The Everyday Millionaire Show
The Everyday Millionaire Show
Reimagining Real Estate After Disasters with Dave Seymour (Full Podcast)
Multifamily real estate investor Dave Seymour joins us to share his incredible journey from battling fires to battling the real estate market. Dave's shift from single-family homes to multifamily investments, particularly in workforce housing, demonstrates his commitment to offering affordable solutions for essential workers in Florida. His story isn't just about success; it's about an entrepreneurial spirit driven by innovation and the desire to tackle the housing crisis head-on.
Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Kalfas. All right guys. Welcome back to another episode of the Everyday Millionaire Show. We are here with Dave Seymour, a multifamily real estate investor. You've started a fund. There's a couple of things you've done, so why don't you give us a kind of an elevator pitch on what you've done?
Speaker 2:Yeah for sure. I started in the single family business coming right out of the crash. I used to tell people I'm in real estate and they'd say I'm sorry, I just I was still working as a firefighter and a paramedic just north of Boston Mass. At the time, work construction on my days off got a little taste, a little flavor for the investment side of things. I remember I was sitting on a construction site in January in Boston freezing my butt off. Car pulled up with three or four individuals in it. They were in nice clothes, driving a nice car. They had smiles. I didn't. I said to one of the guys on the job who's that clown circus just showed up there. Who's that? He goes. They own the house we're working on silly. He said those are the investors. I go. What's an investor? He goes. Those are the guys that make the money while we dig the ditches. I'm like, well, I need to get to know those guys. So anyway, long story short, I got to talk to them a little bit. I realized they weren't that smart.
Speaker 2:Through a set of circumstances that I believe to be a little bit of divine intervention, I found myself in a position to become on the investment side and you know I really did progress from this, like I said, starting a single family business during the crash, doing clean out, short sales, loan modifications. You know I got to sort of see the greed in this business as well. You know what I mean Just greedy, greedy people doing stuff. And then from there we transitioned into our own small portfolio of multifamily landed. A reality TV show ran with that for four or five years on the A&E network put me on bigger stages, bigger places. From there I moved into the lending space. From there I moved into the lending space hard money lending, private lending Again, through a set of circumstances, transitioned into what we're doing today.
Speaker 2:Today's focus, today's attention is all about solving the housing crisis. The single-family homes are priced out of range, can't even afford to put gas in the car, eggs in the refrigerator. So people still need a place to live. So we're building. We're building what we call the Miss Middle in Florida workforce housing, police, firefighters, nurses, hotel workers, people who can't afford the fancy stuff and they don't want to live in the crappy stuff. So we're building them homes, small apartment complexes, raising capital, deploying capital and doing our best to give a return. Are you based in Florida?
Speaker 1:So you live in Florida 100% of the time? No, I don't.
Speaker 2:So I'm still up in Boston and the reason that we have two offices the Boston office and the Florida office, is there's a lot of money up here in New England and it needs somewhere to go. Okay, it needs somewhere warm. Up here we have what we call the snowbirds, yeah. So you know they live in Florida in the winter and they live up here in the summer, and you know that capital resource from accredited investors, smaller family offices it's pretty prevalent. So I'm bagging for dollars and then we put that money to work in the Florida market.
Speaker 3:So we're both real estate investors and I've heard this before, but would you say that what you just described is kind of like the cycle of a real estate investor? You mentioned that you started with single family, you went to multifamily, then, I'm assuming you had some money that you could start lending. It became a hard money lender and now you're doing like you know funds and such. Is that kind of like the progression that you know?
Speaker 2:people who start out eventually want to get you or just kind of no, no, it's not. It's absolutely not the progression. It's absolutely not the progression. It's um, I think it's part of my DNA. I get bored quickly and, um, you know, I can take a single family home today, uh, analyze it, underwrite it, flip it and it doesn't really get get my blood boiling. So I think a true entrepreneur is never, is never, happy with the norm right Scalability.
Speaker 2:The next challenge it's been a driving force for me personally. You know my personal life as well as my business life, so you know it's learning a new business model altogether. You know the fundamentals are sticks and bricks are the fundamentals. They don't really change that much. But what does change is you know what angle are you coming at that piece of real estate from? Are you coming at it from a financial standpoint? Are you coming at it from a construction standpoint? Are you coming at it from a repositioning standpoint? And each of those strategies within a real estate deal in and of themselves are a business plan on their own.
Speaker 2:So again, for me personally, to move into the lending space was cool, but that's kind of boring too.
Speaker 2:That's just sitting there underwriting numbers and making sure that your capital or the line of credit you're working off has a good pipeline of borrowers who aren't going to screw stuff up, so you have to take over the properties. So for me, the three years in there led me down the road to some of these larger financial pools of capital, if you will. And then, once you have access to capital, money hates sitting still. It wants to move. It's what it's designed for. It's designed to go out, and I always talk about velocitizing capital. So for me to then transition into the work that we're doing today, I would not say it's a normal transition for an investor, but it's also interesting what noise you listen to out there. Right, if you listen to some of the gurus, slash experts out there, they'll tell you that you can buy a 500-unit property in an A market with no money down, no credit and no track record. Well, they're full of shit. If that's what they're saying, it's not a reality.
Speaker 1:Yeah, those people are typically just debt raisers.
Speaker 1:They're trying to basically put money together and buy the assets themselves. So we typically I mean I could speak for probably Nick and I both we're in the heavy in the single family to small multifamily one to four unit game where we buy and hold, we do some flips. I own a construction and a property manager company and we make great money. But you know you always kind of see like the grass is always greener situation with the guys that are that are doing these big debt funds and big developments and stuff. What are some of the kind of the hurdles from getting from where we're doing these single family deals, you know maybe buying and selling in the five to 700,000 range and you know what. What. What was your biggest hurdles from getting to that to you know doing track developments and stuff.
Speaker 2:Yeah, Let me. Let me ask you a couple of questions first. So your single family flips, what market are you guys in?
Speaker 1:Like DMV, I'm in near annapolis, maryland, so right inside okay and then how do you fund those?
Speaker 2:are you funding those who have money lenders, private lenders, combination?
Speaker 1:combination, yeah, combination people. Um, I'm from long island originally, so I have some investors from new york. I got some people out west and um, you know, just people we put money together for. And then there's obviously your local hard money companies. And then we use some institutional money as well. You know, now that we have some more experience, we're doing some more institutional money. But yeah, that's basically it. You know, we buy them, fix them up I own the construction company that fixes them and we resell them or rent them on the back end.
Speaker 2:So when I emigrated from England back in 1986, my wife was an American. I met her in London. She was from Wontar, so you and I can be friends. Okay, she was a lifeguard on Jones Beach. Okay, I lived in a village for about six months.
Speaker 2:But the reason that I ask you those questions is you know the folks who listen to your podcast, your show, and get to know you. You know you set a precedent out there. So if you guys are looking to scale, you know your question is what's the track right? The grass is always greener. You said greener. You said it's a case of the first equity position that's raised for a, let's say, a 12-unit building or a 14-unit building, that first equity position that's raised between LP Capital Limited, partner the equity position, and the GP, the general partner, you the investor or the investment group. That capital usually is friends and family or people who already know and trust you.
Speaker 2:So when I ask you, do you have private lenders as well as hard money lenders? Your hard money lenders are not interested in your three to five-year strategy. As you know, hard money lenders are quick-turn capital. They want to see it in and out in six months to a year because they're probably working off of a line of credit and ripping those notes right back through Wall Street anyway, making a couple of bucks on the spread. So you know, in the world of scale, you know it's somebody or a group of people who have experience with you as individuals. You know I teach people how to raise money as well. I teach people the velocity of capital.
Speaker 2:And it's the same question how do I go from where I am to where I want to be? I've got 20 single family homes or I flip 20 houses or 100 houses, and that's a job. That's a hard job flipping houses, construction et cetera. And they say how do I get to be that general partner in a 12 to 15 unit property when I need $3 to $5 million down? Plus, I got to go get a bank loan. I don't know that my net worth is good for the balance sheet. The balance sheet isn't strong enough. How do I get into these deals?
Speaker 2:What does an AIA contract look like with a GC, with a contractor who's building big stuff, not just the guy that's going to the Home Depot three times a day to pick up another plank of wood. It's a different game. It's just a different game altogether. So on the financial side of that, it's who have you worked with in the past that has trust in you. And then do you have the skill sets and the ability to underwrite a piece of real estate that's a cash flow and asset for a three to five year period of time.
Speaker 2:Now what does that look like? Are you able to proform around and project expenses and incomes? Are you able to underwrite an asset with market stresses in there? What if the cost of construction goes up? What if the cost of construction goes down? What if the interest rate increases? Did you lock in an interest rate? Is it an adjustable rate? What's the rental market look like? What does the population growth look like, the employment growth look like?
Speaker 2:I know a few guys who were in Indianapolis and in that market and they said it was really, really strong and it's maybe leveled out a little bit. Now I don't know, I don't invest down there, but if you can, it's a good story. Do you have a good story that makes sense, that's based on fundamentals of real estate, income and expenses? And if you do and you can package that properly, then you're in a position to offer an investor. Let's say, somebody can write you a check for a million bucks and you're going to go buy a $3 million property, just for example, if that investor is coming in for a million bucks and you can quantify and qualify your return to them to be an internal rate of return of 19 to 25 percent, you know they're looking at a two equity multiple on their money over a three to five year hold. I don't know many people who do not get excited when you start talking about doubling your money every three to five years. You know without without selling drugs.
Speaker 1:So do you suggest that people get involved as an LP first prior to becoming a GP and managing a syndication? So I do construction for some bigger multifamily developers and I'm doing a 60-unit apartment assisted living facility right now build out. So do you suggest that you know we get involved first as like a limited partner and learn the game that way? Good question.
Speaker 2:Yeah, it's each to their own. Right, it's each to their own. So I'm sorry to turn this on you, but we'll make it about you, right. So you're a GC If you're building a 60-unit complex, you're a GC with some skill sets and some depths and you've got your overhead and profit built into that deal. If you came to me and you said, dave, I'll build this for you, here's my overhead and profit. Can I take some of that and put it back into the deal as a limited partner, so that I can be on the investment calls, so that I can see the other side of the equation? I may very well do that, and that would be a fantastic learning lesson for you.
Speaker 2:I like to work from a place of abundance and not scarcity. Right, somebody might hear me say that and go what are you crazy? He's going to know what you're making. I don't care. Right, my, my experience, my knowledge is incredibly valuable, as is yours. So when you in that situation, I would highly recommend that you get in at a, at an LP level. You know your exposure is less and in your, your situation is kind of interesting because you know if you screw up as a GC, you also screw up as the LP, you hurt yourself in both equations. But you know the avatar for the majority, the retail avatar.
Speaker 2:When I say retail, I'm talking about somebody who's not a family office. I'm talking about somebody who's not a high net worth individual. They're probably just an accredited investor as determined by the SEC. I mean those individuals. They know this. If they've never done it before, they know there's something there. You know what I mean. They just know that there's something in those cash flow and assets and they're timid, let's be frank. They're not educated enough to make a decision on how to pull the trigger on their first deal.
Speaker 2:So if they can come in in that LP position and get to see how these assets are acquired, either built or repositioned, how you can maximize the net operating income all repositioned, how you can maximize the net operating income, how they can begin to defer the tax situation and put themselves in a strong tax position, when they learn about depreciation and cost segregation, they get super excited and there's a lot of education just in that one sentence alone. But once they learn that, they can then stand back and say to themselves okay, I feel like I have enough of a foundation, if you will, to go out and do it myself. But to be frank with you, brother, no fluff and buff here. They look at it and they go.
Speaker 2:That's too much work. That's way too much work. Here you work my money, right. You put this money to work on my behalf, on my behalf, and then we as gps get into that position of being a steward of other people's capital, which is, I don't know that there's a a higher you know higher position within real estate than stewarding somebody else's capital.
Speaker 1:You know yeah, so that that's very true. Using other people's money to make money, it's a beautiful thing, uh, that's why we that's part of the reason we love it. But so go back to your time with reality television. How'd you get involved with that? And I'm just interested because I feel like we've had a boom of real estate investors in general because of reality shows, of the flipping shows and all the different shows. And from somebody that actually flips a lot of houses, some of those shows seem completely made up and BS Nos no, no, like they're flipping the whole home in seven days they renovate the house in
Speaker 1:seven days and they make three hundred thousand dollars, like I just I know from flipping a hundred and you know hundreds of houses at this point. Um, you're, you know you, we're doing renovations, a lot of them. Nick owns a hundred houses, I own a bunch. We're we see it and then we see them. Nick owns a hundred houses, I own a bunch, we were we see it, and then we see this stuff on TV. What's where's there? Is there a line of reality there?
Speaker 2:Yeah, it all depends on the production company and the people on the show. Brother, it really does so. I was in. I told you I was a firefighter and a medic and then a few years later I was watching the reality TV shows like everybody else does. I'm like I know how to fix a house, like you. That takes more work than that, but it was entertaining, right. Reality TV show Show it's a show, it's not the real world. Right, and through the education space in the seminar world. That's how I landed the show.
Speaker 2:I was running with a bunch of internet marketers that I've met at various events that I've been to during that period of time. Gary Vaynerchuk actually was one of the up and coming guys back then. Who's the guy who does? Russell Brunson? These are all internet guys. These are strong, intelligent guys who know how to drive information to where you needed it to be. Anyway, one of those guys, russell Brunson, sent me a link to the TV show Application, right, and this was 2010,. 11, maybe a little late, 11 or 12, I think. And real estate was dead. Dude, it was dead on arrival. Hit that with the paddles. That sucker ain't getting up.
Speaker 2:And anyway, I turned in the application. I loaded it with profanity because I knew I had to separate myself from everybody else who wanted their you know 30, 30 minutes of fame. And, uh, that was how it started. You know, I sold myself to these guys as a you know the firefighter in the worst market ever. When everybody else goes running out, we go running in. Uh, you know, it's all bullshit, it's all fluff and puff. Man, it's a story, but I know how to tell a good story and that's how we landed the show. And then, once we land that show, then I get to see the backside of what was going on 29 or 30 episodes, something like that. And everyone was a real house, built in New England turn of the century, and every single freaking thing that could go wrong with a house would go wrong in my market. Right, we still had to make a profit. We still had to take the ugly duckling and make it real.
Speaker 2:And one thing I'll give my partner was was he said you know, at the end of every show they go, you know, bought it for this, put this into it, made this right, whatever that is. He said he never wanted anybody to ever come back and question the finances of our deals. So we kept the numbers real. Now, what everybody else does, I don't know If you watch half of this BS. Like I said, it's a show and if it's entertaining, take the entertainment value, but for us we stay true to the numbers.
Speaker 2:We even took out the free stuff out of our numbers, if you ever watch one of those shows, and I'll give you an example Hi, I'm installing three-quarter-inch mulligan flooring with stain and scratch-resistant coating from blah blah, blah. Right, I would have to do a mini commercial inside the reality TV show because the stuff was free TV show. Because the stuff was free, my partner would deduct the value or he'd use a line item value for you know, hardware floors in a you know whatever a thousand square foot home. He'd add that on the line item to make sure that the numbers were real. You know was some of the shit manufactured? Yeah, I got sick and tired of that stuff. I said to him early on I go, I promise you there'll be enough aggravation and argy-bargy going on that we don't have to manufacture any drama, I promise you. So you're right, there's a lot of fluff in there, but it was good for us. It put us in a good position for sure.
Speaker 1:Did they pay you for being on the show, or was it just money? Yeah, yeah, pay you for being like on the show, or is it just?
Speaker 2:yeah, money, yeah, yeah, I didn't. I didn't get no. Uh, what's the name of the the family there in la? What the hell's their name? Um, jenna kardashians? Yeah, kardashians? Right, let me tell you I didn't get no. Kadashian money all right, my first episode. Gdansk money All right, my first episode. My first episode, I think. They paid us 1500 bucks, um, and then the last episode was 30 grand or something like that, you know.
Speaker 3:And they were all episodes of properties that you guys bought yourselves, that you were going to do a renovation on anyway. Yeah.
Speaker 2:Yeah, yeah, and that was that was interesting because towards the end, because we were successful, we were getting regular following. You know our ratings were so they say. Anyway, the ratings were the best ever on A&E for that time, saturday morning slot. I'm sure somebody's crushed us since then, but you know, we were kind of proud of that. Look at us, we're funny. I'm sure somebody's crushed it since then, but we were kind of proud of that. Look at us, we're funny.
Speaker 2:But I could have done better with it. To be frank, it was good. These were all our houses and when they were looking for the repetition I don't know how you are in your market and how good your pipeline is we would do two at a time tops. Now all of a sudden they want three, four, five going because they know it takes us six to eight months to fix a house. You know another 30 day, 45 day cycle to sell it. So you know we had to really crank up the pipeline. We did a couple of small commercial deals to pad out a couple of episodes and stuff. But yeah, we got there, we got it done, we got it done.
Speaker 3:It made me rich. Did the pipeline get cranked up from the marketing that people saw from the show? Would they contact you saying, hey, I got this house, I want to sell you, and if so, how did they even have your contact information just from seeing the show?
Speaker 2:this house I want to sell you and if so, how did they even have your contact information just from seeing the show? Yeah, so we made a point of um having our company name on on our trucks right whenever we could. Um, we couldn't be blatant with it, they didn't want it to be over. But you know, as soon as people as dave seymour Seymour from City Light Homes you can Google that and they would find us if they wanted to. To be frank with you, I don't know that we got a massive pop in the pipeline.
Speaker 2:It's interesting, you know that seller mentality. We like to buy single family homes from sellers who were in a distressed situation. Well then, the sellers who came to us after the TV show, you know they all wanted top dollar for everything, because their perception of who we are is now different. So you know it wasn't a massive opportunity. But you know my ex-partner's brokerage has done well off of it. You know he's maintained it since then. So you know, good for him. And then I just went in a different direction in the commercial world. But I still leverage it today. You know, I still leverage Dave from Flippin' Boston. I think about him as somebody else. Otherwise it's ego, and ego is just BS, you know.
Speaker 1:Nice. So do you have a place down in florida that you go to?
Speaker 2:that you go back and forth or do you stay fully up there? I stay up here in boston. So my my um chief investment officer is a gentleman by the name of walter novicki. He's been in the market for 30 plus years down there, so he lives in fort myers and then our chief operations officer, er Eric. He will go between the two. He's the young gun on the team, just turned 30. So between the three of us we underwrite, execute, manage, get these things up and out of the ground.
Speaker 1:Yeah, I was always interested. So I bought a house in Tampa and we do it, you know, put it on Airbnb and we go down there in the wintertime when it gets cold here, I bring my boat down there and all that stuff and I'm always interested in looking at the market down there. But the single family market is is so crazy with the way that they're priced nowadays. So do you? Are you finding that? That's why you have to build these new developments to keep your costs down.
Speaker 2:It's not even keeping our costs down, it's, it's um, it's single family. Single family pricing availability that you know the majority of the workforce in Florida cannot afford. You know, 1,500, 1,800, three, two single family home. They're priced out of the market. It's a shit show out there. So that's why we built, so they got somewhere to rent yeah, the housing.
Speaker 1:When I see deals down there, people doing deals I'm like those deals don't make any sense compared to like the single family stuff that we were doing up here, so we never really kind of tapped in besides buying the one, the one house. So you're you're saying the stuff that you buy you own, own and rent. Basically right, you rent it out. It's like apartment complexes. You focus on that, not necessarily condos or resale. At the end you're more of a buy and hold guy.
Speaker 2:Correct. Yeah, so the strategy. My investors don't want a quick turn, right, they want to double their money every three to five years. So if I'm in the single family game in a market that's overpriced, I'm not going to keep my investors happy, right, I'm not going to keep their capital moving. I might be able to do one if I find one here or there. Like you said, market doesn't make sense. But if I put my investors capital into a 20 unit, 300 unit I'm just finishing up 100 unit, 106 unit building Cape Coral, you know I put that capital into those. They sit in a negative cash flow position for two, three years. Then we get into lease up, maximize the return of the net operating income. Now I can turn that capital over. So that's, not only is it good for the investors, but I got renters. I mean, lease up is ridiculous in that market.
Speaker 1:Yeah, so that's actually.
Speaker 1:It's interesting.
Speaker 1:You say that because there was one commercial deal 24-unit building that I was doing due diligence on and I had raised the money, I had everything ready to go, and somebody that bid against me bid and paid like a crazy amount of money more than me, right, and it turns out to be more of like an institutional kind of person with a fund, like you did, and they, the guy that I had raised the money from I, was like how the heck? You know, it's a half million dollar renovation that we need to do with these numbers, how are they making any money? And he's like, well, they're not, for five years they're not going to make any money and that's purposeful. And they have the money that they're going to burn for three to five years and then they'll turn it over and then their money will you know, at the refi when the rates go up and blah, blah.
Speaker 1:So what's like the? I guess? I guess we can go back to that lpgp thing like how not to get bullied around by those big guys just by joining? You just have to, you know, join up with them as lps yeah, yeah, you're not gonna beat them.
Speaker 2:You're not gonna beat them. And look, man, we've had the same experiences at our level. There's always a bigger fish in the pond somewhere. So you know, accept the way that it is if the bully's in the playground, but figure out how to work around them. Right, work around them. If you can come in in a passive position, which is what you're getting at there as an individual, and you're able to still get an aggressive return profile based on good fundamental underwriting and a track record, then why not? Right, do whatever's right for you, mr Investor, but the individual, smaller apartment builder or property owner, you want to buy that 24 unit, for example, without mowing the deal. I'm going to guess that was probably two or three years ago, because the yeah yeah, it was like 2021.
Speaker 2:yeah, worst time ever, because there was so much stupid money in the market. Brother, you, you didn't stand a hope in hell. You know, you, you didn't, you didn't stand a chance. Um, you know that market is what it didn't drive us, but it it didn't make sense to do that. Those deals because the institutional capital is coming in and they're buying at a two and a half three cap. Well, they're buying two and a half three cap because they're buying 10. You know that 24 unit was one of probably 30, 40, 50 properties that they snapped up at that period of time. So that's what pivoted us over to ground up construction.
Speaker 2:So if I could build at a cost of 6%, 7% return, I've then still got the upside. Over the next three to five years, I can put a healthy, clean return in front of my investors without worrying about the institutions, because if you're smart at this game, you build and then the institutions take you out, because they're going to take us out at a premium, rather than sitting there waiting for Jimmy Joe Blow to show up and write you a check and you can't qualify if you want to get out of the deal and even if the market isn't great at the time that you proform it for an exit. All my investors know that's all right. We're going to just sit in the cashflow. Whatever, we'll sit in that cashflow.
Speaker 2:So it was tough to play from 21, 22. What I'm seeing now is I just had one come across my desk today. It's a new build that faltered and sputtered and fell flat on its face in the Kissimmee market. Now it's a bankruptcy auction and I think we're going to see more of that in the commercial space over the next 18, 24 months. So I think there'll be some opportunities and opportunities to take some of this smaller stuff out as well.
Speaker 3:How are you finding most of your deals?
Speaker 2:Hey, good question. I'd love to tell you we were direct mail marketing. We're not. It's a network, right? So again, my partner Walter, 30 plus years in that market, over 30 years, that those connections, those realtor relationships, homeowner relationships, property owner relationships, property management, insurance construction, you know that network is critical to know where the opportunities are. So for us it comes just through our network of brokers, realtors, et cetera, et cetera.
Speaker 1:Interesting, interesting. So the yeah one of the rates are 6% 8%. There's a lot of those syndications that are getting massive capital calls. How do you hedge against that? Great question.
Speaker 2:If you're underwriting on the buy side of any deal, deal is not fundamentally just you got to. I'll tell you how you hedge against it. You use your common sense when you're looking at a PPM and a pro forma and if you see a pro forma that says you know, last year there was a 5% rent increase, so I'm going to pro forma out the next three to five years at 5% and run away from them. Conservatively underwriting your deals is the only hedge you have against unknown forces. I didn't know that Russia was going to invade the Ukraine. I didn't know that Biden was as much of a donkey as he ended up being. I didn't know that the interest rates were going to spike. I didn't know that COVID was going to pour trillions and trillions and trillions of dollars into the marketplace. I didn't know any of those things.
Speaker 2:But the fundamentals, all the way down to that one single family house that you guys buy, we make our money on the buy side of the equation. It's always on the buy side. If we're lucky, we make money on the exit. That's when we realize the profits. So, being a super, super conservative GP, and then also, as the market has moved in the opposite direction of what you described at those 3% rates, and for us it's a case of we go with higher, lower, sorry, loan-to-values. I might put a deal together at a 65% loan to value or a 60% loan to value, so that I know that the cash is sitting strong in that position as the volatility of the markets messes around and does its own thing. Does that make sense? Yeah?
Speaker 1:Yeah, absolutely yeah, nick, you have anything else for Dave? This is an interesting yeah, absolutely yeah, nick, you have anything else for Dave? This is an interesting, I guess.
Speaker 3:Just at least one more question so you're buying land deals or are you buying deals that have property on them that you're tearing down and new building?
Speaker 2:No, we don't tear anything down, I'm not taking stuff out. So there's so much dirt in Florida and still such a strong demand for housing, it makes sense for us to develop and build Now at the same time. If across the desk comes a 60, 70, 80, 90, 100 unit asset that's been mismanaged, just poorly rented, et cetera, et cetera, it's got all the key factors in there for us to reposition and make it more valuable, and we'll we'll underwrite it and take that one down as well. So we're not you know we're not one trick ponies in that sense that we're only builders or we're only repositioners. I would love to tell you we're only in multifamily, but it looks like I'm building a pickleball facility in the next in the next few months, which is just interesting.
Speaker 1:We're building a pickleball facility right now, as the GCs Are you really. Yeah, yeah, yeah, one of our projects. Yeah, the cash flow on this thing in Florida is absolutely ridiculous.
Speaker 2:It's ridiculous. I'm embarrassed to put it out in front of investors because it sounds like such a scam. It really does that can't be true Right.
Speaker 1:Yeah, no, it is. I belong to a pickleball club here and it's yeah, it's got seven courts, it's got one employee that works there and you pay for the membership and then you pay to rent the court for an hour. It's an unbelievably profitable business and they're always booked. It's it's pretty wild, but yeah, we're actually getting in. We're building one right now. Um, yeah, interesting and trying to get in, and I never really thought about using our construction as a leverage to get in as lps on some of these bigger deals. That's a really good idea.
Speaker 2:I used to do it even with my GCs when I was doing single family stuff. I mean my GC in the single family world. Obviously it doesn't apply to you because you're the GC, but when you're subbing out to a GC, once they prove themselves on the first couple of deals, I would bring them in. I'm like carry the cost of XYZ and I'll bring you in on the back end. And if they carry 50 grand's worth of whatever into the deal and they got their 50 back and they made an additional 25 on a SPF, let's do it again. That's what I would want to hear from them. But you're building that pickleball facility. That's definitely one you want to get in on, brother, I'm telling you.
Speaker 2:Membership fees are nuts. It's crazy. They'll spend a thousand bucks a year and they'll give you 250 members. We got a tennis club that approached us and said, hey, you own that piece of dirt. Will you build a pickleball facility? And I'm like why? Because these pickleball bandits keep on setting up on our beautiful tennis courts. Those low lives, you know, we, we need to help them out. Okay, so you?
Speaker 1:know, when.
Speaker 2:When somebody offers you a half a million a year just in membership fees before you go out, it's kind of crazy. You can't turn that stuff down. It's nuts yeah.
Speaker 3:So I have one last question in regards to the land and developing and building on the land. How are you guys gauging the demand on a property that's basically dirt before you start on it and then you build up? How are you gauging, like, the demand of filling that place up once it's done?
Speaker 2:yeah, great question. Look, it's all data driven right. That's the boring stuff. That's the stuff that makes me want to stick pins in my eyes, which is why my team does that, my partners do that. So I'm looking for rent growth, I'm looking for population growth, I'm looking for employment growth. What are the driving factors? And Florida continues to be the number one, number two growth market in the country. Yeah, there are pockets that aren't as sexy or as attractive. You talk about Tampa. Tampa's done, tampa's flat now. It went through a crazy drive. But where we primarily focus in southwest Florida, down by Fort Myers, cape Coral, i-41 corridor and down there, we're still seeing massive population growth and for every one retiree that comes into that market, it brings with it four service jobs.
Speaker 3:So was that a good buy opportunity in Fort Myers when the hurricane came through Was that last year and wiped out a lot of it?
Speaker 2:Yeah, yeah, it still is. It's nuts, isn't it? So we went through Hurricane Ian and then we just went through this last hurricane. Floridians, they forget. I don't know what it is, I can't put my finger. So I'm in Boston, right, we get six feet of snow. I can't put my finger. So I'm in Boston, right, we get six feet of snow. It's national news. I get six feet of snow. I go, I got to crank up the snowblower. Come on, kids, let's go shovel the driveways. Like we just know how to deal with Mother Nature. Now, when Mother Nature is coming at you at 150 miles an hour with 14 foot surges right, storm surges, it's a little bit different than six feet of snow, I get it.
Speaker 2:But what it does is it takes out the inventory that is no longer applicable in that market, the amount of property that just got taken out. It's re-gentrification. It's going to come back up again. From the ashes of disaster, grow the roses of success. It is what it is, and Florida continues to assist and help businesses like mine grow in that marketplace, build it and they will come. It's a field of dreams. I'm sorry to be so airy-fairy with it, but it's all based on solid data. Hurricanes take the old inventory out. They let us build new hurricane code inventory. And if you look at Fort Myers Beach after Hurricane Ian from an aerial shot, you see exactly what I'm talking about. Anything that was hurricane code was standing there. Everything else was gone. So it's sad, sad, it's horrible, but I I can't control the weather. But I can, you know, I can definitely uh strategize around it, yeah yeah, that's.
Speaker 1:There's profit to be made in sure, in catastrophes, unfortunately. Yeah, so I'm unfortunate for others but yeah, yeah, all right, dave. Well, um, I know you got a two o'clock to get to, so I don't want to keep you too long and we appreciate you coming out on the show and we'll uh, we'll be in touch soon to get this stuff out there.
Speaker 2:Yeah, guys, I appreciate the time with you. It was good.
Speaker 1:Thank you, thank you.
