72: Investing For All With Janine Yorio

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Now here is your host, James Nelson. Welcome to show number 72 of real estate Investing Live from New York. This is your host, James Nelson. I'm principal and head of Tri State Investment Sales for Avis and Young. And wow, those last two shows that we did and this was kind of a back to back interview first with Peter Sulianos and then Brandon Donnelly, both from Slate Asset Management. We actually have not had many foreign investors on the show, so they're a Canadian based company that has investments here in the US as well as overseas. So it was great to hear Peter's story and then Brandon following up and talking about his introduction to the business and how he built his audience through blogging. If you didn't hear those shows, definitely go back and check it out. But for today's show I have my good friend and partner Jeanine Yorio, who is head of Republic Real Estate and co founder of Compound. She's going to be talking today about this exciting world of retail investing. And I know she does not like the term crowdfunding, but her Republic platform gives access to retail investors to invest in real estate products. And we actually have a fund that we recently launched on this, the New York City Opportunity Fund. So you'll have to check that out as you see what's out there and it's a really exciting conversation, especially when you look at this whole world of investors out there who are really underserved for years through private placements. You see a lot of accredited investors getting in on the game. But now an opportunity for all investors to take a look. Definitely give this episode a listen to Blackstone has tapped into this Starwood. You can now invest in those funds for 2,500, 1500 and this very well could be the future of real estate investing. We're going to have a brief word from our sponsor and then we'll get right into that interview with Janine. Thank you.

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And now it's time for our Investor spotlight. And with us today is my friend and now partner Jeanine Yorio. She is head of Republic Real Estate, former co founder of Compound, and now, as I mentioned, my partner in our newest fund, the New York City Opportunity Fund, which has debuted on her Republic platform. So Jeanine, welcome. Thank you for joining us.

Hi James. It's so nice to be with you this morning.

Wonderful. So really looking forward to getting into your story. I know you've got 20 plus years experience. I know you've managed.

Don't tell people that.

Tell if we're on video. People would be amazed unless if you started in your early teens. But yes, you've managed over 2 billion in real estate transactions throughout your career. You've worked as head of real estate for Schrager Standard Hotels. You were a portfolio manager at Northstar and also did investment banking in Solomon Brothers. So we're going to get to hear about all that. The one thing and just on your tag for your social media, you say that you're not good on sports analogies. So does that mean, I mean if I throw out a sports analogy during this, is that, is that gonna throw a curveball or what? Can you, can you roll with that?

No, I always just mess them up. I'm always, I'm always like, I say something like, you know, you gotta shoot the puck out of the park or skate where the ball is going or you know.

Right, right.

I'll be honest, I grew up with a single mother and that's a big part of my backstory. So I didn't grow up watching sports every weekend. I didn't have a, a dad to explain to me what first down and 10 means. So when people use those analogies around the office, I've always felt a little shut out. But I more than make up for with lots of enthusiasm.

Love it. Love it. Well, you kind of, you know, if there's only one Sports analogy that you get right, you know, skating to where the puck is going. You know, that's my all time favorite, you know, Gretzky quote and seems applicable with what you've been doing here. So, yeah, since you brought it up, why not talk about your childhood and kind of how that shaped you? And I know ultimately you ended up at Yale University. So tell us, what were you interested in as a kid? Where did you grow up? Tell us a little bit about your story.

So one correction to my bio only, because if hotel people are listening, they'll cringe. You called Standard Hotels, Ian Schrager's company, which Ian Schrager and Andre Balaz are two very different people. Certainly not arch rivals, but both were doing similar things at the same time. So to be clear, I worked for Andre Balaz, but I was also involved in Trigger's hotel company in a previous role at Northstar Capital. They were the financial sponsor behind.

That's. That's okay. I'm glad you clarified that.

Just to clarify.

Good.

Thank you. No worries. So a little bit about me. I grew up in Annapolis, Maryland. My parents were not together, so my mother was an architect and she was the sole breadwinner, and I was an only child. And she, you know, this was kind of back when not everybody had a nanny. And so a lot of my childhood was spent with my mom to work. And that meant going to construction sites where she would have these big rolls of blueprints and tracing paper and a pencil and be on site. And I think that's really what made me so excited about real estate. I grew up watching real estate take shape. And I grew up to my mom in these meetings while these men who were running the development project and who she was working for would tell her what has to happen and how the building was going to look. And it made me realize pretty early on that the people that own the buildings are the people that call the shots. And I kind of knew right there that when I grew up, I wanted to be. I was very impressed and taken with my mother's job, but I wanted to be the person owning the building and calling the shots. And I was lucky enough to get into Yale, which dramatically changed the trajectory of my life. And I'm forever grateful for that opportunity. And then I also the privilege of working for some insanely talented and successful people along my career, most notably at Northstar Capital under David Hamamoto and then at Andre Balaz, at Andre Balaz Properties, who is a marketing and design genius. And so I've just I learned from some of the best, and hopefully I've taken a fraction of what they've learned and applied it to my career. And I've gone off in a different direction than any of my predecessors in that I think I've always been obsessed with the future. Like, I always want to do something that's new and next. I've always had what. What can be called anxiety of influence. I don't want to do the same thing as everybody else. And. And sometimes that's meant doing things that are maybe too early or too out there, but that's just what motivates me. And I think it's fair to say I'm doing that again.

So, for the last five or so years, I've been working in the technology industry, trying to figure out ways to make it possible for more people to invest in real estate, because real estate can feel like a very daunting thing to take part in, especially in a place like New York City, where the price points tend to be so high. You know, the average price of an apartment in New York city is nearly $2 million. So very few people can afford to speculate in a market like that. And there are different ways to attack the problem. And that's what I've been focused on, both at the startup I founded and then now at Republic, where we are designing new ways for more people to make investments in asset classes that historically have been only open to the ultra rich.

I love it. I'm sure you've heard of Simon Sinek's why, the Power of why. And it's so clear to me, your journey and kind of your mission statement and why you're doing this. And I think for so many of us who get really busy or maybe you're really good at doing something in particular, but you don't really understand why you're doing it. And I just love that mission statement to make what is such a challenging, opaque industry accessible to all. So I really want to get into that, but I do want to talk a little bit about your experience leading up to this. I mean, a lot of our listeners, many of them are in college now. They're trying to figure out their next steps. And, you know, you definitely, you're very humble in that you said you were lucky to get into Yale. I've got to imagine, you know, you were a pretty good student. I mean, were you. Did you have good grades at the time? What were your interests? I mean, what would you. If you had to give a reason on how you thought you got into Yale. What would you say to that?

That's funny. I don't think anybody's asked me that question in a long time. Yeah, I was a really good student. I was really driven. I grew up in a small town and I knew I wanted to get out of there. I always wanted to move to New York City. My mom was from New York City, so we would visit my grandparents there. And I knew that getting out of Maryland, which, Maryland's a wonderful place, no disparagement there, but I wanted to be where things were happening in New York and be a real mover and a shaker. And so I figured out at a pretty early age. I remember when I was eight years old, I named my dog Harvard, and obviously I went to Yale instead. But, you know, that drive to be part of the best and part of that really hyper academic ecosystem was something that was just very innate and I really strove toward that goal.

Amazing. And you know, Yale has such an incredible architecture school. I mean, with your mom's experience there, I mean, were you thinking maybe you would end up in the architecture program or urban planning?

Did you know, it's funny, my mother made me promise not to be an architect. She said, you know, it was a wonderful job. And she still, she's still practicing to this day, but it doesn't pay particularly well. And again, a lot of my experience in my life is colored by being financially independent and making sure that a woman can stand on her own two feet. My mom was actually part of the first co ed class at RPI and she studied architecture. She was one of very few women that graduated with an architecture degree. And when she graduated, she got a job with a big firm in New York City. And they said to her, oh, great, we have a woman you can pick out the curtains. She had actually a bachelor's in architecture and a civil engineering degree and was relegated toward picking out fabrics. And, you know, that was the person that raised me. And that kind of motif has run throughout my life. Being the only woman in the room and making sure that we're overqualified, that we prove our worth, and they make sure. Make sure we have a seat at the table.

That, yeah, that, that experience and that, that perspective, I'm sure fueled you. I mean, talk about maybe some of your summers during Yale. I mean, were you. Because I know ultimately you ended up as an investment banker at Solomon School. I mean, were you doing the I banking jobs? And if so, kind of have.

Not at all. Not at all. I wanted to be a broadcast journalist actually. So I worked at all the TV stations. I worked at CNN and C SPAN and the local news station in Maryland. And then when I was a senior, one of the first things you have to do when you're looking to get a job as a broadcast journalist is do a screen test. So you get in front of the camera and you speak. And the producer who made the screen, the video for me said, you're pretty, but you're not pretty enough. And it was at that moment I kind of realized that I was trying to get into a career where I would be always judged on the basis of my appearance. And it so soured me at that moment. And I. And I really did a complete 180 and decided to focus squarely on something where the score was about merit and about accomplishments, as opposed to my physical appearance. So I did not do any of those investment banking jobs. But then I was able to get a job on Wall street right after college and never looked back.

Wow. So talk about joining Salomon Brothers. And I have visions of that, I guess from what I read, was it Liars Poker, Liars Poker and just kind of freewheeling. And I mean, what was that like? I mean, what was that environment like? I mean, were you one of the few women there and what were you doing for the bank?

I was an investment banking analyst. I was in what was called the Large Cap Investment Banking Group. So we called on the firm's largest clients. My boss was Chris Lawrence, and he's now the vice chairman of Lazard Frair. Some of my. They're not classmates, but my colleagues from my same class there have gone on to be wildly successful. They were actually pretty good about recruiting women into the junior ranks. So the analyst class, I think was almost. It was probably 30% women. So I was in good company in the junior team members. But like most corporations and certainly financial institutions, as you climb up the ranks, there were fewer and fewer women. It was definitely the era. It was a little bit post Flyers poker. So it wasn't quite the Bacchanalia that you read about from the late 80s. I'm not that old, but there were crazy, crazy things happening on the trading floor. I remember lots of eating contests. There were bets about who could eat an entire chocolate cake or five cheeseburgers or who could lose £50 in two months. It was fun, it was a lot of work, but it was an amazing training ground. And I really learned so much of what has been able to keep me employed and make me valuable throughout the rest of my career. I learned all about financial modeling and financial analysis and negotiation, which is really what I do every single day, no doubt.

So were you able to get some real estate experience while you were there and.

No, no, I was. I didn't work in real estate at all. But then when I left Salomon Brothers, I went to work in real estate private equ. And I've been kind of in and around the real estate industry ever since. I did want to be in real estate. In fact, it was really into hotels. My mother was an architect for Marriott. She was the head of design there. So all of those. Those buildings I was alluding to earlier, they're actually hotels. And I've always loved the hotel industry. I mean, it's. People are on vacation, they're having fun. And being in that space was always very seductive to me. So I intentionally sought out a job at Northstar Capital because they were the financial sponsor behind what was a new and nascent industry, the boutique hotel industry. And I thought it was so exciting. I was living in New York City. I was going to the Morgan's Hotel and eating at Asia de Cuba. And the older people on this call may remember all of that. And I just thought that was the most exciting, fun thing ever. And I knew that's where I wanted to work. So I, you know, pushed and shoved and elbowed my way in and joined there when I was fairly young. And I was there for a long time and rose through the ranks there.

Were you at a disadvantage because you didn't have the real estate experience, or were your skills transferable from the investment banking?

I don't remember. I don't remember ever really feeling like I was at a disadvantage. I always held my own. I mean, I think if I hadn't known how to build a financial model, I wouldn't have gotten the job. So there are differences between real estate and, say, you know, an automotive manufacturer, but they're not that profound. And if you understand how to dissect financial statements and how to do due diligence, that's really the nature of the job inside a private equity firm. So I was actually in pretty good shape.

And what specifically were you doing for Northstar? I mean, were you doing mostly the underwriting? So were you really an analyst, or were you actually getting some frontline experience helping put deals together?

Well, people on this call may know Northstar as a giant company that sold itself for billions of dollars. But when I was there, it was about an eight person. We all did a little bit of everything. I was certainly low man on the totem pole. And I remember getting boxes of due diligence materials delivered to me by hand truck and filling up my little teeny office that was a transformed broom closet and just sitting there picking through leases and reading out clauses and termination clauses and making sure that we were getting what we thought we were getting. The first fund I actually worked for at Northstar was one of the first mezzanine debt funds out there. We were a pioneer in that space. And it was backed by GE Pension Trust and would look at hundreds of deals in order to try to get one closed. And it was a long, cold slog. But I remember back then, mezz loans paid like 15% interest rates, so it was also insanely lucrative because we were first movers.

You know, I hope our listeners take note of what you just said. And it's kind of subtle, but looking at hundreds of deals to do one, I mean, I think so many people get this idea that, hey, I'm going to go be an investor and I'm going to just go walk out there and I'm going to find something. You know, the first or second deal I look at, I mean, literally, if you look at the funnel and if you're doing your job properly, you probably have to look at 100 deals to do one.

I think I remember that first or second year, I believe I did account that. I looked at, I think over a thousand deals. Now, you don't look at all of them with the same level of scrutiny. Some of them you look at for 10 minutes and throw out, but you have to chase a lot of them down and bid in an auction process and go through your investment committee and then take it to your outside investors. And there's a million different things, steps. At any point in time, the deal can die or you might decide to kill it. Being a deal person means being sort of unflappable and having tireless energy to keep chasing things down in order to get a few of them across the finish line.

Great advice. So talk about, did Northstar then run its course or did an opportunity come from Belaz that was just too good to pass up? How did that happen?

We, you know, the company evolved a lot. I was there for a long time and it got bigger and bigger. And Northstar really became almost exclusively a debt shop and then took itself public, took most of its assets public through an externally managed reit. And I was involved in that ipo and I really wanted to get back to the hotel business. That's, that's what I loved. And the debt Underwriting experience was. Was helpful in terms of building my skill set, but it's not really what I wanted to do with my life. So when I had the opportunity to jump ship and join Andre, which was also a very cool company at the time, the Standard Hotel on the High Line was. Was just on the planning board. Andre owned the Mercer in soho on the Chateau Marmont in la. And I spent a lot of time in the summer at Sunset beach and Shelter island out in the Hamptons. And being a part of that company, which was also very small at the time, I think I was employee number 11 or so reporting directly to Andre. It was an awesome opportunity and got me back into a seat that I wanted. And I spent. You know, Andre was obsessed with finding perfect beaches to build beach resorts on. We never ended up doing it, but I was flying around on these tiny little prop planes all around Central America, looking for hotel sites in Mexico and Panama and Saint Barts, and ultimately we did the Chiltern Firehouse deal together in London. So it was a lot of fun and it was a really exciting time to be in the hotel industry. And then in 2008, the music stopped and all the deals we had on the table, which were under development, went sideways. And it went from being this wild, fun party to all of a sudden trying to stave off imminent foreclosure. And the music stopped and I wasn't having fun anymore. And I was also at a different phase in my life. I got married and my personal situation changed. I didn't want to be on a plane flying around quite as much anymore. And so I wanted to do something that was a bit more countercyclical, that appeared to be viable in the face of an economic meltdown. And I actually started working on farmland investing. So, you know, I did a total again. Once again, I did an about face in order to be in the market at that moment. And I spent the next past focusing on farmland investing, which was also really interesting and the exact opposite of the boutique hotel industry, I'd say.

So, wow, I've known you for years and I've already learned certainly a couple new things about you. So you full of surprises. So while you're out in, I guess, the Midwest specking farmland, is that when you thought up the idea of compound asset management or when did that happen?

Gosh, this is getting complicated. So I was working on all this farmland stuff, and New York City was basically melting down under this financial crisis. And I felt like I had this. I feel like I've always had a Little bit of a. An ability to see the future, not in a clairvoyant kind of way, but just able to see how things happening today might look if we play them forward in 12 or 18 months. And the writing was on the wall for the hotel industry. And I knew that new hotels were going to be stalled for a while, and I didn't want to do workouts and restructuring. So I made this foray into Farmland Investing, and I did it for a while. And then I also had two children during that time period. And. And being in Farmland Investing afforded me the opportunity to work from home a lot and be around my children when they were young. But ultimately I still felt the calling to get back behind the wheel and get back in the. In the fun hotel space. And so I linked up with this software engineer who had an idea to build a post, basically what was a hotel company, but with a. With a unique twist. And he went out and raised a bunch of money in Silicon Valley for this. For this company. And I went with him and helped him do it. And that was how I got into the tech Silicon Valley world. And I met a lot of VCs in that process and helped him build his company. And a lot of those VCs said to me, jeanine, you have a really interesting point of view. We can tell you're a hustler. We'd love to be a part of whatever you do next. And that was the moment for me where I was like, you know what? I've been doing all these things for other people. I've intentionally sought out things, smaller companies all around my. All throughout my career. I think maybe it's time for me to strike out on my own. And I decided to start my own thing. And I reached out to those very same VC investors, and a few of them came in really early when it was just me and a PowerPoint presentation. And that's how I ended up building Compound.

When did you end up meeting with Jesse Stein? Because was he the one that you jointly built out this.

No, no, no. I was on my. I was on my own with it with a smaller team for about a year. And I met Jesse. Jesse and my Jesse and my hus, who's also named Jesse, which is super confusing for everybody. They actually went to college together. And we, you know, I was. Being a sole founder is actually really hard. It's a lot of stress. You have to both manage the team and raise capital, and it's a lot. And I knew I needed to find somebody to defray some like to diffuse some of the workload. And it was when I met Jesse, we just really saw things the same way, and he wanted to do something similar. He was actually doing something very similar on his own. And we started talking and meeting, and one day he was like, you know what, Janine? You've got the team, You've got the VC money lined up. I've got the know how. Why don't we link up? And. And we decided to try it out in a very tentative way at first, and it works really, really well. And we've been working together ever since, and we have probably one of the most harmonious business partnerships I've ever been witness to. We're both very clear about who does what, and he's very comfortable in his role, and I'm very comfortable in mine. He's the detail person. He does all the things that I find very tedious, like legal documentation and financial modeling, and I do all the things he finds tedious, which is business development and capital raising and doing podcasts with James Nelson. So it works out really, really well for us. And we also just get along really, really well. Our personalities are compatible. We're both in the same phase of life. We both have families and really prioritize time with our families. So we're very efficient during the workday, make sure we have dinner with our children at night, and. And it's been a really amazing partnership. We've done. Done a lot together.

Wonderful to hear. And that's certainly been my experience working with Jesse, as well as a partner in this new fund, and. Yeah, just brilliant as well. And I don't think I've ever stumped him with a question. He always, you know, and he's unflappable. It's like, it doesn't matter what's going on. It's always, you know, he's got the answer so well, and he's.

And I'm so excitable, you know, I go from, you know, hundreds of miles an hour to, you know, I'm like a puddle on the floor of sadness. And he's steady Eddie, so he's the perfect foil to me because I get really worked up and really excited, and he'll. He's so calm, and if we were both so excitable, I can't imagine what would happen. We would. You know, we'd be intimately suicidal and partying, but he's just like the exact opposite of my. My bipolar mood swing, so he's perfect.

So you end up creating this app and maybe explain the difference between Get Compound and Compound. But where? Because we had known each other for years. In fact, I'd probably reached out to you when you were at Standard. But when I saw that article in the New York Post about this apartment we bought in Miami, I was just blown away. First of all, I thought it was the coolest thing I had heard in a very long time. And I was like, I gotta figure out how you all did this. And this has to have broader application than just single apartment. So talk about the app and how you pulled off that purchase in Miami.

So the difference between Compound and Get Compound. The company was called Compound, but we were too cheap to buy the URL compound.com the owner of that wanted like $6 million for that URL. And the world was moving away from people actually typing in URLs. People were finding things through Google and through links. So we didn't think it was a big deal. So we had the URL get compound.com and it confuse people. But the company was Compound. But we decided to take something that wealthy people have always done, which is buy condos, to hold as an investment property and make it so that people could partner with strangers. So what that means is we bought a condo in Miami and we opened it up for investment to people through an app where they could invest as little as $100. And in the end, we closed on that investment with over 4,000 people and raised $450,000 through the app. We never spoke to any of these people on the phone. It was all fully automated. All the investor relations, the distributions were automated. And then we repeated that process four more times in Austin, Nashville and in Miami. Again.

Go ahead, because I love how you gloss over this, but the idea that you had never done this before and you got 4,000 people to show up to buy into this, I mean, how did you have any credibility? How did you even find these people to do this with?

Well, first of all, it took us a couple years to actually make the app and go through the SEC approval process. So everything we were doing was highly regulated because we were selling security. So we actually had to file with the SEC in order to do it. And it was a new thing. So getting that approval was horrible and took a really long time, much longer than we expected. So we did have a lot of time in that doldrum period to drum up demand. And we got a lot of favorable press. We were in the Departures magazine and New York Post and all over the place. And we were named Inc. Magazines one of top 50 companies to watch. So we had all these little milestones along the way that built our reputation and also built a really big mailing list. And when we launched the app we actually had 15,000 people waiting to use it. So it wasn't by accident that we were able to close on that deal, but through rather a long hard slog. People always underestimate marketing. They think it's something that can happen after and is not a big deal. Marketing is really really hard and we did a lot of that while we were waiting on our SEC approval so that when we opened for investment it would happen rather quickly and luckily it all worked out that way.

I would second you on marketing and what goes on there. It's not just fluff but what allowed you to go out to the retail investor because traditionally real estate has been something only available to accredited investors. It's done with private placements that are very quiet and non solicitation. And if I'm not mistaken it was President Obama and was it the blue sky laws where suddenly wanted to open up investing to all? Is that kind of what happened or how is it possible for you to do this type of retail race?

Well, this is one of those questions where if we were sitting in a room with Jesse I would kick it over to him because my SEC history is probably a little bit lacking in detail. And so I preface all this by saying it's directionally accurate but may be factually a little bit off. But the JOBS act enabled and broadened the ability for small companies to raise money directly from investors. And we used an SEC exemption called Reg A which allows you to raise money from all investors including non accredited, assuming you get qualification from the SEC to do so. And so that's the exemption that we used. And it was under Obama that that law came to came to be. And that's how we were able to raise money from these retail investors. We weren't the only people out there doing it. There are other people, they like to call themselves crowdfunding. I've never really liked that word, but the whole crowdfunding industry came of age under the JOBS act as well.

Well, I'll have to talk to my producer about having a disclaimer maybe at the beginning or end of the show. But for those of you listening, please do not rely on any of this information starting your own fund. Please consult professionals, accountants, etc. Etc. But yes, I think it is important for our listeners to know there was a change and because the even though I know you don't like the term, I mean the crowdfunding space has exploded. I mean, and I remember whether it was five years ago or maybe even a little longer, when you start hearing about fundrise, and now there's crowdstreet and thinking, oh, this might be okay for smaller deals, but the growth on this has been exponential. And so maybe talk a little bit about the space. And I know even Blackstone, Starwood, they're now working with retail investors to talk about this space.

Sure, sure. So I think as somebody who's come out of the institutional real estate world, and this is you too, James, the retail investor has always seemed like small ball. It's like, why bother? You know, they don't do big deals. You can chase down a few big pension fund LPs and spend just as much time and raise $100 million instead of talking to lots of smaller investors, going to invest 10,000 or $100,000 and try to cobble together millions of dollars the hard way. But what happened over the past few years, as we've seen through both the JOBS act and also a lot of these private non traded REITs that the likes of Blackstone and Starwood have launched, that retail investor dollars can actually aggregate into massive amounts of money. The crowdstreet, which is a crowdfunding platform, has raised over a billion dollars for real estate deals. Blackstone REIT at their peak was raising money, $700 million a month exclusively from retail investors with a minimum investment size of $2,500. So we've all watched as the retail investor has become the new hot ticket in the space. And more and more financial sponsors are trying to figure out how they tap those retail investors. Where do they live? Because younger investors, millennials, we've all seen this over the past few weeks with Robinhood, they don't use wealth managers. They like to do it themselves. They want to be able to research the investment opportunities, sometimes speak directly to management. They don't necessarily want to pay the fees a wealth manager will charge. And so that's opened up this entire opportunity for the financial sponsors and the fintech players that are creative enough to figure out how to go direct to those retail customers. And it's big business now.

Really interesting and also fitting if President Obama helped put this into place. I heard that the way that he raised money for his campaign, you know, record numbers of donors who even came in for 25, $50 donations. And, you know, you just think for every accredited investor out there, how many thousands of Main street investors are who have been underserved. Right? I mean, most people, I Mean, they just have not had the ability to get into real estate. So after you buy the apartment in Miami, then now you know you're onto something. So then I think, if I'm not mistaken, you end up buying additional units. Where did you go next? Because I know you hit a couple.

Cities, Nashville and Austin. We wanted to be in places where there was really strong investor demand, where people are hearing from their friends. Wow, Austin, it's really booming right now. How do I get a piece of it? How do I get a piece of that action? Same with Nashville. And we wanted to make it so that you could invest traffic truly passively in the downtown urban core through our app. And that's what we did. And then recently we merged with Republic, which is a bigger financial services platform that shared a lot of the same mission that we did in terms of improving access for retail investors, but they did not have a retail group, sorry, a real estate group. So Jesse and I and the entire compound team joined Republic to build out their real estate group. And that's where, James, your story and mine start to intersect.

Absolutely. So what was your goal when you came on to Republic? What was the plan? What was the opportunity?

Well, the goal is fairly simple. Obviously, we want to build a really big company that changes the world, and we share Ken. Ken is the CEO of Republican Win. We share his vision for that. Real estate is the world's largest asset class, but it's one the of of the most difficult ones to access. And so the more that we can bring unique opportunities that empower retail investors to make direct investments on their own behalf and get comfortable with playing in the real estate space, the more we can increase the ownership and improve what that ownership really looks like. I mean, every building you see on the planet is owned by somebody. And I think that that's always a hard concept for people to grasp. The real estate industry is all around you. Wherever you're sitting right now, somebody owns it. If you're not in your own home that you own, that's real estate, and there is an owner there, and you can be one of the owners. You just have to figure out how, through a platform like Republic, we can make it so that more people can invest and start with smaller, more accessible dollar amounts in order to start playing alongside the big players. It's not just something that only the ultra rich should be able to invest in. Real estate ought to be able to be owned by more people. And that is the mission that Jesse and I are building out on.

Republic love it, and you certainly benefited by Republic's track record because it really, if I'm not mistaken, started off more as raising money for angel investments. Maybe talk about their network and their past successful raises and how you parlay that for the real estate space.

Sure. So Republic, their website is Republic Co. They were started in 2016 and they were an offshoot of Angellist, which is a fairly well known company in the startup ecosystem. They were raising money at first exclusively for early stage tech companies, but over the past four years they've expanded their mandate and today they raise money for still early stage tech companies, but also late stage growth companies, cryptocurrencies, esports and gaming and main street companies which are like restaurants, music venues and like the kinds of bricks and mortar operating companies that you would see when you walk down the street. And now real estate too. So Republic has closed on over $250 million of investments from over a million different investors from 100 countries around the world. The largest raise we've ever done is $30 million. The fastest raise we've ever done was $8 million in two hours. So we are comfortable raising a few hundred thousand dollars, but we're also comfortable raising tens of millions of dollars depending upon the offering. We have a ton of range inside the company and we're looking to really expand that and become basically Goldman Sachs for the retail investment industry. That's our North Star and that's what we're building toward today.

Wonderful. And so this is really where our stories merge now. So, so I've been a partner in funds before. I launched, helped Launch River Oak NYC 2 funds over the last 10 years that went out invested JV equity and value add deals for New York City. Now we've got the deals that we invested in have a total capitalization about 350 million. And I really enjoyed and for you brokers out there listening to this right now, sometimes there's a question, hey, is it competitive if you're investing? Not if you do it in the right way. And I've always found that investing as well is accretive. It can even be a value to clients. I end up working with them. In fact, we ended up through River Oak investing in a lot of deals with clients. So I've really enjoyed the process and is challenging and terrible of a thing as this pandemic has been. There was no doubt going to be dislocation in the market. And just looking at previous cycles and I know you fully agree with this Jeanine, New York City always comes back and it's just I've never bet against New York in my 22 plus year experience. I've seen how the pendulum swings too far, whether it was after 9, 11 or whether it was. It was after the financial crisis. And then you get this enormous run. And so I knew there was going to be a big opportunity to invest now and the question was what and where? And so I guess I'll turn it back over to you because I know that you share this excitement for the business plan, but why don't you tell the listeners about the premise of the New York City Opportunity Fund, what we're doing, what we're focusing on.

So I agree with you, James. Anybody who follows me on social media knows I've been like, I heart New Yorking for the last couple decades. I love New York City with all my heart, almost as much as I love my children. And it pains me to see the city in the situation that it's in now. But I get a lot of comfort knowing that London and Paris and San Francisco and LA and Washington D.C. are all in very similar limbo states. And they're all going to come back and New York is of course going to come back with a vengeance. We are excited to open up the opportunity to invest in what is a very unique window of opportunity because when New York has a dip, it's usually very short. We've been in a very long dip now because there was already a decline leading into the pandemic and the pandemic has just fanned the flames. But what that means is there's a chance for people who may not have gotten in on New York back in the 80s or 90s to get in on it today and to get in on prices that if you'd heard them two years ago, you would have thought would never been attainable. And with you, James, out in front negotiating deals on our behalf and with the assistance of Jesse and I, we're able to get these kinds of deals and lock them in for our investors. And I think it's going to end up being a really exciting and opportunistic time to go out and build a portfolio that over the long term is going to look amazing, no doubt.

So talk about structurally, how the fund works, what the plan is, total size of the raise and how we're breaking that up.

So we're raising a $50 million fund. It will be a reg a offering through the Republic platform. We will charge market standard fees, asset management acquisition and incentive management fee, and we will incorporate be investing primarily in bulk condos. So we'll go out and buy, ideally the last few unsold condos and new developments, but we'll also make other opportunistic investments as we see fit in New York City specifically so exclusively in the five boroughs, but probably with a concentration on Manhattan and downtown Brooklyn where the softness is most noticeable and most profound.

And talk about, because I was pretty blown away by the retail user experience. So we were very fortunate that we got a nice write up in the Wall Street Journal. You opened up the reservation line where people could go in and invest on Republic's platform, make a reservation. So maybe talk about how that works.

Sure. So today, while we are in what's called a testing the waters campaign, and that is a technical definition by the sec, we are taking non binding commitments of interest on the Republic website. That's Republic Co, where if you look for the NYC Opportunity Fund offering, you can make a non binding investment, meaning you, you make the reservation and we won't hold you to it. When we finally do receive the qualification from the sec, then we'll start closing on those investments and you'll have the option of participating in the fund. At that point, it's all fully automated. You don't have to get on the phone with anybody unless you really miss James and want to talk to him. But otherwise you can do it from your phone, from your desktop and do it while you're walking down the street or sitting in an airport. Whatever it is, it's really easy and really painless. And then learning about what we're investing and staying in the know also happens in an automated way. There's a discussion chat at the bottom of the offering page where you can see the questions that other people are asking and see the answers that we're giving. And then you'll get automated updates both through the website and to your email as the fund makes, makes investments and other material announcements are made. So it's a unique way to invest, but the underlying assets and the way that the capital is being managed is very traditional and completely buttoned up and SEC qualified and reviewed.

Yeah, I was just blown away. I mean, obviously getting the article in the Journal was a great thing to get this kick started, but besides that, it was just a page on Republic and, and to this point, I mean it's been $100,000 of reservations per day and coming in from dozens and dozens of people. So the critical mass and just watching that and I know we're going to make our full, our big splash in mid March when we do the full retail launch. But one Thing that I found really interesting is talking to clients, talking to other general partners. And, you know, because what I've been telling people is, look, this isn't, you know, there's a great, I think, real estate business plan here, but you're also getting access to this new retail investing platform. I've been amazed how many people have said, hey, can I raise money for a deal on the Republic platform? And so, you know, what do you say to that? What kind of deals for our listeners who might be looking to raise equity for a deal? What works for Republic? And obviously there's other fundraising platforms out there too. There's fundrise, there's crowdstreet. What would you say to those people? What makes for a good deal to have a successful raise on your platform or any of these others that have been growing?

So I think I wanted to disabuse the listeners of the notion that crowdfunding is easy money or dumb money. Retail investors are almost always investing out of their personal accounts, and they are much more conservative and careful than I think even professional investors might be. People ask really tough questions. They are not stupid. And they sniff out any kind of fees that are. That seem to be too favorable to the management team or investment theses that are flimsy, or management teams that don't have the right experience. The offerings that perform the best on our platform are ones where the management team has a ton of credibility and already a following. It's not that easy to raise money on a crowdfunding platform. It requires marketing, which kind of rehashing a theme we teased out earlier. Marketing is hard. Cutting through all the noise and getting people to focus on your offering isn't easy. And people have thousands of options. They're not just even comparing real estate products side by side. They're comparing real estate to stock market investments, to crypto investments, to investments in their friend's company that they heard about at a cocktail party. And you're also competing with inertia. Do nothing. A lot of people don't invest their money at all. So crowdfunding is for people that truly believe that having a community of investors is beneficial to their thesis if it's core to their mission. Or they already have people that are saying to them, wow, you're a real estate genius, or you're something else genius, I want to invest alongside you. When people are clamoring to invest with you, those are the offerings that tend to perform best on Republic because the demand is already there. And we're just helping to take that demand and convert it into investments in an automated way that would allow a sponsor to take the $5,000 checks, $10,000 checks that they normally wouldn't bother with because it's too, too cumbersome and too paperwork intensive, and do it in a way that's fully automated. So to the listeners who are wondering if they can raise money for that real estate deal that they've shopped around everywhere and can't seem to find an investor for, I would say, no, that's probably not going to work. We do best investing alongside smart investors. Retail investors like to see social validation from other investors and people that they trust. We like to invest the last dollars in the project, not the first. We want to know that if we're successful in closing this raise, that the project is going to happen or the acquisition is going to close. And we want to invest in people that have a reputation that's verifiable, that have an Internet presence and a footprint that people can verify on their own through LinkedIn, through news articles. And so there is really a magic mix of things that make for the perfect crowdfunding offering. And I would challenge people who are thinking of raising through our platform to really ask themselves critically whether they're in the right position to do that. It's certainly not for every real estate project out there.

Great advice, and I'm sure our listeners are taking notes, so really appreciate that. Well, Jeanne, we only have a couple minutes left, so just two last questions from May. You know, you've had a lot of success over your career. You've held a lot of interesting positions. What are the key attributes that you would say you attribute your success to?

First of all, I don't know that I would pat myself on the back or do a victory lap about my success just yet. I have a lot to prove to the world. I know that I work insanely hard. I'm one of those lucky people that does need a lot of sleep. I'm very efficient. I also, you know, James, you ever notice that the most successful people are the people that respond to things? I always find it remarkable. You write, you know, some junior person at a company, and it takes them five days to respond, but when you write the CEO, he responds immediately. And I think responsiveness is a, is a quality that people really value. I'm very honest. You know, I tell my team all the time, never, ever lie, because your credibility is your most important, important asset and the only way that you can build your personal brand. I am a very vulnerable leader. I tell my team when I'm nervous about things or I'm unsure. I'm the first to admit when I don't know something. I'm also the first to give up credit when it wasn't my idea or I made a mistake. I think humility and it's come with age. I wasn't always like this. I was probably not the most pleasant person to work around in my 20s. But I've been humbled by life and work and I credit a lot of people with all the opportunities I've been given and don't take any of them lightly. And I also really enjoy mentoring young people. I think watching the young people that work for me grow into really mature and interesting professionals is almost as gratifying as being a parent. And it's something I really enjoy.

Wow, you said so many good things there. So really appreciate all that and, and you embody everything you just said. And I could certainly personally attest to your work ethic and really 24 7. But I would imagine, I mean I know it's because there's a passion there for what you do and if this was just a job, then yeah, then it just becomes one more thing to respond to. But no, that was really fantastic. And then the last question, advice especially, maybe this is for those listening who are in college or maybe they're thinking about pivoting in their careers. Talk about the intersection of real estate and tech. If someone, I mean really, I mean I've spoken, you know, to several people in the prop tech world and the growth there. If someone wanted to get into that space, so to speak. What would be your advice of how to best position themselves to do that and where to start?

I think a lot of people assume that working at a startup is a lot of fun. They think of working at a startup as like working at Google. It's like free lunch and foosball and massages and working at an early stage company is nothing like that. It's a nail biter. Every single day you teeter on the brink between thinking that you're going to be the next unicorn and worrying that you're going to go out of business. When we launched Compound, we had a tiny office on the Lower east side that had one bathroom in it. We all joke that we, we all got to know each other a little too well sharing that bathroom. But that's what it really is to build a company from, from ground zero. And I don't know that every, everybody has a stomach for it. I think there's about 1% of the population that can really handle the volatility and uncertainty that comes with starting a company from nothing. If you are interested in finding a job in real estate prop tech fintech, I would encourage you to start on Angellist. They have an amazing job database and lots of really interesting opportunities. You might also start it on the side. There are a lot of opportunities on there that are unpaid equity only where you can get your feet wet, get to know other people working in the industry and see if you actually enjoy it. It's definitely not for everybody but the rush is pretty insane and when you do have a success it feels amazing. So I start there. Start an Angel I actually wrote a Medium blog which you can check out. I think it's one of my most popular Medium blog after the one I wrote about Taylor Swift. But it is how to Get a Job on Angellist. Where do you get that on medium.com if you just search me by name. I wrote an article called how to Land a Job on Angellist which goes through some very specific steps on how to find a job in an early stage tech company and I think that's a good first pass for people that are looking to get into the industry.

Janine, this has been awesome. I've enjoyed collaborating with you so much. Today was no exception. I always just learned so much from listening to you, working with you. So thank you so much for joining us today and sharing all this helpful advice.

Thanks. The privilege is mine. Thanks James. Talk soon.

Wonderful. This is James Nelson, your host of Real Estate Investing Live from New York. If you haven't already, please connect with me through my social media handle, James Nelson nyc. And please continue to spread the word on this show. Really cannot thank you enough for subscribing for your comments. Please keep them coming. We're here to be of help to you. We want you to be as successful as possible. So until next week, this is James Nelson signing off. Thank you. Thank you for tuning in this week.

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We'll talk again next week. Sam.