76: Niche Players with Peak Capital

Foreign.

This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis & Young's Tri State investment Sales Group. In this program, you'll learn about the world of commercial real estate and find out why it's one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to episode number 76 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. Thank you for joining us once again. I really appreciate your support, telling your friends the comments that you're leaving on itunes, Spotify, wherever you get your podcasts and your ratings. And if you haven't done so already, please connect with me at James Nelson nyc, whether it's on Twitter, whether it's on Instagram or on LinkedIn, and you can certainly send me a message there so I can answer your question on the show. And last but not least, I've been very active on Clubhouse. If you have not checked out this app, I would highly, highly recommend it. Unfortunately it's only available right now for iPhone users out there, but I'm sure they will expand it to all of my Android listeners as well. And it's a great community that's out there and we're having a weekly show on Thursdays at 12 noon and this past week we had Andrea Himmel on for discussion on office and industrial. We've been having some really good guests as well and I host the show with Chris Moreno who's a fabulous entrepreneur and and Jeanine Yorio who I've launched a real estate fund with on Republic Co. So definitely give a listen for that show and if you're not on Clubhouse yet, definitely check it out. Well worth it. So we've got a great show for you today. I have with us Alex Rabin and Alex Cascal and they are part of Peak Capital, which was founded in 2017. Peak specializes in the acquisition and development of multifamily office and retail properties with a geographic focus on New York City and the surrounding boroughs. Their team leverages proven institutional experience and a diverse set of capabilities across development, debt and sourcing to provide superior risk adjusted returns for our investors. And what I really like about these guys is they've established a brand. When you go into one of their buildings, you know it's a Peak building. It's got the same look and feel. I love how active they've been. Even post Covid they tell me they've got 11 deals in contract. So they are active, they are out there. So for those of you who are looking to jump in the game, I think you'll get a ton of value out of this interview. Before we do that, I do want to give you all a quick update on first quarter 2021 sales results for Manhattan. And I realize that some of you might not be even listening to this podcast for months down the road, but so maybe you'll listen to this and hopefully by then we will see a big pickup in activity. But for Manhattan sales, we only reported 31 sales for the quarter for less than a billion dollars. Maybe for some of you listening in from elsewhere across the country might say, hey James, a billion dollars in sales, that's pretty impressive. But unfortunately this was in line with the second quarter of last year, third quarter, where we were still deep into the pandemic without a light at the end of the tunnel. So I was hoping after the Manhattan sales figures for the third to fourth quarter doubled that we'd have some positive momentum. But I think what you're seeing here is that the market is a little choppy, where sellers are still trying to wait and now that people are getting vaccinated and offices starting to talk about coming back. I love that Google said that they're going to be coming into the office three days a week ahead of schedule, which they were thinking would be September. Amazon has talked about how important it is to return to the office. So I think a lot of people are looking to postpone decisions, but in interim there's a lot of opportunities out there. So in Manhattan, out of the 11 average apartment buildings that sold, the cap rates were about four, excuse me, five and a quarter percent. Again, that cap rate for some of our first time investors, that's the rate of return that you get when buying a property before factoring in debt service. And when you can borrow money at say low mid 3% range, you're getting what's called positive leverage, right? Because you're borrowing money from the bank at a cheaper rate and that can produce a high single digit return, cash on cash return, which is what your equity is actually making you. So I haven't seen an opportunity like this in 10 years because of how low interest rates are. And the spread with the cap rates moving over to retail over eight sales, average price $2,000 a foot has actually been picking up from last year. Too few sales to report a cap rate there office very few transactions, only four sales in the first quarter for about $88.9 million average is 11 $12 a foot, which is a little bit up from last year. But again, across four sales, that doesn't really tell you much. And we're still watching this office vacancy rate that's gone from 10 to 16%. We're also watching the amount of sublet space which has tripled since pre Covid. We're now up to about 21 million square feet of sublet space. So a lot of these companies, as their leases are coming due, are downsizing and so that's something we're going to want to closely watch. Last but not least, development land sales, again, only four sales, which is down from last year, representing only about $73 million. And average pricing, there is only 324A buildable foot, which is almost half of what it was, say two years ago. And the development we're really seeing right now is for rental, not development.

So I thought it would be helpful.

For you all to hear some of those snapshots and some of our listeners that I'm hearing from you down south or whether it's Nashville, Austin, it's like you guys are living in a different world. You're telling me that you're selling apartment buildings down there for sub 4 caps. Who knows, maybe New York is the contrarian play right now as it seems again, a lot of the capital is looking in other markets right now which might have recovered a little bit quicker. So there's a little snapshot for you. We're going to have a brief word from our sponsor and then we'll be right back with that interview with Alex Rabin and Alex Kaskal. Thank you again.

Hi, I'm Mark Rose, Global CEO of Avis and Young, the world's fastest growing real estate services firm. And we are proud supporters of Voice America. With over 5,000 professionals in 120 offices in 20 countries, Avis and Young delivers local expertise in partnership with global reach. Because we are principally owned, Avis and Young prioritizes client success over shareholder profits through our open architecture. Our firm's experts provide value added client centric investment, sales, leasing, advisory management and financing services to clients across the office, retail, industrial, multifamily and hospitality sectors. Our culture is the bedrock for collaboration that enables each assignment to benefit from the collective intelligence garnered from a company wide database partnership performance. Learn how we deliver different@avisonyoung.com learn more. You are listening to Real Estate Investing live from New York. To find out more about James Nelson or avison young, visit avisonyoung.com now back.

To our show now it's time for our investor spotlight. And with us today I've got Alex Raymond who is co founder and CEO of Peak Capital. And along with him, Alex Cascade, who is the managing director of Peak Capital. Not with us, but here in spirit is David Gomez. He's the other co founder and COO of the company. So Alex and Alex, welcome. And I've known you guys for years, but it's awesome to have you come on the show with us today.

Glad to be here.

Thanks for having us.

Perfect. So typically on this show we give our listeners a little bit of an idea of your stories, how you got into the business. You know, our audience ranges from college students who are looking to get into the business, maybe some associates who are working for bigger shops but looking to start their own investment platform. And we get a lot of seasoned veterans as well who are looking to up their game. And I've just been so impressed with what you all have accomplished. And so Alex, Raven, why don't we start, why don't we start at where you are today and then we can work our way back on how you got there. But just for our audience, why don't you give us a little background on Peak Capital's portfolio. What do you all specialize? Because I think one of the lessons here is you've established a really great niche. So tell us what your portfolio consists of today.

Yeah, so Today consists of 11 properties closed and then we have 11 in hard contract. The majority of that is focused in Western Queens. That's Sunnyside, Astoria and Long Island City. But we also own 25 units in Park Slope and 11 units on the Upper west side. And the real crux of our thesis and center of what we're focused on is creating affordable luxury housing in New York City. And really we found the opportunity in Queens in three different submarkets to really within the proximity of 20 minutes by public transportation either on the 7 train or the NQR to create very highly renovated walk up product that appeals to young professionals or young families that either, you know, basically can't afford Manhattan or prime Brooklyn or just not, you know, not don't really want to be in Manhattan and not really quite ready for the suburbs and play. At a nice point, really we're targeting people making 80 to $120,000 that want really high end renovated but can't afford nicer stuff that we've seen in Manhattan and Brooklyn. And we saw this really as an opportunity given the huge need for affordable housing in New York City. And we saw in A lot of these Queens sub markets, there was a real opportunity there, given that you really only had one of two things. You either had very high end new development that was highly amenitized, doorman elevator product, and then you had the older generational product, but you didn't have somebody that was going in fully gutting buildings very institutionally, you know, marketing it with a brand name, you know, doing everything from renovating the hallways to gut, renovating the apartments, kitchens, bathrooms, you know, all new appliances, all new finishes, washer and dryer and unit, all split systems and really creating a product that separated ourselves from the rest of the competition and that has allowed us to achieve premium rents. And really when a tenant comes to our apartment, there's really nothing else on the tour that is comparable. And secondly, we really like these sub markets because they're a fraction of the price of many of the prime areas of Brooklyn. And a lot of these areas haven't been canvassed by brokers to the same scale the way that Brooklyn was. And we just as a born and raised New Yorker, I saw the last decade of what happened in Brooklyn and how that market gentrified. And we saw the opportunity to do that here in Queens. And also doing it in a downside protected thesis that is middle class value oriented rents that would stand the test of time. And it's held up very well during COVID which I think is one of the biggest, just shows how resilient our thesis has been. We've had very minimal vacancy, very minimal delinquency. And you know, you look at what you see in Manhattan and prime Brooklyn and we're really happy with the thesis that we rolled out.

I would say so, I mean, just remarkable. And I hope our audience is taking notes here because, you know, you had a thesis, a business plan, and you've gone out and you've executed, but you've really differentiated yourself by, you know, finding that niche and finding where the need is in a way where you can still acquire properties a year into the pandemic and still get them leased up. So it's really a testament to what you're doing. So, you know, Alex Cascal, I know you came on board to really ramp up acquisitions and maybe you could talk a little bit about that because, you know, 11 contracts, I mean, we had, I don't know if you know Steve Kashanian with closed properties and he was on the show a couple weeks ago. I mean, I haven't heard anyone else tell me that they've got, you know, double digits deals and Contract right now. So you guys are obviously a machine. So, Alex, maybe talk about kind of what the environment is like right now and how you all have been able to source and acquire all those properties at this difficult time.

Yeah, of course. I mean, first of all, I'd say that Alex Raven is a total animal and attacks every single property in Queens like none other.

I would.

Second that. He also throws a really good party. I remember you guys did a holiday party two years ago, and I think maybe you had done. I mean, no offense, but all of one or two deals and you rented out the whole. Alex, what was that place again? It was some really swanky place downtown. And I was like, man, these guys are going places. Just Tono. But the best part of that whole.

Party, we spent zero dollars there.

You.

Yeah. Value oriented party.

Could have fooled me. I love it. I love it. All right, so how did. Yeah, so, yeah, I mean, an animal, but yeah.

In the last four months, we've closed on four deals, and in the next four months, we plan on closing one or two deals a month. It's an aggressive approach, but we really see these next 6 to 12 months as being really unique in the New York City landscape. I mean, how many times in your lifetime can you really take a look at New York and say, we're going against the grain by investing in New York City and we're able to find deals that are being sold by owners that have held onto their properties for 40, 50 years. They're typically, you know, between the ages of like 70 and 90 years old. And, you know, they don't want to go through another potential cycle. You know, Alex Raven's a born and raised New Yorker. I'm born and bred, you know, New York through and through. My family's been in New York since, you know, the 1940s, 1950s, and time and time again, people have doubted New York. We see New York coming back in a very big, strong way and only getting better. And personally, I only see this as being part of a great reset in terms of rents, especially like in the retail sector, where we're going to start to see new concepts, new bars, new restaurants, new ideas that are able to come out in Manhattan and in the boroughs that, you know, is just going to draw more and more people and, you know, continue to, you know, gentrify and create value throughout all of the city. But, you know, we've really been combing through the Queens market in a. In a very strong and in a very institutional way, which, like Alex said earlier, hasn't really been done in these neighborhoods.

I think it's really three things that stick out to me of what we've done differently. One is really establishing broker relationships. Like as you said with the event, I spent seven years at RWN establishing relationship with off market and market brokers. And that's the bloodline that gives us deals. And establishing those relationships too, I would say, is really just following up and just being repetitive and just continuing to follow up and tracking all these things to see what's trading, what's getting stale and just continuing to follow up with these people to show that you're a real buyer. And then I think three is really just sticking true to your niche and having, you know, real confidence in that, you know. 1. You know, in the beginning of COVID we were trying to do different things like buy deals in Brooklyn, buy deals in Manhattan, and we were really struggling to find opportunities because it wasn't stuff that we were, you know, it wasn't our niche and it was, it was trying to be somebody that we weren't. And then I kind of just flipped this switch in my mind and I'm just like, let's just focus on Queens and focus on that only. And then, you know, we kind of went gung ho on that and then, you know, literally went laser focused. And you know, basically from March we put, you know, probably 15 deals in contracts, have closed four of those and continue to go. And I think we're just, you know, true and tried to believing in New York City. And, you know, growing up here, it just makes no sense in our mind that the city's not going to come back to, you know, a vibrant place. People want to be here. As soon as the nightlife and everything comes back where there's, this is a fun place in a 24, 7 city, we know that the real estate's gonna follow.

It's already happening. We already see that stuff.

Couldn't agree more. And I love how you guys are doubling down on New York now. And many would even call it the contrarian strategy. I mean, you hear so many of these New York families who are now buying down in the Southeast. And look, our audience, we get listeners from all over the world, so, you know, look, there's good deals everywhere, but you know, some of the stuff that I'm hearing about, and I know Nashville and Austin, they're pretty popular to talk about, but you know, if you kind of follow that herd mentality, so, you know so much, I mean, I'm hearing about apartment buildings that are selling for under 4% returns there, where in Manhattan, you know, you're getting fives. But I love the fact that you guys pick Queensland and it's not as flashy as maybe the soho investment, but there's probably a lot less competition out there, right? I mean professional institutional competition for what you guys are doing. And again, there's a built in demand. So I think that's really great. So let's rewind the tape a little bit because I think it'd be really good for our audience to hear your story. So Alex Rabin, maybe talk about, you know, grew up in the city. Where'd you go to school? Did you know at the time that you wanted to go into real estate, talk about kind of some of those earlier years and then talk about, you know, how you ended up at rwn?

Yeah, so I have a pretty crazy path. I mean I went to University of Michigan, you know, great school. But I graduated in 2008, which is literally, you know, one of the worst times to graduate, literally. Bear Stearns College collapsed and two of my roommates lost their job that were working at Bear Stearns Investment banking. And I had to basically figure out what I wanted to do. So I actually spent two years working at a company called ABM that focuses on basically bidding on cleaning assignments and security assignments, large scale for owners like Tishman Speyer and Silverstein and did that for two years and then decided this is not really what I wanted to do. And I went back and I did the NYU Master's program. And while doing that I had two internships. One, I worked for Larry Gluck and Matt Lembo Estelle for a year, which was a great experience. That was really my first foray into acquisitions and really got honed my Excel skills. And then I also spent a year working for JLL doing leasing analytics. And that was great for us because we really established a relationship with Peter Regardi, who is one of our biggest mentors and has been a big part of PEAK since the beginning as well. And then really from there, once I graduated, I spent three years at ti, at cref, basically supporting the head of Northeast Asset Management. And then for seven years after that I worked for Mark Rowan's family office, who's the CEO of Apollo, and really focused on JV equity value add deals, backing middle market operators like ourselves doing deals and really focused on New York and Miami, everything from multifamily to office. And that was really a great learning experience and really built all the skills that I had today to really start this business.

So for Those of you listening who are not New Yorkers, what Alex just said, some of those company names that he's worked at, I mean, best in class. And what I like about your track record is you've worked for, you know, ultra high net worth individual, one of the largest institutional managers out there. And as well as working for a family office, I mean, and having those analytical skills as well, I mean, that's coupled with the nyu, I mean, you got an incredible amount of experience in a short time. So that's wonderful to hear that you could bring all that to the table. So, Alex Cascal, you grew up in a real estate family, so how was that? I mean, did you kind of start helping out with the family portfolio early on? Did you always think you were going to do this? What was it like growing up around that?

Yeah, well, I spent summers in middle school and in high school working with my grandpa, Earl Altman at abs, which originally was at Harry Helmsley at Helmsley Spears and then was part of Murray Hill Properties and then branched off and became abs. So, you know, I feel like I've been in this industry for a very, very long time, but it's very different when you're really in it full time and starting a new company, but actually came from two different sides of the family in real estate. One with ABS and another one with Carroll Management, which built Doral down in Florida and Doral up here, both with very different ways of being in this industry. So it was definitely interesting to learn from both sides.

Yeah. And you know, for those of you who don't know, Earl, such a legend in the business, but such an incredible, kind, giving person. And I even remember early on when I started my career 20 plus years ago and reaching out and he, you know, he'd return the call and, you know, it was always just wonderful to speak to. And I used to hear about those early Helmsley Spear days when they always said, look, you can't broker until you own. And there was always that emphasis where, hey, how can you go sell a building if you don't even know how to operate it? And so what happened was a lot of those brokers from back in the day just amassed these immense portfolios because they were buying when no one else was. So that was an incredible era. And to have kind of him as a not only family member, but a mentor is amazing. So, Alex Raven, I think it would be helpful for our audience to hear because we do have a lot of people who listen to the show or two, three, five years in the business and they're probably working at a big shop and they're saying, hey, you know, I'd love to do this thing on my own, but let's face it, I mean, it's scary to, you know, completely start off on your own and start from scratching me. You kind of did this in a more transitional way over time, but I think you also did it in the right way. So maybe talk about while you were at rwn, how you were starting to think about peak and how to start doing things that didn't, you know, conflict with what you were doing with your quote unquote day job and how you ultimately made that transition.

Yeah, I mean, I think I had a very unique circumstance. I mean, you know, my background happened in a very organic and natural way. And I also had the benefit of Ari Shalom, who is a great mentor and was somebody that really invested in my future and career and allowed me to grow. So I don't know that it's the easiest thing for everybody to do that because he really wanted me to just grow to the best of my ability. It really started off with a one off deal. You know, I always had, you know, the inclination that I wanted to be an entrepreneur and that I wanted to own real estate myself and, you know, have my own equity in the deals. And, you know, basically what happened was, you know, I found one great one off opportunity and, you know, I happened to know that David had experience operating because we tried to buy a property from him when he was a broker and he executed an amazing deal at 39 Spring street on his own. So when we, when I came across this deal, you know, I reached out to David, we ended up partnering on it. We did a great deal. It's at 2940 7th Avenue and Sunnyside is a corner. Six apartments, four stores. We fully got renovated the property, you know, refi'd about 70% of our equity out and it was a total success. And we just realized we were onto something in these, you know, queen sub markets and that, you know, nobody was really attacking those markets the way we were, you know, from an institutional mind frame, you know, given my background being at rwn and it just seemed like a great thesis and, you know, it just happened naturally. One became 10. And you know, that basically got to the point where I was earlier last year where, you know, I basically started speaking to Ari and, you know, basically got to a point where, you know, I just couldn't really do both full time. And it made sense for me to move on to the next, you know, stage of my career.

Wonderful to hear. And, you know, you're so lucky to have someone like Ari as a boss. And he's been on this show and he's someone who gives back and I've lectured for him. He teaches a course now, Wharton. But I, you know, I think it's so incredible when a boss, you know, if someone, one of their employees wants to move on and do something, they're supportive and they want you to grow. And it's not like, it's not that there was something wrong with what situation. It was time for you to go do your own thing. And I think that's really incredible. And I've had, you know, dozens and dozens of people who've worked for me over the years, and I'm, you know, I'm happy for them when they say, hey, James, I'd love to move over to the principal side. I'd like to do this. I want to do it full time and, you know, having that network, but also doing it in the right way. So that was really, I think you really benefited from that. So, Alex Cascale, talk about. Yeah, go ahead.

No, I was just going to say quickly, like, I think one of the biggest things I would recommend to young people is, you know, mentors are extremely important because I think not only for, you know, the growth of what you learn, but also, you know, as you move forward in your career, they really have the best interest in moving you forward and not, you know, just using you for the skills that you were trained for.

No question. And my advice when it comes to mentoring is, and I'm sure you do this is. It's a two way street. So, you know, you're getting benefit, but I'm sure you're returning the favor and, you know, and doing business. And so that's a great point there. So, Alex Kaskal, talk about moving from ABS to do something a little more entrepreneurial here. Talk about, you know, what caused.

Yeah, sure. So, you know, I would say that it's somewhat of a similar situation in some ways in the sense that Greg Shanker, who's one of my mentors and advisors throughout my career, you know, has always. He's an entrepreneur himself, you know, in joining, you know, my grandpa at abs, and he's a great person and someone who I very much admire, you know, very much encouraged me to be an entrepreneur and go out and do it. So, you know, when I was at abs, I started off on the leasing and management side and was always, you know, very interested in. In not only Managing and leasing to the best of my capabilities, but also turning each one of these buildings into more than what it was. For instance, we took 915 Broadway, on the corner of 21st and Broadway, and turned it from what was a class C building into today, what's a Flatiron, really, Class A type building. And after doing that for about six years and growing that portfolio to about a million and a half square feet that I was managing with Jay Caseley, among others, I talked with the team, and I always wanted to be a principal and get onto the ownership side. So after doing that for a few years, I talked with Greg and he said, look, it's very difficult. It takes a lot longer. You're not going to make as many commissions. It's going to be a longer path. But, you know, at the end of the day, if you want to be a principal, you know, you have to sacrifice that and move forward, you know, with strength and with, you know, the thought in mind that you're going to come out on top. So I talked to them about that. And, you know, Starting in about 2017, 2018, I really went onto the acquisition side of the business, and I was working with Greg and with Steve on acquiring property. We acquired about a billion dollars worth of assets since probably in full, not our investment, but in total, about a billion dollars. And I was a part of each of those investments. But my real strategy, or the strategy that Greg and I were working on mostly was acquiring small retail buildings on Steinway street in Astoria, Queens. We acquired four properties. Now it's up to five that are all, you know, in a very niche area on Steinway street, really, between, like, 34th Avenue and like, just north of Broadway, right around the subway stop. And, you know, through that I really became, you know, much more ingrained into the Queens community. Community. And, you know, saw what Alex and David were doing and, you know, through seeing how active they were and really with the belief in Queensland, you know, so I had to jump on the peak train. And, you know, I've. I've been very excited and doing that ever since. And, you know, we're incredibly active and it's really exciting to be involved in.

You know, it's. What you guys both have in common is all the amazing people that you've, you know, surrounded yourself. And I know I keep saying, oh, and this person is great, but I mean, really just class acts and talking about Greg Shanker, and, you know, we're all members of the Young Men's and Women's Real Estate association, and that time of need, right early on in the pandemic, Greg just said, hey, we're doing a fundraiser, we're doing this, we're going to help Mount Sinai. And like within a week he lined up Jimmy Buffett and like all these star. I mean it was unbelievable. And he's just, you know, I believe you asked him the secret of his success. I mean, certainly doing the right thing, integrity, but just, you know, just taking action, you know, and that's, that's what I hear you guys doing too, is just, you know, this isn't a business plan that just sat on the shelf and collected dust. I mean that you guys really did this. So, you know, Alex, Raven, talk to us about what it's like to build out a team. Because when you started was you and David, right? You did a couple of deals and when it's a couple deals, you can, I would imagine you can kind of manage that or maybe if you talk about, if you bring in third party managers, professionals to help but like at some point you got 20 plus building. I mean, now you got a real business. So may talk a little bit about the evolution on how you built out your team and you know, how you work with professionals out there to augment when you don't have those services in house.

Yeah, I mean, I think a lot of it is just learning what you're good at and what you're not good at and getting to a point of humility where you can really realize that, you know, things are better, more efficient uses of time focused on what you're good at and dividing everything up so that you are able to really efficient and have a great team and focus on the things that really make sense for you to focus on. So originally we started, it was me and David and I think one of the most important parts was, you know, both of us were doing acquisitions at first. David had a lot of experience as a broker. I had a lot of experience on the, you know, institutional side. And like, one of the biggest decisions we made in the whole business was, you know, David deciding, I'm not going to do anything with acquisitions, I'm just going to focus on operations and construction. And he's gotten, you know, amazing at that. You know, the design has, you know, gotten great responses from everybody. You know, we've gotten really efficient as far as construction timing and getting everything done on cost. And he's done an amazing job at that. And that has really allowed me to focus on acquisitions, sourcing opportunities, underwriting deals. And really we're not getting in each other's way. So that was really probably the first part of our evolution. And then secondly, as we continued to build scale, we needed to raise more and more capital. And that's really what Alex came in to do. And it allowed me really to continue to focus on the acquisition. And yes, I get very heavily involved because I'm a founder and people want to hear, you know, my story. But you know, ultimately, you know, Alex focusing on that has really made us a much better business. And as far as operations, it's just continuing to build scale. You know, we started with one property manager. Now we, you know, just brought on an accounting team that's helping us with that. We're also, you know, planning on bringing on another bookkeeper. And it's just continuing to build out the team and figuring out what the weaknesses are and addressing them and really just, you know, admitting where, where you have certain areas of weakness so you can address that and become a better team overall.

That makes a lot of sense. No, that, that all. And yeah, as you're growing, you build in, you bring in the expertise where, where you've got deficiencies. So I think that's really smart to, you know, be able to kind of make that own analysis of your own shortcomings and to bring in help when you need it. So, Alex Cascal, talk about real estate being a hands on business and sure, there's triple net properties where you just collect a check every month. Although today after this pandemic, there might be nothing that doesn't require hands on, but maybe talk about the importance, importance of being hands on in your investments and you know, whether it's even from an acquisition standpoint going in, pounding the pavement. Talk about, you know, all the work that goes in there.

Yeah, I mean, I guess I would go back a little bit to what Alex was talking about earlier and the importance of following up. Following up, following up. Because I think that no matter where you are in real estate, whether you're a broker, whether in acquisitions, whether you're looking for a job in real estate or whatever it is, the more times you follow up, the more likely you're going to make things happen. And even if you're an owner, you have to follow up. You have to follow up with your contract, you have to follow up with your architect, you have to follow up with the tenants who aren't paying rent. It's just constantly being on top of your stuff and, you know, making sure that you're constantly reaching out to those that need to be contacted. Because if you're not on top of them, they're not always going to be thinking about you. And I think that there's some humility that comes with that. You just have to stay in front of people and then they'll recognize that you're there. But, you know, in terms of, you know, making sure that we're on top of our stuff and, you know, the importance of being hands on, you know, we take a very, very fine approach to everything within our business. I'd say from the acquisition through the closing, through to construction thereafter through management. And we're getting better in each different facility and, you know, making improvements. You know, we're a young company, we're thin, but we all work incredibly hard. And, you know, Alex, Raven and I are probably putting, you know, 15 hours a day into this work, maybe even more 15, 20 hours a day at some times, especially when it comes down to the closing. But from the acquisition, we tore the property a number of different times. We put in the due diligence. We make sure that we have all the DHCR reports reviewed by the right attorneys. We do PCR reports, we do all the necessary things that you have to do in order to close the deal. And then from there, you know, make sure that we're on all of our investors and make sure that they know what the deal pipeline is and continue to follow up with them. Because our investors are, you know, important people who have, you know, other businesses that they're running. And, you know, we just want to make sure that they know that, you know, our investments are there and that, you know, they have the ability to continue to grow their wealth through our investments. And then, you know, once they put their money to work with us, we then, you know, we close on the deal. And day one, we start construction. We start construction. David really takes the, takes the baton and he's incredibly detail oriented throughout the construction process. Everything from branding the building to giving the building a name. All of our buildings have different names. I think that a big reason for that is all of the addresses in Queens are all over the place in terms of there being a 48th Avenue, a 48th Road, a 48th Street. You know, it's really just crazy in some senses. But, you know, we give each one, you know, a very nice name. And each building has, from the second that you walk in to the second that you get into the apartment, you know, it really speaks peak. We have peak on the front door, which, you know, a lot of buildings in Queens don't really have. And we have the name of this specific building on the front door. So if people say that they're living at the Anthony or people say that they're living at the Gwen, or people say that they're living at the Eden, you know, we know that that's a peak building. So we're very hands on with everything from the acquisition to the financing to the construction to the leasing process to the management. And we think that that's essential in terms of really knowing your buildings and running them to the highest capability.

I'm really glad you covered all that because you guys really have created. It's not just a portfolio, it's a brand. And you know, the buildings look and feel the same. It's this color palette, it's the brand. I mean, it's, you've done a phenomenal job for kind of a small startup, so to speak. Oftentimes you don't see that. I mean, sure, we had Ofer Yardeni, you know, on the show and you know, everyone knows the Stonehenge building. But look, I mean, he's got a portfolio worth a couple billion dollars. I mean, I'm sure it took a while. So it's really impressive what you guys have accomplish in a relatively short time. So. Speaking of short time, Alex Raven, unfortunately we only have a couple minutes here, so I've got a couple more questions. But I'd be remiss if I don't ask you about capital raising and talk about because for a lot of our listeners, some of their biggest hesitation to getting started is how to get the capital to do their first deal. So can you just kind of quickly tell your philosophy on how you brought investors in the fold and full disclosure, a fund that I'm a general partner and is a happy investor and in two of your deals. So, you know, and I can just, I can attest the quality of what you guys do in the reporting, but talk a little bit more about how you bring in investors.

I mean, I think the first step, if you're really talking about somebody starting off, is just, you know, having confidence in yourself and knowing that, you know, the business plan makes sense and just going for it. Because if you're always going to just be scared about it and not take the chance, you're never going to do it. And part of us was just believing in the business plan and knowing that we can do it. I think for us it was a little easier to start. Just given my background as being an LP investor and spending seven years working for a large middle market private equity fund. I just understood a Lot of the processes, challenges of, of what these funds look for, what their hang ups are, how they structure deals, and that just made it a lot easier. So I think that helped when speaking to investors and speaking to funds. But when we really started most of our investments, we had a couple high net worth families. We did the deal with River Oak, as you mentioned, but a lot of it was friends and family and a lot of it was, you know, real estate people and sophisticated real estate investors. But, you know, we really went through the process and spent the hard work, you know, really getting these guys in. And, but more than anything, I think, you know, you really need to understand what the investor wants and what the challenges are and then, you know, really believe in the business plan and pitch like you're pitching any other, you know, deal to an investment committee as an analyst or whatever role you're in.

Yeah. And I'd say that also we're putting our own money into these deals too. So with each deal we have to convince ourselves like, why are we putting money into this? Why does this deal make sense? And then sort of use that mindset and say, if we really believe in this deal and we're willing to put our own money into it, why would someone else. And you know, I think that sort of allows us to, you know, really tell the story as well.

Awesome. Well, hey guys, with just a minute or two left, Alex Raymond, if, you know, advice that you would give. Again, you've given so much great advice. But just to sum it up for our listeners, you know, and any other, you know, key traits. What are key traits, you would say are the attributes for success, especially in a time like this, in this crazy market, what it's taken for you guys to persevere, what would you say to that?

I mean, starting with one, you know, I would say perseverance, like this is a very hard business. There's going to be a lot of roadblocks. You know, there's good days, there's bad days, and especially in a time like a pandemic. And you know, there's been a lot of challenges in New York, you know, from, you know, the rent regulation changes to, you know, Covid changes to, you know, the political environment and taxes. And it has not been an easy thing having a very contrarian view. But I think if you are confident about your thesis and you believe in the business plan and you have perseverance and work hard and continue to just keep pushing and pushing through, I think that's the most important thing about being successful. Because look, you're going to fail, and you're going to probably fail many times along the way until you become successful. But if you keep, you know, working through and powering through it and think smart and prudently about how to, you know, really roll out the business plan and really focus on a niche, that. That's another key importance is focusing on what you're good at. You don't want to be in the same thing that every single person is doing because otherwise you have, you know, no competitive advantage and you're not going to be able to be really successful. But if you focus on that and you work hard and you continue to persevere, you know, I think it's a very doable thing. It just takes, you know, those traits in an operator.

That's amazing. Well said, Alex Cascal, what would you say to that?

Yeah, I mean, I echo Alex Raven's thoughts, but, you know, I would say kind of similarly, you know, don't be afraid of failure. And don't be afraid of the word no. No is just one step closer to yes. I know that that's something that we've heard before, but, you know, along those lines, it's just, you know, follow up, follow up, follow up. No matter who you are, you know, you just have to be consistent and you have to be in front of people if you want to, you know, make sure that they're gonna listen to you and that you're gonna be able to get things done. And I also think that, you know, following your instincts, and I think that that's like a really simple thing, but I think it's incredibly important. Typically, the first thing that we think about is usually the right thing. And when you have two different things talking over your shoulder, one telling you this, one telling you that go with the one that you really feel is right, and then good things will happen.

Well said and a great way to end the show, guys. Thank you so much for coming on. Amazing story. Really appreciate your sharing, you know, with us. So thank you so much for coming on today. Yeah.

Thank you for having us, James.

Yeah, thanks, James.

I know I will be. I know I'll be seeing you all soon. This is your host, James Nelson of Real Estate Investing, live from New York. Thank you so much for listening. And please tell your friends, leave a rating, a comment. I really appreciate it. If you haven't already, connect with me at James Nelson NYC, Twitter, Instagram, or message me on LinkedIn, I'd be happy to share your question on the show. Until next week. Thank you again. Everybody.

A different approach to Putting our clients first Avis and Young's Tri State Investment Sales Group sells multifamily office retail development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first, providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagramesnelsonnyc to learn more. Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm and New York 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast on Wednesday mornings at 7:00am Eastern Time and 4:00am Pacific Time, as well as Always on Demand. We'll talk again next week.

Sam.