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Mor Milo - Real Estate: Bringing Wall Street To Main Street


What if investing in commercial real estate could be as accessible as buying stocks? Mor Milo is Co-Founder and CEO of Relli, a PropTech platform built to change how everyday investors access commercial real estate. Growing up, Mor watched his immigrant parents build generational wealth one property at a time—and eventually became determined to figure out why that same opportunity remained out of reach for so many people. After several startup ventures, Mor and his co-founder Ross Iannarelli identified a major gap in the market: commercial real estate syndications offered powerful passive-income opportunities, but high barriers to entry and limited access kept most individual investors on the sidelines. 

Relli is working to create a two-sided marketplace connecting vetted commercial real estate operators with individual investors, bringing greater selection, transparency, and accessibility to an industry traditionally dominated by wealthy investors and institutions. If you've ever wondered how technology could reshape real estate investing and give everyday investors access to opportunities once reserved for the wealthy, this conversation offers a fascinating look at where the industry may be headed. 

 

In this episode, you will be able to:

  • Learn how Mor is reinvesting how real estate investors do business by providing a digital marketplace to connect investors with real estate opportunities.
  • Explore how new technology can fit into current real estate investment regulatory structures to give people access to deals that may not have been able to in the past.
  • Understand the difference between active, hands-on ownership and passive real estate investing.
  • Discover how passive real estate investing can lower barriers to entry.
  • Learn how investors can diversify their portfolios without taking on the responsibilities of directly owning and managing properties. 

 

The key moments in this episode are:

0:00 Making Real Estate Easier To Access

2:03 Milo’s Founder Story And Rally

5:49 Landlord Pain Versus Passive Investing

12:30 Lower Minimums For Better Deal Access

14:37 SEC Rules And Regulation A Path

20:55 Due Diligence And Sponsor Vetting

 

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Full transcript here:

Mor Milo 

The goal for us is really to be able to not only help the uh person like our investor that I just described find more opportunities and lower the barrier of entry so they can participate in more deals, but also figure out how we can get the average consumer involved and give them a place where they can deploy that thousand, ten thousand, fifty thousand dollars at a time so they don't have to come up with a big chunk-down payment for a piece of property and go out and venture into real estate buying land for the first time and have to figure it out on their own.

Mike Swenson

Welcome to the Real Freedom Show. We inspire you to pursue your production to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson. Let's get some real freedom together. Hello, everybody, welcome to another episode of Real Freedom, where we help people build time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson. If you want to get started on your real estate journey, check out our website, freedom throughrealestate.com. It's where we put all of our episodes, all of our content with the goal to help inspire you to pick something inside of real estate, get started and run with it. Uh, we want to see action takers out there and we want to expose you to some great concepts and great things that are gonna want to make you want to take action. And today's episode is absolutely one of those things. It's really exciting topic, something that's really cool, new out there, and excited to see where it goes. And so we've got more Milo with Rally, so founder and CEO of Rally, essentially looking to take stock market type of uh impact and put it into real estate and allow people to invest in real estate simple and easy. And that's always something that's excited me is how do we make this as simple as possible for people? Remove as many barriers as entry so people can get in and invest in real estate. So excited to hear you and uh have you share your story more. Welcome to the show.

Mor Milo

Thanks for having me, Mike. I appreciate being here.

Mike Swenson

Get us started, take us back. Um, would love to hear a little bit about your background, some of the stuff that led up to where you're at uh today working with Relly.

Mor Milo

So I'm a founder. Uh, I guess I have uh I enjoy punishment and pain, so I do it consistently for the last 10 years. But uh, I have a wonderful business partner whose name is Ross, and he's uh one of my best friends. And for the last 10 years, we've been trying to build things that help people. And uh we're now on our fourth startup together, and Relly is the brainchild of the two of us going out into the world and building a stock market for real estate. Uh, what got us here was really just a true thirst for knowledge and a desire to invest. Uh, we both have an uh affinity for investing in stocks and cryptocurrencies and all sorts of things that we can get our hands on. And we've done pretty well. However, we don't qualify as accredited investors in the eyes of the SEC, which for those that may or may or may not know, the term accredited investor means uh essentially it's someone that has over a million dollars in in assets outside of their residence or 200,000 in income as an individual or 300,000 with a spouse. So we didn't qualify in that category just yet, but we really loved the concept of real estate as an investment. My family had invested for the past 25 years in single family residence and uh rented out those homes and apartments to individuals and turned a profit that was greater than the W-2 income that my father earned at his solo job. And uh that was an incredible wealth-building tool for my family, but I also had a front row seat to the pain of dealing with tenants and managing toilets and pain and just pain, lots and lots of pain. So I uh looked at Ross one day after three previous startups and said, How do we get our hands on some of this real estate and how do we do it like the super wealthy do it, where we don't have to participate in the nitty-gritty of the ownership? And we discovered that there were very limited options for the average consumer. So we set a goal to create a stock market for real estate experience similar to Fidelity, e-trade, Charles Schwab, Robin Hood, where anybody could come and invest as little as $100 into commercial real estate buildings, uh, multifamily projects, uh industrial facilities that are managed by incredible operators with a long track record of experience, delivering returns to investors for many, many years and giving access to the average consumer through a digital marketplace. So, what we discovered was that this market operates behind closed doors. It's all, you know, who you know and how you know them. And everyone is attempting to bring their business to the forefront in the digital revolution, but they're having a real struggle figuring out how to cross the divide between the old way of doing business and the new way of doing business with complete strangers in a digital format. So we started our journey by creating a marketplace that could connect the two uh parties that currently exist in the ecosystem, which is the limited partners, the accredited investors, and the general partners, which are the sponsors of operate uh of different real estate operations. And we help them generate accredited investor leads on demand. And slowly but surely our uh North Star of building that stock market of real estate experience has not changed. And in the next 12 to 18 months, we plan to roll out our first initiative to introduce the retail community into our platform.

Mike Swenson

That's awesome. And before we kind of dig deeper on that end, because obviously there's so many cool things that we'll we'll talk about here, I kind of want to go back to a little bit of what you had mentioned with like the pain with your parents, because I know for people like you know, somebody listening to this episode maybe hasn't invested in anything themselves, wants to get invested, they they listen to podcasts, they do a bunch of research, and they get started. And and what we find is, like you mentioned, pain, right? Not knowing how to find deals, what makes a good deal, the pain of having to take those 2 a.m. phone calls, having to find contractors, deals with licenses and inspections and all that. And if you do have some success, then you get another property and another property, and then it's figuring out how to scale, and more pain comes with that. And either you're gonna manage it yourself or you're gonna hire it out to somebody else. And so I know for us, we're having we're hoping to take away some of those pain points with our investors investing in an apartments and and doing it through syndications because yeah, then they don't have to experience that. But I'd love to hear just a little bit more of for people thinking, right? There's a couple different approaches. Either I can be active and hands-on or I can be passive and hands-off, just maybe a little bit more about that experience that you saw, or some of those challenges or difficulties that your platform now will hopefully take care of by allowing them passive opportunities.

Mor Milo

Yeah, my parents uh came into this country with me in tow at three months old and uh immigrants, uh, my no college graduates, and my dead father was an engineer and very, very smart and worked for Hewitt Packard now for many, many years. But um, you know, never really decided to chase the corporate ladder. And real estate was their methodology of kind of getting in and building some sort of wealth. So they just house hacked, just like a lot of people do. They bought the house, they moved to the next one, they kept the previous one, they rented it out, figured out how to be a landlord, right? Uh figured out how to be a business person. And they learned it very grassroots. And as I grew up, I watched them do it and participated. And obviously, as an immigrant child, uh, you know, you get wrangled into doing all the heavy lifting so that we don't have to pay for anybody else to do it, which in fact happy to do it. Uh, but you know, I watched and experienced the inspections and the demo days and the build-outs and the evictions and the pay. So I I watched them learn firsthand what it was like to be a business owner. And even to this day, they aren't particularly interested in the idea of being a business owner. They like the concept of having the real estate. And should they had put that hat on, they probably would have built an even larger portfolio and had more in income and everything fine and dandy there. That's one path that you could choose to go down. They chose not to. They chose to have a comfortable life and you know, manage their you know, 10 properties or so and deal with uh the the pain associated with those properties so they could generate that income. And now, after you know, four years of research associated with trying to find an alternative, because I watched them do that, and I was going to go down that same path of buying my first property as well. But instead of buying that property, I actually decided to build our first startup. Me and Ross, Ross, uh my business partner, was uh had brought me into an automotive startup that he had started, and we started going down that journey. And instead of investing my money in property, I invested in that startup. And unfortunately, I lost my money, it didn't go the right direction. We learned to boad, all sorts of good stuff. But had I not gone that direction, I would have gone exactly the same path as my parents. But now, after going that direction, learning what it's like to be a business owner and now building a product that helps investors passively participate in real estate in a way where they don't have to get their hands dirty. Even my parents, who were extremely old school in their methodology, are looking and saying, all right, well, if I can give $100,000 here instead of put it as a down payment for a new property, and I can get 9% return on my money every single year from a loan that's being put out from a fund that I've invested in, and I don't have to do any headache, any homework, any nothing because I've invested in a great sponsor, that's very attractive. That's very attractive. And that's where my curiosity has continued to uh boil around this topic of how do we get this type of solution to the average consumer? Uh so you know, if anything, the process of watching my parents buy and manage property and being involved in that process has educated me and them on the fact that there's so many different ways to do things. For an operator like yourself that has the operational know-how and desire to build and scale a portfolio makes all the sense in the world. But maybe for an individual that doesn't want the headache but wants the exposure, giving someone to someone like Mike might make a little bit more sense for them.

Mike Swenson

Yeah, and my my exciting part has been hearing the investors that we've worked with, they're like, Mike, I've wanted to invest in real estate before, but I I didn't know how, right? It's like I don't know how to get started, I don't know how to find a property. I probably I may not have enough money to do anything for an actual down payment on a multifamily or something, or you know, maybe even a single family if you're not going to own or occupy. Like, so there's kind of the financial constraint, there's the time constraint, they're probably working a W-2 job, and the knowledge constraint of I don't really know. And so encountering us, right? The way that we do it is it's dependent on the relationship. You have to have a pre-existing relationship with this people. We've been able to help people, and so those people were thankful because they're like, hey, we we now get to invest in real estate, and I didn't know if I would want to, and I don't want to be the one getting the the 2 a.m. phone calls, which is maybe what prevents other people from doing it. And so it's been exciting to hear that great feedback from the you know, kind of quote unquote average person that wants to invest in real estate and and can't or doesn't know how or doesn't have the means to do it on their own and doesn't want to do it on their own. And so that's been what kind of keeps me going is um knowing that I'm helping those people accomplish some some things on the real estate side that they couldn't have done on their own. And so that's obviously what what you guys are working on too.

Mor Milo

That's absolutely true. And you did a great story. Uh, I just uh met a new investor that came to our platform, found us online, uh, was searching on uh I think it was Gemini on Google and asking questions about passive investing, and they found our platform somehow, created an account. We reached out to them, scheduled a concierge meeting, talked to them about options, and lo and behold, the guy owns a 40-person law firm. He is always looking for new opportunities. And the two biggest constraints, usually for him, are the uh ability to find a new deal with a sponsor that they trust and the minimum investment associated with participating in that deal. And this is a person that has the means and has no issue writing a half a million dollar check to an operator that they trust. However, they only have so many places to find new deals from new operators, they only have so many arbiters of uh truth when it comes to figuring out who's real and who's not, right? Because they have to go through their own means of figuring out how to vet this person, whether they're of a high quality or not. And for many of these offerings, the minimums can be large, they can be big, you know, $200,000, $150,000, $100,000. So finding opportunities where you can put a smaller stake in the pool, experience the actual engagement associated with that sponsor and them delivering you returns, and then make a bigger bet after you feel more confident. So the goal for us is really to be able to not only help the uh person like our investor that I just described find more opportunities and lower the barrier of entry so they can participate in more deals, but also figure out how we can get the average consumer involved and give them a place where they can deploy that thousand, ten thousand, fifty thousand dollars at a time. So they don't have to come up with a big chunk down payment for a piece of property and go out and venture into real estate buying land for the first time and have to figure it out on their own.

Mike Swenson

Now it's interesting because you know, investing in real estate in that type of opportunity, right? The the SEC Securities and Exchange Commission, they've got guidelines on what you can and can't do. And those are the guidelines that we have to follow. And, you know, I I've heard you talking about, you know, being able to bet on sports, like you can do that and lose money and not know anything about what you're betting on. And how does how does that happen? But when it comes to real estate, you know, the SEC's in there and and has to make sure you're following these guidelines. It's interesting, kind of what's allowed and what's not allowed in our world, and things like cryptocurrency and stock market, right? You can lose lose a bunch of money or even investing in a startup business, right? Like those are things where you can lose money, and yet in real estate, the SEC has all these guidelines of what you can and can't do and monitor it. Now, since those rules are in place, you have to follow those rules. So, kind of walk through what are some of the challenges or what are some of the things you've done here to be able to provide the offerings you're providing and play within the the fences of the of the playground, so to speak, here. You're definitely right.

Mor Milo

There are definitely fences. Uh, there's a lot of red tape. And the difficulty is definitely in finding your way and slithering through the red tape to see what you can and can't do. And it's been one of our biggest struggles as a startup that's been building this system. And what we've discovered is that most operators have uh private placement opportunities for uh different reasons 506B versus 506C, which I know you've mentioned in the past because you're an operator that uses those different syndication types. The beauty in those functions is that you can go out and advertise either to your direct community where anybody can qualify or to the wider community where only a specific uh level of investor can qualify. And the beauty in those particular methodologies is that they're very affordable to build. The uh documentation, the requirements associated with the uh reporting and auditing, should you need to audit, which in most cases you don't, uh, you know, the those processes are for the most part affordable in the five digits, let's say. Whereas if you look at a company like Apple or Google, or uh you look at the you know, QQQ index mutual funds of the world, uh they're setting up systems that are very expensive to not only build but maintain millions and millions of dollars to build out a 40 act or an S1 security. So, and then to maintain it with audits on a quarterly and annual basis and all that heavy lifting. There are exemptions in between those private placements and those fully fledged public securities that allow for crowdfunding syndication, but they also require some digital nuance. You're gonna have to have a certain system in place that allow for you to be able to attract those investors of a retail caliber and then deploy that capital into your investment opportunity in a way that there is a uh trusted intermediary, a broker dealer in between to actually manage those transactions for those crowdfunding syndications. And those, those are the things that we're going to take advantage of that the real estate market as a whole hasn't implemented, but is starting to slowly trickle into the market. So, as an example, there's a name that everybody knows. Some people love him, some people don't love him. His name is Grant Cardone. Grant Cardone raises from everybody, he has over 20,000 investors. Why? Because number one, he's an excellent salesperson, but number two, he also has what's called a regulation A offering. And that regulation A offering is what gives him the ability to go out to the retail consumer and offer and solicit an investment at a minimum of $5,000. Now he's built an infrastructure that's cost him millions of dollars to build. What we're attempting to build is a plug-and-play solution for sponsors to be able to leverage that same regulation A offering in a compliant and legal way, but through a platform that consolidates all the functionality in one place, such that the average syndicator or operator that might be really good at operating real estate, but not have the background technically to build out all the infrastructure on a digital platform, can plug into a platform that's already ready and set up for them. Now, in addition to that, what we intend to do, because we still find ourselves a few years ahead of the community of sponsors that are building companies. And keep in mind, real estate is a very old business, right? It's one of the oldest businesses in the world. Real estate has always been around and always will be around, and that's why it continues to be around. But uh the way in which most of these operators can fund their deals and go out and generate revenues is through their networks and communities. And now they're finally starting to feel the pressure of needing to go out to the wider market, and now they're having to figure out how to implement these digital functions, but they're still figuring it out. They're not fully there. So what we're gonna do to bridge the gap is we're essentially going to be uh essentially an asset manager that creates a uh a type of asset that allows for any average consumer to invest as little as a thousand dollars in the same private syndications that you offer to your community, but uh through a special purpose vehicle that we have created that they can participate in where they get the benefit without the large minimum investment or the actual accredited nature need. And all legal, all compliant, all operating beautifully in a way where the GP is like yourself, we write you guys a check. Here's a check for all the money from all of our people. We now hold you accountable to that check. And then all the the individual investors that turned around and gave us a thousand, ten thousand, twenty thousand, fifty thousand dollars at a time, they hold us accountable and we show them what's happening in each one of the deals.

Mike Swenson

In terms of vetting people out, you know, making sure that you're providing them with great opportunities from experienced people, kind of talk about that process of, hey, I've I've got this great deal. Well, everybody's got a good deal, right? So it's determining what is actually a good deal, what's your experience level, that track record that's really important, so that people come to your platform and they're putting their money in kind of vetted out or uh you know have a better opportunity of success. It's still real estate stuff happens and you're doing your work to try to provide the best opportunities for people. Are you looking to get started or scale in real estate investing but don't know your next step? Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it? Go ahead and push the easy button and invest with us. Real estate investing is what we do full time. We've done dozens of deals with hundreds of doors. We have the knowledge and experience to handpick the best deals that most investors can't find. We've got large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own. The best thing is It's 100% passive to you for less capital than you put down trying to acquire a property on your own. Don't let this year go by where you don't make the leap, add to your portfolio, or you just did an analysis by paralysis. To find out more, visit freedomthroughrealestate.com and click on invest. You can book a call and learn more there. So get to scaling your portfolio now with us by your side. That's freedomthroughrealestate.com and click on invest.

Mor Milo

Investing has risk. You can lose all your money. The secret is doing the due diligence up front to make sure that at least when you placed your money, you feel confident in it. And what we've noticed is that investors as a whole don't really do due diligence. They'll work with people that they know and feel comfortable with, but because of maybe a lack of knowledge or a lack of desire or lack of time, they won't take the time to comb through the numbers, they won't take the time to do a background check, they won't take the time to go ask the difficult questions that are painful because it's either they don't know or they don't want to. So the added layer at Rally is our due diligence layer. Because any sponsor that gets on our platform that we deliver services to, we will not only underwrite the deal to see if things are within reason. Obviously, I can't determine whether a deal is going to be great or not great based off of a piece of paper, just like anybody else. But we can look at the numbers and say, okay, this rental replacement cost or this replacement cost makes sense. This rental increase makes sense. This uh occupancy, depending on you know what we've learned about you, makes sense. We think that you can fill the gap between where you're at today and what you're projecting. Fair. Okay. If you come to me and tell me I'm gonna build in San Francisco for $300 a square foot, I'm gonna tell you that you're out of your mind. Right? So that's the baseline that we're able to do from a financial perspective. But in addition to that, we will also go do background checks and due diligence on the sponsor and the operator behind the sponsor, such that we know what other companies they're involved in. Are there lawsuits that have happened in the past? Is there collections that are coming due? Are there issues that are happening in previous deals? Does the entity have multiple other entities that are connected to it? How are they? So we will actually take the time to spend a little bit of money and a little bit of time to make sure that we know that this person, we have all the bigger picture. And after we feel confident that we see a track record, we see that there's nothing, no skeletons in the closet that we can see from our preliminary checks, and the deals look within reason and uh compliant from a legal standard, we will then advertise those deals. So uh the added layer of compliance and due diligence that we provide gives our investors an added uh comfort level in the fact that we've done some background checks and we're not going to put any bad actors on our platform.

Mike Swenson

This is great. I I love it. It's you're you're knocking down barriers, you're giving people an opportunity to get into a space where it's uh tougher to get into, especially when you don't know people, right, with that pre-existing relationship. And to your point, mentioning to have a continual flow of deals, because I know for us we're doing about two a year, and so you know that's all we got. And and we don't want to take on a deal that we don't have confidence in just to do a deal, right? And so you you want to try to hold that line of what you think is a is a good enough deal to to take all of our time and effort to move forward with and to purchase. And so you're solving a lot of challenges in the in the meantime, and I know what you're building is no small feat and probably uh a very expensive one. So um, I know you've got a a lot of uphill work that you still have yet to do, and yet you've already done a lot of uphill work to get to where you're at.

Mor Milo

Thank you. Yeah, there's uh there's quite a bit to do. There's a reason that this hasn't come to market yet, and it's because it is very difficult to execute and not cheap. So uh our goal is really to just take it one step at a time and try to meet our customers where where they're at, whether it's the investor looking for a deal or the sponsor looking to get out in front of investors. And uh slowly but surely we're adding and bolstering the opportunity for everybody to participate.

Mike Swenson

Yeah, that's wonderful. What are you guys thinking? Kind of, yeah, I know you mentioned 12 to 18 months, you're continuing to work on this stuff, you know, numbers-wise, maybe what what you've already accomplished and and some goals here for the next year or two. What uh what are you looking to see happen?

Mor Milo

Our biggest goal right now is going out and getting a regulation A offering that we can implement the uh invest now style button on our platform and allow for the average consumer to participate in a way where they'll be able to manage their entire portfolio in one place. That's the number one focus. Uh currently we've worked with uh over 15 different sponsors that have been underwritten and approved to be on our platform that we've uh helped get in front of investors, anywhere between 20 million assets under management and $3.3 billion in assets under management. Uh, private companies, publicly traded companies, annually audited companies. Um, and every day we talk to new sponsors. So just in the last three or four days, I've probably talked to two handfuls of sponsors, uh, uh with probably about 50% of them being over a billion dollars in assets under management. So good track record, been around the block, gone through multiple exits, done done the stuff correctly for a long time and looking to expand. Like this conversation is very relevant for everybody across the board. Everyone wants to expand. And there are many great players out there that have a strong track record of success that people should be able to see. So we're we're actively going out and finding those people. We probably talk to between, you know, eight and 15 of those a week, uh, between all of the channels that they find their way to us. Um, and we're always underwriting deals. So we're always looking at deals, we're always looking at opportunities to get people on the platform. We're always looking for people that qualify. Um, but right now, the most important thing to us is how do we incorporate the average consumer at a thousand dollar minimum. Eventually we'll get to a hundred, but today we want to get to a thousand um and provide them with uh resources to be able to get north of 10% annual returns on uh syndications, funds that we're able to arbitrage from the private uh from the private markets to the average consumer in a way where they can participate without a big, massive, huge check chunk out of their bank account and still get the benefits.

Mike Swenson

That's awesome. Well, thank you so much for for sharing uh what Relly is and and what you guys are working on. Excited to see how it continues to develop and see where where it heads. For people that do want to reach out, learn more about what you're doing, how can they best do so?

Mor Milo

First thing you should do is go check us out at relly.co. Uh as an investor, it's 100% free. Uh, we offer a platform that you can just go to www.relly r-e-l-l-i.co. And you can create an account. You can check out deals. You can even request a concierge meeting with myself or one of my colleagues, mostly myself, actually. And we'll walk you through all the deals on the platform. We'll connect you directly with sponsors that we have vetted. Um, and it's all totally, totally free. If you'd like to meet with me or get to know me or check me out, I'm on LinkedIn very actively. Uh, you just look up my first and last name, more M-O-R-M-L-LastName M-I-L-O. Uh, you can find me there. And then we are at InvestWith Rally on all platforms: Instagram, Facebook, TikTok, you name it, we're there.

Mike Swenson

So uh please come hang out with us. Awesome. Well, thank you so much for coming on and sharing and the best luck to get in the future.

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