Masters In Real Estate

Eli Mills' journey from real estate broker to strategic investment expert. In this episode, the former executive reveals his transition to Chief Investment Officer and his focus on long-term value creation. Mills shares valuable insights on investment committee dynamics, raising LP equity, and the critical factors influencing property decisions in today's market.

Key Timestamps:
00:20:30 – Chief Investment Officer responsibilities
00:21:39 – Shifting to LP equity fundraising
00:23:14 – Investment committee decision-making process
00:24:09 – Family offices vs. institutional investors
00:25:33 – Deal structures: equity and waterfall models
00:28:09 – Accessing institutional capital
00:30:56 – Identifying promising deals in current markets
34:42 – Construction market opportunities and cost reduction
36:12 – Evaluating deals with tight profit margins

This episode offers a glimpse into the strategic thinking behind major real estate investments. Learn how industry leaders make high-stakes decisions and adapt to market changes.

Like, subscribe, and share for more expert real estate insights!

Tyson Williamson joined me in the studio to talk about the hottest asset class of 2024, Data Centers. We talked about how they work, where to find them and much more.

We also discussed the business of real estate development, building a variety of asset types including multifamily, Industrial, retail, and office products.

[00:00:00] Tyson Williamson's background in construction and education.
[00:02:08] Transition into data centers and real estate development.
[00:05:38] Founding The Will Group with integrated services.
[00:09:22] Evolution of data center development and requirements.
[00:11:25] Complexity and types of modern data centers.
[20:08] Advancements in data center power efficiency.
[21:47] Power grid challenges due to AI and data center growth.
[23:22] Difficulties in securing power for new data centers.
[26:07] Load ramp process and regional power negotiations.
[28:10] Shift towards smaller, boutique office spaces.
[33:25] Profitability and appeal of data centers and multifamily projects.
[00:39:15] Comparison of tilt-up construction with alternatives.
[00:41:49] Trends in apartment development types.
[00:42:58] Developer's focus on quality projects in Utah.
[00:44:05] Importance of in-house construction expertise for developers.
[00:46:10] Role and importance of owner's representatives in construction.
[00:48:16] Compensation structures for owner's representatives.

The discussion focuses on the role of economic development agencies, such as RDAs and CDAs, in the development process. RDAs, with state-granted powers, create CRAs to enable tax increment financing, aiming to boost job creation, sales tax, and city beautification. Developers should collaborate with these agencies, securing political and taxing entity support for success. The Salt Lake City RDA is noted for its significant resources, including a loan fund for affordable housing and downtown revitalization. The conversation also highlights the importance of relationships with site selectors, brokers, and developers, as well as using incentives like tax increment financing to attract businesses. Beautification, walkability, and high-quality buildings are emphasized as key factors in development projects.

Chapters

00:00
Introduction and Setting

00:38
Different Government Agencies Involved in Development

01:26
Role of the Redevelopment Agency (RDA)

04:24
Community Reinvestment Areas (CRA) and Project Specifics

07:10
Utilizing Economic Development Tools for Impediments

09:33
City Goals: Jobs, Sales Tax, and Beautification

10:31
Different Economic Development Goals for Each Community

13:02
Sales Tax as the Main Revenue Generator for Cities

14:24
Involvement of Taxing Entities for Personal and Real Property Projects

19:36
Role of the Economic Development Director and Collaboration

21:24
Approaching Economic Development Agencies and Building Relationships

24:06
Political Buy-In and Involvement of Taxing Entities

30:24
Redevelopment Agencies and Low to Moderate Income Housing

32:23
Funding and Financing Options for Developers

33:56
Activating Downtown Areas and Reinvesting in Communities

34:31
Supporting Small Businesses and Economic Development

38:38
Attracting Businesses and Initiating Conversations

39:08
Understanding Motivators for Businesses and Developers

47:45
Incentives for Developers and Aesthetics of Projects

49:51
Beautification and Walkability in Community Development

56:12
Other Tools and Incentives for Economic Development

I had the pleasure of sitting down with Michael Bingham Co-Founder and Chief Investment Officer of Blue Diamond Capital- an entrepreneurial family office based in Provo Utah. Michael discussed his love for real estate based operating companies, and how real estate can fit into a wealthy family's portfolio. 

Link to Blue Diamond's website: https://www.bluedicap.com/

In this conversation, Stephen Clark and I discuss the process of construction management in real estate development. We cover topics such as selecting a civil engineer and architect, choosing between design-bid and design-build, hiring a general contractor, managing the schedule and budget, maintaining quality control, and handling punch lists and HOA transitions. Stephen shares his experience and insights from his background in civil engineering and construction management.

Chapters

00:00 Introduction and Background
10:48 Quality Control in Construction
23:16 Managing the Schedule and Budget
26:25 Unpurchased Scope and Allowances
30:45 Software and Tools for Construction Management

Today I was joined by Arian Lewis, founder of Kiln, discussing the evolution of coworking spaces and the importance of creating a high-quality, engaging environment for employees. He explains how Kiln focuses on building a lifestyle brand that elevates the quality of people's lives while they're working, and emphasizes the value of flexibility and choice in the workspace, allowing for different work styles and fostering creativity. He also discusses the challenges and opportunities in the coworking industry, including the need for strong executive teams and patient capital. 

In this conversation, Kyle O'Hehir teaches me how to start a credit fund. Kyle's journey from buying crack houses to starting a credit fund. We also touch on the types of assets Kyle invests in, the hurdles and due diligence process involved in buying non-performing loans, his approach to evaluating distressed real estate deals and the factors he considers when deciding to invest. 

Kyle on Twitter: @financeguy725
Tanner on Twitter: @twallyweb

Summary

Andrew Schaper started his career in the oil and gas industry as a petroleum engineer before transitioning into investment banking. In 2018, he started his own oil and gas consulting business. However, he became interested in commercial real estate, specifically boat and RV storage, and started a development project in 2020. The first phase of the project involved acquiring land, obtaining permits, and constructing the storage facility. Financing was a challenge, but they were able to secure construction loans from a bank. The project is being phased, with each phase being financed separately. Andrew spends more time on the real estate business now and sees it as a long-term investment strategy. In this conversation, Andrew Schaper and Tanner discuss financing options for real estate development projects. They explore the importance of having a sufficient spread between long-term financing costs and the desired yield on cost. They also discuss the challenges of using the Small Business Administration (SBA) for financing and the benefits of working with community banks. Andrew shares his approach to finding deals, conducting due diligence, and managing environmental risks. He emphasizes the need for an outside source of income to support the development business and discusses his plans for the future.

Chapters

00:00
From Oil and Gas to Real Estate

06:10
Understanding the Oil and Gas Industry

09:59
Potential for Direct Oil and Gas Investments

12:31
Venturing into Boat and RV Storage

22:03
Phasing the Development and Financing

25:28
Stacking Construction Loans and Long-Term Strategy

27:17
Balancing Real Estate Development and Other Ventures

28:12
Financing Options and Building Relationships with Community Banks

32:04
Land Due Diligence and Dealing with Environmental Issues

34:00
The Importance of an Outside Source of Income for Development Projects

36:11
Supporting Investments Through the Full Cycle

50:50
Balancing Multiple Businesses: Oil and Gas Consulting and Commercial Real Estate

Summary

Origin Exchange is a platform that allows investors to participate in 1031 exchanges through Delaware Statutory Trusts (DSTs). The DSTs are a way to invest in real estate without the transactional and fee-laden nature of traditional DSTs. The equity raise for a DST typically takes three to six months, and investors stay in the DST for about two years. After two years, there is an option to acquire the DST property through the Income Plus Fund. Origin Exchange uses a data-driven approach to identify markets with potential rent growth and focuses on multifamily properties in the Sunbelt region. The platform also offers an exit strategy where investors can be up-readed into the Income Plus Fund, providing a diversified portfolio and eliminating idiosyncratic risk. Origin is a real estate investment firm that offers a unique investment strategy called the Income Plus Fund. This fund allows investors to exchange their real estate holdings into a diversified portfolio of institutional-quality assets without incurring high fees. The fund provides liquidity through a redemption schedule, allowing investors to access their capital if needed. Origin focuses on multifamily properties, which they believe is a resilient asset class with long-term growth potential. They carefully select deals based on factors such as location, job growth, population growth, and market demand. Origin has a transparent and honest approach, and their founders have personally invested over $80 million in their deals.

Chapters

00:00 Introduction to Origin Exchange
02:11 Understanding Delaware Statutory Trusts (DSTs)
06:36 The Problem with Traditional DSTs
09:10 The Benefits of Origin Exchange for Investors
15:10 Data-Driven Approach to Identifying Markets
21:42 Exit Strategy: Up-Reading into the Income Plus Fund
23:45 Real Estate Ownership and Taxes
28:34 Transparency and Valuation
30:29 Focus on Multifamily Properties
32:16 Target Rate of Return
35:39 Transparency and Investor Care
37:31 Content Marketing and Growth
39:22 Paradigm Shift in Apartment Living
41:11 Factors in Deal Selection
43:26 Market Outlook and Interest Rates
46:37 Opportunistic Investment Strategy

Daniel discuss the basics of LIHTC and affordable housing development. Daniel advises market rate developers to find a partner with experience in LIHTC projects. He explains that LIHTC projects are different from market rate developments in terms of economics and incentives. Daniel also discusses the sources of financing for light tech projects, including low income housing tax credits, tax-exempt debt, and subordinate debt. He highlights the importance of finding a partner familiar with the jurisdiction's rules and regulations. Daniel also explores other creative structures for affordable housing, such as tax abatements and energy-efficient retrofits. In this conversation, Daniel Warwick discusses the concept of structured funds and their role in affordable housing. He explains how structured funds can replace high-return equity with lower-cost capital, reducing the cost of housing and allowing for the preservation of existing affordable units. Warwick also highlights the importance of public funding in these funds and the challenges of navigating community engagement and local politics. He explores the future of affordable housing, including the potential of middle housing, ADUs, and increasing land availability.