Kevin Song With withco

Intro: [00:00:04] Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for Atlanta Business Radio, brought to you by on Pay Atlanta’s new standard in payroll. Now, here’s your host.

Lee Kantor: [00:00:24] Lee Kantor here another episode of Atlanta Business Radio. And this is going to be a good one. But before we get started, it’s important to recognize our sponsor on pay. Without them, we couldn’t be sharing these important stories. Today on the Atlanta Business Radio we have Kevin song with withco. Welcome, Kevin. I am doing well I am so excited to learn about your company. Tell us about withco how are you serving folks.

Kevin Song: [00:00:51] Yeah definitely so withco we are an acquisition firm that helps small business owners become commercial property owners all across the United States. We do that through our financial product called Lease to own. We think that mortgages are pretty unattainable for most small business owners. We think leases are not a good option, especially for the best best business owners. And so we’ve created this third option that really helps small business owners turn into really fantastic owners of properties and in that hopefully help them build generational wealth versus get to this place.

Lee Kantor: [00:01:30] Now, when you’re saying small business, how are you defining small? I mean, the government has one definition and a lot of small business owners have another.

Kevin Song: [00:01:39] Yeah, definitely. So I think from a very baseline perspective, we do use the Small Business Administration’s guidance on what defines a small business, but it comes in all shapes and sizes. And so we look at everything from doctors and dentists to people starting up retail concepts to people who are in the concrete polishing business. So of course your local restaurants and neighborhood services.

Lee Kantor: [00:02:06] So then the property you’re looking there, you’re talking about, it could be, like you said, kind of a mom and pop small salon that’s a standalone building to a larger office building.

Kevin Song: [00:02:20] Yeah, that’s right. It could be mom and Pops who want to buy a single location and have a very permanent relationship with that community. It could be an entrepreneur who is looking to scale a concept from one to many locations, and it could be anything sort of in between.

Lee Kantor: [00:02:40] So what’s your back story? How did you get involved in this line of work?

Kevin Song: [00:02:45] Yeah. So I started the company in 2019, actually. Quite a little bit of a personal story. My family had a grocery store in Brooklyn for about two decades. Mom and dad, good people ran that thing. Blood, sweat and tears. That a lot of good things for the community. I think that was just a part of running a good local business. And yeah, long story short, we got a phone call from a big developer who decided to raise our rents, and so we lost that business three weeks and we actually lost our home after a few months. And I was 11 when this was happening. And so really trying to understand why the heck this was happening in the first place. But the question that I asked then and still sits with me to this day and I sort of become the kernel to start with CO was why being really successful and creating a lot of value in that community actually ended up leading to our own demise. That question of why are there really good, fantastic entrepreneurs and families across America who effectively displaced themselves by being really successful? That became the real genesis to start the company.

Lee Kantor: [00:04:00] So ironically, the more value that your folks were providing the community, the more valuable that property became. And that ultimately led to them being kind of removed from their the neighborhood that they built and served.

Kevin Song: [00:04:16] Yeah, exactly. It’s it’s like the greatest irony of them all. It’s the fact that we built the system that, you know, kind of markets itself as rewarding hard work and success. But through that hard work and success, you actually end up destroying a lot of the value that you created. I don’t think that’s an America that we’re really proud of. And I think when something like displacement actually happens, it’s this sort of identity crisis that we face, that the reality of our situation actually is not congruent with the identity that we have. And so that instance not only happens on a small local corner in Brooklyn, but it’s happening more systemically across the country. And one of the reasons that we’re in Atlanta and we’re in Georgia in general is because we think this is going to be one of the next sort of epicenters where so many people are moving there, so much, so much is changing. And that’s in no small part because of the fantastic local entrepreneurship that exists and the great local businesses. And so we want to support as many fantastic entrepreneurs as we can to sort of ride the wave that they’ve actually created.

Lee Kantor: [00:05:38] Now, what percentage of small businesses own their own property? Is it just a super small number?

Kevin Song: [00:05:47] Yeah, literally. Raz 0%. It is one of these weird sort of instances where it’s mostly these sort of like mom and pop landlords that actually work and sell and invest into these properties. And I think in that it’s really, really easy to sort of understand why some of these bigger sort of issues exist in the first place. Know, we think the issue isn’t that like a local landlord is making a practical decision for their family on who to work with and why. It’s really that the system has been put in place where a small local business, you know, we use coffee shop, you know, doesn’t really stand a chance against like a Starbucks when, you know, you’re competing on price and kind of rents and all of that sort of stuff that actually are important decisions. And so, yeah, there’s there’s a lot of sort of systemic sort of thinking that we do because ultimately it drives to a conclusion and that again, like I don’t think any of us are really, really proud of.

Lee Kantor: [00:07:03] And it’s one of those things I don’t think people realize that a lot of larger franchises or businesses that have stores around there really real estate plays more than they are business plays, or that business is just a part of what the what the real business is.

Kevin Song: [00:07:24] Oh, yeah. I mean, we know some well known entrepreneurs who, you know, for example, in New York City have told us that they’ve made more money on selling or owning their real estate than they’ve had on selling millions of pastrami sandwiches, creating sort of a different method or way for small business owners who are truly putting their blood, sweat and tears into creating a great operation and letting them get on sort of this path to a different type of wealth creation is something that makes us proud to come to work every day. And I think we’ll hopefully be the foundation to to change a lot of the way that even America thinks about small business. We think it should be this career path that’s accessible and exciting and wealth creating and not perceived to be this thing that’s very risky or very passion driven exclusively. It should be a really good decision for your family. And we think real estate ownership is just just the start of that path for great business owners in America.

Lee Kantor: [00:08:39] It’s funny that you bring up the delis in New York. Most of the kind of name brand delis aren’t there anymore because of this.

Kevin Song: [00:08:48] Yeah, that’s right. But, you know, 305, this house is curated. Katz’s Deli is going strong. They’ve been there for over 100 years and I don’t think they’re going anywhere. And I think it’s in no small part because they own 250,000 ST.

Lee Kantor: [00:09:02] Right, they own the building, so therefore their future is kind of safe.

Kevin Song: [00:09:08] Yeah. And again, it’s this sort of like weird platform risk that exists that is like great irony that we’ve set up for ourselves where business owners work really hard to make their business and therefore their place extremely valuable. Yet aren’t the ones that actually get to cash out on that value. And it comes from the fact that mortgages and ownership are highly inaccessible for most business owners. You know, they cannot save a down payment because it’s an impossible amount of money. They also do not know how to buy commercial real estate and for good reason. It’s a very esoteric product. And, you know, unlike even buying a home, which has been very, very consumer ized and educated and government supported small businesses, no one knows really how to buy commercial real estate except for a handful of companies and people. And, you know, again, on the other side of the lease is just this product that is so counterproductive. You end up you know, if you do really well, you end up raising your own rents or having someone pay more for the space that you and the neighborhood that you’ve created, most likely a big business or you have a big developer or someone else who has a genuine higher use of that space come in. And so we’re sort of in the business of trying to serve small business owners to sort of have as many options as they can to to build wealth. And one of those main pathways and sort of the foundational layer we think for businesses that occupy space is just to make sure the relationship with that space is not only secure and that you have control over it, but that it’s something that is an extremely good return on your investment because you’re probably not only operating a great business, you’re probably spending a lot of money to make that space wonderful, and you’re also doing a lot of great things for that neighborhood.

Lee Kantor: [00:11:15] So how does it work? How do I know if my business is the right business to take advantage of this opportunity? How does the whole process work?

Kevin Song: [00:11:26] Yeah, sometimes we’ll find you, but we welcome people to come find us any day of the week you go to with Darko, you can learn a lot about how we work and what we’re doing. On that. You’ll sort of tell us what your situation is. Maybe you’re in an existing space that you love and it’s the one for you, and you want us to help you buy that specific building. Maybe you’re coming at the end of a lease term and you want to move and look for a space that’s bigger, smaller, exactly the same. Or maybe you want to grow. Maybe you have a few or one really successful location. Your landlord is never going to sell it to you, but you want to open up your second or seventh or 15th location of a business and we can help you with that too. Once you sort of come to with Echo and go through that onboarding process, you’ll get sort of white glove treatment from our team to really help you kind of understand near how to invest in real estate with your business. We want to make it as easy and informative and we want to create options for you as much as possible. And so by uploading your information and telling us what you’re looking for, giving us your lease and letting us really understand your purchasing power, we can be extremely consultative in trying to create as many options for you as we possibly can.

Lee Kantor: [00:12:58] So say hypothetically, I have a I’m a doctor, you know, it’s my own practice. I’ve been, you know, leasing in this space for a period of time. I make, you know, X number of dollars a year. You see how much I’m paying in rent? The lease is coming to an end. You know, my size is okay, maybe I could always go bigger. I come to your website, I fill out some forms, I have a conversation, and you are going to take that data and then say, Hey, you know what? Down the street, here’s a building that might be appropriate and you help me move or help me acquire it. How? How does it work?

Kevin Song: [00:13:41] Yeah, we’ll be we’ll be fully turnkey, fully consultative to you. So it could be a like this space that I’m in, my lease is expiring and, you know, my landlord has asked me, do I want to buy the building in which you like the building, in which case we will help you price that building, make an offer, run the entire due diligence process for you, and basically give you back the key. So you’re now on a lease to own agreement with us Every year that you pay rent, When you’re on your agreement, you get part of it back effectively in the form of a down payment credit. And over the course of our lease term, our goal is to build you up to a full down payment that you need to actually buy the property back from us. And we do. We run sort of every process of that journey. If you’re interested in moving or expanding, we’ll help you actually find those new locations. We work with great brokers across the country. We understand kind of the inventory, the real estate that’s out there that’s possible to purchase. And so whether you’re coming to us with a property in mind, it could be the one you’re in or the one down the street that you saw for sale sign on, or you need us to start from scratch and actually understand if the one you’re in is the right one for you and help you find new locations, that can be great options for your business.

Kevin Song: [00:15:13] We’ll take it all the way through from beginning to end. And the idea is to also not only run that process for you and make it something that you can you can rely on. We also want to build trust with you by actually educating you on why we’re making some of the decisions that we’re making, because we are, in effect, making them together. We don’t succeed unless you become our buyer. We want you to own the building. And so we’re buying lease to owning and then selling the building to you. And we both need to understand why this thing that can be the most transformative experience of your life can be the thing that sets your family up for generational wealth. Why, that’s a fantastic decision for both sides.

Lee Kantor: [00:16:04] So I’m not just trading one landlord for another. You’re help your partnering with me to help me at some point be the landlord for myself and own the space.

Kevin Song: [00:16:16] Yeah yeah exactly. You know, I think business owners already have an ownership mindset, right? Like, no one’s building a business, you know, for just a short period of time. At least the ones that we want to work with, they’re building a business because this is what they’re called to do or this is what they need to do or this is what really motivates them. And so we’re with them sort of every step of the way, and we want to make sure that they are, in effect, making a fantastic investment decision for themselves, where they’re making a fantastic return on their time by running a great business. And that might be, you know, creating great profits for them. We want to make sure that those profits stay within their their hands by making sure the real estate is secure. And also in that same breath, actually helping them capitalize on that work that they’re already doing in that space by educating them and doing the work for them to make them sort of evolve them from being just a small business owner into a community, into being both a small business owner and the literal community owner by owning a piece of property.

Lee Kantor: [00:17:37] Now, when you’re talking to a small business owners, is this kind of a mindset shift? Are you having to educate them on on the understanding that they are kind of vulnerable in the situation as a tenant rather than a, you know, the owner of the property?

Kevin Song: [00:17:53] Yeah, definitely. I mean, we want no one likes surprises in the world of real estate, right? It’s not like no one likes when the landlord and the tenant have the conversation six months before the lease six fires and the landlord says, Well, actually I’ve got a double year rent, you know, the neighbor, the neighborhood, and that business owner kind of go up in arms and say, you know, this is this is like an infringement on the community rights. And it should be like that should be the feeling, actually, because, you know, losing like a cornerstone of your neighborhood is like. I don’t know, like Coca Cola going out of business in America because they can’t resign their lease like that local corner store or that local cornerstone, like failing to exist in the local economy and local society is. Absolutely tragic thing. And so we are sort of in that business of trying to help these business owners really get on that path and in that education and understanding and really changing your mindset from being someone who operates a great local business on a daily, weekly, monthly business into someone who can really think about how to build something for the long run. Because odds are if you’re if you’re great, you’re already doing that. We’re just trying to walk you across that bridge of being a renter to an owner and enabling you to do that financially and with sort of the means and the education.

Lee Kantor: [00:19:39] Well, I just don’t think that most business owners understand how vulnerable they are. Like you’re mentioning some stories, you know, where they raise the rent double or triple. I mean, I’ve heard just recently a store here locally in Atlanta, they raised it four and one half times. And it can happen to anybody. And and you are vulnerable. And if you have an opportunity to take control of some of the this risk by investing in yourself and investing in your building specifically with the help of somebody who knows their way around, I think it’s definitely something you should be considering. I mean, I just don’t think that the typical business owner understands how vulnerable that that at the end of a lease, you’re your rent can go up at whatever number that the landlord wants it to.

Kevin Song: [00:20:30] No, that’s right. That’s right. I mean, I think one of the great philosophers said something like, you know, a healthy man, you know, thinks about a million things and a sick man thinks about one thing. I think real estate and the relationship with the space is very, very similar to kind of that sickness. Right? It’s like it is the thing that is so foundational. It is the thing that your entire business runs on top of. Yet, you know, I think it’s easy to sort of forget what that relationship actually means for the survival and the thriving of your business. And so one of the first things that we ask for from a business owner is the lease, because we once we see that lease, can actually tell you, well, hey, you have three years left on your lease, that’s great. Like you might have you might be on a great lease today, but actually, like there are a lot of cranes going up in Atlanta right now. And, you know, these big brands are actually coming in. And so even though you have the security of your lease today for the next three or so years and you did a really good job of figuring out how to get a lease that would protect you for for a period of time. But it is a slow moving car crash. We know what’s going to happen at the end of that at the end of that lease term, which is your landlord is going to be shopping around and asking, you know, my lease coffee shop is interesting, but Starbucks is willing to pay me three times as much because Atlanta became you know, this part of Atlanta became really cool.

Kevin Song: [00:22:11] And now Starbucks wants to capitalize on that or, hey, like this big developer is coming into town and they’re willing to pay me a lot of money to actually make this this face really meaningful financial sort of opportunity for me. And so, again, like, it’s really about preparation. Like we don’t want small business owners to be caught by surprise about what’s going to happen. And with that preparation, we can actually advise the business owner. All right. Hey, like your lease today, the current relationship that you have with your space is actually really good. You are sort of tracking where the market is. And so by the end of that lease term, unless you just genuinely want to own like you probably have a good option to sign another lease set of fair term. Or it could be that, hey, like we just want you to know the price of rents in this market for compared to where you are today is actually already doubled. And so there is going to be this car crash, really tough negotiation that’s going to happen. And we want to prepare you whether that means helping you think about other options that you could potentially move to, whether it means making an offer to your landlord today so that maybe you can you can take advantage of sort of having that relationship for the next three years. Some places already. And so, yeah, again, all of this is about making sure the small business owner has all of the options in front of them to have the best relationship with space, including one which is around permanent ownership and wealth creation through their business.

Lee Kantor: [00:23:52] And you’re open to talking to people with several years left on their lease. They don’t have to be ready to move, you know, in six months or 12 months. You all talk to anybody, right?

Kevin Song: [00:24:02] Yeah, we’ll talk to everyone. We want people to come through our doors. We want to be really helpful and supportive. We know like starting a small business and running one successfully doesn’t happen by accident. And so all of that work and, you know, blood, sweat and tears again, that you’ve you’ve you’ve you’ve done to create value. We want you to keep it. And ultimately we understand that you coming to our doors today may mean we’re not going to be able to have a meaningful conversation with you if you’re not ready for ownership or you have too much time left on your lease before you can make make a move. But ultimately, it is again about providing great options to business owners, which once we have that information, What is your current relationship or relationships with space through releases and where is the market? And also how is your business doing? We’ve we want situations where someone comes to us, give us gives us this information and tells us what they’re looking for and we tell them, hey, we’ve got nothing for you right now because your business isn’t ready. Once we have that information and we see that your business does become ready because your profit margins go up or you’re about a year left on your lease, we can start really creating great options for you. It’s just again, like business owners have no business in or no reason to have thought that this was something that was extremely possible for them. We want to enable and empower and educate them to prove to them that this is one of the best ways to actually run a business and to create security and control and wealth through having a fantastic local business.

Lee Kantor: [00:26:10] So if somebody wants to learn more, have more substantive conversation with somebody on your team, what’s the way to do that? What’s the website?

Kevin Song: [00:26:17] Yeah, with that super easy should be some great sort of easy options there to sort of go go through the journey. You could also contact partnerships with ICO directly if there’s something more urgent. But I would, I would recommend Watsco as a place to learn more and to start the journey.

Lee Kantor: [00:26:38] Well, Kevin, thank you so much for sharing your story today. You’re doing important work and we appreciate you.

Kevin Song: [00:26:43] Yeah, thanks so much. We really, really excited. Thanks.

Lee Kantor: [00:26:45] All right. This is Lee Kantor. We’ll see you all next time on Atlanta Business Radio.