90: Best Of: Young Guns On Real Estate Investing Live From NY

Foreign.

This is Real Estate Investing Live from New York with James Nelson, the.

Principal and head of Avis and 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 Real Estate Investing Live from New York for episode number 90. This is James Nelson, your host, principal and head of Tri State Investment Sales at Avis and Young. And I have an incredibly exciting announcement to share with you all. I want you all to be the first to know that I have officially launched James Nelson.com. yes, James Nelson.com is where you can go to get the insider's edge to real estate investing. You can go. You can find these podcasts, you can find the show notes, you can find white papers, key terms, and also sign up for an exclusive video series that's going to show you step by step how to invest in real estate. And I could not be more excited for this and I can't wait to hear your feedback. So if you haven't already, please connect with me at James Nelson NYC. Let me know on LinkedIn. Tell me what you think about the new site and I love your feedback and questions. So thank you so much. So for today's show and we did do a best of for the Legends of Real Estate Investing. So if you haven't heard that episode, that episode was number 50. Go back and check that out. But for today's show, I want to have the best of the young guns. These are all investors. Entrepreneurs have built their companies from the ground up. They started like many of you who are listening, maybe some of you are college students or maybe just starting out in the business. You haven't even gotten your first deal under your belt and they're going to tell you how to do it, how they built their business up and how they've been able to achieve so much success. So we're going to take you through. I'm going to give you a quick overview of who you're about to hear. You're going to hear clips of the interview with Jordan Vogel. He was the founder of Benchmark and I entitled his episode Just do it and he'll tell you why. At the end of the episode he talks about the need to be disciplined, to be an expert, but also to just start, just to jump in there and, and make a purchase. So I think you're going to enjoy hearing that clip. You're also going to hear from Aisha Seldon, who is a influencer, author, investor, and she's going to also talk about discipline as well as mindset and the mindset that you're going to need to achieve success. Next you're going to hear from Philip Michael, who has also an author and he's achieved incredible success and a huge following. And he's going to talk about the power of real estate investing over time. Next you'll hear from Steve Kashanian from Closed Properties. That's closed with a K. And he's got to be one of the most active buyers in New York right now. He's going to talk about investing with confidence and also building a team and leading by example. Next you're going to hear from Adam Kaskal as well as Alex Raymond from Peak Capital. And it would definitely be a toss up between them and Closed Properties as far as who's been more active because these guys have been racking up properties throughout the city. They're going to be talking about perseverance, what it takes to succeed and raising capital, which I know for a lot of you, when I hear some of your questions, it's always, you know, James, I'm finding opportunities, but I don't know how to go and access the money. So I think you're going to love hearing the clip from this interview. Next we'll hear from Jessica Zaske from Acadia. She's the director of acquisitions. Acadia is one of the most successful retail investment REITs out there and certainly they have been weathering the storm here. And so I think you're going to learn a lot from her. And she also is going to talk about hard work, but she's also going to talk about culture and what it takes to build a company and environment that. Next you're gonna hear from Chris Okada and he's gonna talk about communication, preparation and he's gonna talk about how his company came back after Covid and after I interviewed him because he had been dormant. He'd been sitting out this white hot market over the last couple years. He has just contracted on his first deal in a couple of years. So he's jumping right back in. So I think you're gonna really enjoy hearing from it. And then Martin Nussbaum, which I've gotta tell you from Slate Property, he has been one of the most listened to downloaded episodes and we only did this episode about a month or two ago and just getting huge rave reviews and just talking about what it takes to succeed, to specialize, the hard work, everything that goes into this and he's just unstoppable. So I know all these stories are going to really inspire you to be the best possible investor you can. So can't wait for you to hear this. As a great reminder for you all, we're going to have a brief word from our sponsor and we'll get right back into those interviews. And thanks again for your support.

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Yeah, so our first fund was a quasi fund. It was made up of the same investors that invested in all of our deals. And the pitch was very much of why invest in one if you could diversify and we're going to raise a pool of capital, you'll get to invest in multiple different buildings. And most importantly, you don't have to do paperwork on every deal from an investor standpoint to have to review the operating agreement and speak to their attorney about it and fund the capital call and all the rest of it. You have to keep in mind for a four year period, we were doing a new deal on average every nine weeks. And our investor base, which we're very fortunate about, was a sticky investor base. I mean we have investors that came into every one of those 23 deals and they had to read 23 different operating accounts, operating agreements. They had to show up at the bank and deposit a check 23 different times. And the part of the pitch on the first fund is this is going to make your life easier and you're going to get to invest into a pool of properties versus just one property. And so our first fund was made up of all the same type of high net worth investors. Our second fund was Those type of investors and family offices. And now we're on the road trying to raise our third fund, which will be our first institutional fund.

I know there's definitely rules against discussing returns fees. I'm not even going to ask that on the funds, but kind of going back to that run. Of the 23 deals, what was your typical deal structure? How much money? So you said you had the deposit up for 600,000 and then you raised $6 million. You had roughly in total, you had 10% of the equity. Your investors had 90%. How did the economics work on something like that?

We pay an 8% preferred return and then take a 25% carry. The way that works is investors get 100% of their capital back first, the next, then everyone gets an 8% annualized return and then whatever's left, we get 25% of those profits. Our investors get 75%, which is very standard in the industry.

So you're putting them in the priority position. They get all their money back, then maybe you get your money back, right?

No, we all get our money back at the same time.

It's treated the same until you hit that 8%.

But you have to get everyone's money back. You have to get an 8% annualized return before I make anything. Got it. It keeps interest in line where I can't do mediocre deals. If I do a deal that generates a 7.9% IRR, my investor may be very happy. They may be saying that that far exceeded what they were making in the stock market or bonds or any other investments they may choose. But I make nothing. We only make money above that 8% return.

What would you say your key has been to success?

Hardcore operations. It's such a challenging business. Everything in New York is challenging. And by the way, if you're not investing in New York, it's still challenging. And every market's different. The challenges in New York have nothing to do with fundamentals. We operate in a essentially a zero vacancy market and rents are pretty strong. Problem is we're dealing with Department of Buildings, HPD Landmarks and all of the government agencies that make things more challenging. And you have to be an expert in order to invest in buildings. You can't believe that you're going to buy a building and you've made so much money on the buy that everything's going to take care of themselves. And at the end of the day, the crux of our business is being highly disciplined in terms of really good management. Collecting rent, which is not always easy. Keeping your expenses down and generating returns for your investors. And it's a real business. And I think that there's a myth that real estate is, it's easy and you're making money at night when you're sleeping because everyone has to pay rent, even when you go on vacation. But it's a tough business and I think that the, it all starts with operations.

So. And I'll add one more thing to your key to success, because I think your product, very early on you realized that you were going to deliver a product that was above and beyond your typical rental. The thought that goes into how you design your units. I mean, almost and in many cases a condo level finish. And, you know, we see the rents that you've been able to generate maybe 20, 30, 50% above what the rents that are next door just because of the product and the experience. You've done an incredible job with your attention to detail as well. Jordan, we only have a minute or two left before we have to go to a commercial break. Last question. What advice would you give to the aspiring investor?

Buy.

Buy anytime or right now.

Buy. Do it.

You.

There's many, many people that, that waste many, many years talking themselves out of doing a deal.

Okay.

And there is a benefit of real estate that I've made it sound today is if everything's challenging, but you have a very good inflation hedge. You have a asset that is cash flowing and so long as you don't over lever the deal, you will own it forever. And that's, that's been tested and true over time. And so I meet with so many young people who say, I can't find anything. Everything's too expensive. And it's very hard. The hardest thing is drawing the line what constitutes too expensive or what doesn't. But I'll tell you the secret. Overpay. You have to. If you do not overpay, the winner of the deal is always the person willing to pay the most. You have to be very careful not to over lever it. But you don't also want to waste your early career, your early days, talking yourself out of a deal, because there's not a. I've never bought a deal where I didn't wake up the morning of the closing thinking, am I closing on a deal that's too expensive? And even today, there's literally never been 49 straight deals. I believed even on that Soho deal at 281 a foot, I overpaid for that one, too. Time will tell. If you over lever, you may have some trouble. But if you overpay a little bit, it means your cash on cash returns may be slightly lower. You just have to jump in somewhere.

Well, that's a great way to end this segment. It sounds like the Nike slogan of just do it. That's really encouraging words for our audience. Jordan, thank you again for joining us here today.

Thanks so much.

And listeners, please stick around. This is James Nelson. I'm your host of Real Estate Investing live from New York on the Voice America Network. We'll be right back. Incredible inspiring story again for our listeners. We only have a couple minutes left. So what advice would you give to someone and maybe to the college student who's out there right now and when you were telling your story about buying something for the first time with 108% financing, and I forgot to ask you at the time, so I'll ask you now in closing, but like, do those deals even exist today? So if someone doesn't have the money to put down right now, you know, how would you advise them to jump in and get in the game?

You know, I'm a little sorry about that. Can you hear me okay? I'm a little old school in the sense that even though I didn't have to finance my deal with cash, I had the cash. So people ask me that a lot. Like, you know, how do I. Because you'll hear these gurus out there. Like I've heard I can buy a property with no credit and no money down. You know, so how can I do that? My response to that is don't like go save some capital and fix your credit first. Because I think that there are a ton of issues that we can come up against as real estate investors. And I think that having first the discipline to be able to accumulate enough money to acquire real estate will take you a long way in being an owner and being a landlord and in being an investor. Some really good advice that I'd have for somebody who's in college right now is there's a, I recently wrote a book that is specifically for new investors. I mean, it's the book that every like 15 to 22 year old should read. It's like the, the book I wish I had when I was, when I was a kid. It's called Mud to Millions. And it's the number two. It's on Amazon either through paperback or Kindle. I would go read that book. It's the stuff that is first about mindset. I say all the time that mindset is the genesis of wealth creation. And it talks a lot about like all the things that you need to think about to be a successful investor. It tells a little bit of my story and it's a super quick book. Like self help books are extremely boring for me. They're usually too long. I'm like, what the hell is this guy talking about? So it's a super quick read. It's a fun read, it's a fast read. It's my story. Some of the things I've shared on our talk here are documented in the book. A little bit more at length. That's some great advice and there's a ton of jewels in there that I think would benefit folks.

Awesome. Well, this has been fantastic. Thank you so much for joining us today. And last question, where do our listeners find you? I plugged your website. It's definitely they should check out your book, but what are your social media handles? Where else can they find you?

Yeah, so I'm on typically on Instagram and Twitter. I have a Facebook page but I very rarely check it. Instagram and Twitter you can find me at my name, Aisha Selvin. No spaces, no underscores or anything like that. I'm always on there. I'm on socials, particularly Twitter every day.

You know, just with a minute left, besides going and buying that 4 family for the first time investor, what would you say to our listeners right now? The jump in the game and get started.

Here's the thing, one of the best, the beautiful thing, I'm stealing it. I'm paraphrasing Warren Buffett here, he says himself, time is your best friend because the way the American economy is set up, your wealth will compound over time. If you put your money into S&P 500 index funds or just some of the top stocks or the fangs, Facebook, Amazon, Apple, Netflix and Google. Just naturally your money will compound over time if you disregard the daily swings and the daily monthly short term volatility. But if you look at it on a longer term horizon, your money will just compound. This is how it is. The stock market is like that. Although there's that emotional factor of supply and demand and what we shape prices in the short term, but still over time it will go like that. Real estate is one of those almost income producing real estate that is recession proof as a class is simply because if it's in an area where prices go up and inflation goes up, so will the values of real estate because rent will go up. It's just a natural function of things. I would say get started. If real estate is your thing, you can invest in REITs, you can invest in stuff like fundrise. Like what we have is stock is your thing. I think you should diversify. You can download Robinhood, it doesn't cost anything. You can buy s and P500 stocks, you can buy the companies that you know and then just look at it from a 10 year investment horizon, commit over. The reason I said 100,000 million is by 2030. I'm telling you James, if people start now and they start making the right, just changing how they think about money and buying a property and investing, diversifying and doing that consistently in the next 10 years, becoming a millionaire isn't a problem. It becomes, it's not just a probability, it becomes an inevitability. So that's really what I'm. They don't, people won't know that until they get started. So I would say just get started because time, time will work for you. As long as you have time on your side, you should just get going. That's what I would say. I hope that's helpful.

That's fantastic. Philip, thank you so much. I know you've made a lot of our listeners very happy as well to know this is obtainable and with your story, if you could do it, you know, again, it's, it's obtainable. And so really great to have you with us here today. I really appreciate you taking the time. Stephen, with only a couple minutes left, would love to hear what your advice would be to an aspiring investor, someone who's maybe thinking about getting into the business. Maybe they're a little nervous about with everything going on and when to jump in. What would your advice be to them?

I think that fear is healthy. It's a good thing because it keeps you in check. I think that especially the first transactions are really going to shape your career because if your first acquisitions are successful, they build your confidence. They help you understand better the life cycle of a deal. It helps your reputation with lenders and with partners. So I would cherry pick the first acquisitions very, very, very, very carefully. And as you grow, you make more acquisitions. It's really critical to have an infrastructure behind you that allows you to keep growing. I am very, very proud of my team. We have a very open dialogue. We don't have an employer and employee kind of relationship. We all work as a team. And when you're leading a company, it's critical to really lead by example. I happen to be a maniac when it comes to work, so I'm in the office by 6, 6:15 in the morning and I Don't leave till much later. But that's a. Because I love what I do. I'm fortunate enough that my family, my wife and kids are very supportive of it. But I wouldn't be able to tell my guys to work hard if I was sipping tequila on the beach all day. So if you're running a business, it's critical to really lead by example. Don't forget that people don't really forget when you do something wrong. They may nod, they may pretend. But doing the right thing, even if it's painful and difficult long term, pays dramatically. Now, we are dealing with a lot of money, and money unfortunately brings the worst in people. I give this example to my acquisition guys on a daily basis. I'm like, listen, you're here talking millions of dollars all day long, but put me $20,000 on the table right now. How fast can you get $20,000? It's a lot of money. We get desensitized by the money aspect because we treat them as if they were potato chips. So dealing with people with integrity, surrounding yourself with people that you can trust, that you can rely on, it's very, very, very important. And that's ultimately how you're going to be able to build a real relationship with your investors and with your lenders and with your team. It's a lot of work, but ultimately I believe that this is the best way of growing and scaling.

Well, Stephen, you definitely are a power of example. And Adam, I'm sure you would agree. And it's amazing to hear what both of you and your company has achieved. So just really appreciate your coming on the show today and sharing your story. I know our listeners are going to get a tremendous amount out of it. 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 Rabin, 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 into the fold and full disclosure, a fund that I'm a general partner in is a happy investor. 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 you know, part of us was just believing in the business plan and knowing that we can do it. I think for, for us it was a little easier to start. Just given, you know, my background as being an LP investor and spending seven years, you know, working for a large, you know, middle market private equity fund. I just understood, you know, a lot of the processes, challenges of, you know, 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 real estate people and sophisticated real estate investors. But we really went through the process and spent the hard work really getting these guys in. But more than anything, I think you really need to understand what the investor wants and what the challenges are and then really believe in the business plan and pitch like you're pitching any other 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, you know, with each deal we.

Have to convince ourselves like, why are.

We putting money into this? Why does this deal make sense? And then, you know, sort of use that mindset and say, you know, 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 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 and any other 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 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 Cascale. 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 going to listen.

To you and that you're going to.

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. Yeah. The seller's motivation is so critical to understanding, you know, the type of opportunity. And you'd be shocked how rarely I'm asked, james, why is this person selling? And to me, you know, and you're right. In an up market, a discretionary seller says, oh, I'll sell if I can get this price. I mean, that's probably not someone you want to buy from today. And, you know, sometimes they're not going to reveal, oh, you know, there's distress, they're having trouble refinancing. But, you know, maybe it's an estate selling sale, maybe it's a partnership dispute, maybe it's an owner occupier who closed down their business. I mean, those are motivated sellers, and I think it's so important. Jessica, we really appreciate your perspective, and we only have a couple minutes left, so there's two more things I want to ask you. Your company was named a great place to work, and you talk on your website that acadia stands for Integrity, Intensity, intelligence, Innovation, and have built an environment that encourages our employees to step out of their comfort zone and work creatively, helping to make us not just our portfolio, best in class. So maybe you could share with us what goes into a successful company and making it a great place to work.

I have to give credit to Ken Bernstein, our CEO, because, you know, I think it starts from the top down. And, you know, Katie, is a place where you are definitely called upon to be, you know, sharp and on your game and dedicated and, you know, think, you know, intelligently and creatively about things. But we sort of have a no jerk policy, right? And so, you know, we just, you know, egos are checked at the door. And, you know, it's just, I would say from the top down, from Ken, from all, all of us on senior management. It's just, it's a place where I think younger people are nurtured to take the next step and to grow. And we sort of teach them to think how to think about whether it's investing or leasing or managing property or accounting. I think it's all about from the top down, how we hire and sort of how we treat people and conduct ourselves every day. So it actually, it's not just, you know, marketing on our website. I actually think it's really true.

You know, could not agree with you more. The people, the culture, it's got to come first. And we have the same thing in our bylaws at Avis and Young. And we've, you know, we've asked top producers to leave because if they, if they aren't team players, if they don't get just that can spread throughout an organization. And you want people who are team players and make it a pleasure to work. That's really great to hear. Lastly, what advice would you give to someone looking to start out and maybe make their first investment? What would you say to them.

Huh? Capital is key, right? You know, I mean, that's, that's. We know this is a capital intensive industry. So I think probably the hardest part is getting your money lined up and striking the right deal. So I think that, you know, is probably a piece you want to think long and hard about. But also track record, right? You know, you want to, if you're just striking out, particularly if you're investing with somebody else's money, you want to think about being the right fiduciary and being smart about that investment and the track record that you build. It's tough, right? Especially in New York where deals are big and things are competitive. But sometimes starting small, as we know from starting small or even unglamorous, the property might not be, you know, very high profile or sexy, but, you know, if you can make a great return, that's very attractive. So, you know, even if something is modest or unexciting seeming, I think, you know, it can be exciting from a home run deal perspective.

So in this case, yes, communication is absolute key. You're going to want to be very communicative with the tenants, with your investors, with the banks. And everyone is in this together. In a crisis like this, when it's an isolated situation where the, where a restaurant defaults, they can't pay rent, it's a very different scenario. But in this case, having a conservative business plan really helped us out. And having, meaning that how much Runway, how many months can you last without, you know, having income? And that was the, that's sort of the name of the game that we have in any crisis. And we have a crisis every seven to 10 years, crisis management and preparation, having the right insurance. If we had a business interruption, we have business interruption insurance on one of our properties, but it doesn't cover a governmental or pandemic. It's only property level. So all of my business interruption insurance from now on is going to cover a lot more. And it may be a little bit. It may be a little bit more on a monthly basis. However, you really got to think about in times like this, when liquidity, $100,000 really feels like $500,000 and $100,000 could feel in a drought, in a liquidity crisis, which we're not necessarily there yet, but it's not off the table. $100,000 will feel like a million dollars and a million dollars will feel like 5 million in times of liquidity crisis. And that's why.

To have Runway is.

Probably the more important thing. But you just got to do the best that you can with things that you can control. The current pandemic that we're undergoing, it's a black swan. You never, ever, ever would have imagined it. You never saw it coming. It's like 9, 11. You don't see it coming. You don't know. So you just have to do the best you can before, during, and after. And then the lessons have to be learned. And then you look at all the risk. Fire, tenant going out, construction risk, natural disasters, pandemics, now terrorist attacks. And you, you like the Boy Scouts.

So much to talk about.

It's crazy.

You're prepared. You're prepared. So hopefully you still sleep well at night, though. I mean, I know kind of going from the brokerage side to the investor side and the brokerage, you make your commission and life goes on. But obviously, when you have skin in the game, it's a whole other level. Chris, this has been an awesome talk. Just as a closing question, would love to hear. A lot of our investors, listeners are aspiring investors, and what advice would you give to them to get started?

Come up with a strategy. You need a strategy first, A specific strategy. Is it single homes that you want to build? Is it multifamily that you want to build? Is it, you know, a neighborhood that you want to focus on and grow in that neighborhood because you feel like there's a chance that the neighborhood would improve? So think about a strategy first and then implement it with different investors, lenders. And you could start out small, too, as a limited partner and. But that's kind of it. You got to do a lot of homework and you got to bang on a lot of doors for any one deal that we acquire, we haven't acquired in five years. But I'm going to do whatever it takes moving forward. Opportunities are certainly going to come around and then surround yourself with people that are already doing it. And by osmosis and by questioning and speaking to people, you'll get inspired and that knowledge is a gateway.

Chris, this has been awesome. And I know you jumped into the business right after a crisis brokerage side and then you started investing right after another financial collapse. So trying to find the opportunities in very challenging times. I have no doubt that in this next cycle you're going to do whatever it takes to succeed. So thank you for joining us today and so much.

So, you know, our portfolio now is about 4,000 apartments and I would say about half of them are existing multifamily and half of them are ground up development. Right. That's basically the metrics of our portfolio. And both myself and my partner David come from a development construction background. And so, you know, we've always wanted to buy land and build buildings. It's a, it's a, it's a phenomenal experience to go through to buy a piece of land, design what you want to, exactly how you want to from, from every inch of the way, unit sizes, finishes, amenities, all those kind of things. It's, it's really an exciting process. The construction side of it is always the hair on it, right? Because that's the, you know, you got to really know what you're doing there. And you got, and there's some, there are variable risks that you can control and some you can't. And so sometimes you're going to run into deals that are just uncontrollable and some of them are controllable. So, you know, we really, we started to really spend our time in Brooklyn because that was sort of Williamsburg wasn't what it is today and nor was Bushwick and East Williamsburg and Clinton Hill and all those neighborhoods. And we started to really pursue land because we were seeing that there was a dislocation between sort of the yield on cost that we could achieve on a ground up development deal versus what we were putting a lot of effort into some of these rehab deals. So we built out a development team and sort of fast forward a little bit. We now have built out a full construction team. So right now our company self performs our ground up development again only for ourselves. We built out a full property management team, a full leasing team and a full asset management team. So, you know, we really have built out a fully integrated company that can handle every aspect of a project from start to finish. And I think ultimately that was our goal. Our goal was to have enough mass to be able to really control every aspect of a real estate transaction from start to finish.

And now your business is multi pronged. You're lending, you're doing affordable housing, you're buying in other markets. How did you decide how to grow your business? Because you could have just continued to expand on acquiring more multi, building more product in the city, but now diversifying. Talk about how you decided to go into these new business lines.

Sure. So I think, you know, I think the one big lesson that I, that I learned early on in my career was when I first left the family office and went out on my own. It was a really tough time. Right. Because it was the end of 2008 and it was like beginning of 2008, it was a really tough time. And what it taught me was you need to diversify. And we're seeing it again now, unfortunately.

Right.

And what we, what myself and my partner thought about is there's going to be a time where buying multifamily buildings isn't the smartest thing to do. There's going to be a time where building, buying a piece of land and building isn't going to be the smartest thing. And so how do we diversify our business but stay true to the core of what we know, which is in our opinion, we stick to residential properties. And so affordable housing is a residential asset class. Right. Homeless shelters, which we've gotten heavily involved in, are a residential asset class. When we're on the lending side of the business, we're focused on residential lending. So we've stayed very true to the things that we understand, the information that we have in our portfolio that allows us to be smart and sharp of what's happening day to day. But we build different business lines. So right now our lending business is doing phenomenally. We're extremely busy. We're putting out a tremendous amount of money and it's been very successful for us. Whereas we're working every day to keep our existing portfolio stabilized and alive because it's a very challenging time in New York for multifamily. But it doesn't mean that we're not still growing. We're growing a lot. We're really focused on social impact investing. We're really focused on trying to grow into one or two other markets on the residential side. So we went into California and we started to buy some multifamily, went back to sort of what we did originally, which is, let's go in, let's buy some older product, go through renovation plan and retent it. So we started to do that. That then led into us being able to lend on someone else who was doing the same thing. So we really stayed focused on what we know and what we do. But we branched out into every possible aspect of it that we think we can try to generate revenue from.

That's awesome. And it's been really exciting to watch you all grow and be able to get involved in pretty much every aspect of the capital stack and again, stay nimble. But again, with the focus, with residential. So, Martin, you mentioned earlier in the show, I mean, you've got 100 people now who work in your office. Especially for those who are out there, maybe they're in college and looking to come out into the, the workforce. What do you look for in a candidate? And you know what, what advice would you give for someone looking to get into this business?

You know, I think that to me, the first thing I look for is someone who's hardworking. Personally, I think someone who's really hardworking can work through a lot of other deficiencies that they may have. Like even myself, like, you know, I often view myself as, you know, I really work really, really hard. You know, I'm working all the time. I wake up at 3 o' clock in the morning and unfortunately take my phone and start working, right. And, and put it away to make sure that I can get back to sleep. But it's just like it's something that just been, you know, it's been inbred in me and it's something that. So it's something that I focus on. And then I think you really need to focus, you need to pay attention to what you really want to do. I think it's really hard when you first come out of school that it's very scattered. It's like, you know, I want to be in real estate. Real estate's a. It's a big place, right? And just from my experience, I stumbled into just the financial side of real estate. So I think that it's important to pick one or two spots within sort of real estate, if that's the direction you want to go and really hone in on that. And it doesn't mean you're married to it forever, right? It just means that that's where you're going to spend your time and really get some master of that specific part of it before you move into the next. And then once you have Enough of experience, you know, you'll either get lucky along the way and get some success, or you'll have put together a plan for yourself that you can then take and do something with.

It's great advice. And I'm a big Gary Vee fan, and, you know, he talks about, you know, his secret to success, which is really that hard work where there's. There's just no substitute for it in execution, following through and delivering. So, you know, so true. Martin, what. And we only have a minute or two left. But what would you say your other keys to success are, you know, above and beyond hard work. What do you think has allowed you to get to where you are today?

So I think one of the things that I've really focused on in my career is being transparent and honest. I think it's like something that isn't spoken about enough in the business. When things are going great, you can be transparent and honest about it. When they're not going great, you should be equally transparent and honest about it. And I think that it's led to a lot of success for us, very honestly, because, you know, when you're making an investment or you're getting into a relationship with someone, it's for the good and bad, and hopefully it's more good. And thank God for us, you know, knock on what. It's been good, but there haven't been without a couple of roadblocks along the way and some speed bumps that we've had to get through. And we've always really tried to be transparent, and I personally try really hard to be honest and transparent with my investors, my employees, my friends, my family. It's just a very important thing for me that I think leads to good communication is another very important thing for me. I try really hard, as my career has gotten further along the way, to communicate clearly what you're. What you're trying to achieve, what your ask is, what's being asked of you. I think those. You know, to me, there's a lot of interpersonal skills that come into the business that aren't just sales. Sales is another one. But to operate the business and have a real company that operates, that everyone's pushing the ball in the same direction, that comes down to some interpersonal skills.

That's fantastic now and could not agree with you more. You know, your integrity in this business is paramount. So, Martin, this was awesome. It's been great. So great knowing you over the years and make an effort. And I know our audience is going to get a ton out of this so we just really appreciate your being here today.

Thanks so much for having me, James. I really appreciate it.

This is thank you again. This is your host James Nelson of Real Estate Investing Live from New York. I want to thank you all for joining us this week. Please tell your friends and leave a rating or comments if you haven't already. Please connect with me at James Nelson nyc, whether it's on Instagram, Twitter or link in with me. And please feel free to ask any questions or share your thoughts on this and I'd be happy to answer them on a future show. Until next week.

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And we'll talk again next week.