Building Trust with Adam Altman

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis & Young's Tri State investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host.

Welcome to episode number 166 of the Insider's Edge to Real Estate Investing. This is your host as always, James Nelson. As I mentioned on the show last week, we are Now a top 3% podcast globally and that is thanks to you. So I cannot thank you enough for your support, for listening, for rating the show, your comments and most importantly, sharing it with your friends. If you have found this helpful, be great if you could just pass this along to a couple people today who you think would benefit from this and I have no doubt that you will benefit from this episode. Today we have with us my good friend Adam Altman, who I've known for quite some time. We've had the pleasure of doing several transactions together and I'm entitling this episode Building trust which is paramount to your success in this business Adam is the founder and Managing member of Kabir, which is a vertically integrated private equity firm responsible for the investment, development and management of real estate. His portfolio includes commercial, multifamily, industrial, hospitality and development. And his role Adam is instrumental in fundraising, structuring, JV partnerships. Adam has participated in transactions totaling approximately 6 million square feet of commercial properties, along with thousands of residential units, hotels and new development land with over 6,000 units of entitlement. Prior to joining Kaber, Adam focused on acquisition, development and management for a multi billion dollar healthcare company. He's also worked with the Private wealth group at Deutsche bank and a Portfolio manager at Chestnut Ridge Capital. He was intrigued with real estate early on as he walked the blocks and neighborhoods while studying at nyu. After college he went on to other ventures including Wall street, his own Internet company, family office, and turned eventually to real estate. Today's Adam firm focuses on geographical areas of the New York metro area and the south eastern region of the US and looking back on his track record, he says being able to trust someone is almost more important than anything else. It doesn't guarantee outcomes, but it does guarantee alignment. I could not agree with this more. He goes on to further say that he also emphasizes the value of teamwork, saying it's about collaborating and making it interesting. So I know you're going to really love this episode and get a lot from it. As always, you can find in the show notes@james nelson.com how to connect with Adam and see what their company is up to. We're going to have a brief word from our sponsor and we'll get right into that interview with Adam Altman. A Different Approach to Putting Our Clients First Avis and Young's Tri State Investment Sales Group sells multifamily office, retail, development.

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Please Visit us at aytristateinvestmentsales.com and follow us on Twitter LinkedIn and Instagram amesnelsonnyc to learn more. Welcome everyone. I am thrilled to have with us my good friend Adam Altman who is co founder and managing member of Kaber. Adam, thanks so much for joining us today.

James, thanks so much for having me. It's a pleasure to be here.

Awesome. Awesome. And I'm trying to remember when we first met. It's definitely more than 10 years, maybe closer to 20. Maybe you can tell the audience kind of when you started, when you got into the business, and maybe a little bit of your backstory of how you got into it.

Sure. So I always knew I loved real estate, and I learned I loved real estate when I lived in New York and I was going to nyu and I just enjoyed walking the blocks and walking different neighborhoods, seeing what was evolving in these different neighborhoods, and just exploring and discovering new things. I was never someone who liked being chained to a desk, so I knew that real estate was something I wanted to be involved with. I took a little bit of a windy road and I didn't go straight into real estate. I went to Wall street first, had a brief stop running my own Internet company, which was somewhat successful, and then ultimately got back into real estate. But by time I did that, I had learned a lot of lessons from mostly failures in those other spaces. And maybe the failures might have not even been economic failures as much as knowing that it's not what I really wanted to spend the rest of my life doing. So even if I was somewhat successful at it, I didn't see myself doing this for decades upon decades and what I learned during that sojourn from Wall street to Internet to family office, and then ultimately back to real estate was I learned how to put capital together. And the ability to put capital together is, you know, they say there's 10 steps to buying real estate. Step one is identifying it, and step 10 is managing it to model. Well, steps two through nine are finding the money to buy it. And so learning those steps two through nine were really, really important. And those other experiences enabled me and really allowed me to have the ability to not. Not just see real estate as something I would love to own, but now how do I go and own this thing?

So talk about that Internet startup, because that sounds interesting. So maybe a little bit about what it was. And then I guess a big part of it was raising the money to. To launch it. So maybe talk about what that experience was like.

So it was a company that sold socks and T shirts and underwear online. It was. It was in 2000, 2001, that it started. We actually grew it to about $2 million in revenue in the first year and a half. It did not take a lot of money because it was totally bootstrapped. I was one of the first major advertisers on Google, buying keywords. And ultimately, I did sell the company. I made some money. I think if I would have held on to it, it would have been probably. I probably should have figured out a way to do that because E commerce and obviously exploded. But sometimes you learn from the things you move on from and you learn from the. The major successes and the mild successes. So running my own business, that taught me that I wanted to be independent, that I didn't necessarily want to be at a big shop. And it also taught me to love real estate because we were based on the Lower east side. So when I went to work every day and walked from my apartment in Greenwich Village to my warehouse where I was packing boxes of socks after graduating nyu, not nearly as glamorous as it sounds, run an Internet company. I was packing boxes of socks. I loved walking by the buildings. And what I noticed was all of these guys who ran these little stores that sold this kind of sock or that kind of sweatshirt or that kind of T shirt, who's actually known as the gatka, which is Yiddish for underwear, the underwear district. And it was on Orchard street on the Lower east side of Manhattan. And what you realized is they weren't really making any money selling these, you know, two pair of socks. They had made money buying the buildings where their retail stores were located. And I also learned that I got to know these guys because I was buying product from them, right? Because I was bootstrapping this. So I would get in 10 orders and I would go and buy the goods and I'd mark them up and I'd sell those 10 orders out. And what I learned is I got to know these guys and they were really nice and interesting and all had unique personalities and unique stories. And you also learned that real estate was a very personal interpersonal endeavor. You had to create a relationship with that person that owned that real estate in order to ultimately figure out a way to transact. Now, I wasn't yet ready to transact and I wasn't yet ready to start building a real estate company. But these little lessons ten years later started coming, becoming really important in putting together what ultimately would be the real estate private equity fund that I run now with my partner and going to.

Definitely get going to get to all the success that you've had over the, you know, the past decade in that regard. But let's, let's talk about the failures since you brought them up. So I once, Barbara Corcoran spoke to our company once and she said the number one thing that she saw which determined if an agent was going to be successful or not was how they handled failure. So you brought it up. You had some challenges, Wall Street Internet company, some failures along the way. How do you handle failure?

So there's no way to handle it other than to pick yourself up, brush yourself off and move on. But if you just did that and you didn't really internalize, what were those things that maybe I didn't do well enough or I didn't do right? Or what are those skill sets that maybe I don't have? Because nobody has all of the skill sets, right? You have to surround yourself with really smart people and sometimes people that are much smarter or better at things than you are. And I think a lot of people are nervous to do that because they're worried about being overshadowed or not being the brightest one in the group. To me, I always knew I picked the best working group in college when I was the dumbest one in the group. That means I was really smart. I picked a really good group, right? So, so to me, it was, you know, it on the Internet side, it was finding people who knew more about technology, right? Because I was an idea guy. I wasn't a technologist. You know, my partner now at Kaber Group, he has built large multi billion dollar companies. He's an unbelievable operator and builder of Businesses and detail oriented. And that became really important when I was working at Deutsche Bank. It was about learning how to raise capital and talk to people about raising capital. But Deutsche bank also taught me that I didn't like being at a big bank. Right. So in some ways it was a failure because I did something I didn't love. But in other ways I learned from that and learned what I was good at and what, and what ultimately I liked and what I didn't like. So. And along the way, you know, one of the things I'm really proud of is I left all of those experiences on very good terms, you know, with the people that I had worked with, with the exception of the Internet company. But, but I left Deutsche bank and Care One and Moody's and all these different companies that I work with. Those people ultimately became friends, some of them became investors. And I left on very good terms because I was always very honest about what went right and what didn't. And I also always tried to leave more value than I took. Knowing that I had, you know, I felt like I had a bigger, better or higher purpose. So I didn't. It wasn't about burning bridges, it was about a journey. And you know, when I, when I finally got ready to launch this company, I was about 31 years old and, and I felt like all of those things had accumulated to a pile of value and lessons that I was really going to be able to use in order to launch my career with my partner Ken Pasternak.

Love that. And I'm sure to have all those different perspectives and learn how to work with people. And I, I love that adding value. I think a lot of people, sometimes, it's human nature, how much can I take from this situation? Whereas if you have that mentality where, look, I want to bring value to the, the table, that's really a great long term view. So talk a little bit about, okay, you went from the Internet company, you sell that, then you go work for a family office, talk about the road. Then that got you to real estate.

So, so I went to work for Kenny Pasternak, who's my now partner. I went to work for him as an assistant. I went from, I, I went home to my wife and I told her I'm working for this really amazing guy. He's built this multi billion dollar publicly traded company which he has since left. And I'm going to be making half as much money, you know, so, but it's going to be an unbelievable experience. I'm going to learn so much and and, and, and that's what I did. And, and I think I got as much out of that experience as I could. And then I, he recognized and I recognized that I needed to have even a more robust experience. So I went from there to Deutsche bank, and now Kenny actually became one of my clients. And at Deutsche Bank I was on a team that was managing a couple billion dollars. And I really didn't enjoy the large corporate format, but I was pretty good at it. And I enjoyed the people I was working with, but I didn't enjoy the structure of the environment. And one day I was out and I was meeting with a very large family office. And, and the individual said to me, what are you doing there? You should come here. What do you really want to be doing? I said, well, I've always really wanted to be in real estate. And he said, okay, well, you're in real estate now. And he said, if you can get along with this guy who is partially in charge of some of the real estate, they'll figure it out. And all the problems, or many of the problems started landing on my desk. Zoning issues, environmental issues, lease up issues, cost overrun issues. And I just had to start solving problems. And so I didn't look at it. Oh, you know, solving problems. You know, I looked at it. Wow, I get to learn so much about the toughest situations, talking to really smart people, great lawyers, great law firms, smart brokers. And all of a sudden, through the process of solving those problems, I was basically learning more and more about this thing that I kind of knew I wanted to do. And now 2007 rolls along and the market is really getting ready to crap out. And Kenny calls me up and he says, adam, the market's getting ready to crap out here. I want to allocate a lot of my own capital to this asset class. And I said, that's great. I'd love to do it with you, but I want to be a partner. I don't want to be a worker. He said, well, partners don't make really any money. Partners put in sweat equity. So now I go back to my wife and I say, I'm going to make less money again. And she was incredibly supportive, unbelievably supportive. And that was really. And I went to the person I was working for, wonderful guy. And I said, hey, this is what I'm doing. This is why I'm thinking of doing it. I want to be very upfront. And he said, that's a great opportunity. You should take it. And I still consider him a great Friend, great mentor, an investor. And that was. We really wrote the business plan in 07, started the company in 08, and really got in, leaned in in 2009.

So clearly you had experience. Having worked with Ken originally starting as an assistant, then you worked with him on the other side on. On the. The financing route. And then, you know, now you're coming to him as a partner, which, you know, partnerships are not taken light lightly. I mean, this was a, you know, a big undertaking. So what would you say was about you that led Ken to say, that sounds. That sounds great. Let's do it together. I mean, what is it about your personality or how did you complement his strengths to know that this was going to be a great partnership that's lasted so long?

So I think there are probably two things that he appreciated about me and had gotten to know in me or about me. One is he saw I would, you know, I had a relentless curiosity and a relentless energy. And the other is that he trusted me. And one of the things I've learned now, you know, I'm 47, I've been in the business a long time. To be able to trust someone is so much more important than almost any other quality that they have. Doesn't guarantee success, it doesn't guarantee outcome, but it guarantees alignment. They will act in a way where they will look to align their interests with yours. And I guess I'd say if you have a partner and you see a dollar on the floor, you pick it up and you say, okay, we're splitting this 50, 50, 50, whether they're in the room or not when that dollar falls on the floor, right? And I think if you always kind of have that approach and that mentality, it's not about making the most money. It's about creating a collaboration. It's about creating something that's interesting. It's about creating an interesting journey. I was never really thinking about money. I was always thinking about, how is this going to be interesting? How is this going to be successful? How am I going to collaborate with really smart, good people? And if I can do all of those things, then success will follow.

Couldn't agree more with you on the importance of trust, certainly when talking about partnership. So it begs the question then, how do you earn that trust? Or how do you. And again, you had the experience to work with him, but I know and observe these incredible partnerships that you've formed over your career. How do you. How do you really ensure that? When you're looking for a partner, what is the test? How do you know, whether you can trust someone or not, I guess is the ultimate question.

You have to start somewhere. You know, for instance, people talk about in our business, NDAs, right? Someone, you know, someone's like, well, before you talk to me about the deal, do you want to send me an NDA? If this is about maybe potentially partnering on a deal, I say if I have to send you an NDA, a piece of paper that's going to assure me that you're not going to talk to anyone else or you're not going to go around my back to get the deal. If I'm going to spend and I have to then show it to my lawyer and then you're going to mark it up and I'm going to mark it up. If we can't even trust each other that from the get go, then it's probably not going to work. So I think it's through action, it's through consistency. It's over time, right? But I think you start saying, okay, I'm going to try to trust this person. And then over time you realize, wow, did I make a good choice or did I not? And you won't always make a good choice. But you also learn how to pick people who, who you feel have characteristics or qualities or reputations that align with your own.

That makes a tremendous amount of sense and really appreciate you sharing that. I want to get back to some of those partnerships that have really been key to your success. But let's first give the audience and for those of you joining us on Instagram, we're also now streaming on LinkedIn and Twitter or whatever they're calling it now, I believe. X so great we're multi media at this point. But Adam, why don't you give a sense for our audience what the KBER portfolio looks like today. You are a fund model, right? So maybe you can give a little sense of kind of the history of kber, types of assets that you invest in and what that portfolio looks like today.

So we are a private equity real estate fund. We, we, we look for value add and opportunistic situations. We are never passive capital. We are always active capital which means we're the GP and we'll find a suitable LP or will be the gpn. Lp we will just buy it ourselves. Are our investor base are ultra high nets and family offices. They tend to be very repetitive and sticky based on how we've done and you know, and we geographically we're, we're very focused while we're not asset type as focused. We're geographically very focused. So we're New York metro. So the greater New York area. So that's New York, New Jersey, Connecticut, Westchester, Long Island, New Jersey, not so much in New York City, although that's maybe starting to change and we could talk about that. And Northeast Florida. So from Daytona up through Jacksonville and into St. Mary's Georgia we have gone in certain circumstances a bit further afield if the opportunity warranted it. But we, but that's, those, those, those situations have been fewer and further between.

And I could certainly attest and from what I've seen you acquire and own operate, it really is a range of different assets in those geographic locations. So if not mistaken, in Florida you have built thousands of apartments at this point for, for rent.

Yeah, I think at this point we've, we've built, you know, I don't want to get the number wrong but I'm going to say over a thousand stick built resident rental units. We've bought thousands of resi rental units. We've sold thousands of resi rental units and we have a land inventory that's permitted and approved to build thousands of resi rental units. And our land is currently unencumbered which allows us to weather this interest rate storm better and allows us to sleep at night better. But still, you know, it's a very, it's probably the toughest environment I've seen since 2008 and 2009.

And then in the tri state area here you have significant office, residential, retail holdings and industrial in New York and New Jersey.

Yeah, so we've actually, we haven't bought an office building probably seven or eight years. Happily. We do have a legacy office portfolio which we've, and we've pared down our office probably by 70% over the last five plus years. But again we still do own office even if it's performing really well. It's a tough asset class now because lenders don't want to lend against it. And even if, you know, we have one asset where we have the, the most income we've ever had on that asset, it's an office asset. But I couldn't. But it would be very, very difficult to refinance right now. Correct. So, so you know, it's just a unique moment in time for office. Everything cycles and changes. If you remember a few years ago, retail was a bad word. No one wanted retail. It was the end of retail, the death knell of retail. You know, Amazon was going to kill retail. Now you see Amazon, you know, they buy Whole Foods and they buy you know, the convergence of Internet and having retail experience is so important. And retail's back and office is out. And there is some truth to the way people are going to work differently now and off and be. Office is certainly much more obsolete and rental rates will change, but people will still go to a place of business to do their work. Right. Zoom recently called their employees back into the office. If that's not a bellwether for the importance of in person collaboration in a place of work, I don't know what is. But yes, office people will work differently. Floor plans will be different. People will need less space. People want more quality. You know, they want a place where they can work collaboratively. So it's absolutely changing, you know, but the only thing that is consistent is change. And if you have, if you don't change consistently with that, then you become the. The thing that breaks. You have to be flexible.

No doubt. And on that note, I'd love to talk about an acquisition that you made last year. So we sold you a large scale industrial property in Queens.

Correct.

This was the former Mattel Toy factory building, as they built GI Joes there back in the day. And. But we're talking 600,000ft on multiple levels. At the time, it was about half vacant. This was not your typical kind of one story, 25 foot high ceilings. But what did you see in that asset and how did you approach it?

So we bought that it's in Jamaica, Queensland. It's on Jamaica Avenue. So it's centrally located, it's near the airport, it's near major highways. It's known as the Ideal Building. And it was.

We might. I don't know if we ended up naming that.

Wait.

But you're. Well, you're welcome to.

I don't have a copyright. No, the Ideal Building. I think it was actually known as the Ideal Building. And it's where they made teddy bears.

Okay. It was teddy bears.

I didn't even get my story. And no, it might have made GI Joes too. I don't know that it didn't. And they also eventually made the Rubik's Cube there.

Oh, wow.

So. So this was a big toy factory. And I think it was known historically as the Ideal Building. Okay. And it's 615 or so thousand square feet on six stories. And for us it was about basis. Right. So when, when you can. Basis cures a lot. And we, we bought this at a basis that gave us the flexibility to really pull in those tenants that were being pushed out of Maspeth Bushwick Williamsburg, Long Island City. Those tenants needed a place to go and they still need a place to go. And they wanted a place that was commutable, that offered them a flexibility environment to ship on Amazon to. We have a make, we have a kimchi maker, we have an auto parts supplier. You know, we, we have all these different uses where they, they would have been probably a bit closer to the city and that became unaffordable. But they needed to be somewhere and they need to run their business. And we now have a basis that we can give them a great product at a great rent. And when you can buy something at a basis where you can give a great product at a great rent, you kind of become like, almost like the target of real estate, right? So, you know, my daughter and my wife, they love Target. Why? Because you go in there and you have a great choice of products, good pricing, good looking environment to do your shopping. And so, you know, some people want to be Hermes, you know, or Gucci. That's not our style. We always say the dollar, you know, doesn't know where it's made. We, we want to be, we want to be. Deliver a great product at a great price in a really strong area. And if we can see something where we can do that, that starts checking all the boxes for us, that's awesome.

Now I want to. And I've got to give you a lot of credit because having been the broker in that transaction and watching how you pursued that opportunity, right, because this was a complicated deal, tight time frame, your focus and attention and perseverance on that deal was really commendable. And I don't think if you applied that focus, there's no way that would have happened. So, you know, when you get a deal in your sights, you know, talk about what it takes to get things across the finish line. Because I would imagine there was multiple times along that negotiation where you could have said, I hit a dead end, this isn't going to work, I'm out. Right. But it seemed like to me that every time there was a challenge, you, you doubled down. I mean, I remember at one point you brought in an engineer because you were trying to figure out how to. And this was completely on spec. You, you were not in control of this deal. You didn't have, you know, you were still in negotiations. So what, you know, so, so I.

So first I want to give credit. We have part partners in the deal. Monocle, Monocle Group. Great partners. I guess you become myopic, you put on blinders and just have tunnel vision. If you believe in it for how am I going to get this thing done? And everything else kind of slows down and stops. And you just say, I have to believe in it first. It doesn't always mean I'm right, by the way, but I have to believe in it first. And if I believe in it, then I need to find a way to push forward and persevere and ultimately get this thing done.

And I think it's also worth noting at this time that. And not that there's anything wrong with the 95.5model 9010 model, but if I'm not mistaken, in your investments, Kabir is coming in oftentimes with half the equity. So you are truly putting your money where your mouth is. I mean, this is not, you know, let's. This is a little risky, but, you know, hey, that, that's our.

We, we tend to invest. Granted, the Kabir fund is our partner's money. You know, we. And we are a very large investor in the fund, but it's also my investor's money. So I'm coming in with the fund's money. But we do not shy away from eating our own cooking. And if we like it. I've seen a lot of models where guys go in and they say, oh, I'm going to do a95.5, and I'm going to charge XYZ and fees, and I'm going to take those fees and I'm going to use that for part of my five, and then I'm going to syndicate out the rest of my five. And then I'm going to get enough fees in the first two years when I'm really out of the deal. And then if it works, great, and if it doesn't work, I'll just do another one. And, you know, we don't. That's not how we roll. We roll where we really make money by aligning ourselves with our investors, having our own capital at risk, and, and really. And eating our own cooking.

Awesome. So I want to now talk about partnerships because. And you just mentioned a great partner that you had on the Jamaica deal. You have several other partners that we've done business with. And it's an incredible group of people. It's a very diverse group, different types of owner operators. It seems like you really have a knack for finding the right partner for the right opportunity. So what comes first? Is it the deal, then the partner? How does this all come together?

So one of the great parts about real estate is it's a, it's, it's A personal business. So AI can do a lot of things. It still can't negotiate a deal. Right? It might be able to tell you how to negotiate a deal, but it can't actually sit on the other side of the table from another human being and create a connection and negotiate an outcome. And so I think people are at the core of real estate, right? You get to know people. We've known each other for, what is it, 15 plus years. You, you get to know someone and then you do business with those people that you want to do business with, and you learn about the skill sets that other people have. And I have tremendous respect for other people's skill sets. I think, as I mentioned earlier, I have tremendous respect for those things that people can do better than me. And I remember those things. So when I see a deal that has things about it that I feel like someone else can do better than I can, I'm really excited to bring those people to the table or frankly hire them into my organization. Obviously, the more successful owners are, sometimes they don't want to be hired, they just want to be my partner. Sometimes I say, this is a role that we need within our walls. And that's a decision that Kenny, my partner, Kenny and I make. But we partner very selectively, and as we've progressed and as our company has grown, we partner even more selectively because, you know, I think at the end of the day, a partnership is like a marriage. And, you know, you have to take those really seriously, and you have to take kind of those vows of partnership really seriously.

Couldn't agree more. And I'd like to dig a little more into how these partnerships are formed, because a big part of the book that we talk about for those looking to get into the business, and I believe the number one reason that people don't get into commercial real estate investing is fear, lack of capital. So we talk up front in the book about finding a great partner. So if you have a great opportunity in the expertise, but you do not have the capital, the track record, a great way to get started is to find a partner. So how does that conversation go? When you are, let's say you're trying to get into a new asset class and you realize you don't have that skill set and you find that co GP that, that operating partner, how does that conversation go? Is it just right out of the. The gate, hey, let's be 50, 50 on this. You do this, you do that. I mean, you don't have to get into the waterfalls and all that stuff. But just how does that partnership conversation go?

So with the partners we choose, it goes really well because it's never about looking for the last dollar. It's always about trying to create the most successful outcome and working with a spirit of fairness. And those who do the work should get paid. Paid the money meaning if, you know, we own a grocery anchored shopping center, we have a tremendous leasing broker on it who's also part of the partnership. Right. He's going to be better at leasing and talking to tenants. And I would be. I don't want to get part of his leasing commission, but he's really doing that work. Right. I don't need that. That's not what I'm in it for. I'm in it for the outcome, for the deal to be successful. So I think. And partnerships don't evolve overnight. These are people I've often known for many, many, many, many years and have broken bread with them many, many, many times. It's hard for partnership to really evolve quickly because there needs to be a lot of trust there.

How do you divide up the workflow? Because I told in that example you gave of the shopping center, that makes a ton of sense where you have the broker, has the expertise in the leasing. But then what's your piece to the equation? Is it the capital?

It's a combination of the capital. It's knowing how to run a deal in an institutional format. It's recognizing the value at the onset. Right. And also recognizing where you might need to bring talent to the table. Right. And listen, there are many deals that we don't partner on, right. I would say the majority of the deals we do ourselves because we've homegrown a lot of that talent within our organization. But we're never so egotistical to say that our organization, we always acknowledge that there are people out there who can do things better or different than we can. But those conversations about finding great partners happen over time. You know, I've known my part, my partner Kenny now for, you know, over 27 years, you know, and, you know, so it evolves, you know, and that trust deepens and that respect deepens and that give and take never changes, but it's healthy, right? You know, you inform each other's view on things and how you look at things. And, you know, someone on a certain deal might start out more positive, the other one more negative, and then by the end of the deal might be totally switched around where. And that's how you often reach a good consensus.

So if someone's listening to this podcast right now or joining us live. And they have seen your portfolio and what you've done, and let's say they've already done similar projects on a much smaller scale in your neighborhood asset class, but they found something larger. Great opportunity off market. You might not don't know them. If someone were to just call you out of the blue and say, hey, Adam, I think you all would be a great partner for this. Would you consider doing this with me? What. What would you say to that?

So the reality is probably not because. Because it's, you know, it's just so out of the blue. And, you know, you know, if you called me and said, adam, this is great guy who I've known for 10 years, and he's really smart and he just found his unique opportunity, then that would be a totally different story than someone kind of reaching out to me blindly and saying, hey, you know, someone's selling this. Let's be partners. You know, I think that's a really. There's a really high threshold, and it's not so easy to just get married. Yeah, right.

Oh, no, I totally get it. And the reason why I asked the question is because I think it's really helpful for our audience because a lot of them, especially if they're new to the business and we get people who listen to the show who are in college and are thinking about doing their first deal, and if they do find that tremendous opportunity, what do they do? But what I'm hearing from you is to really kind of work within your network, and sometimes it's maybe not that direct connection, but maybe that person who you do know and trust, who can speak on your behalf, is going to help you find that next partner.

That's right. And if someone, for instance, is in college and they find and, you know, figure out what your superpowers are, figure out the areas, you know. Do you know the areas where you're looking for that property better than the brokers that are trying to sell it to you? Right. So if you're an NYU student and you happen to live in Brooklyn or on the Lower east side, do you know those blocks better than the broker that's trying to sell you the building on those blocks? And what are. What's the backstory on that building? And why is it coming to you? Now? You have. And for whatever reason, you now have that opportunity. You figured out something. Maybe it's a specific angle around the zoning, or it's this angle around air rights, or it's an angle around a ground lease that's getting ready to expire or some story and you have what you believe to be is a unique viewpoint or solution that's valuable. Right. And maybe, and maybe what you need is someone who has capital. So who in your world, or who in your world might know someone that says, hey, that's a really smart idea, that's a really unique way of looking at that. I'd be willing to put capital behind that idea or behind that way of looking at something. Or if you have capital and you have guys who want to just be smart about stuff. Right. You know, then, then it's, then it's the other way around. But I think it starts by being an expert in whether it's the capital. You know, I think in real estate there are a couple of ways to make become successful. Either knowing how to marshal capital, knowing how to find and create opportunity, or the third is knowing how to really, I think, be a great builder or construction. I think those are kind of the three categories. Capital construction and finding deals. You know, managing being a great manager or being a great operator of an asset, very important, but it's also something that you can pay for. The others are skills that you, that are more innate or that you have to have learned. You can't. You can go and hire a great building manager, right. And it might be very expensive because they might be the best, but those other things are really hard to just find and buy in the marketplace.

Yeah, I, I really love how you talked about having that expertise, that perspective, having that, that adding that value that you just can't buy.

Right?

So that, that, that's, that's really helpful. Talk about a little bit of how you source opportunities. I mean, such a big part, I mean that leads to the question, okay, well if, if I have knowledge of an area, I have a business plan, okay, so now how do I go find an opportunity? And for you, you've been doing this for a long time. Brokers are very, you know, quick to return your call. How do you, how do you find these opportunities? Or how do you, how do you go out and find things that aren't even on the market right now?

So first of all, when I started, brokers were not quick to return my call. And I remember once calling a broker who, you know, was at what I probably described today as a very mid level shop. And the individual took my call and I said, oh, you know, I really want to talk to you about this deal that you have the listing on. It was pouring rain. And she said, okay, but you have to Come over right now and talk to me about it. So I remember walking there in the rain, like getting sopping wet, sitting down. So I think some of that relentless kind of pursuit is important. Creating a network is important. By the way, feedback to brokers when you're not going to buy a deal is important. Right. So, so if you're not going to buy something, tell them why, you know what, what are some of the reasons, what's the rationale? Because that becomes valuable to them, become a resource to them and to their process.

Yeah.

Because then they're going to want to call you and have a more broad based conversation which because you end up doing business with people, the more you do business with people and so the more you're talking to someone, the greater the likelihood of creating a commercial interaction. And so, and people talk to people who they either are getting knowledge from or enjoy talking to or whatever it is. So I think it's really important to kind of continuously and constantly be having those conversations, putting yourself out there, sharing, you know, what, you know, you know, if you, if you're always just taking information from people but never giving it back, you know, nobody likes a one way street, right. If you're aware of things that are going on in the marketplace or if you can be helpful to a broker or some, or even a competitor. Right. If you can be helpful. I remember a number of times where I lost a deal and I had spent 10,000, 50,000, whatever it is on work putting that deal together. When I lost the deal, I called up the winner and I said, listen, I've done this stuff, I have it. If you want it, you can have it. Right? Wow. Because he's now won the deal and he did it fair and square. And so now I'm gonna like, why would I be a jerk? Right? Right. Why not? Like, why wouldn't I share that? Because maybe, maybe on the next time it's like it's the other way around. Now that doesn't happen super often, but I've called and shared architectural plans and other things when I've lost. You know, one time I lost a deal and the winning, the person who won the asset, well they didn't win, they won the ass. They went hard. Non refundable for a seven figure number. We both fought hard and they paid more. So winning a deal usually means you've earned the right to pay the most and they paid more. And I wasn't willing to go there and so I sent them a really nice note and I sent them, I think a Plate of cookies or something and said, because there was one of the buildings next door to a building I already owned. I said, you know, welcome to the neighborhood. You know, if you ever need a cup of sugar, come on over. And they laughed. It, you know, they laughed. They said, thank you so much. And you know, kind of the way, I guess maybe it's a basketball game and two opponents fight hard, you know, at the end you still shake hands and something happened or changed in their business and they ended up not going forward on the deal. And, but I knew that because they said, listen, they called me up three weeks later and said, we're not going forward. Something changed. Our deposit is hard, non refundable. The seller's keeping it. I said, okay, that's really interesting. And then I bought it for the price I wanted, but for a million dollars less because their deposit was credited to the purchase price. I knew that. The seller knew I knew that. And so that was an example of sometimes it comes back in, in, in a way that is, is, is, you know, karma or, you know, goes around, comes around.

But I love how you were doing that, just the right thing just to put that positive energy out there and it, and it comes back around. So that's wonderful to hear. I mean, I, I think this business gets a reputation for being a lot of sharp elbows, but it really, the way you conduct yourself, it really seems, I know that you enjoy what you do and, and I mean, look, I'm sure there's stressful moments, but how do you keep an even keel? How do you kind of stay level throughout?

You know, it's hard. It's, it's, it's hard to always be even keeled. You know, you, you. I, I think anyone who's competitive, wants to win and wants to have and find success, you know, certainly family, my, you know, my partner currently, you know, create perspective or balance or tell you, you know, hey, you know, and then certainly looking back in, you know, sometimes the best deals are the ones that you ended up not getting or not winning. And at the time you're so upset or I'm so upset, and I said, oh my God, I can't believe I lost out. That was, that would, that was going to be an amazing opportunity. And then, you know, looking back three, four, five years later, you know, you say, oh my God, thank God I did not win that deal, because that would have been a disaster. So, you know, kind of understanding that gives you some perspective over time and you know, knowing that kind of. I don't say it's just money. But, you know, these are. You trade all these things in a moment for those things that really matter in life. So kind of having that perspective, I think those are important parts of it.

It's incredible advice. Well, Adam, this has been unbelievable parting advice to especially the people out there, aspiring investors. What would you say to them right now?

If you love real estate and you want to be involved in real estate, the best way to do something is to actually just go and do it. So if you don't have money, start walking buildings in neighborhoods that you think are going to be interesting. You know what's an interesting neighborhood? To me, you find the neighborhood on the edge, the neighborhood where, you know, maybe it feels dangerous because it's not super safe, but it also feels really cool and hip. Right? What's turning? Where. Where is that energy turning? And then. And go there. Just walk buildings you don't have the money to buy building, walk and become experts and then. And then start to understand how to marshal capital. And you don't have to buy something big to start. Just buy something. Maybe, maybe it's an apartment you rent out, right? Maybe, you know, start thinking, you know, start thinking about getting in and learning about the business. And I think it's also really important to, you know, find mentors in life, find people who are willing to share their knowledge and pass it on to you. I think that's a really important part of success as well.

That's fabulous. Adam, thank you so much. It's been incredible knowing you all these years. You're such a power of example. Let the audience, what's the best way to see what you all are up to and connect with you.

So, first of all, James, thank you so much. You're one of the leaders of the brokerage industry. You've built incredible success after success. Even walking around the walls here. You see what a wonderful job you've done building up the presence of Avison Young here, being an authority now and kind of sharing that knowledge. Amazing. And being a great friend if people want to learn more about us. The name of the company is kaber k a b r and we have a website, www.cabergroup.com and. And thank you again for having me.

Thank you and appreciate all of you who joined us, especially those live. And for those of you who are listening to this on. On your podcast, please make sure and rate this episode. Give your comments. That's really what helps. Share the word. This show is for you, to give you the insider's edge to real estate. Investing. I hope you took a ton of notes. I will quote one of my mentors, Rod Santomosimo. Remember that knowing isn't doing so. I really hope you take these words and this advice to heart. Until next week, this is your host, James Nelson.

Thank you. Foreign thank you for listening to the Insider's Edge to Real Estate Investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James AmesnelsonNYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show, notes and other episodes along with an exclusive video series and other helpful resources so you can gain the Insider's Edge to Real Estate Investing. Until next week.