Ep #518 – Multifamily construction from the ground up

Joseph Bramante is in 1000 doors from Houston to Corpus Cristie. Joseph’s current focus is on new construction. We had a great discussion about navigating getting a new complex designed, approved, and built. Here’s some of what we covered.

  • Why now is a good time to develop
  • The timeline on new development
  • Development team makeup
  • New development underwriting
  • Getting “Shovel Ready”
  • Net Rentable Area (NRA)
  • Communications with the community
  • Systems review

To find out more about our guest:

Full Transcript Below

Rod: Welcome to another edition of “How to Build a Lifetime Cash Flow to Real Estate Investing”. I’m Rod Khleif and I’m thrilled that you’re here. I know you’re gonna enjoy our very knowledgeable guest today. His name is Joseph Bramante and he’s a Co-Founder and CEO of Houston based TriArc Real Estate Partners. Now they’ve got approximately 1100 units under ownership as a GP. They’re vertically integrated in construction and property management. And we’re gonna have a lot of fun today. Welcome to the show, brother.

Joseph: Hey, thanks for having me. It’s glad to be here.

Rod: Absolutely. Yeah. So, we know, we talked a little bit before we got started and I wanted you to just kind of give a brief background on how you got into the business. And then, we’re gonna drill down on some things that I think you guys will all find very interesting. So, start with your story, please.

Joseph: Yeah. So, Engineer by trade, worked for Exxon for a couple of years, was overseas with them. That had some pretty gnarly places, I was in Australia for a year and Papua New Guinea for two years living in country. That’s where I made most of my money. And then from there, went and bought my first apartment complex in 2016. And so, sorry no, 2011 I was 26. Sorry, there are six. Bought that first property, kind of cut my teeth on it. It was a 25,000 per door acquisition that we did a 30,000 per door renovation on as a first time buyer. Really had no business doing that big of a rehab. But nonetheless, we did it because the alternative was, you know, I got myself into a bad situation. Within the first six months of owning that property, we found out that we had fraudulent insurance, that we had some vandalism. We found out that we had asbestos on the property while we were four units down our renovation. And then on top of all that, I end up losing my job. So, I was in a really bad spot on that first deal. Turned the whole thing around. Two hundred and seven percent return on the refine. I still own it today. We’re actually working with architects right now to redevelop it into a 30 storey mid-rise.

Rod: So, how many doors is it right now? How big was it?

Joseph: It’s 26 doors right now.

Rod: Okay, all right. That’s it. Yeah. I mean, as a brand new 30 midrise. Holy crap. That’s impressive.

Joseph: The good thing about doing a big rehab though right out of the gate is that, not much scares you. You know, you’ve already gotten that behind you. So, if I see asbestos on a property, I know what to do. It’s not the end of the world. And then from there, I use the success of those deals to raise money and also use my own money to purchase several other properties. So now, we just closed on 440 units two months ago and we’re under contract again for another deal. And we got, you know, four other new developments are working on. So we’ve kind of pivoted our entire company over the last several years to going into more into the new development space, because we see a lot of value there. You know, we’re really good at the value add space, that’s what we’ve done. We’ve done our top three renovations, have averaged over 30,000 per door renovations. So, I’ve done more than just one, actually done three that averaged 30,000. So we’ve got a bit of a knack for it. And now, we’re going into that new development space because it’s, you know, it’s fun, it’s exciting, but also it’s extremely challenging. It’s got challenges that you don’t have on the normal acquisition side, like dealing with HOAs and city council. And, you know, just last week, I was talking with the mayor of a town, you know, so you’re negotiating tax incentives and stuff like that and working with communities to build the right property. So it’s not, you know, when you’re doing value-add, you do what you want. You put, you paint the thing whatever you want. You add whoever amenity you want. Whenever you go to new development, there’s a lot of outside input, a lot of politics involved with new development that people don’t realise.

Rod: Sure. A lot of voices on every one of them and they’ve all got differing opinions and they lie. And you’ve got to make sure you document everything in writing whenever you’re dealing with a municipality. Are you mostly in the Houston or Houston kind of MSA?

Joseph: Yeah. So we are in the, everything between Houston, Corpus Christi. It’s kind of our playground where we go and we buy properties. We just, we have a lot of comfort there. Although we did just hire a VP of acquisition a few months ago. And they’re gonna be, he’s kind of all over. He’s all over Texas, so we’re kind of in the triangle, the Texas Triangle between Houston, San Antonio and Dallas. There’s a lot of opportunity there. And we just kind of between those three cities, Austin right there as well, and College Station. So, just tons of product to choose from.

Rod: Yeah. There’s a lot of opportunity in Dallas. We just went under contract on a really nice asset ourselves in Dallas

Joseph: Yeah.

Rod: Very close to one of ours. So, you pivoted to development. Let’s chat about that a little bit, because I don’t have a lot of people on the show that are doing that yet, although it’s a fantastic time to be doing it. And it’s not often that you can do it as profitably as you can right now. So let’s speak to that. So, what sorts of development are you doing? Straight multifamily? You’re doing mixed use? What are you doing? What size? Give us an idea of what you’re up to.

Joseph: So, we’re breaking ground on a two phase, 400 unit property garden style. The town outside of Houston. It’s, you know, small tertiary market, which I want to talk about. But, we’ve also got three properties in Houston. One’s on the Light Rail. Another one is at I-10 and Silber. And another one is a property that actually under contract for. So we just went under contract for a property with the sole purpose of tearing it down in three years and putting new development on. And that’s why we went into the development space back in 2016 because we knew that there’d be opportunities like that coming up where you’ve got older properties that, you know, you can’t really do a value add for the needs, it needs something more and that something more is development where you just complete the life cycle of a property where you’re tearing it back down, redeveloping it and starting it all over again. And so, this particular property sits on five acres of land. We’re buying it for $30 a foot. I mean, those are development prices but it’s not ready for development today. So it just needs, it takes time to develop those plans about two to three years and your first time plan on three years to get all the plans together to get the team together. In the more seasoned guys, they can crank it out per 18 months. I’m probably, I’ve spent over three years on just one project. So, just to give you an idea, and when I started there was, you don’t think just people talking about it now. Back when I started in 2016, nobody was talking about it. I literally knock on doors, bang, chase down these developers and say, hey, teach me how to do this because it’s just nobody, nobody does it. And once they figure out how to do it, it’s kind of it’s a really close knit group of people who do development and they’re not telling you their secrets.

Rod: They do it in scale for sure. So, talk about the different pieces that you have to bring together, you know, the architect, the builder or the GC, talk about that a little bit. Let’s go a little bit more micro on the development process.

Joseph: Yeah. So your team on development side is gonna be, first of all, if you’re not an architect, which most of you probably are not, you’re gonna want to getting good with an architect right away. And they’re gonna tell you what’s possible. They’re gonna have a site and they’re gonna give you some really important metrics, like your cost per square foot and also your units per acre. Those are the two most important metrics for you. So if you’re looking at, for example, we had a five acre site, we went down to different types of developments we can put on there between a wrap and a podium. So a wrap is where you’ve got basically just the mid rise and you’ve got a detached parking garage to it. And a podium is when you’ve got the actual garage and the building’s on top of the garage. So those are the two main types when you’re going into more dense development. And then, the third type is your garden style, but that we typically buy as acquisition B and C operators. So those are your three main types when you’re doing kind of urban infill development, you’re gonna be doing more the first two and they’ll give you the numbers. You know, like a four floor wrap is gonna be 70 units per acre, whereas a five floor wrap I can get 80 units per acre. And I know that the cost per square foot on those is gonna be– actually I don’t have that number memorized, got it written down somewhere. But, you know, you have–

Rod: Approximately. Give me a range, cost per square foot just to give people an idea.

Joseph: So you’re looking, could be completely off here, but it’s in the like, the 180 per square foot, $180 per square foot, depending on whether it’s I think that’s more of the podium style. The wrap is gonna be a little bit lower at 145 a square foot for a wrap. And then, if it’s a five floor, goes up a bit more. But that’s what you’re looking at.

Rod: Because of the elevators, because of the, you know, the vertical nature of the–

Joseph: Well, the podium is gonna be more with the elevators. And also, the podium has more elevators because it actually goes through the concrete, whereas a wrap it’s all still wood. Your build is a wood shaft.

Rod: How about the garden style? What do you think is the range in garden style?

Joseph: Garden style? You’re gonna be lower. You’re gonna be in the 110 to 120 range.

Rod: Okay. And that’s what most people are doing. I mean, as far as, you know, except for the urban insults like you describe. So you like that urban stuff. You like going in there, finding some land, maybe tearing down what’s there now and–

Joseph: It’s just a number, you know, and you just plug it into your model. And if it works, it works. And if it doesn’t, it doesn’t. But speaking of model, I think on the other, a key person on your team is you cannot underwrite new development like you underwrite acquisitions. It’s completely different. And so I would recommend you hire a consultant who does strictly underwriting for new development or somebody we might brought on. That said, I did take a stab at doing the underwriting myself on the first deal. So I understand a good bit about underwriting is one of my strengths. And I encourage you, if you’re starting out, to at least give it a try and you’ll see for yourself, Wow, this is hard because you literally it’s a blank canvas. You’re looking at just a blank screen. You’ve got to type in every single number that you think is gonna be on that property from every single expense line item. There’s no T12 to go buy. So, it’s extremely challenging in that regard.

Rod: Well, yeah. That’s fascinating.

Joseph: So, that’s your team.

Rod: That’s fascinating. So, really just the architect and someone as a consultant to underwrite. Now, what about the selection process as it results, as it relates to the actual construction of the asset of the property, you know.

Joseph: You see, your architect will be able to help you bid that out. We’ve had meetings with the builders as well. You find out pretty quickly who the good guys are, and who the guys have reputation are. On your first deal, I’m recommending don’t try and go cheap, just go premo because it’s, you know, your first deal. You don’t want anything to go wrong because when things go wrong or new development, they go wrong in a big way. And so for us, you know, we’re much more likely to just pay a little bit more for somebody, but have that certainty of execution that we know it’s gonna go well, that they’ve done this, they’re fully vetted and that there’s a good relationship between the architect and the builder. You want a team that’s worked together before because once you break ground and you get going, there’s no pumping the brakes. It’s, you’ve got to go because you have a timeline, you have a contract, your bank will come in. The whole thing’s fully funded and you just go.

Rod: So, let’s talk about funding. That’s a great segway. Let’s talk about the financing on a new development deal. Are you doing any HUD deals? How are you financing this?

Joseph: We actually did a full HUD up, 221D4, which is market rate, and we spent a year applying for and then, we declined it.

Rod: Why?

Joseph: They gave it to us, they approved our project because we’re out in a tertiary market and they approved it for half our project size. And so, we said no. It was an 86 units. You can’t build that economy of scale, 86 units to be way too expensive to get any kind of money out. So we turned it down. More likely than not, you’re gonna be going, unless you’re in a, you know, a big market like, as you’re building in Houston are some of the major market, you’re gonna be going with a regional bank or some local bank and there’s gonna be full recourse. And I think that’s the other important thing people need to realize is that, this isn’t just like securing financing for normal acquisition. Most of what we do in the B and C space is nonrecourse. And you get investors all day long for that. But as soon as you change, that’s a full recourse. People really start second guessing and they kind of get really squeamish on you and investors that were, you know, your die hard investors will all of a sudden start turning you down because, you know, there’s a big difference, big risk exposure when you switch from full recourse to nonrecourse.

Rod: You’re talking about investors on the General Partnership side or investors on a Limited Partnership side?

Joseph: On a limited partner side.

Rod: Really?

Joseph: You’re also gonna need–

Rod: But there’s no recourse to them. So what–

Joseph: I understand there is no recourse but it’s, you know.

Rod: Interesting.

Joseph: They don’t. It doesn’t matter. That’s just been my experience. And I’ve explained since I look, I’m signing on a loan, not you. People still get little squeamish about it.

Rod: Interesting.

Joseph: But then, also on that, on you as the personal guarantor, you’ve got to be a much stronger of a sponsor. And so, it’s gonna cost you more. So if you’re used to doing KP’s on your deal, they are gonna want either a lot more money to be a KP or not be a KP at all.

Rod: Right. Sure. So, when you’re structuring one of these development deals, what do you tell the prospective investors as it relates to when they can expect to receive distributions and what not? And if they invest, if someone invests say, 100 grand in one of your development deals, when does the clock starts ticking on their returns? Can you just drill down a little bit on a structure that either you’ve done or you’re aware of as it relates to that, what I just asked?

Joseph: Most of the time when you’re doing a new development, you’re already gonna have some of your own personal dry powder that you’re using at your cost to get everything secured. And you really only wanna start raising money and receiving money at the moment that your project is fully entitled, fully funded, fully financed and ready to go. Because everything up to that point has experiences, tremendous delays, I guess have been on one project for over three years now.

Rod: So, you’re like nurturing these people and bringing them along and keeping them warm and happy until you’re actually ready to have them cut a check. So you’re getting soft–

Joseph: I won’t even talk to investors until you’ve got the project, you know, until it’s called shovel ready. So, until you’re shovel ready, means that you’re ready just to sign on the dotted line and get going, I won’t even mention it to anybody. I mean, you might have your close group of investors. You might bring them on as General Partners in a deal in exchange for some money if you don’t have that powder. But otherwise, that’s just the nature of the beast when it comes to development. You don’t want to start raising money early on. And I’ve made that mistake on my first development. I’ve got investors who put in the very beginning when we were going a certain way. And then, we’ve just experienced delay, we’ve changed sides, we’ve changed the designs. So, development is full of risk up front. But once you’re shovel ready, your risk is, I mean, that’s the hard part, is getting to that shovel ready part. Once you turn the edges, that’s an autopilot and you just sit back and you manage it as well, you’re gonna have consultants and construction engineers overseeing and representing you on the site. But the hardest part is getting a shovel ready. So don’t raise any money until you’re at that point.

Rod: So even at that point, you’re shovel ready, you start raising your money when, you know, because obviously there’s no income coming in on that property for probably what? What’s an average construction time? A year?

Joseph: So it’s gonna take you nine to ten months to get your first building back. Twelve house and one building

Rod: Right.

Joseph: One building is gonna be about 24 units. That’s typical kind of garden style, three storey. So, and then, you could imagine you’re gonna get on average, one building back per month, fully C-code after that. So you’ve got, you know, you’ll start getting money in that first year, the very end of it, but not, not much. Typically your development is gonna be over 200 units to get the economy of scale you need. So, you know, you’re ten percent occupied in the first year. And then, the second year is you really stabilize it and you ramp up to 90%. And then, the third year is when you’re really doing well because you’ve got this much lower construction loan compared to what it’s really worth. And that’s where the money’s at, right? Because you’re building these properties for less than what they’re actually worth. And that’s why people like development. But, you know, it’s tough and it’s also the time horizon. You can, 90 days, you can find a property close on it and have that cash flow instantly. Development, not that way. Not that way.

Rod: So, let me ask you this. You know, there’s been a lot of talk about a contraction coming of, you know, a hiccup, maybe even a crash. You know, I’m in that camp. I think something, the proverbial stuff is about to hit the fan. I even did a YouTube video on it and my eyes watch video, the coming real estate crash. I just watched video overhead on YouTube. But, you know, what are your thoughts about that and the implications of the potential for that, based on what’s happening with unemployment and everything as it relates to, you know, building right now? Just give us your thoughts? What do you tell your investors?

Joseph: The biggest concerns I have for development right now is not so much on the cash. It’s more so on the instability we have with our markets, for the material market. So like, lumbers through the roof right now, it’s twice as much as it used to be, just pre-Covid, because the whole cycle is completely disrupted. Appliances, you know, and a set of appliances for our units, $500 more per unit. And we’re experiencing first hand, we’ve got $34,000, sorry, $37,000 per door renovation we’re doing on a property out in Garden Oaks in Houston that we just, you know, we’ve taken the brunt of this Covid. We started in January of this year and pushed right through Covid and we have experienced significant increases in material costs. And so, it all transfers over to development as well. You’re stick there, you’re significant, you’re mostly lumber unless you’re doing steel stud construction. So, that’s the one thing I’d be worried about. It’s gonna take some time for this market to stabilize. The other, but other than that, I mean, just keep in mind that this is an 18 month cycle. So if you were to, you know, today Rod If you said, I want to do new development, you found a site, you don’t have any plans. You’re not ever gonna be turning dirt at best case to 18 months from now. At most ideal case, I mean, probably 24 to 30 months, you’re gonna be well past whatever crash that we’re about to come into. So, you’ll be ideal timing for new development. And so, I think, now is a great time to be doing new development or at least securing sites for a future new development. Because you’re gonna be, you know, by the time whatever is coming comes, it’s gonna be behind us before you’re even turning dirt and you’ll be, you know, on the other side of this crash, which is a great place to be.

Rod: Oh, that actually makes sense, buddy. That makes sense. So, just to circle back on one thing here, so let’s say you find some dirt, is the architect the one that’s gonna help you with density? It may be increasing that, you know, unit per acre number? Is that the person that you’ll have on your team?

Joseph: Yeah. They’re gonna do– so they’re gonna give you some general numbers first. And then, they’ll do you’ll hire them. So you’ll spend probably $3,000 to $5,000 once you’ve gotten some comfort on one site that you like. And they’ll do what’s called a density study. And so, they’ll go in and they’ll do kind of a mock up design for you. And it’s only a couple of pages. But what you’ll get is you’ll get a number of units, you’ll get the NRA, the Net Rentable Area per floor, total NRA, average unit size. So you’ll know from that study, how many units you’re gonna get on there? What their average unit size will be? How many parking spaces it’s gonna be? Generally, kind of what it’s gonna look like? They’re just gonna block it out. It’s not gonna be any architectural aesthetic designs, just the functionality of it, you know, the raw numbers that you need. And then from there, you can plug it into your model and you can start playing around with, you know, construction costs and stuff like that. But they’re gonna be your, some of your first stop is, you know, well, the first stop is understanding, having a meeting with them, and saying, Hey, I’m interested in new development. What are your benchmark costs for the different types of construction and what are the units per acre that they’re seeing? And then, once you’ve kind of identified a site using those general numbers, then you’ll go and you’ll actually hire them to do a proper density study for you. And then from there, you’ll take if it still works out and it’s still of interest to you, then you can go to the next step where they do a preliminary design package. And that’s a bit more expensive, around $30,000 when you’ve actually got floor plans and stuff like that. Although before going to that step out, engage that consultant who does the underwriting for you, because that’s what he needs is on that density study. And you can give him that. He can build out the whole model for you and he’ll tell you, Yep, this works or it doesn’t work financially. And once you’ve got a financially feasible project, then you can look at, All right, let’s do a preliminary package, let’s kinda get some drawings together, make sure–

Rod: At what point do you go to the county or the city and start getting–

Joseph: So that’s the next point, you know, here’s to know how to have zoning. So, you’re nine times out of ten, you’re gonna be okay. But most other places do have zoning. So, you really want to make sure that that property has zoning or that if you’re stitching together pieces of land, you know, and that it’s all zone correctly, if anything requires a rezoning, you really need to pause and pump the brakes because that is not an easy process. It’s time consuming. You need to meet with the city numerous times and you also need to meet with the community leaders. Because, you know, I’ve gone through this already. We’ve received full approval on a project from the planning and zoning staff only to have the commission turn it down because they were overwhelmed by negative sentiment from the neighboring community. So if you don’t get the buy in from the community, these guys can completely kill a development, whether or not on the surface it checks all the boxes that, you know, that’s kind of irrelevant when you’re in communities and you’re doing new development, especially when you’re next to houses and stuff like that. It’s a very emotional thing. And that’s what the challenges, you know, were I’m an engineer, so it’s very cut and dry, black and white for me. But I imagine a lot of other folks are that way as well. And the business side, it’s just math. It’s strictly a business decision. Not so you’re doing–

Rod: Not buy a home, not in my backyard. Right?

Joseph: Not in my backyard. “NIMBY” as they say. So you want to see some angry people. I had to give a presentation and tell you these people had, you know, I’ve never been, I mean, I’m from South Louisiana, we’ve got pretty thick skin. But I tell you what, I walked into a room of hostility and you could cut it with a knife, you could tell they were not happy with me or this project. So.

Rod: Is that the one that died or were you able to impact them at all, influenced them at all, or was that just a done deal?

Joseph: It’s a work in progress. We’re still working on it. And now, again, it’s in my lessons. Now, we’re working directly with those leaders. And it’s just a communication thing. It’s all back down to the basics, communication, letting them know what you’re doing, hearing their concerns, making adjustments to your design to make everybody happy. It’s, you know, it’s got to be a win-win. If they’re not happy, it’s not getting done. And that’s what we’ve experienced. And so, that’s my gift to you guys. So please make sure that–

Rod: No. This is really, really informative. I’m learning as well. And I’ve been around this for a long time. So this is a lot of fun. So, you know, you get it to the city or the county you’re dealing with that, you know, the different pieces of the city or county. You know, one one deals with the community, the other deals with zoning and or I guess the actual design, construction, and everything else. And any tips for dealing with municipalities?

Joseph: Smile, be nice. You know, you never really know who’s on your side, who’s not your side, so that’s best you can. Get one-on-one conversations with them. All their information is public, especially in smaller towns, it’s pretty easy to get a hold of people. You can get their phone number and just call them, call them all directly, introduce yourself, talk about the project, because they’re the ones voting on it. But your first step is gonna be planning and zoning, right? You don’t go straight to the mayor and say, Hey, I’m here to build something. You first go to the planning and zoning folks, it works with the staff. You get all their buy in and you make sure that, you know, everybody’s happy with the project. And then you just, you know, just got network. You start talking with the other, the more senior up folks. And then, the other thing I do is just start attending their city council meetings. Even if you’re not on the docket. Just ten people can see your face, you’re there, you’re listening. Usually at the beginning of every session, you can sign up for public comment. They can’t respond. You can just say whatever you want to say for three minutes. But, I would recommend you sign up for those if you’re trying to go into some town, and build something, and you want people to get to know who you are, that’s the best way to do is you find out when the next city council meeting is, go attend, sign up for the speak. And when you get your chance to say, Hey, I’m Joseph. I’m here to build some apartments. I’d love to meet you.

Rod: Oh, that’s good.

Joseph: That’s it. Something, you know.

Rod: Yeah. And I’ve always not done any development other than some single family houses, which weren’t a big deal. But, you know, I’ve found that sometimes someone there will tell you something. And unless you documented it by email or with a letter, a follow up letter documenting the conversation, sometimes you can really get screwed. Have you ever experienced that people talking out of both sides of their mouth on any of your projects or do you make it a policy to always follow everything up and writing?

Joseph: Yeah. It’s, everything should be in writing, because writing or have everything recorded, so there’s a record of what you’re doing for that very reason. People forget you’re making a lot of decisions when it comes to new development. A year is very challenging, like I mentioned it. And it’s very easy just to forget, you know, like, Oh, yeah. I forgot you said that or they forgot we said that, etc.. And so, it’s you have to document. It’s about keeping alignment with everybody. So they’re aware of what was said. And also, it’s a good way to clarify. So you have a great meeting with somebody and then you follow up with that with an email and say, Hey, it was a great meeting with you. These are things we talked about. This was my understanding. These are my next steps. And then, they’ll respond right away if you misunderstood or misinterpreted something. But it is very important, as you mentioned, to get your alignment early on, because if you start going down a certain way, misaligned, you’ll be chasing a rabbit and you’ll be your worst pass you’ll spend, you’ll waste a lot of time by not being aligned. And that’s the biggest killer under new developments, it’s time.

Rod: Right, yeah. Now, in my case, I had some nefarious examples in my past. Sounds like for you, it’s really just people forgetting. And maybe that’s what it was back then, too. It’s been so long, but. Okay, very interesting. Well, let’s shift gears.

Joseph: Yeah.

Rod: Let’s shift gears.

Joseph: I’m about to say the same thing. Let’s shift gears.

Rod: So, let’s talk about systems a little bit. You know, I asked you before we started recording, you know, what’s your super powers are, or what you enjoy talking about? And in your first answer was actually systems development was segmented. So, talk about, you know, why don’t you expand on that conversation? Because every business is really nothing but people and systems. So, you know, that’s a great superpower to have.

Joseph: Yeah. You know, we’re a small company and we want to stay small. We don’t want to have, you know, tons and tons of people. And so, I think it’s, you know, when you’re growing your company, it’s about forming great teams and systems. And by great teams, I don’t mean going hiring your best friends you went to highschool with or something like, my opinion is that you should have know anybody on your company. You shouldn’t be prior friends with them, because I think that’s, you know, any time you work with somebody or you hire somebody, you’ve got to fire them. And it’s very hard to fire somebody you’ve been best friends with for a long time. And to be honest–

Rod: Is this from personal experience?

Joseph: It is from personal experience. I hired my younger brother. I love him to death. But I hired him. He was 22 at the time. I hired him to be working maintenance on a property and it caused a lot of problems. And anyway, he wasn’t working for us after a year. So, you know, it’s personal experience. Love the guy. But still we had to let him go and it was tough. But be careful what your team’s on the system side, absolutely, we used smart sheet. Other people use Asana and any of those things where, you find one that works for you and you use it. What works for us is smart sheets. And we created these dashboards so we have all our week reports in them, we’ve got a dashboard where I look at on a weekly basis how all the properties are doing, just kind of the high notes for them and all them get ranked. So, you know, and everybody sees the ranking of their properties. So you don’t want to be at the bottom because that’s the one that we’re gonna talk about on a weekly basis. The other stuff is on, you know, the investor management side. I mean, that’s the last couple of years you’ve had all these investor portals come out, you’ve got IMS, and–

Rod: Juniper.

Joseph: Juniper is another one. We just started using called massed.io, it is really we’re liking it because it kind of–

Rod: I think we should just switch to that, too. I think we may have just, I could be wrong. You know what Robert–

Joseph: It’s got this really interesting kind of social site, kind of LinkedIn and Juniper Square. I had a baby, you know, so you’ve got this social aspect to it. So I don’t know. We’re still checking it out. And then, but that’s a game changer, right? Because we have about five or six. See, you end up with these deals with 40, 50, 100 investors sometimes. And it’s, you know, I just couldn’t imagine managing all those guys without some of these software. So, you’ve got to have those systems in place to take care of it.

Rod: So, sheet is like a project management software. We use Asana. So, I guess they’re similar.

Joseph: Very similar. I would push that the smartsheet is a bit more customizable. It does everything Asana does plus a little bit more. But, you know, if it works for you then that’s great. Use whatever works for you.

Rod: And you guys use slack for interoffice communication or what are the technology that you use?

Joseph: So, we’ve got all of our internal, we’re all on the G-Suite, although we’re getting ready to switch to Office 365. And so, we’ll see what happens there if we end up converting to slack or not as well.

Rod: We love it. Just to put, I mean, we love it, we use Office 365 and Slack, and it works very, very well. Okay.

Joseph: Yeah.

Rod: Any other technology that you’re leveraging? Anything as it relates to inspecting properties, job, cost jobbing out because you have a construction division, correct? I mean, you guys are vertical–

Joseph: Yeah. We do. So we launch our construction vision. Our construction folks, they use Buildertrend, which is construction software, I think, internally we use Resman for probably manager software.

Rod: So do we. Yeah.

Joseph: Yeah. But I think, smartsheet is the kind of software that we use to connect everything together. So, we manage our rehab projects on smartsheets, and we manage property, managing smartsheet as far as weekly goes. And we do some other really cool stuff with it. So, as much as I can say, it’s a fully customizable service, so we are able to, you know, make it fit the need for us. That’s kind of our swiss army knife of our project management tools.

Rod: Nice.

Joseph: That’s kind of the extent of the software we use.

Rod: So, do you, you know, systems is not just the technology, it’s certainly, it’s the accountability, it’s the consistency. It’s all of that as well. Checklist thing, it’s all of that.

Joseph: I recommend, to my prior experience, so I’ve done a lot of personal development. I was a member of a strategic coach, which is absolutely phenomenal organization. I did that for three years. And then, I joined EO, which is Entrepreneur’s Organization, an amazing organization as well. But in the process of all that, so while I was a strategic coach, we implemented EOS, which is the “Traction” book.

Rod: Oh, love it. The “Traction”. I love it. We use it too.

Joseph: And, you know, I highly recommend them. You do as well. If you want to grow a company, even if you’re the only person at the company right now, if you’re a company of one, still read this book and at least give you a framework and it kind of help you understand how to build this company the right way.

Rod: That’s great advice. Yeah, great advice. I hosted the largest multifamily mastermind, I think, in the world now. We just exceeded 14 billion in assets by the members. And I presented the book, “Traction” to them. I’ve had EOS speakers come in and speak to them and, you know, just see those of you that are listening, that have a company, you know, and maybe you’ve got an organizational chart. One of the cool things that they do differently, which may sound crazy, but when you read the book, you’ll understand is they have an accountability chart instead of an org chart. So, you know, what everyone is accountable for, which is a hell of a lot more important than a title. It’s just such a simple thing. And then, the other thing is they, you basically, you do one, three, and five year goals, I think. But you also, the big thing, the big focus is what you’re gonna do over the next 90 days. So you’re not all over the place. You’re literally focused on the next 90 days. It’s just an incredible way to gain traction. So the title is applicable. Anything you want to add to that, Joseph?

Joseph: You know, I would say when people are reading this book, your natural tendency is gonna read the book and self implement. I want to read it. I’m gonna do what the book says. And depending on your company, if you’re a company of one, yeah, you can probably do that. But if you’re a company of five, 10 folks or however many if you’ve been around and you’ve got some partners already, I would say if you got more than one person, really, you’re gonna need to self implement maybe one or two people, because that book will force you to have some very, very hard conversations with one another, putting the right people in the right seat. And I think that is, you know, you’re having a face to face with somebody and you’re like, I see you here. And you’re like, No, no, I see me here. That’s a hard conversation to have. And when we sell them, when we self-implemented, honestly, we just skipped over some of those conversations. We had them, we kind of came into a headbutt, and we just didn’t make any progress on it. And we just moved it aside and kept going and did the rest of it. So we got about 80% implemented. But then once we hired a professional to come in and implement for us, first, it was a very long day. So a couple of days actually. But then, we had several sessions where we had to break apart and take time out. Everybody cool off because it’s, you know, everybody’s passionate about your company. And I think that, and if they’re not passionate about the company, then you don’t want them there. You know, you want people to have opinions and be strong minded and really care about the company and want what’s best. And that’s to have those conversations, to have those people that typically means that you’re not all 100% aligned. You know, most likely you and your partner will be aligned on 80% of stuff. But that 20% that you’re not aligned on, you’re gonna spend a lot of time getting aligned on that.

Rod: That’s really sound advice. In fact, that actually added value to me, buddy, because we actually self implemented just because my controller went through it with another company, she still had the binders and everything. And, so we did it ourselves. But I think we’re at the point now we should bring in an implementer. And I got referred to a really good one from one of the members and my mastermind. So, yeah. Well, this has been very, very powerful, Joseph. I really appreciate all the wisdom around development, around systems, around, you know, and how old are you?

Joseph: 35.

Rod: Wow. Okay. You actually look much younger. That’s why I guess I treat that as a compliment.

Joseph: Yeah.

Rod: Yeah. Very, very funny. Very, very impressive. Even, you know, at your age, it’s very impressive what you guys have going. So it’s TriArc Real Estate Partners. I appreciate you adding value to my tribe here. And, you know, I really enjoyed this conversation with you, my friend.

Joseph: Absolutely. Well, again, it’s a pleasure to speak with you, Rod.

Rod: Thank you.

Joseph: Much success and do get that implementor. They will be a game changer for you.

Rod: Yeah. Thank you. Take care.

Joseph: Take care. Bye bye.