My Story

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and 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 everyone to show number 114 of the insider's Edge to Real Estate Investing. Yes, you heard it right. We have renamed, we are relaunching the podcast. But don't worry, we are still doing all the exciting things that we were doing with real estate Investing Live from New York. But this new title coincides with the title of my upcoming book. Yes, you heard it. We are going to be releasing a book next year. I am writing it with my co host, Rachel Hartman. Rachel is a very accomplished writer. She's covered many Fortune 500 companies. She is a weekly contributor to U.S. news & World Report. Her work has also appeared in Forbes, Fox Business, Yahoo. Finance, Bankrate, nasdaq, msn, the list goes on and on. And now we are collaborating together to write this incredible book that's going to teach you everything you need to know. How to find the opportunities, how to build the right team, how to reposition these assets, raise capital, then ultimately capitalize on them. Yes, and real estate is an insider's game. That's what I love about this asset class. The subtitle of the book is going to be Game Changing Strategies to outperform the Market. So that's what we're teaching you here. And for these next 12 episodes, we're going to show you step by step how to do this. And for today's show, you're going to get to hear my story. Yes, we've had incredible interviews from legends in the business over the last two years. But now I'm going to share with you my story not only as a broker, but also as an investor with the goal to be helpful to you and not only some of the successes I found, but also some of the failures which will hopefully inform you. So I'm very excited to have this discussion after we have this. The next episode we're going to talk about why real estate and how real estate as an asset class compares to, say, investing in the stock market. All the advantages, why you should be interested in real estate. And then we're going to get into that 10 step series on which is going to teach you everything you need to know on how to invest and you can also find that video series@jamesnelson.com Please go ahead and subscribe for that if you haven't already. So I want to thank you all for all your loyal following and spreading the word on this show, telling your friends, it means so much to me when you subscribe, when you have your ratings, and I can't thank you enough. And so we're going to have a brief word from our sponsor and then we're going to get into that discussion with Rachel Hartman.

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 Instagram amesnelsonnyc to learn more.

Rachel, thank you so much for joining us. I'm really excited to be doing this project with you and I know there's a lot of great stuff in store for us.

I agree. This is such an amazing project. I love how you're taking all sorts of concepts and ideas and putting them in a way that so easy to digest and understand. I can't think of a better way to get us started than to actually put you on the spotlight, so to speak. Because we are repositioning retitling as insiders knowledge, getting that insider edge to real estate investing. And I see you as that classic example of an insider. So I think it would be encouraging and inspiring for listeners and myself and to hear how you got to where you are today. So if you want to take us back in time a little bit, we'll follow you along and talk to us about where you're from and how it all started.

Awesome. So Rachel, thank you for that kind introduction and I am equally excited on this project and it's been the podcast has now been running for over two years, so I've had the privilege of interviewing over 100 incredible investors investors and so so much that I've learned is from listening to those legends in the business. But what's also interesting is I think as a broker I have this incredible vantage point, because if you spoke to most investors, they're doing anywhere from a couple deals a year to maybe, you know, there's a couple clients we have that maybe you're buying a dozen buildings a year, and that's a lot. Meanwhile, we see hundreds and hundreds of transactions a year. And I also have the vantage point where I see how our clients not only acquire properties, but how they reposition those assets and how they capitalize on them. So it's really, I appreciate what you're saying that I've got this great vantage point as the insider, as the investor, but a lot of that has to do also with my exposure for a broker. But that being said, I do have a lot of personal experience also investing that I'm happy to share with the audience and so happy to jump into it, so to kind of start where it all began. And Rachel, if I'm not mistaken, you have Wisconsin roots as well. So I think you grew up not far away from where I did. But Madison, Wisconsin is where I grew up. My family moved when we were 10 years old. My dad is a general practitioner and he got a big job at the Washington Hospital Center. So that, that prompted a move to D.C. and so that's where, you know, from sixth grade on, grew up in Bethesda, Maryland. Right. Right outside the northwest tip of D.C. and so no real estate in the family, with the exception of my grandfather, who was in the car business. He had successfully run multiple car dealerships and so grew up watching his real estate empire expand. And so which would generally consist of his buying property, putting a dealership on it. I didn't understand how he was actually doing it until much later in life that he was actually buying the land and then leasing it back to his business. And in the meantime, he was buying and selling homes. And they were always working on multiple homes at once. And he really had an eye for great real estate and a real appreciation. He didn't play the stock market. He didn't think that. He felt like he was an outsider there, whereas he had a real understanding of real estate. And he always said that the old adage that they're not making any more of it. And so I certainly had some exposure. But, you know, growing up in Wisconsin, that was, you know, and then Maryland, you know, was a great upbringing and wonderful family life and lots of sports and I was a swimmer. So that's how I spent my summers. And then eventually year round and I don't know, I ended up in boarding school for a couple years. St Andrews, Middletown, Delaware, which was an incredible experience. And then off the Colgate University. So I was a swimmer there and an English major. So they didn't even have a real estate program at the time, but had some incredible experience there with that liberal arts education. Met some tremendous people there. And it was because of Colgate that I got my first job into real estate. And so I didn't even at this point, late my. My senior spring semester, all my friends already had jobs. A lot of them were working for the investment banks down in New York. And I was still trying to figure out what I was going to do. And I was thinking, well, maybe I'll go out to the west coast to make movies or something. That. That sounds fun. Until I figured out no one was willing to pay a salary to do that, and I didn't have any money. So I said, all right, well, everyone's going to New York. Let me. Let me see what jobs are available. So I went up to the Career Service Center. I mean, this was probably. Yeah, in March, and seeing. Okay, what you got? Any job postings left here? And as it turns out, Massie Nackle had a posting for a sales associate. And the resume deadline was that day. So I happened to be there. I had a copy of my resume. They didn't even require a cover letter. They would usually tell you if you needed to write up a cover letter expressing your interest. They said, no, you don't even need a cover letter. Just drop your resume in the box here. So I did that. And miraculously, they called me the next week. And so they called me in for an interview. And I'd been into New York City a couple times because my roommate was from New Jersey and he visited him and he'd taken me into the city, but I was still completely lost. I didn't even know where I was. But their office was on Park Avenue, which was really impressive. And I went in there and I was just blown away. And I think the important thing, even though I didn't know anything about real estate, and they knew that I didn't have that background either, but I think they appreciated the fact that I was on the swim team. They liked to recruit athletes because they knew that they weren't afraid of hard work. They liked the fact that I was the captain of the swim team, showed some leadership. And for me, it was very clear that Paul Massie, Bob Nackle. I owe a huge part of my career and success to them getting me started in the business. And I just had a great gut feel about the place when I first met. That being said, after I was offered the job, after a week or two, I found out much later that I was actually their second choice. There was only two people who applied for the job and. And they had given another Colgate alum the job. That was Paul Massey gave. Very nice gentleman, but they gave him the job. And then, I guess Bob Nackle went to Paul. And today I'm actually looking for my second associate. How's that other guy? That other guy, Nelson. You think he'll be all right? Paul said, I think he'll be all right. So P.S. the other guy they hired lasted six months, and I ended up going on to be a partner with the firm and 17 years later was along for the sale to Cushman and Wakefield, one of the preeminent global real estate brands, and stayed with them for three years longer. So we had an incredible run and we stay close in touch today. But I learned a tremendous amount from them and especially those early days. And so I'm very grateful.

Excellent. Thank you. Greatly appreciated that. I'm on mute every time we talk. I'm laughing out loud. So I never in a million years would have guessed some of those aspects of your story, including ideas about making movies or even that you would have been a second choice. So thank you for opening up and sharing that testimony to your hard work and dedication. So let's. So let's move forward a little bit. So then you got to that point. Talk to me about some of your first deals, those first years, those first experiences that you had.

Yeah. So, you know, starting off as a broker is a great way, like I said, to learn the business because you're out, you know, pounding the pavement and meeting with a bunch of owners and learning constantly. And that's what I love about the business is every single day, I feel like even today I'm learning something new. And it might be about a new area, about a new business plan. And so Bob and Paul had devised this incredible system, the territory system, where they divided up New York City into 50 territories, and we each covered a specific neighborhood. And so my job was to cover Chelsea and get to know every single owner, every single sale, everything that was going on. And so we would actually go. This is clearly the days before Google Earth. We were literally going, building to building, taking photos of every single property. There used to be the owner's book where you had all the owner information, property information. This was of course, before Reonomy and some of the services where you can get all this online and then we'd make a physical three ring binder where you have a picture of the property, property information, owner's information. And I'll tell you, even though that was now, I mean, it's crazy to say, close to 20, you know, definitely 20 plus years ago, I still remember and talk to a lot of those owners from when I originally were walking the streets and learning the area. And, you know, I think for our investors listening, you know, so important that you really, you know, real estate is the contact sport. You can't sit there, you know, behind your computer and, you know, check out Google Earth, see what it looks like. You really. There is no substitute for going down, walking the neighborhood, finding out what's going on, speaking to the owners, speaking to the super, you know, just finding out what's, you know, what's going on in an area. And so I, you know, even though I was brand new to the business and competing with, you know, a lot of seasoned brokers that were, you know, 20 plus years into, you know, the business at the time, I was able to bring in assignments and get hired to sell them because in a very short time studying in a neighborhood, I knew more about an area than kind of these generalists. And so I'm sharing some of my brokerage experience and I want to get to your question about my personal investments because I think there's a lot to be learned from brokerage that actually can be brought into the investor process. And for those of you listening, you really need to think about what is your thesis, where do you want to be investing, what do you want to invest in? And then study the area, area and get to know that area, that space, better than anyone else. That is going to give you the insider's edge to real estate investing. Right. So, so what happened? And look, I think, Rachel, this would be an appropriate time to talk about this as well, because there is potential conflict. Right. As a broker and also looking to buy. Okay, so let me be clear. You know, throughout my career, my day job is to be a real estate broker. So if owners call me and say, James, you know, I want to get your advice. I want to, I'm interested in selling my property. I'm not thinking, oh, well, this is actually a property I'd like to buy, maybe I should just say, you know what, I know you want to sell the property, but I can save you the whole hassle. Why don't I just buy the property, you know, from under you? That would be bad for a lot of reasons. Right? So to be very clear, my Job is always first and foremost, I'm looking to work with owners, find opportunities, represent them, and to sell their properties for the highest price. Right. So if I was also looking to buy property, that would put me in direct conflict. So that being said, there are opportunities where, you know, either another broker is handling it so that owner has, is already represented by someone else, or if I'm brought in through a partner, okay, that, that can be a way to invest. So most of my earlier investing, even today, is not as a general partner. I am not the one who is actually going in, purchasing the property. And of course, I've done that several times before under the right circumstances. But usually I'm coming in as a limited partner. I'm coming in with someone who's going to help invest, help bring the capital. And so very early on, I'd say a couple years into my business, I met Matt Blesso and I've stayed in touch with him today. He's actually now a big developer down in Panama and Costa Rica. He built everything he could possibly do in New York. Incredibly successful, great guy. And I think I had met him actually through nyu. I think he was an instructor there. And so I was introduced and he called me because he had tied up this property in Greenwich Village. And he said, james, I've got this property tied up. I want you to go out and flip it. So what he was actually, he actually hadn't closed on the property. He'd actually signed the contract and he wanted me to go in and see if I could find a buyer to take over the contract. And I think he was in contract for a million eight. And he said, you know, get me two and a half million dollars. If you can get me, you know, seven, $800,000, I'll sell. So I knew, I mean, this was a great property right in the heart of the village, 25ft wide, beautiful restaurant, apartments above. And went in and I made a couple phone calls and I said, hey, Matt, great news. I got your 2.4, $2.5 million. Let's get the attorneys involved. Let's get this sold. He said, james, I really appreciate everything you're doing there, and I know you delivered what you said, but I'm looking at the numbers here, and this is too great of an opportunity to pass up. I'm going to just close on this. So I'm sorry, we're not going to sell. So I didn't even know that investing was really a thing back then. Obviously I was out there selling, but as far as how these Deals are put together. I didn't really understand the structure and how these things work, but I trusted the guy. And that's a really big part of what we do, Rachel, is understanding our partners and having that faith. So I said, matt, clearly this is a great deal, because I know you're into it for a million eight. I know tomorrow you could sell it for a huge profit. I said, are you looking for investors? He says, james, I. I am. I'm going to go out, I'm going to raise, I think it was $600,000, you know, bring in a couple partners. And at this point, I had closed a couple deals under my belt. So I had some money I was sitting on, and I said, you know, I'm in. I'll come in. And I was one of four partners who gave him $150,000. And to this day, that still is the most successful investment I have ever made. Because he went off, he condoed the building. We got all our money back times two or three on the residential condos upstairs. We still had an interest in the ground floor retail, which years later sold for, I think, four and a half million dollars. We took that investment. We went and bought an apartment building in Brooklyn. We then sold the air rights off of that. We then, I mean, it was just. It's just been the gift that just keeps giving. But more importantly, it got me into the investment game. I went on to invest and probably, I don't know, at least a half a dozen, if not more projects with Matt had a lot of success. But then it really, you know, again, gave me the introduction of this to say, okay, hey, I'm seeing a lot of opportunities. I've got a lot of clients who are doing a lot of great deals. And as long as I'm not selling the property, right? Because if I'm selling the property and then I'm bringing in a group of buyers and I'm part of that group buying it, that doesn't really work. But these, my clients, they don't just buy from me exclusively. They buy stuff all over the city through, you know, on their own. And if I come in after the fact, as an investor, there's no conflict there. So I've had, you know, the privilege and the opportunity to invest in dozens and dozens of these opportunities, which also gives me insight into how other partners operate and invest.

Perfect. There's some great takeaways there right from that story, including, you touched on the importance of getting out, being on the ground, the importance of trust as you start out. And Then as you go on, and then also the potential return that can be found in this space. Okay, so those were your early years. So now you've been doing this for a while. Do you have any other memorable moments or things that you can still see clearly in your mind that really speak to how you've gained this insider knowledge?

Well, you know, sometimes the deals, you remember the ones that got away, and, you know, it's. I think early on, I did feel like I somehow had to kind of keep everything to myself as opposed to reaching out. And so there was one incredible opportunity in Chelsea again, which is the neighborhood that I was in. I tried to get the listing. The owner's like, look, no brokers. I'm selling this on my own. I don't care what you have to say. And he would have sold that property for five or six hundred thousand dollars. You know, this was an eight family. And I tried to put it together on my own, but I didn't have the money. I could easily reached out to someone, one of my clients, to say, hey, can we just go in on this? 50, 50. Let's do this together. But I waited too long to try to do it on my own. And I think for a lot of listeners, our listeners out there, they're probably seeing things, and they say, oh, this deal, it's so good to pass up. I can't bring anyone else in on it. And I waited, and someone else bought the property. And P.S. i turned around and resold it for that buyer like five, 10 years later for like four or five million dollars. So, like, almost 10 times what I could have bought it for. And so half of something would have been a lot better than, you know, 100% of nothing. So, you know, the next time that, you know, a property actually came up on the same block, and this time I think it was a million or a million two, I reached out to my friend Matt Blessow, and I said, all right, Matt, I found something great, but I'm busy. I'm out there brokering. You're the one who knows how to run this thing and bring the investors. Let's go do it together. And that. That one was tremendously successful. So I think knowing when to bring in partners and what, you know, what your own limitations are, I think is important as well.

Yep, so true. And we'll actually be diving into that later on as we walk through some of these processes. We'll be talking about the importance of building that team right from the start and, you know, using them as you go into These deals. So that's a great point. So I'm curious to hear, you know, in recent times, can you go over any ways that your investment strategy has changed? Maybe, I mean, maybe it's always been the same since day one. But I'm curious, you know, as we think about, there's that starting out, there's the learning and experience, and then, you know, you almost build on what you've learned along the way, typically. So I'm curious to hear what your strategy is these days.

Sure. So, I mean, and let me. Because there were several other different types of investments I did over the years, and so let me get to that. But kind of when I started buying properties for just myself, I found that to have the utility of ownership was a great way to kind of buy, get an investment offset, and then also benefit from the appreciation. So one of the early investments that I did make, my first ones were kind of as a limited partner. But then I bought a 3 family up in Cold Spring, New York, right on the Hudson river. And we lived in one. We had a unit where we go up for the weekends and then rent out the other two. And those rentals would cover the cost of the mortgage and everything. So we would basically be staying for free. And finally, once we moved out of the city, I mean, we had that investment for years until we moved up to Connecticut and we said, all right, well, we don't need this place anymore. And so we sold it off for a profit. But along the way, I ended up buying a lot of vacation properties. But I never wanted to just own a property and say, oh, isn't it cool that I've got an apartment down in Florida and I got a couple homes up in Cape Cod and I'm doing all these. I had a townhouse in Manhattan, but I would never just keep them for myself where I go there for a couple of weeks out of the year, and then they'd sit empty. I was always renting them out the whole time. And so, yeah, then I go for a couple of weeks a year and, you know, would get the benefit to stay there. But. But it was really, you know, for the, you know, the rental income was what carried it. Right. And so I found that to be an incredible way to do things and, you know, keep the property going while you're also benefiting from the appreciation. But there's also incredible tax benefits as well, because, you know, if these properties are running, in some cases even break even, right. On paper, I'm still losing money in many situations on these properties. Because they depreciate over time. And that's something you got to our listeners need to speak to their accountants. But it was also a great way to kind of offset because I'm in the real estate business, I'm bringing in income through my brokerage activities, but I can offset that by some of my passive losses in some of these investment properties. So, so I've done that as well. And then a big part was, and this is really where my investment activities have really, you know, reached to today is that I said, okay, well, I've got a knack for finding opportunities, for finding not just the deals, but the right sponsors. Right. So it's not just, you know, what's a great investment property, but who's the best sponsor, the person who can actually execute on the business. So I've got a pretty good record of finding these sponsors, these opportunities. And so going back about 10 plus years ago, I reached out to my partners at Massey NaCl. I said, you know guys, we should be investing here and even if we're not buying properties, we should come in as the limited partners. Let's go raise a fund and go do this. And Bob and Pawal said, james, that sounds great, but we don't know anything about running a fund. So why don't you, why don't we go find a fund manager, someone we can partner with. So I started looking up and down. We wanted someone who had experience in our, in New York and you know, the Northeast and came across River Oak. And we're going to have Rachel, we're going to be interviewing or doing a show with Derek Aiken a couple weeks from now. But you know, he was the ultimately the chief investment officer for River Oak. But they had put together four or five funds investing up and down the Northeast coast. And what they were doing was raising money from high net worth individuals, putting that money together as a fund and then investing as the lp, the limited partner with these sponsors. And so that way they could invest in a portfolio of different investment opportunities. So we raised two successful funds. We raised around $50 million of equity, which I can tell you is not easy. We were bringing investments of anywhere from 100, 250,000, a million dollars and bringing all those investors together. And then we ended up investing in a total of over, I think it was 33 transactions with a total capitalization of $350 million. So it was, okay, now I can take what I've learned and now I can sit as a general partner in the fund, you know, raising this money, putting it to work and then, you know, paying a preferred return to our investors, but then receiving a promote on the profits above and beyond. So that has been a great way for me to invest from where, where I stand now for a lot of our listeners, you know, they might not be, you know, a real estate broker, they might not have the platform or the ability to launch a fund. But I think again, going back to my perspective, having invested, if you look at it that way, dozens and dozens of transactions because I sat on that investment committee, every single deal that we thought about doing, I understood, okay, what's the opportunity? What's the business plan? Why is this a good purchase? Why is this the right team to execute on it? And again, it was a great way for me to stay involved and leverage my brokerage knowledge to invest.

As you said, we'll be bringing Derek on the show and he is an absolute mastermind. So I'm very excited to be able to feature him in one of these upcoming episodes. He has a lot to share on that on those financial aspects. I have a couple of follow up questions from what you shared. The first one, maybe I'll ask is. So it sounds as I listen to like you made investments in different areas. I'm curious if you can talk to us a little bit about, for example, did you start closer to home or in neighborhoods you were familiar with and branch out? Did you make sure that every place you invested you were very familiar with the neighborhood, either because you've been there or you knew somebody there or trusted somebody who had information about that. I'm curious if you can speak to that.

Great question. And certainly for the fund, both those funds were specific to New York City only. I mean, again, if you look at my brokerage career and at this point been involved in the sale of over 500 properties, over $5 billion have been involved in a lot of sales and 95% of those are in New York City. So if you take me anywhere in the country, I understand the numbers and I can figure it out, but I don't understand value as well. And I think part of. Obviously we said this a couple times throughout the show, but the one thing you cannot change about an investment is where you purchased it. Anything could change afterwards, market conditions, what happens. But having the ability to understand, and that's why I love real estate so much, is and we're going to talk about it in the next episode, why real estate is the inefficiencies and the ability that you can buy something at below market. And so we value Hundreds of properties a year. So I can very quickly understand, is this property being acquired below market value? You know, where are the rents in relationship to market? How do you add value? But because I'm spending almost all my time in New York City, that's where I'm focused. Right. And once you go outside New York and I'll give you a quick story of an investment that went horribly wrong. Was so again, I live up here in Connecticut. I said, all right, I'm going to just buy some apartments. I'm going to go ahead and just put this in my retirement account. And this thing is just going to make money in my sleep. And you hear a lot of that. There's a lot of books out there. Passive Income, the joys of owning Multifamily. Oh, my gosh, what a nightmare. I bought these apartments and, you know, this was, you know, really challenging tenancy and the conditions. Something was always going wrong. I mean, it was just a total, total disaster. And you know, on paper, when I bought this, I did the numbers. I'm like, oh, wow, this is a, you know, a 7, 8% return. This looks amazing. Until a lot of my tenants stopped paying rent. And, you know, it was just a disaster trying to get people out and get, you know, get an attorney involved. And so sometimes you go chasing what looks like a higher return or a great opportunity. It was like, okay, at what cost? Because how things actually play out in reality are often very different than what is actually on paper. And I probably would have been much better saying, okay, I'm going to take a lower return in a neighborhood where I can generate higher quality buildings and a better tenancy. And so, but yeah, I also learned from my mistakes that when I go outside my area of expertise, I don't have that advantage that I do say in New York. Now, that being said, Rachel, I end up investing now all across the country. But when I invest outside New York, I'm investing in the sponsor, not the deal. And I've invested with one fund based in Atlanta and had a personal connection, I've probably invested with them the most out of any of the sponsors. I've probably done over 20 deals with them and have done incredibly well. And whether it's buying 800 single family homes in Atlanta or buying industrial or we sold some retail on Broadway in Nashville, Tennessee. Anything they touch somehow naturally goes up in value. And again, it's because they have an advantage again over other buyers. They have an in with a lot of these banks and they can buy at discounted prices and they're able to move very quickly. Right. And so I've done that. I've invested with bridge lenders who are going out and lending money across the country. So again, do I understand every single loan that they're making? No. But I understand who is lending the money. I understand that they know very quickly how to size up a deal and understand who they're working with at the borrower. So, you know, when I go outside my area, it's very important. Obviously the partner who I'm working with.

Exactly. Great points. So another thing I'm curious about is for those who are listening and are curious about understanding the different ways that investments can be made, you've certainly invested in all sorts of different ways. As you shared with us through the years, are there advantages and disadvantages that come with different types of an investment? For example, if you invest completely on your own, if you're buying a property with a couple others compared to these funds that you just talked about.

Yeah, really important to understand kind of what your strengths, weaknesses are. And also, you know, the time that you have and even that story I gave you, you know, buying a half a dozen units up in Connecticut, you think, oh, it's six apartments. I mean, how much trouble can that be? I mean, I remember getting calls while I was away on vacation. You know, Saturday, 10 o' clock at night, oh, we've got a flood. There's, you know, there's, you know, there's the plumbing, you know, broke down. I mean, it was just like a constant nightmare. And you know, for me to actually be managing those properties made no sense at all. Right now it probably that investment wasn't large enough to have a third party professional management. But it's, I think a lot of this is really asking yourself, well, you know, do you have the time? And you know, sometimes this isn't, by the same token, this is not a business that you can just, you know, farm out. Right? I mean, if you're buying a couple hundred units, you know, sure, then you've got professional management, then you fulfill the role as the asset manager, you're overseeing what's going on. But you know, chances are if you're buying 10, 20 units or less, you know, you pay a manager who's running 100 other buildings, they're probably, they might not be as, you know, watching that investment as closely as you are. So for a lot of you getting into this, who have that time to dedicate, figure out how to improve that, learn what it takes to, you know, lease an apartment and what you should look for in a tenant. I mean, that can be an invaluable experience, but you have to have the time. And for me being busy with, you know, a growing brokerage business, you know, to actively be managing these investments, you know, can be very, very challenging and time consuming. And I'm not. I'm not doing that justice. So I'm an owner in four properties in Brooklyn, and my partner on those is a managing agent. And so he knows, you know, so he's got an equity stake, right? So he's managing the properties. And of course, we pay him, you know, for what it takes his company to run those. But he has an equity stake. He has a vested interest in running these properties, you know, really well, and making sure that we're as efficient as possible.

So I know in a later episode, we're going to touch on how real estate investments compared to other types of investments, such as stocks or bonds, other, other ways you can invest your money. I'm curious for the purpose episode where we're looking specifically at your story. If you want to speak to some of the personal benefits you found from being involved in these investments. It could be anything. You know, every time I talk to you, it comes across as you, that you just love what you do. So I might personally put that as a great benefit. But I'm curious if you can share with listeners some of the things you really enjoy about it.

Rachel, you took my answer because I was literally thinking that just as you were saying, I mean, I love this stuff. I mean, it's so much fun. And again, going back to what I said earlier about always learning something, I mean, you would think that at this point, I've seen everything and understanding how to reposition properties and what to look for, but there's always stuff that you're picking up. And I just. It's just super fascinating to me, you know, something about, you know, this is a physical asset, right? So this isn't, you know, and sure, I've got my stock portfolio and I get a spreadsheet and this and that, but it's like, okay, how much do I really understand what's going on here? How much of an impact can I really make except just kind of sitting back? Whereas, you know, there's that, you know, that ability where you really have the opportunity to go in and create something, right? And I think creativity is really valuable in this business because if you can figure out how to reposition a property and do it better than the previous owner, that's what you're rewarded. For Right. And so, yes, I mean, of course we have a market and our market is cyclical and timing is very important. But if you can find the right opportunity and you have the right business plan, it can really protect you for the long haul. So I just, I really enjoy seeing, you know, and solving problems and challenges. And look, we're recording this now. Hopefully this pandemic is in the rearview mirror, but it's changed a lot of ways that we're going to work. What's the future of office? Are people going to be going into the office every day? Is there going to be less office space needs? Probably. What does that mean? Can we convert the space to residential? Maybe. What are the zoning considerations? Can I do that? How do I need to work to get this done? What are the requirements? Do I need affordability? You know, can I use the existing footprint? Do I have to take part of the building off? Can I put that square footage on top? Like, can I assemble it with the neighbors? Can I bring air rights from here there? Like, I can go on and on and on about looking at these opportunities and thinking about the different ways to reposition. And that's also what I love about brokerage because part of what I'm doing is bringing an asset to market. And I always tell my team, it's like, okay, well what's special about this asset? Like, why would you buy this? You know, and really understanding what is the opportunity, what is the value add? And that, that's just, it's really exciting to me.

Yeah, I agree. And I'm curious. I feel like you know so many people, your LinkedIn context is probably miles long, so I'm guessing I can always use more.

So if you haven't connected with me yet, please do so at James Nelson nyc. And I do respond. If I love your questions and the people listening link in with me, I'll definitely respond. And so thank you for that plug, Rachel. I know that was unintended.

No, it is so true. We'll be talking later on about the importance of keeping that network strong and that it doesn't ever end. So very true. It's an ongoing thing. I'm curious for those listening that are interested in this space, haven't made investment yet, do you see that beginning investors tend to share similar traits? Do you find that when you see a first time investor, they might be coming from any sort of background or do they typically share some commonalities?

Wow, Rachel, I don't know if you stump me yet, but I'm thinking, is there a Common denominator. Because, yes, I've seen investors come from all different walks of life. You know, I've seen architects who are great at creating and reimagining. I've seen, you know, people coming over from the finance side are really strong with numbers. Obviously, a lot of brokers have gone into investing, you know, but what is that common thread? You know, I think there is a certain amount of confidence level required because I think the number one thing that holds people back is fear. Right. And it might be fear that it's not a great investment. It might be fear that you won't be able to raise the money, put the deal together, that you don't know how to pull this off, and some of that can be healthy and that you need to know what you don't know. I mean, that's the whole Ray Dalio theme of investing. But I think these investors who are successful, there is that confidence that. And really problem solving that. You know, I'm not going to take no for an answer. I'm going to figure this out. Okay, so you're telling me I'm not the, you know, the top bidder, but how can we structure this differently? Can we find another way to, you know, figure out what the seller wants and to meet their needs? And so I think there's that, really. And, you know, it's also a trait for being successful in life. It's someone who is willing to overcome rejection. Right. Because if this was easy, everybody would be doing it. Nothing ever works out perfectly. There's going to be challenges you get into, and you can either take it in stride and learn from it and try to figure out ways around it, or you can just throw in the towel. So I think maybe that common thread is that if you want to call it optimism or ability to continue to see things through, but that's super important. I mean, what my grandfather always said, the most important thing for success was tenacity. Tenacity was the word that he used, which is that stick to itiveness. And I'd like to think if you look at my brokerage career, I mean, sure, over the years there's been a lot of sales, but there's also been a lot of failures. There's been plenty of business that I've lost out on, plenty of deals that have gone sideways or failed, but it's like, okay, I'm going to learn from that. I'm going to keep doing more. And that's super important for real estate investing and in life.

Exactly. That persistency and that ability to say we're going to move forward and work through any fear and such, which I honestly think education helps reduce a lot of the fear levels, just knowing what's involved, knowing the steps. So I think that's a good takeaway as well. So one of my last questions that I wanted to ask is we've looked at your past past. We've talked about some recent things. I'm curious, as we look at your story, share a little bit with us about what's ahead. What are you excited about in this coming year, for instance?

So I'm super excited about this, and I'm super excited about the book. And it's, you know, when I got into the business, I had no idea what I was doing. And, you know, I talked to so many people who say, you know, I want to, you know, this real estate seems really interesting, but where do I start? Where do I go? You know, I don't know if I have time to take off two years and go get a master's degree. Like, how do I figure it out? Like, what's, what's the book? Where do I, you know, and that's Rachel. That's why we're writing this. Because, you know, I've also, I've spoken to a lot of professors at these schools, and I asked them, well, hey, what's the textbook? What do you, what do you use? And they say, I don't have a textbook that I assign. I just provide my own materials. So, like, it's amazing to me that how big the real estate investment market is. I mean, we're talking, you know, billions and billions of dollars, and yet why is it so challenging to figure out, you know, how to make these investments and learn about them? And so I'm really excited about what we're doing and sharing, you know, these strategies to be successful in this. And I'm excited to see where this kind of takes the next phase of my career. I mean, right now I'm just, you know, we're putting this out there to be helpful. You know, I'm a big believer that you don't just do something for an immediate return. I mean, one of my favorite books is from Adam Grant, Give and Take. And you do things to put things out there and to be helpful. And I'm not doing this to expect that I'm going to get something in return where, you know, I'm going to. I mean, I would love it if people go out and they make, you know, successful investments and they say, hey, James, you know, I listened to you, you were right. I did my first deal. I'm ready to sell it. Can you help me broker it? You know, sure. That would be fantastic. But that's not why we're doing this. Right. We're putting this out there. This is something that, you know, I think needs to be published. It's even this podcast. I mean, I hear from so many of you. Say, James, you know, thank you for, you know, putting this out, especially during those dark days of COVID you know, where people trying to, you know, stay sharp and learn and, you know, there's so much knowledge out there, but it's not stored anywhere. Right. So I am really passionate about what we are doing here. I think we are only scratching the surface and I couldn't be more excited to see what the future holds.

Thanks so much for sharing your story. I personally really enjoyed you taking us back a little bit and talking us through about how that path all went, really eye opening. And there are so many takeaways that can be learned from your story as well. So I'd love to close with a final encouragement, inspiration for listeners. I'm wondering if you could share some of the reasons why, you know, investing now, making those moves. Now is a great time. What are the opportunities that you see or why would you say now is a great time to get started in real estate investing?

Yeah, you know, I think I'm going to have to borrow a page from Warren Buffett and, you know, again, are we going to be greedy when people are fearful? Fearful when people are greedy. But look, there's a ton of uncertainty out there, right. And, you know, certainly Covid, but, you know, it leaves a lot of questions. And in my experience, when everybody agrees that everything's going great and everything is going to keep going in a straight line, it can be very difficult to transact. Right. It can be very difficult to buy when everyone thinks prices are only going up and up and up and up. Okay. But right now you've got people who are making bets who are on different sides of the table. And I haven't seen kind of a climate like this in the over 20 years that I've been doing this. I mean, take New York City, for example. I mean, you got, you know, we've had a lot of investors who told me for, you know, decades that they're not selling, hey, I own everything in New York. This is where I am. I never, you know, stepped foot outside this market. And now, and many of those are, you know, investors are fleeing. They're going to, you know, the Southeast, they're buying all over the country. And that's not just Covid. I mean, there's regulation. There's what, you know, there's rent regulation. There's all these different considerations, you know, blue states, red states, all this stuff out there. And then, you know, there's that whole, you know, what we were talking about earlier about the return to office and is it happening and what happens these buildings and, you know, so you've got investors who are making different bets. Right. And when people are looking at things differently, that's what creates transactions. Right. And so, you know, sellers might become a little more motivated. Your buyers, you know, might be able to break into a market that maybe they haven't been for. You know, we're also seeing now interest rates are starting to rise. Okay. Interest rates have been, you know, at historic lows for years and years. Right. And so now. Okay, so now it's getting a little more expensive to borrow. Okay, well. Well, that's only part of the equation, what's happening with rental growth. And look, there might be some owners out there, and maybe that kind of gives them a little extra push to say, okay, well, you know what? Maybe I want to sell now because if rates are going up, you know, maybe I'm going to miss my window. So I think this is a time in the market when there's a lot going on. I don't want to say it's volatile, but it's, you know, you got different people on who are making different bets, and that's what makes it interesting, and that's what creates opportunity. So. So look, there's definitely concerns out there and things that you need to be aware of and factor in. But again, you find the right opportunities with the right business plan where you can add value. I really do believe that you can outperform the market, and that's what this show is about. Right. And it's going to be the subtitle of our book, Game Changing Strategies to outperform the Market. Right. Because, yes, we're not entirely immune to, you know, what's happening on the macro scene, but we're going to. If you listen to these next episodes we're doing, you're going to learn step by step how you can get that inside edge. That's what we're talking about. And so that's it. I mean, hopefully that was encouraging enough for people to stick around and listen to the shows that we have in the future, because we've got a lot of great knowledge to share here.

Thanks so much. Yes, Definitely. As James mentioned, we'll be talking about the next steps in the coming episodes and that will also be laid out in the book. So I think both of those will be incredible resources and they're full of more stories, more inspiration and more encouragement. So thanks again, James. Really appreciated hearing your story today.

Absolutely. Rachel. This was a lot of fun and thank you so much for your help and I'm really excited about this partnership and the work that we're doing together. And so yeah, that's it for this week, everybody. As always, really appreciate your tuning in and sharing this with your friends, especially with the new name change. It might take a little while for people to find where we are now, but spread the word that we are now the Insider's Edge to Real Estate Investing. And thank you again. Really appreciate your listening. And you're going to tune in next week where we're going to have really the introduction on why real estate. And then we're going to get into those 10 steps to give you the Insider's Edge to Real estate investing. Until next week, thank you again.

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.