In this episode, host Elizabeth Ledoux is joined by Jay Rollins, one of the top real estate people in our country. Over twelve years, he built and then sold a commercial real estate finance company, JCR Capital. Tap or click the play button below to listen to: The Power of Eliminating Options & Focusing on Less with Jay Rollins.
In this episode, Elizabeth and Jay discuss the importance of having a clear timeline for your career, especially as you get older and closer to retirement. They also explore the need to make the most of our limited time left and to prioritize our passions and goals, rather than simply continuing to work for the sake of it. They also talk about how passing on knowledge and experience to successors is key to a successful business transition.
Connect with Jay on LinkedIn: https://www.linkedin.com/in/jaynrollins/
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Elizabeth on LinkedIn: https://www.linkedin.com/in/elizabethledoux/
Transition Strategists on LinkedIn: https://www.linkedin.com/company/transitionstrategists/
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The Power of Eliminating Options & Focusing on Less with Jay Rollins Transcript
Jay Rollins: Once you say, Well, I don’t need to do it again, and I really don’t want to do it again. Then at least you’re closing off options. And so now that is eliminating some things that you know, you’re not going to do. And I think, knowing what you’re not going to do in the early stage is just as important as knowing what you are going to do, or certainly helps you get to what you are going to do, because you got to eliminate stuff. And so for me, the aha moment really came for me when I said, I really want to stay in the real estate business. But I want to get out of the real estate finance business. I don’t want to finance other people’s properties anymore. And that’s been my whole career. I want to be on the ownership side. And I want I’ve done this enough, I’m pretty good at it. I got a good track record. Why don’t I own these assets versus financing.
Elizabeth Ledoux: Welcome to the business transition roadmap. My name is Elizabeth Ledoux. And through my years, I have seen how communities thrive. When business succession and transition are done. Well, me and my team at the transition strategists have been helping business owners develop and implement transition strategies for over 30 years. And on this show, we want to help you by giving you the roadmap to a healthy business transition. Let’s get started. Hi, everyone, and welcome back to the business transition roadmap, our podcast today we’ve got Jay Rollins with us, and I am thrilled to have him join us today. He’s got an extensive background. He’s one of the top real estate people in our country, in my opinion, and he built a great firm. He was a founder of JCR capital. And he transitioned that while back a few years ago, and he’s just got a lot of perspective and a lot to share with us today that I think you’re gonna find very valuable in just understanding his thinking. So Jay, welcome.
Jay Rollins: Thank you. Glad to be here.
Elizabeth Ledoux: Thanks. Jake. Can you give us a little bit about the background, your background and maybe a little bit about JCR capital and the you know, just how that transition came about?
Jay Rollins: So JCR capital was a real estate finance company. My career had been all in real estate, had a couple of prior entrepreneurial ventures. But JCR came about it was a transition. What did start JCR KY interesting story. So I was working at JMac, commercial credit, real estate finance company, a lot, which was a subsidiary of General Motors. A lot of people have forgotten that General Motors went bankrupt in the early 2000s. And one of the first things they did was to shed GM JMac commercial mortgage. So I found myself out of a job. And after seven great years of running a platform for GMAC, GMAC was no more. And so I had been through that before in my life. And so I kind of knew what was what was headed, where this was headed. But I went home and I talked to my wife and I said, Hey, I’m going to take $50,000 out of my checking account, put it into a savings account. I’m going to use this 50,000, for expenses for pitch books for travel for hotels, and I’m going to go around the country. And I’m going to try and start a commercial real estate business that models GMAC, that is a middle market debt and equity provider, because I saw an opening in the marketplace. Because of J Maxx exit and GE capital’s exit. I thought there was an opportunity to rebuild a middle market commercial real estate finance company. And I said to her, if the 50,000 runs out, I will go get a real job. But I want to go try this. And the 50,000 never ran out. And oh, 20 years. 10 years. 20 years later, you know, here we are talking about it.
Elizabeth Ledoux: Wow. That’s a great story, Jay. And, you know, just yeah, very entrepreneurial and and going for it. What a wonderful thing that you did. That’s not That’s awesome.
Jay Rollins: Yeah, I mean, you get I think youth breeds a lot of that. I think it’s good to know what we don’t know. And to have the unbridled enthusiasm, I actually saved it, I have my first pitch book was called NewCo didn’t even have a name. And I dragged that around the country, telling people what this was, and that they should be involved in it. And it’s hard to believe looking back that you’d walk into a conference with a pitch book called NewCo. And try to convince people to invest in something that didn’t really exist.
Elizabeth Ledoux: Right, right. And truly what they were doing is investing in you. Right, they’re trusting you, and they’re investing in you and probably didn’t matter at that point in time what the name of the company was.
Jay Rollins: Yeah, that’s right. I think our business is of trust and honesty, business. And yeah, people were betting the jockey, not the horse at that time.
Elizabeth Ledoux: Yeah, yeah, for sure. Well, great. Well, so walk us through how JCR capital, you know what, you went through a first transition with that. And I know that you’re getting ready to finish basically that engagement, right, that transition with them. So walk us through kind of, you know, how did that happen? And what were some of the details about that.
Jay Rollins: So there were a lot of interesting cocktail stories along the way, starting at zero, and getting growing this company to 1.2 billion of assets under management doesn’t happen overnight. Doesn’t happen with a lot of cocktail stories along the way. But the big picture was, I had grown this business to $1.2 billion of assets under management. It was a fund management, business, all related to real estate assets. And, well, 1.2 billion sounds like a big number. And it certainly is, we were kind of in no man’s land, in terms of size, we weren’t, like super big that we are fees could support us, we weren’t boutique enough, where I could only have five or six people, we had 35 people, that’s a lot of overhead. And in a business that you constantly had to raise money into the next fund to keep it going. It’s like throwing firewood on the fire, you can’t run out of trees, because you don’t have a gas stove. It’s just a wood burning stove. So we were burning a lot of wood. And I did want to create a liquidity event, I wanted to sell the business, I had a board, I had outside owners in the business at that point, you know, I had to dilute my equity down over time to bring capital in to the business. And in order for it to survive. I would say, you know, if you go back and look at regrets, I don’t regret doing it because I had to do it. But if I didn’t have to do that, it would have been even better. But be that as it may you there was an opportunity to sell the business. I did that in 2018. And but when you sell an asset management business, a big part of your assets are your limited partners that come with it and trust you. And so we’ve made a covenant with them, that we would manage out the portfolio to the very end with them. And the new owner could start to rebuild or rebrand or do whatever they wanted and build on to our success. But we spent, we have been managing out the portfolio for the legacy LP base is what we call them and doing very well. And they’re very appreciative that we stayed and then just leave them and because they they signed up for us and we felt compelled that you know, to give them us to the very end and so that so that becomes a business going out of business and to wind down so that once the wind down is started, you got one eye, looking at the wind down then you got one eye looking at the future. You know, that’s the start of the transition.
Elizabeth Ledoux: Right, right. So as you as you went through this transition when you look back what what was the best thing that you did what really worked for you?
Jay Rollins: Well, the transition I guess I think we probably should define what that is so so Here, I’m an entrepreneur who built a company and sold a company. And then I stayed on with the company to manage out its legacy business with the business I sold. And so then the question became on the transition. About two years after the sale, I started thinking about, Okay, this is gonna go away, what do I want to do. And I think at that point, when you, when you run into an entrepreneur that sells a business, that’s then looking at the next thing, a bunch of stuff goes through your head, the obvious one that goes through your head is, oh, I’ll just redo it, I’ll just do a do over, I’ll do this business. again. I won’t do anything related to this business, I will go pursue some other passion and exit stage left, or a bunch of combinations in between. And it was a it was a windy road to get to where I live landed. I kind of knew I didn’t want to do it. Again, the way that I had done it, I was a little bit burned out on it, frankly, in terms of we were a finance model, we were a real estate finance business. We financed people all over the country, a lot of time on airplanes, going into random cities, evaluating transactions, sleeping at Marriott’s and flying back having flight delays on the road, two or three days a week, every week. I just felt, you know, that was good to me. It worked. But I just felt there was a better way. Alright, I just thought I didn’t want to do that again. So it took a while to kind of land on how do I stay in this business? Because, you know, I, I do have a legacy in this business? I do. I’m well known in the space, and I have a lot of legacy assets and relationships. But how do I take that? Use it, but not do it again? In the same way. And that was really the challenge.
Elizabeth Ledoux: Go? Yeah, and so that windy road. Yeah, understanding that it’s, it’s usually pretty difficult for people who are preparing to and actually go through a sale of some sort, even if they if they stay on or they don’t, at some point in time, there’s an ending to staying in that business. And so yeah, deciding what’s next is often really difficult. And earlier, we were talking about a book, I think I’ve mentioned it before on the podcast, but it’s called transitions is the name of the book. And the concept in it is that every beginning starts with an ending. And there’s a middle area, it’s kind of they call it the neutral zone. And there’s this neutral zone in the middle, where it’s pretty uncomfortable to be in that neutral zone where you’re not sure of where you’re headed, what you’re doing. And you know, you’re leaving. And you haven’t figured it out yet.
Jay Rollins: Yeah. Yeah, I was in the neutral zone for a while. I tell you what has helped. It’s a small individual, but what helped me was visualizing it, doing a lot of journaling. Doing a lot of, I like to get these big sketch notebooks are like 17 by 12, or something. And there’s no lines on the paper. And people have always asked me like, why are there any lines as well, the lines would constrain me, I want a blank piece of paper. And I always want to stare at a blank piece of paper. I just get more creative that way. And then I start, you know, drawing boxes and circles and arrows. And you know, what about this? And what about that? And and then sometimes you got to put it down and come back and put it down and come back and you meet people and you have conversations and you think this is the right thing. And inevitably, there’s false starts for sure. So that really helped me a lot in terms of finding where this would land and and also coming to terms with kind of where I was. I mean that and that was also an interesting interpersonal journey is that I didn’t have to do this again. It was kind of just a knee jerk reaction. Like of course I should do this again. And then once you say well, I don’t need to do it again. I really don’t want to do it again. And then at least you’re closing off options. And so now that is eliminating some things that you know, you’re not going to do. And I think, knowing what you’re not going to do in the early stage is just as important as knowing what you are going to do, or certainly helps you get to what you are going to do, because you got to eliminate stuff. And so for me, the aha moment really came for me when I said, I really want to, I really don’t, I really want to stay in the real estate business. But I want to get out of the real estate finance business, I don’t want to finance other people’s properties anymore. And that’s been my whole career. I want to be on the ownership side. And I want, I’ve done this enough, I’m pretty good at it, I got a good track record, why don’t I own these assets versus financing them, it’s a lot easier to own them, actually. It takes less capital to buy one than to raise a fund that’s going to finance 25. But then on the other side, I said, you know, I really don’t want I don’t have any infrastructure. I don’t really want to start over and build a company to buy assets. I didn’t want to deal with the back room. And a backroom super important in our business. I didn’t want to deal with managing people, I you know, I’d done that. And so I kept eliminating, you know, here’s the things I don’t want, here’s what I don’t want, here’s I don’t want. And so what finally bubbled up to the surface was that I could partner up with younger, like a 40 year old, existing sponsors, who’s never accessed institutional money, they’d like to access institutional money, they would view me as as an asset, and I could bring intellectual capital, I could bring some of my balance sheet for GP capital, and I could be on their board, I could be on Investment Committee, and I could help them grow their franchise, while participating in that growth without having to run the day to day business. And for me, that ended up checking all the boxes. And that is the path. Once I determined that, then I was like, Okay, I’ll go find some of these guys. But that that was the aha moment.
Elizabeth Ledoux: Yeah. And the great thing for you is you figured out what the boxes were so that you could check them right, you knew what your criteria was and what you were looking for. And then you were able to go find them. Because otherwise you wouldn’t have known what you were looking for. And so it’s so important. What worked for you is going through that neutral zone and taking the time to figure out what what really would be exciting, fulfilling would give you relevance, right? We’ll give you all of those things, for this next step and next adventure in your life.
Jay Rollins: Yeah, when I sit here and talk to you about it now, it seems so crisp, and clear, and concise, and logical. It’s like well, yeah, of course that sounds right. You must that must have been easy. But no, it took a while. A lot of long walks, staring into the ocean, and all those kinds of things to come to this spot. And I think part of the beauty of it is that I know it’s the right thing, because it sounds so easy, and so natural and not forced. But, you know, typically when things look easy, there’s a lot of hard work behind them. And just like you know, major league athletes, they make it look pretty easy. And that’s the sign of a good athlete.
Elizabeth Ledoux: That’s a great thing to say. So as we as you look through this, what things really didn’t work, what things would you look back and you’d go man, I wouldn’t do that again.
Jay Rollins: Well, I think what I don’t know if I’d say it quite like that, I think saying no. And saying no more often. Now saying saying yes led to where I am. But you know I probably had a bunch of false starts by chasing things that I kind of knew wouldn’t work spending my time on things because people approached me, and it’s like, hey, why don’t you do this? Hey, come do this with me. And it was hard to say no, at first. So let’s explore this. Let’s explore that. And I would say to say no quicker, but it was a lot of those yeses that ultimately got you to clarity. So I don’t know that I would say, I know that saying yes, early on, to a lot of things sucked up a lot of time, but was probably part of the process. As I look back on it,
Elizabeth Ledoux: yeah. Yeah. Because everything that you do, if you were navigating, and you’re being thoughtful about it, everything that you embarked on, you would either go, gosh, you know, that’s a no for me, and double, right, double? No, you would find that out. And then whatever was a yes, you could continue down that road and continue learning. So yeah, I would think it would have been a part of the process.
Jay Rollins: Yeah, and for me, you know, this was just a moment in time. I mean, COVID was right in the middle of all this. So we, we’ve all kind of forgotten about that. But so you’re in this lockdown. And that you got a lot of time with a notebook. And I, and because you couldn’t go anywhere, you know, you’re afraid to do anything. And so I think there are some pluses and minuses to that. But I do think my process probably took longer because of the pandemic than it than it would have occurred, it also creates some opportunities. But anyway, that’s, you know, probably not, that probably won’t replicate itself. But for me, it was looking at a lot of different things and thinking about a lot of different things. And what would those outcomes really be? And again, putting them on a piece of paper and say, Okay, if I did this, and do a timeline, I think timelines are really important, especially as we get older. You know, and being realistic about time. And, you know, I didn’t have time to do another something that was gonna take 10 years, that wasn’t part of the process. You know, when you’re 35, you don’t have a, an ND, you know, when you’re in your 60s, and you do,
Elizabeth Ledoux: I think that’s a great point. Because, yeah, you see, some I guess finality right, a less, your runway is shorter. And as you know, what I found in my work is, as people near that, they get more thoughtful about other things that they want to do in their lives. So I think when you are younger, you’re immersed sometimes in your career, and building the company, and you’ve got a long time to go in there, it doesn’t even really cross your mind, you know, transitioning and that kind of thing, unless there’s a big opportunity to do so. But more, you know that that is you, that is your life. And so as you get closer, and you get a little bit older, starting to look at, you know, what’s next for you? And how do you want to spend your time? I think that’s very important. Timelines are huge,
Jay Rollins: right? I mean, there’s an old joke that you get to a certain age, you start counting backwards versus counting forwards. And so you start counting backwards and saying, What do I want? You know, some guys retire or say, Well, alright, if I’m not, if I’m not going to do nothing, so now that I’m gonna do something, I’m gonna stay in this business. But I don’t want to, you know, do a complete, do over, you know, day one de novo. And so all those kinds of things lead you to the, to the right answer. And, again, for me, it was putting that on paper and drawing it out and actually sketching out a timeline and say, Okay, it’s 10 years from now, it’s 2030. I’m this age. This is how many years there I’ve got, I mean, it becomes a life becomes a math equation, you know, at this point.
Elizabeth Ledoux: It does. It reminds me of that book called 4000 weeks that we have, if you live to be around 85 years old, you have about 4000 weeks in your life. And when you put that all into perspective, you know, how are you going to spend those weeks and the less you have the more perspective I think you need more choices you need to make there. Exactly, yep. So Jay, you know, as you embark on this next adventure, of working with younger people, and and you have this clarity, you know that one of my passions is to help younger people. Have have the knowledge and the background and the information to build and grow a little bit easier. And so I think it takes some weight off of you to be able to do that. And it also is a high advantage for them. And so how is it, thinking about that and starting to work with them?
Jay Rollins: It was an interesting mix, I’d say. And I was ready for it. And I would also say that the economy has a lot to do with it. But I knew going in when I spoke to some of the younger guys, there would be a group of them that would say, Thanks, but no, thanks. You know, I’m good. What do I need you for? I can do it, you know, they didn’t see value. And that’s fine. I mean, that’s life, right? People see value in all different places. That’s why there’s lots of different cars, and houses, whatever it is, but like anything else, it doesn’t, you don’t need everybody, you don’t want everybody. And it was a little bit of a like a marriage, like, Okay, well, this guy likes me, but maybe I don’t like him. Because you’re gonna be throwing your reputation in with these guys, which is, you know, at this point that’s highly coveted. So but then, just like in life, when you know, you find the right person who appreciates you values, your your thought values, your content values, your contribution, shows that value appreciates that value, is grateful for the interaction that, especially at this stage, is highly rewarding. And so it was really very, very similar to the dating process, or a lead investor process, or a board member process, that you had to find the right fit. And when the economy was booming, and money was flowing, it was harder now that things have changed. I’m more in demand. But now more particular.
Elizabeth Ledoux: Very good. Well, in in weather, I mean, this is your this is your next adventure. And you technically, I mean, you’re finding what would be kind of a new partner, but also in a way a new successor, right? It’s the WHO that you want to work with for your next time. And I think of business owners trying to figure out who their successor is. And sometimes the pool is inside of the company. And sometimes the pool is the family. Sometimes they’re not out there looking. And so it’s kind of an interesting thing to think about finding the finding the ones that are going to be grateful to have you there and respectful. And then also trying to figure out, who do you want to work with? And how do you create that new relationship?
Jay Rollins: Yeah, so I’ll just one interesting point, in a word choice you made, which I found relevant. I never viewed this part of my journey, as finding my next successor, my mindset, and going into this was helping somebody grow their franchise, and if I can help them grow their franchise, and be part of that growth, that was the objective. And when the when I am talking to these guys, it’s about them. It’s about them. It’s about their business. It’s about their brand, not mine, and can I help them build their brand, and, and then participate. But that was a new and somewhat freeing thought, but also somewhat different thought, because for years, I’ve been building my own brand and had a brand and monetize the brand. And I had to drop me and focus on them, which I thought was the right way to look at it. And say I’m here to help grow what you’ve started. But this is going to be about you. It’s not going to be about me.
Elizabeth Ledoux: Awesome. And yeah, thank you for saying that because that is a huge shift. And just for people that are going through transition, even if it’s an internal type transition, that shift that you just talked to us about is so important, even if it was a company that you started and you do have new buyers new successors that are coming in to take it over for you to become their mentor, teach You’re helping them and it’s all about them and not so much about you, as you go through that, that’s a big shift that really needs to happen even in internal transactions.
Jay Rollins: If you don’t make that shift, if I didn’t make that shift that wouldn’t have been successful, because then it just looks like I’m trying to come in and take over somebody’s business. And I knew I didn’t want to do that. And I had to get comfortable being the promoter of another person, versus promoting what I was doing, and taking gratitude in their success, and what they’re and how their franchises growing, which was a big mind change. But I think the appropriate and needed mind change along the way.
Elizabeth Ledoux: Absolutely. Gosh, that I think is the highlight of our podcast is really the, you know, your ability to do that. And, yeah, a big deal in order to make a transition or, you know, for you to pass on your knowledge, because you and I talked about that for a long time, is just how much knowledge and wisdom and experience and just even the way you look at opportunities and how you see them and how you analyze them. And all of that is you’ve just got a wealth of knowledge to be able to do that and passing that on to somebody else that can build and grow their company, I think is a gift.
Jay Rollins: Well, that’s the idea. And that’s the idea of give it to someone who appreciates the gift.
Elizabeth Ledoux: Exactly, exactly. Somebody who can take it and use it. Yeah. And who want and who wants it to, right, who respects it? Yeah. Well, gosh, amazingly enough, we’re at our time, and, you know, try to keep these relatively short. J one question that I just like to ask at the end of all of our sessions, is what one thing would you leave with our listeners that you think would help them as they start to embark on their thinking about business transition, or if they’re in the middle of it?
Jay Rollins: I would say, talk about it with a variety of different people. Test out your thesis, test out your ideas, everyone always is asked is going to ask you, what do you do? And next we do and next, you don’t have to be? It’s okay to say I don’t know, I guess that’s the first thing, or I’m thinking about it. But once you start developing a thesis, test that thesis with your close friends or advisors, let them poke holes in it, and keep rebuilding it and keep clarifying it along the way. So I would say that, you know, don’t do it in a vacuum. And don’t think that you can just solve this and go on it takes it takes a number of takes some time. Take some trial and error and and it takes feedback to get to the right place.
Elizabeth Ledoux: Nice. Nice. Well, Jay, I cannot thank you enough for your insights and your thoughts here and your transparency for all of us. So just appreciate you being here. And yeah, thank you.
Jay Rollins: Thanks a lot. Appreciate it was fun.
Elizabeth Ledoux: Thank you for listening to this episode of the business transition roadmap. If you are listening to this and you find yourself wanting to go deeper into these topics and start the process of putting together your transition strategy. I’d love to offer you a free initial strategy session with my team, where we’ll help you to explore the future transition of your business, head over to www.transitionstrategists.com To schedule a call. Thank you again for listening, and I’ll see you on the next episode of the business transition roadmap.
The Business Transition Roadmap with Elizabeth Ledoux
How do communities thrive? When businesses experience healthy growth and transition. Join CEO of The Transition Strategists, Elizabeth Ledoux as she and her guests identify what makes a successful business transition roadmap. If you know you want to transition or exit your business “one day”, today is the right day to start planning. This show will give you the roadmap.