grow. I'm eager to see what the Cambridge Street team comes up with next, and I have such confidence in all of you as stewards that whether it's Royal Oak or something new or whatever's next, I trust that you guys are gonna take the same level of care, the same level of stewardship and due diligence into whatever you guys do.

And so you guys are a partner with us for as long as we all continue to do it, and we'll see what that looks like. But the world needs more Royal Oaks. They need more Cambridge Streets. They need more Rise Advisors and people who just care. And that was advice I got early on in my career, was just prove to people you give a crap. And it goes a really long way. You don't need to do much more than that. If you just prove you care and do what you say you're gonna do, things go a really long way.

Josh: That feels like the right place to end. So Zach, I appreciate the time today. Always a pleasure catching up and hopefully we get to do it again.

Zach: Thank you, buddy. I appreciate it.