Are You Building Your Business from the Outside In or the Inside Out?

Chris Williams: Ladies and gentlemen, welcome to another great episode of The Deal Podcast where we talk to deal makers, we talk to experts, people who've actually done the thing, uh, or currently doing the thing. And so, um, listen, today we have an incredible part two of a conversation that we started all the way up in New York, but uh, he hails from New Jersey, an incredible man of faith, of business and smarts.

Ladies and gentlemen, we have from Flex Ventures, the CEO and the leader of that, Sean Fallon. Sean, welcome to the show. Listen, I wanna get started right off the top. So, uh, first of all, um, you know, let's start with just simply who are you and tell us a little bit about what you do. 

Sean Phalon: Yeah, so great, great having me back, Chris, and, and, uh, always good to collaborate with you guys.

Uh, yeah, I have been in the real estate industry for almost 14 years now. It's hard to say that, uh, started from, uh, jumping into the real estate financing on the residential side. Got into commercial financing and have been on the financing and banking aspect of it. Uh, launched a couple of, uh, branch divisions with the mortgage company I was with.

Sold it to, uh, um, a federal, uh, bank and got into real estate investing, right? Always wanted to own the thing that I was financing. And, uh, I, uh, started flipping properties, a consult on a couple deals, and now I'm building my own portfolio, going after specifically a lot of distressed debt. Uh, we've got, uh, over 200 units on our portfolio and counting about 85 million in the pipeline in addition to that.

So we're excited about what's ahead for this market. And I, I'm, I love real estate, right? I, I love the real estate world. It's my thing. I've been a leader president of nonprofit organizations in Aria, uh, with over 18,000 members. And, uh, I'm also involved in launching Reach Labs, right? This is an incubator for real estate tech startups.

So everything happened to do with real estate, whether it's technology, whether it's the distressed, beat up real estate that looks very unsexy out there and turning that into something special. I, I love it all. 

Chris Williams: That's great, man. So, you know, last time we had a great conversation talking through a lot of, um, how you approach some of these situations, um, some of the things that you find yourself in and, uh, you're really good at putting those pieces together.

And today. I think what would be appropriate is to really understand more about yourself. So let's kind of talk about, you know, it's the big world of real estate, but within real estate there's a lot of nuance. There's, there's opportunity, especially for those of us who are minorities. So I, I really wanna kind of get your take on, you know.

As a part of being in, in a, in a minority or an unrepresented community at times, you know, and they're trying to break into real estate or in investing, you know, what's one piece of advice you would give somebody who, who's in today, in this world, in this day and age, as fast as things move to try to break in?

What would kind of be your advice to them? 

Sean Phalon: That's a great question, Chris and I didn't come from a real estate family. Right. I'm not from that, that, that world. Uh, my, my family and my, my father's actually a pastor of a church. He's been so for over 25 years, right? So I'm not in this real estate mogul business world, and I got into it at 19.

I would say if you are just starting out and you're trying to figure out how do I get into real estate? I want to be an investor or something in this industry, learn all you can. Find a mentor, find somebody who is not 10 steps ahead of you, not 30 steps ahead of you, but I would say one to five steps ahead of you.

Right? Somebody who's far enough ahead to give you really good advice, relative advice, but somebody who's not so far ahead of you, uh, to where they forget. Where, where you're at right now. Right. And so that's what I, that's what I always sought out to do in the beginning. Learned all I could, I mean, with chat, GPT and YouTube and all of these guys out there, uh, who, who are willing to share their expertise for free, right?

For free, Chris, you can literally get a, a. Four year college course on real estate expertise in probably, you know, uh, a month, uh, on YouTube, right? So learn all you can find a good mentor. And if you're in one of these minority tracks, minority communities, uh, this kind of sounds weird coming from me, but I would say don't think of yourself that way.

Right? Think of yourself as somebody who absolutely can go after, uh, what you want in this industry can absolutely. Uh, raise money, build capital, acquire the right assets, learn the right things. Don't, I would say don't ever, ever feel that you ever have to fall prey, fall victim to a circumstance of where you came from, your background, whether you're an expert, whether you're not an expert, whether you're a novice, uh, but embrace the, the stage that you're in and move forward one step at a time.

Chris Williams: Man. That's great. So, you know, um, and, and when you were talking, the thing that I was thinking about is, you know, you, you've, you've accomplished so much and you still have so much more to accomplish, right? Like, you've done a lot since 19, uh, you know, you know, bank takeover, you know, real estate doors, you know, you've.

You know, pretty large a UM of over 80 million, right? Like, you've done a lot. But, um, you know, in, in, in our conversations, in and off the podcast, you know, you, you've got a, you got a depth to you and things that you really do care about. Um, so, you know, in this next chapter of your career, right, when you just think about like, all right, I, I know what I've done so far, right?

But as a visionary and as somebody's leader, you're always the type of person who's always looking ahead. You know, what's the mission that's driving you now, you know, what's your why behind everything that you're building today? 

Sean Phalon: I, I, I think it's so important to identify that, and I would say this for a long time, Chris, I didn't know.

I was just, I have a good work ethic. That's how I was raised. And so when I was poured into the world of real estate finance and then eventually investing in a, in a conglomerate of all of it, it was just work really hard and you'll get really good results. And, and lo and behold that that happens. Now looking back, you know, I'm in a stage in my life where.

I have a lot packed into a 10 or 11 year sector of my career. And now looking back, there's some stuff that, uh, it's invaluable. And there's also some things, Chris, that I would never do again, I would never do again. You know, I had a conversation after a major domestic change in my life a couple years ago with my father and him and I were just talking on the phone and I said, you know, I'll never do the next 10 years the way I did the previous 10 years, not because it was inherently wrong.

But what I think I did a lot of was building my life from the outside in. Wow. I think that's what we're primed to do. Wow. We're primed from the time we're in in high school and college. Get a job, do all these things. Set up your life and then figure out what you want to do with it. I now will die on the hill.

Standing firmly against that saying, no, no, you need to have your values, your principles, what is most precious, and that's your treasure, and you need to build your life around that. I think business is a lot more about choice than we think it is. I think how you build your business might take you a little bit longer.

You might have to shuffle things around, but I think building your life from the inside out. Holding onto what's most important, whether it's your family, y, YY, your faith, whether it's the time that you have, whether it's the lifestyle you have, keeping those things precious and keeping those things protected is of utmost importance to me.

So now as I've got tenure in the real estate financing world, residential commercial bank takeover, right leader. Real estate, nonprofit organizations, all of this stuff. I am gearing it around to using those things to protect what is important and precious to me, which is time with my family. It's time with those in the four walls of my house, building the real estate portfolio, everything around keeping that safe and preserving the time for what's most important.

Chris Williams: So, Sean, one of the most important things that I know is that over your 11 year career, you know, you not only have been able to achieve a lot, but you know, you, you come from a background where you were adopted. And you were given the opportunity. I love how you put it. In our first interview you said, you know, this is, you know, you were adopted and brought to America the greatest country on Earth, right?

Like, it, it gave you a perspective. It also gave you, you know, you've been fortunate to do some incredible things, you know, at an early age. So what I'm curious about is talk to us a little bit about, you know, how do you leverage. You know, your story and your background, that's helped you create, you know, opportunity, but not just for you because you're, I know you're a man of service, and so how have you been able to take who you are, what you've done, and create opportunities for others who are just like you?

Sean Phalon: So, you know, in the beginning it's so much about just get things done right? And you're, you're being evaluated by that. Um, you know, somebody a few years ago, uh, introduced me to the concept of being a, uh, not a go-getter, but a go giver. And I thought, oh, it's so gimmicky, uh, at the time, and it is a little bit.

Um, but I, I, I do believe that there is a, a principle and I think it's universal just because that's the way we're wired as human beings. That the more you are given to, um, psychologically, the more that you want to give back to people. And not just as a marketing ploy, but as something that. Truly is impactful.

Leading with giving with your, uh, you, you know, with your, your hand out to give something and to offer something of value is just a great way to do it in business. And so that really changed a lot for me and not just going, oh my goodness, can we get business? Can we do this together? Can we, you know, can we partner up?

Can we, you know, collaborate? Can we take down the steel? But actually seeing it from their perspective, saying, you know, is this actually good for what they want to do with their money? Is it a good investment for them? Um, is this actually gonna bring them closer to the, uh, the things that they want to accomplish?

Not just, uh, myself, because the one thing. That I learn in business relationships is that you're playing chess. It's not checkers. It's not one move at a time. You are playing 3, 5, 7 moves ahead. And so when you're going into business with somebody, or you're gonna be working with people for a long time, you have to think like that is what's good today, gonna be good for us two years, three years, and four years, and five years from now.

And if you start thinking long term like that, you're gonna start making decisions based upon the strength of the relationship for the long term and what's good for. Both of you, or all five of you or what, whatever the number is. I think that's like the foundation of giving back is making sure that from the get go, you're doing something that is good for all parties.

And if not, it's okay. Right. If we can't figure it out, it's okay. But leading with that, uh, is a very different approach than the majority of the world. And, and I think, uh, creates longer and better. Relationships, not just getting things done, but the fluidity and the strength of relationship day in and day out.

That's good man. And it's interesting because when you, when you think longer term, you take also the time to actually think through the next decisions. You don't make knee kneejerk reactions. Yes, yes. You tend to pause. That might frustrate people who are like. Make a decision now, but you know, as a leader you can't just because you realize the tentacles and all the things that are connected to this one decision today and what that's gonna impact.

Chris Williams: That's, that's awesome. So, you know, when you think through, you know, um, where you're connected today, you know, I, I really love this, this, this conversation on. You know, uh, representing, you know, uh, within the Asian community, the things that you've been able to do, the stuff that you've been able to lead.

Let's talk about, you know, um, aria and, and some of the things that, that you've been able to do. Right. So, you know, you've got real estate, you've got the technology, you know, and, and sometimes even the community doesn't always intersect, uh, naturally, right? Yes. Sometimes it's like there's pieces, but you don't always find the intersection.

Yeah. How was it that you were able to see. Um, the Aria Research Lab being that bridge that brought, you know, all these different worlds together within the Asian community so that entrepreneurs and investors alike could find like that space. Talk to us a little bit about that. 

Sean Phalon: So I started with Aria, Asian Real Estate Association of of America, uh, about eight years ago.

And, uh, somebody who I knew in the, the local chapter invited me in and little did I know, I was basically being voluntold, uh, that's our favorite word, uh, to, to get involved in this. And then, uh, became vice president, then became, uh, chapter president over New Jersey, and also became our National Mortgage Committee Chair for two years in 2019.

And in 2020. Served a lot, um, then took a couple years off and with a big focus on business when we took over the bank those years. And then, um, one of the other gentlemen who's also a leader in the organization reached back out and he said, Hey, listen, we want to take a big business, focus on some underserved sectors in the real estate community, and we're gonna call this thing Aria, reach labs, right.

It's gonna be a partnership with National Association of Realtors and their venture capital structure, and we're gonna cross promote these different startups that actually have a product to offer to the marketplace. And so I'm all about that, right? I, I, you know, I, I love finding out what's, what's new and what's going on, and in the spirit of giving back, being able to help those entrepreneurs launch and promote their products essentially for free on us, and using our.

18,000 plus, you know, person, network. Uh, I, I just, I, I think it's great for them, right? And I think when you are a leader, you, you have that responsibility, right? To do those types of things for the community and do what's good for the industry. And so, uh, we just started that, uh, this past year. Uh, we've had two events.

They've gone phenomenally. We've promoted, uh, I believe it is nine different startups at this point, uh, helping them promote them. And, uh, even some deals are being done because of it. So we're, we're really happy about that. 

Chris Williams: Man. That's so cool. So, so let's dive a little bit further into that, because I think that the most interesting thing is people can build really big communities like, like nothing outta today, right?

Like technology, YouTube, a camera, and a social media platform. You can build giant communities, but not a lot of people can build a community that's actually doing something. Right. You guys have been able to build a community that's actually moving the needle. People can find their path in these communities.

So let's talk about this, this Aria network and the reach and what it really is, right? Can you share a story maybe of like how the relationships that are in the network, right? People who might be listening that might be part of the network that just doesn't, don't realize how powerful it is. Talk about how the relationships within the network.

Um, can lead to a deal, can lead to investment or opportunities, uh, within their business or even in yours. Talk a little bit about that. 

Sean Phalon: So when I started with this, it was really the, one of the first real estate trade organizations I was a part of. And, you know, I was like, oh, I don't know about this. You know, I'm, I'm, I'm, I'm too busy trying to build my business at the time.

And we had a couple branch offices off of, uh, a large mortgage company that we were building up and moving one office to the other. Uh, but I, but I joined, right? And, you know. I just went in with a very specific, uh, type of purpose that I always did from every network. Again, event I ever went to, because I'm not really a, you know, let up the room, walk in there, shake hands, kiss babies, kind of a person, right?

I, I like personal warm introductions. I don't like just going in there and just, you know, being the life of the party, but. Anytime that there was a networking event or some type of organization, my goal is to meet two or three good people, have meaningful conversations, and whatever came of it came of it.

But I wanted it to be impactful and, and effective for, for, for my purposes at the time. And so that's how I approached this organization was, you know, there's a lot of good practitioners. You know, I did, I did some research and all the people were involved and said, wow, there's a lot of business represented here.

There's a lot of, uh, a lot of movers and shakers here. I want to be a part of people who are doing good things because like we were talking about earlier, there's mentorship there. I want to be around the people who are 8, 7, 10, 12 years ahead of me, and I wanna learn from them. Being in close proximity is only going to help.

And so with that top of mind, I entered into the organization, right? I wanna learn, I want to give, and I wanna try to get some good value back. With creating Aria Reach labs and some of the other things, and even it's increased my business. At one point we were doing 35% of our office business just from one of the connections in this organization.

Right. But it's with, because you're focused on saying, I want to do business. How can I, how can I bring value? And how can there be an equivalence change exchange of value? And it's with the leadership, right? There's some phenomenal leaders in the organization that are focused on. Doing better by the real estate community, creating a better real estate community by doing more business in a better way.

Not just saying, I represent the community, but I'm going to better it by actually doing more business in the community and educating the community and those around that. On how to do more business better. So one of the things that you've been able to do with this association is that you served as president as of one of the chapters within this organization.

Chris Williams: That's pretty powerful. Given you know, your, your, your, your career and what you've been able to do so far, for you, what has it taught you when you were president about leadership? What has it taught you about influence and kind of representing an entire community as that president in, in that chapter? Oh man, what a great question.

Sean Phalon: So it, it's so interesting. In 2019, I was the vice president of our chapter, and then in 2019 I also became the National Mortgage Committee chair. So I oversaw all the educational initiatives for the, for the entire organization on real estate finance. And then I was the president for our local chapter in 2020, and also the National Mortgage Committee chair again in 2020.

So I was holding a national leadership role and then a local one. And in the middle of COVID. So suddenly all of your events, everything went, went virtual and it was like, oh, what do we use? There's this thing called GoToMeeting, but I don't think I've used that in like five years, you know? And then Zoom blew up and everything else.

And, and we've been that way ever since. And I'll tell you, uh, I've learned a couple things leading remotely. Even translated into when we took over the bank, I led over 130 people remote for several years now in 20 plus states, never met the majority of them face to face, you know? Whatever you're trying to communicate.

Uh, one of the first lessons I learned very quickly is whatever you're trying to communicate over, communicate it in the virtual world. There is enough. There is no such thing as over communication. Uh, I like five times five different touch points, right? You're trying to communicate something five times, five different touch points, uh, to reinforce it.

Um, your word is. Gold, right? Or I would say if in person your word is gold, then in virtual world your word is platinum. Because it's so easy to distance yourself. It's so easy to forget a promise. It's so easy to not fulfill something you're supposed to be doing. And it happens, you know, from time to time.

But generally speaking, keeping your word from a distance feels much more impactful when it happens consistently to those, you lead into those you are speaking to on a regular basis. Um. And, you know, and, and also, you know. Distance can create disharmony, I've found, I like to say. And so purposely connecting people, whether it's in the chapter, whether it's those who work under me, those who I lead on a regular basis, purposely connecting them, not just corporate driven ways.

Mission is vitally important, but in more personal ways because you have to foster trust, and I can tell you this. Without a doubt. In a virtual environment, vision is not what keeps your organization going. Trust will, trust is first, and virtual and vision is secondary. Vision will give you your first opportunity at trust, but then trust will allow you to keep your vision going.

Chris Williams: So in one of our previous conversations, one of the things that we had talked about was, you know, you, you kind of saw yourself as just a mortgage guy, right? When you first early starting, right? I'm making the deals, I'm, I'm getting things done right. Like I'm, I, I'm, I'm cranking out. At what point though, as you started achieving, as you started moving up the ranks, as you started gaining more visibility, I would even say influence in your space, right?

At what point did you realize like, wait a minute, my real personal value is much broader. Then just the guy who is doing mortgages, like when did it actually start to click what you are and what you provide to this industry? 

Sean Phalon: So I, I think a lot of people deal with that. Because in the real estate industry, you've got title, you've got law, you've got finance, you've got, and in finance there's like five different sectors of it, right?

Maybe more. So there's a lot of sub-sectors of this industry that wherever you start, you can get caught in. And, and if you're great at that and that, and you found your, your niche. First time around, which is quite rare, but if you do, hey, more power to you own it and own it and roll with it. Um, with me, I started as a loan officer, um, and then I very quickly wanted to be in management.

So two years later, I kind of pitched a CEO of a company on starting a team that I wanted to start. And, and, and lo and behold, he said, yes, I can't believe he did. Uh, probably never should have, but it actually, it went well, um, burned out and then. Went on my own with some branches and so on and so forth.

And so, uh, a, a part of what you do becomes your identity very, very quickly. And so it's like being in the forest. You can't see the, the forest or the trees that they say. Um, and sometimes it's good to pan back and to look down at a 10,000 foot view and to see. What's really going on, not what you're doing on a regular basis, per se, your role, your job transacting business, but what is actually going on around you?

And many times in this industry, it's your network. So I would say, you know, for me it was really looking at my networking saying. Who's really in my network. Yeah, it's a ton of people in the real estate industry, but I have actually got guys in hedge funds. I've got guys in private equity. I have guys who are starting tech companies.

Actually, I have a lot of friends and people I know who are doing that. Oh, I actually have a lot of people in high finance and investors and doing this, so. It started to broaden my horizon saying I need to start doing something with these relationships no matter how small it may be, because otherwise I have a network that I'm not utilizing.

Right. I still, even to this day, I run a large team, uh, doing, doing mortgages and it's, and it's quite successful. But, uh, uh, two other businesses are in the real estate investing world from acquisitions and, uh, construction and so on. And it began by looking down at the network saying. How do I utilize this?

Not just getting lost in the day-to-day, but working on your business, working on what you want to be, look doing on a regular basis, and how you can expand and not just getting caught up in the day-to-day. 

Chris Williams: I love it, man. So, you know, one of the most interesting things that, um, I have found is there's typically two paths you can take when it comes to building a business or kind of building the, the, the world of business that you, you get experience in.

There are people who pick one lane and they just go triple down on that thing, and that's all they know, right? They, if, if, if it's mortgages. Don't ask them about anything else. All I know is mortgages. Right? If it's, if it's crunching the numbers. Don't ask me anything else. I'm a spreadsheet guy, right?

Like, but one of the most interesting things that I think has been unique about your, your path so far in the 11 years is that you're not just somebody who understood the one corner of real estate, but you understand the entire ecosystem. That revolves around real estate. So you've been a lot to be able to be a lot more effective.

I mean, you've got it from the banking side, you understand it from the mortgage side. You've got the, you understand the de distress side, you understand the, the VC side and now with the, the lab, right? Uh, through Aria. You've also got like the tech side, right? So when you look at all of that, right? How would you define what you do today given that now you've got that kind of depth and breadth to your own personal experience?

Sean Phalon: I, I think for me, I look at it and I like to start at a central place that I know because I like to operate. In what I know and I, what I'm actually good at. And I think you should, I think you'd should always lean into your strengths. Um, I think you're wired that way for a reason. You should look about your background, your experiences, uh, your strengths, and then a piece of the vision of where you want to go.

And if you can make all three of those align, uh, you typically have something special. And so that's something I try to do on a, on a regular basis, even really on a weekly basis to make sure I'm still doing those things day in and day out and still going in that direction. But. Again, in real estate, it's very, very broad.

And so I started in finance. That's what I know. That's my, that's what I conceptually understand. I can almost create an investment vehicle by chopping up the numbers on almost anything real estate related you could throw in front of me. And so that might be a part of that superpower, right? That we all kind of look for on what we're really good at.

And so when I approach some of these other things, the tech world that we're playing in now. Banking and mortgage side, and then the acquisition of distressed debt through private equity and the funds that we're raising. I see myself as I am a financial structuring specialist. I'm very good at simplifying a problem, structuring it, and then scaling and building it out.

That's my thing, right? And that's what I like to stay in. All of the other things that are around that, I either bring in partnerships on it, uh, or I. Or, or, or, I outsource it because I like to focus on what I actually do well, which is the structuring of the deal, right? So if you're say, what do I actually do today?

It's still real estate finance, right? And that's the funny thing. Is I'm not, you know, some people go, oh my goodness, this business got hard. I need to do something else. And they run and they try, try to run from one thing to another in this industry, which I think is very, very dangerous, right? But it doesn't mean you can't take the same skillset that you learned in one sector of the business.

Keep that going and translate that into others. So now, uh, we're actually working on prep, preparing to raise our first fund, which will acquire about 75% actual real estate acquisitions. And the other 25% will be a combination of media and real estate tech play, right? So that fund is going to be an all-encompassing piece of it, but at the end of the day, I'm still a real estate financier who's just structuring these various verticals, uh, across the ecosystem with my company.

Chris Williams: That's awesome. Well listen, for those of you who've been listening and watching, listen, if you wanna know more, Sean's information will be down in the show notes for sure. Listen, if you're a deal maker, if you're somebody out here who's done deals, uh, part of a deal building, raising capital, and you know what you're talking about, listen to Deal podcast is a space for you.

We'd love to be able to connect with you. Sean, thank you so much for your time and guys, we'll look forward to talking to you in the next episode.