From Foreclosure to Reinvention: How Eugene Gershman Built Back Smarter

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Welcome to Change and Triumph.
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We are here today with Eugene Gershman, and I'm
so excited because you have had an amazing
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career.
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But before we start talking about development,
the projects or GIS, I want to figure out
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exactly who you were before people knew you as
a developer.
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I mean, I'm still trying to figure out who I
am.
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You know how it is.
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But, yeah, it it...
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It's been a it's been a fun journey.
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Sorry.
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You look like you wanted to say something else.
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Did I interrupt?
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No.
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That's okay.
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So let's start out let's let's start out with
who were you before real estate?
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What kind of family and environment shaped you?
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Yeah, I grew up in a construction family.
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You know, my father's owned a construction
company since, you know, since as much as I can
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remember.
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And, you know, growing up, I've always been
exposed to conversations of the subcontractor
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didn't show up, those materials got delayed,
these costs were unexpected.
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It's like this constant stress, constant chaos.
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And that's kind of what I always knew about
construction is that it is a lot of work,
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something always goes wrong, and somehow it all
works out in the end, but it requires a lot of
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work, a lot of stress, and a lot of conflict.
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And so growing up, I'm like, there's no way in
the hell I ever want to be a contractor.
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Like, dad, your business is yours.
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You do that.
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That's not me.
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I never wanna be involved in something like
that.
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And he was always in material procurement.
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He grew up in natural gas industry, his degree
was in engineering.
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So he always had this, I don't know, kind of
fun entrepreneurial spirit, and he would always
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be exposed to all kinds of, I don't know,
interesting approaches to construction
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materials, new people, and so he was always
drawn to it.
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I didn't want anything to do with that.
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So I got done with school, went to college, got
my degree in business or actually economics,
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and then started working at a financial
consulting company, running retirement
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projections for older folks.
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Okay.
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That was extremely exciting for about two
weeks, then I got bored.
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You know, I I did get my series seven license.
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So, you know, I, you know, that's, late
nineties.
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That was, when, the Boiler Room movie came out,
and we all, you know, in in this little
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suburban city of Seattle, we've envisioned
ourselves being stockbrokers in New York, you
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know, trying to...
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Because we have the license.
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Right?
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It was the same series seven life...
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Securities license.
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Right.
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So that didn't last too long.
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After about a couple of years, I figured I need
to do something else.
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I thought, you know, I'm still young, maybe I
should go to school.
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And I went back and got master's in business
with that MBA.
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I thought I'd be so cool, and I had no idea
what I was gonna do.
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Until last year of my MBA, my dad calls me and
he says, hey.
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I've got this fun project.
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Can you take a look at it for me?
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He's like, you're better with numbers.
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You know how to read these projections.
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I don't really know what it is about.
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Let me know what you think.
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I looked it over.
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Was a pretty cool, complex, mixed use project.
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He was a contractor, so he was invited to
invest in that deal, become a co investor, co
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developer, and then also get a chance to build
it out.
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And so Mhmm.
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I...
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I've never seen anything complicated...
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As complicated as that.
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But I said, look.
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Based on what I see, it looks like a good
opportunity.
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Of course, we don't know if these numbers are
real, so we need to, or you need to do all that
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due diligence.
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And he goes, okay.
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Well, that sounds good.
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I actually have a meeting set up with these
folks in the next couple weeks.
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Do you wanna come here and attend the meeting
with me?
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Since you know the numbers, maybe you could
help me with some questions.
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I'm like, sure.
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Mhmm.
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So I went there, sat in the meeting, know,
asked questions.
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That meeting turned into second and third and
fourth meeting, and then more documents got
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exchanged, and he would send them to me to
review and sort of advise, which I did.
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And then at the end, he's like, alright, well,
think we're doing it.
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He goes, I'm gonna have to set up this office,
we're gonna have to grow the company.
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He goes, I only wish I had somebody that I
could trust to have in that office to, you
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know, look over things.
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And I'm like, okay, okay, fine.
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I guess I could do that.
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So, you know, that that was, that was about
twenty three years ago, so that's how I joined
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the family business.
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So he sort of coerced me to
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That's great.
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Joining the family business.
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That is smart.
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But I I don't know.
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I don't know.
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That got you ropedoped in anyway.
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Exactly.
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Exactly.
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And, you
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you know When you...
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Go ahead.
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Go ahead.
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Go ahead.
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I was just gonna say, like thinking.
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Me, my my sister said that she...
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Like, when she was going through college, she
always knew that she would join dad's company.
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Me on the other hand, I'm like, no.
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Please please don't.
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So, anyways, that's that's how I ended up
there.
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And then slowly, we pivoted from construction
to development, and the rest, as they say, is
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history.
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You know, it's...
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That's a great story of how you ended up in in
the family business because I think most
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children watching all the pain and anguish
their parents go through do not want to join
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the family business because you've seen the ups
and the downs.
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It's not like you're an employee coming in from
the outside.
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You've seen them upset.
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You've seen them have money, go through
heartaches, different things.
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What made you say, hell no.
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I don't wanna join your business when you were
younger versus you finally getting involved
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from the financial perspective.
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I'm I'm guessing that when you were younger,
you were thinking more of the hard labor and
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you didn't realize, you didn't think about that
other side of finance.
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What what was actually going through your head
when you were younger?
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You know, it's a great question.
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I guess, well, see, as as a kid, I didn't
really see the physical labor side of things.
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And, you know, my dad is the owner.
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He was always sort of in the office kind of
managing.
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But what I what I saw is this constant stress.
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I saw the anger.
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I saw that, you know, and I mean, I've spent
time in the office too.
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Like summers, I would help out, and, know, so I
was always exposed to the business.
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I saw the firm grow from small two person,
three person operations into a large company.
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But I don't know.
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It's just the difference was that when I was
sort of like a side observer, I didn't see the
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success that the others saw.
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I mean, yes, at at some point, we started
taking nicer vacations.
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They started buying nicer cars.
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So all of that started coming in.
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But as a kid, you know, you don't really see
those things.
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You don't know the difference a, you know, five
star resort or a a little rental on the beach
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because you
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get That's true.
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Water and the and the sand, and you don't care
about the rest, right?
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That's true.
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When I, you know, when I when I got done with
my MBA, first of all, in master's program, in
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MBA, you get exposed to so many different
people, and you get exposed to so many
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different ideas about business strategy and
books and case studies, and then you see how
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businesses grow from nothing to something
great.
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You learn about, you know, human resources,
about marketing, about management, about, I
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don't know, operations.
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I mean, one of my favorite classes was
operations management.
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I'm like, I didn't even understand what that
was all about until I took the class.
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And so now I am getting offered an opportunity
to participate in a new branch of the company's
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evolution to start working on the development
side of things to actually oversee people.
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And I I wasn't in the management capacity, you
know, I was...
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I forget my title.
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It was something like financial, like a
controller type of thing, where I would review
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financial transactions.
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I would be in charge of the budgets.
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And...
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But there was a general manager of that company
who was actually running things.
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My job was to make sure that that that he
doesn't spend the money unnecessarily, and that
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the family, my father and I, know what's going
on.
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So I think that that was the different
perspective is that all of a sudden, I saw this
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opportunity to build something where that...
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Not just physically build something, but build
build a new business where, you know, I had a
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say in it.
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And so that that was attractive.
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And, of course, you know, the potential profits
and all that was also something that I never
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really appreciated as a kid.
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But now I'm...
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I saw that, I mean, I see the projections and
I'm like, oh, holy crap.
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We could make a couple million dollars by the
time we're done with this thing.
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You know, it's, you know, in my 20 some mind,
it was like, that's pretty cool.
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Of course.
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So you didn't just have a salary, he actually
included you in the profits.
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What I meant is I saw the profits that the
business would generate.
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At the time, I would only receive...
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Well Okay.
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It's funny.
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We never actually had anything in writing.
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The agreement was that, yes, I would I would
get a paycheck, and then when the business does
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well, the understanding was that I would get
something out of that.
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And that was enough for me.
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I'm like,
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look, I don't need to know what percentage of
the $3,000,000 profit I would get.
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I'm like, shit, I Yeah.
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Even if I could get a couple 100,000, I'd be so
excited because it's more than I would as a
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paycheck anywhere else.
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For sure.
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For sure.
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So did you at this time, now you're working
with your dad, did you have a vision that you
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would inherit this company and this is going to
be the family business for the next generation
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even?
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At that point, yes.
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And I mean, he talked about it a lot,
especially when my sister joined the business.
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He's like, look, you guys, all of this is gonna
be yours eventually anyway.
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So whatever you do now, figure that you're
gonna have to run it in the future.
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He never had this mindset that he would package
it up and sell it.
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In Okay.
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His...
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In in in his view, this was the legacy that
he's building, and he would pass it on to us,
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and then we could do with it whatever we
thought was right, and then maybe our children
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would get involved.
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So that that was always kind of the thought
that was, you know, discussed and circulated
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at, like, family dinner tables and things like
that.
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That's awesome.
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That's awesome.
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So this is definitely...
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So now you're you're working with your dad.
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And what happened to that company?
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Did he exit, or is it still going?
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How's that going now?
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So we ultimately shut down construction company
and pivoted our focus to development.
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And he, I mean, he kinda slowly was exiting.
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He's still involved.
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I mean, he's he's the type of person that can
never fully retire.
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I mean, we talk at least couple times a week,
and he wants to know how things are going.
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And, you know, he is offering advice, and, he's
asking advice a lot of times.
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But we decided to stop building ourselves
because we realized how heavily dependent and
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how, frankly, how much risk a company takes on
when they do both the development and
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construction.
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And Right.
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Based on the risk profile and based on the
return profile, we thought that it would be...
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That we would be much better off to focus on
leaner operations when we don't need to be
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responsible for hundreds of people, hire an
established contractor to build out the
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projects, but we could be focused on
development deals.
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We could still manage the capital raise.
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We could manage the permitting, entitlement
work, and have ability to not be tied to a
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region.
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00:11:43,654 --> 00:11:48,029
With construction, it's really hard to move
construction company and go to a different
237
00:11:48,029 --> 00:11:48,669
region.
238
00:11:49,709 --> 00:11:50,029
Mhmm.
239
00:11:50,029 --> 00:11:50,990
Because you have your...
240
00:11:50,990 --> 00:11:54,110
Not not only your employees that could
potentially move, but then you have your
241
00:11:54,110 --> 00:11:54,909
subnetwork.
242
00:11:54,909 --> 00:11:55,230
And
243
00:11:55,470 --> 00:11:56,830
And your license is...
244
00:11:58,110 --> 00:11:58,509
License...
245
00:11:58,509 --> 00:11:59,789
I mean, licenses, yes.
246
00:11:59,789 --> 00:12:03,054
Licenses are fairly easy to obtain elsewhere.
247
00:12:03,054 --> 00:12:03,934
But Okay.
248
00:12:04,335 --> 00:12:09,215
But the contractor subcontractor network takes
years to develop and to establish.
249
00:12:09,855 --> 00:12:11,535
And, you know, the same GC...
250
00:12:11,535 --> 00:12:16,889
The two GCs would have the same sub bid on the
job, and they would get different prices
251
00:12:16,889 --> 00:12:22,649
because the sub knows one GC and doesn't know
the other, and so there's that unknown factor.
252
00:12:22,649 --> 00:12:23,529
Am I gonna get paid?
253
00:12:23,529 --> 00:12:30,554
And so the unknown GC would get higher price
from the same sub than a local established GC.
254
00:12:30,554 --> 00:12:32,634
So it's it's much harder to be flexible.
255
00:12:32,634 --> 00:12:35,754
And we thought that it's way easier for us.
256
00:12:35,754 --> 00:12:36,475
There's so many subs.
257
00:12:36,475 --> 00:12:40,475
There's so many contractors out there that if
we ever wanted to self perform, we could
258
00:12:40,475 --> 00:12:43,595
always, you know, hire specific subs like for a
smaller job.
259
00:12:43,879 --> 00:12:48,200
I wouldn't mind working directly with subs and
effectively GC ing the job.
260
00:12:49,000 --> 00:12:49,159
Mhmm.
261
00:12:49,159 --> 00:12:51,000
But I would much rather get a...
262
00:12:51,000 --> 00:12:55,879
Get an experienced contractor who knows the
market, who knows the people, and can get the
263
00:12:55,879 --> 00:13:01,545
job done, so that I could focus on making
deals, so that I could focus on things that I
264
00:13:01,545 --> 00:13:07,225
personally love doing most is, you know, trying
to put together this puzzle of what we're
265
00:13:07,225 --> 00:13:11,529
developing, how we're developing, you know, how
we're gonna put this thing together, assemble
266
00:13:11,529 --> 00:13:14,490
the team because there's so many different
players that are involved in the development
267
00:13:14,490 --> 00:13:15,129
process.
268
00:13:15,129 --> 00:13:17,289
So so, yeah, that that that was the pivot.
269
00:13:17,289 --> 00:13:19,049
You know, that's really interesting.
270
00:13:19,129 --> 00:13:22,809
And you also pivoted for a reason.
271
00:13:22,809 --> 00:13:27,725
And you you said something in there that made
me think about people that do fix and flips and
272
00:13:27,725 --> 00:13:34,365
how as a, you know, trying to hire the subs and
trying to be out of state and then hire people
273
00:13:34,365 --> 00:13:37,725
in another state to do a project.
274
00:13:37,725 --> 00:13:43,549
I mean, just on the lighter side of single
family rehab, it definitely sounds like you're
275
00:13:43,549 --> 00:13:44,269
always gonna...
276
00:13:44,269 --> 00:13:51,149
This is why it's very tough to get to a project
because there's no trust between the
277
00:13:51,149 --> 00:13:53,309
subcontractor and the contractor.
278
00:13:53,309 --> 00:13:59,045
I found that when you have the right team, even
in development, you know, you see some of these
279
00:13:59,045 --> 00:14:04,085
guys from Mexico and the guys from China, they
can put something up in like two months
280
00:14:04,085 --> 00:14:06,485
compared to, you know, peep...
281
00:14:06,485 --> 00:14:08,245
You know, some of the developers here.
282
00:14:08,245 --> 00:14:10,004
And I'm like, well, what are they doing
different?
283
00:14:10,379 --> 00:14:14,860
And the one thing I noticed that they are doing
different is they're working with the same team
284
00:14:14,860 --> 00:14:16,940
over and over and over again.
285
00:14:17,820 --> 00:14:18,379
Exactly.
286
00:14:18,379 --> 00:14:18,940
Do you agree?
287
00:14:18,940 --> 00:14:19,340
Exactly.
288
00:14:19,340 --> 00:14:25,304
Well, and and building similar type of product,
you know, it's much harder to because sometimes
289
00:14:25,304 --> 00:14:28,904
we work on a large apartment building,
sometimes we work on a townhouse, sometimes
290
00:14:28,904 --> 00:14:34,904
we'll work on a land subdivision, and those
require different skill sets.
291
00:14:35,464 --> 00:14:41,110
And, you know, when I work with landowners on
these different projects, it's way easier for
292
00:14:41,110 --> 00:14:48,710
me to call up a couple of contractors that
specialize on that thing to give me pricing
293
00:14:48,710 --> 00:14:53,350
rather than me being locked into one narrow
niche.
294
00:14:54,625 --> 00:14:55,345
Right.
295
00:14:55,664 --> 00:14:56,384
Got it.
296
00:14:56,384 --> 00:14:58,705
So it's true though that you're gonna...
297
00:14:58,705 --> 00:15:02,464
You're not gonna get the best pricing because
you're hiring different contractors for
298
00:15:02,464 --> 00:15:05,585
different products or even if you're hiring
people out of state.
299
00:15:05,585 --> 00:15:07,504
You mean if I was the GC?
300
00:15:07,679 --> 00:15:08,559
Absolutely.
301
00:15:08,559 --> 00:15:10,320
As a developer though, no.
302
00:15:10,320 --> 00:15:15,519
I think, you know, what I typically tell my
contractors, I hate shopping contractors
303
00:15:15,919 --> 00:15:24,345
because the the most common way people shop
contractors is by comparing the bids and going
304
00:15:24,345 --> 00:15:25,384
with the lowest bidder.
305
00:15:25,384 --> 00:15:28,424
Or, you know, some people say, would never hire
the lowest bidder, so they hire the second
306
00:15:28,424 --> 00:15:29,304
lowest bidder.
307
00:15:30,024 --> 00:15:32,904
To to me, you know, it it doesn't matter.
308
00:15:32,904 --> 00:15:34,584
I mean, the classic, you know, you don't...
309
00:15:34,584 --> 00:15:38,669
You you cut off the highest bidder, you cut off
the lowest bidder, then choose from the ones in
310
00:15:38,669 --> 00:15:39,230
between.
311
00:15:39,230 --> 00:15:43,389
Well, you know, I still remember the time a
couple years ago when you can send out 10 RFPs
312
00:15:43,389 --> 00:15:46,590
and get zero responses just because everybody
was Wow.
313
00:15:48,110 --> 00:15:51,470
And even in today's market, sometimes it's not
as easy.
314
00:15:51,789 --> 00:15:59,225
What I prefer doing is rather than shopping
contractors, I would like to get referrals to
315
00:15:59,225 --> 00:16:03,945
contractors that are capable, to contractors
that have built similar product.
316
00:16:04,024 --> 00:16:08,730
And then when I sit down with them, I tell
them, look, I don't care who the lowest bidder
317
00:16:08,730 --> 00:16:09,289
is.
318
00:16:09,529 --> 00:16:12,889
What I will care is what your number consists
of.
319
00:16:12,970 --> 00:16:19,370
The only thing that I ever negotiate with a
contractor is their GC fee or their profit.
320
00:16:20,330 --> 00:16:23,674
I always tell them, I wanna know what your
profit is.
321
00:16:24,075 --> 00:16:31,195
I would love to agree with you on what your
profit is so that everything else could be
322
00:16:31,195 --> 00:16:32,315
fully transparent.
323
00:16:33,514 --> 00:16:36,279
I wanna know how much you're spending on every
trade.
324
00:16:36,279 --> 00:16:38,200
I wanna know how much you're buying materials
for.
325
00:16:38,200 --> 00:16:39,080
And you know what?
326
00:16:39,080 --> 00:16:45,559
If I know a better supplier for, I don't know,
cabinets, I'll tell you who I want you to use.
327
00:16:45,559 --> 00:16:50,040
And I don't care what your margin is on that
because we've already agreed what your margin
328
00:16:50,040 --> 00:16:50,279
is.
329
00:16:51,225 --> 00:16:55,865
I don't want you to hide anything from me
because, you know, if a contractor forgets to
330
00:16:55,865 --> 00:17:01,465
include or intentionally excludes an item and
it later becomes a change order, nobody wins.
331
00:17:01,465 --> 00:17:07,380
I would much rather them knowing what they're
making on this deal and be transparent so that
332
00:17:07,380 --> 00:17:07,940
we could...
333
00:17:07,940 --> 00:17:12,660
Both both of our teams could look at the
numbers, look at the scope, and make sure that
334
00:17:12,660 --> 00:17:15,619
it covers all the expenses that we needed to
cover.
335
00:17:15,940 --> 00:17:20,474
And once I know how much the contractor is
making and once I know what that number
336
00:17:20,474 --> 00:17:21,994
consists of, I really don't care.
337
00:17:21,994 --> 00:17:26,315
And I don't wanna waste time comparing bids and
try to level...
338
00:17:26,315 --> 00:17:27,914
Because all bids are different.
339
00:17:28,394 --> 00:17:31,595
To level multiple bids sometimes takes hours or
days.
340
00:17:33,210 --> 00:17:33,849
Right.
341
00:17:33,849 --> 00:17:37,690
Because, you know, I don't I don't know if I
need to go into details, but, you know, let's
342
00:17:37,690 --> 00:17:38,730
say you're looking at
343
00:17:38,730 --> 00:17:41,289
I do want those details, believe it or not.
344
00:17:41,609 --> 00:17:42,009
Yeah.
345
00:17:42,009 --> 00:17:44,169
Believe it or not, I do want those details.
346
00:17:44,170 --> 00:17:44,329
Yeah.
347
00:17:45,075 --> 00:17:50,274
Like, you're looking at electrical scope, and
one contractor says $2,000,000 for electrical,
348
00:17:50,274 --> 00:17:52,595
the other one says $2,500,000 for electrical.
349
00:17:52,595 --> 00:17:53,474
Well, you can't...
350
00:17:53,474 --> 00:17:55,554
It doesn't mean that one is cheaper than the
other.
351
00:17:55,554 --> 00:17:57,714
You have to drill down and see what's included.
352
00:17:58,990 --> 00:18:05,950
And sometimes they would put, I don't know what
a good example would be, let's say hookup fees
353
00:18:06,269 --> 00:18:07,470
in the electrical bid.
354
00:18:07,470 --> 00:18:09,549
Sometimes they would put it in a different line
item.
355
00:18:10,029 --> 00:18:16,404
A lot of times I carry my utility hookups under
my soft costs, and so contractors don't have to
356
00:18:16,404 --> 00:18:16,884
pay for it.
357
00:18:16,884 --> 00:18:23,204
Well, if one sub included hookup fees, as an
example, in their bid, then it's not apples to
358
00:18:23,204 --> 00:18:24,005
apples comparison.
359
00:18:24,005 --> 00:18:25,845
So we have to we have to level them out.
360
00:18:25,845 --> 00:18:30,339
And it goes, you know, through every single
trade, you know, through every single division.
361
00:18:30,339 --> 00:18:34,339
You have to level out the bids, and that's why
I'm not interested in comparing multiple bids.
362
00:18:34,339 --> 00:18:39,460
I would much rather sit down, shake hands,
agree on what the markup or the profit this
363
00:18:39,460 --> 00:18:40,579
contract is charging.
364
00:18:40,579 --> 00:18:42,339
Everybody recognizes they need to make a
profit.
365
00:18:43,025 --> 00:18:44,384
I want them to make a profit.
366
00:18:44,384 --> 00:18:46,384
If they're not profitable, they're not doing a
good job.
367
00:18:46,384 --> 00:18:47,105
And That's right.
368
00:18:47,105 --> 00:18:48,144
That's how I that...
369
00:18:48,144 --> 00:18:50,384
That's how I typically find a contractor.
370
00:18:50,384 --> 00:18:56,240
So it was a long elaborate answer to your
question of is it more expensive or less for me
371
00:18:56,240 --> 00:18:57,440
to go out to a different region?
372
00:18:57,440 --> 00:18:58,960
I don't think it necessarily is.
373
00:18:59,359 --> 00:19:04,160
What I care about is when I go to a different
region, I just wanna find the best contractor
374
00:19:04,160 --> 00:19:08,559
that is available there who has done similar
projects that we can work with.
375
00:19:08,559 --> 00:19:13,494
So when you talk about the margin, the margin,
there's a rule of thumb that I've heard.
376
00:19:13,494 --> 00:19:20,534
I don't know if it's a true rule of thumb, and
it's the profit should be no more than three or
377
00:19:20,534 --> 00:19:22,775
five times the cost of supplies.
378
00:19:23,650 --> 00:19:24,929
Have you ever heard that?
379
00:19:24,929 --> 00:19:25,809
Is that true?
380
00:19:25,809 --> 00:19:26,690
Cost of supplies.
381
00:19:26,690 --> 00:19:27,970
So cost of materials?
382
00:19:28,769 --> 00:19:29,409
Yes.
383
00:19:30,049 --> 00:19:30,769
No.
384
00:19:31,170 --> 00:19:32,049
I haven't heard that.
385
00:19:32,049 --> 00:19:32,929
I I haven't heard that.
386
00:19:32,929 --> 00:19:33,569
I mean, I've...
387
00:19:33,569 --> 00:19:36,369
We typically compare the...
388
00:19:36,369 --> 00:19:37,730
Just the percentage margin.
389
00:19:38,255 --> 00:19:40,975
And, I mean, it ranges on a really small
project.
390
00:19:40,975 --> 00:19:43,295
It could be, I don't know, 15%.
391
00:19:43,295 --> 00:19:46,815
On a really large project, it would be two or
3%.
392
00:19:47,695 --> 00:19:50,414
And that's typically what we look at.
393
00:19:50,414 --> 00:19:54,880
You know, I may call a couple of contractors
and ask what the fees are these days.
394
00:19:54,880 --> 00:19:58,000
But generally speaking, you know, if a...
395
00:19:58,000 --> 00:20:02,960
If one contractor tells me that their GC fee is
4%, another tells me that their GC fee is five
396
00:20:02,960 --> 00:20:07,934
and a half percent, you know, I can come back
to the five and a half percent guy and say,
397
00:20:07,934 --> 00:20:08,255
hey.
398
00:20:08,255 --> 00:20:10,015
These guys are offering four.
399
00:20:10,174 --> 00:20:10,335
Right.
400
00:20:10,335 --> 00:20:12,734
We can find out we we can find out why.
401
00:20:12,734 --> 00:20:14,414
Are they just more successful?
402
00:20:14,414 --> 00:20:15,535
Are they busier?
403
00:20:15,775 --> 00:20:17,775
Or was one guy busier than the other?
404
00:20:17,775 --> 00:20:20,575
Is this guy really desperate to get this job?
405
00:20:21,559 --> 00:20:23,880
You know, there's there's the reason for it.
406
00:20:23,880 --> 00:20:29,240
A lot of times, what contractors do, and that's
why we also look at their general requirements,
407
00:20:29,240 --> 00:20:37,224
general conditions, is a lot of times they put
a lot of overhead expenses into the project
408
00:20:37,224 --> 00:20:37,944
cost.
409
00:20:38,585 --> 00:20:39,944
And so Mhmm.
410
00:20:40,105 --> 00:20:45,384
That's where sometimes they play around,
massage the numbers to make their profit look
411
00:20:45,384 --> 00:20:51,580
smaller because there's some overhead that's
built to the project and itemized to the
412
00:20:51,580 --> 00:20:52,220
project.
413
00:20:52,619 --> 00:20:52,940
And so
414
00:20:53,180 --> 00:20:53,980
That makes sense.
415
00:20:54,059 --> 00:20:54,299
Some...
416
00:20:54,299 --> 00:20:56,059
Sometimes we we haggle over that.
417
00:20:56,059 --> 00:21:01,259
So three years ago, something happened in in
your business, and I think that's one of the
418
00:21:01,259 --> 00:21:08,224
reasons why you moved from the construction and
development model to just the development...
419
00:21:08,384 --> 00:21:12,065
Or to just the development model and helping
others.
420
00:21:12,464 --> 00:21:15,585
Could you tell us a little bit about what that
season...
421
00:21:15,585 --> 00:21:21,890
What happened and what that season cost you,
and what did you almost have to give up because
422
00:21:21,890 --> 00:21:22,369
of it?
423
00:21:22,369 --> 00:21:23,089
Absolutely.
424
00:21:23,089 --> 00:21:30,130
So let me take a step back before I answer this
question to kinda set the stage for what
425
00:21:30,130 --> 00:21:30,769
happened.
426
00:21:30,769 --> 00:21:31,409
We...
427
00:21:31,410 --> 00:21:39,224
Since about 2015, 2018, we were growing in
parallel paths.
428
00:21:39,224 --> 00:21:43,304
So that was after the GFC, you know, 2008 was a
slow period of time.
429
00:21:43,304 --> 00:21:45,224
We really didn't have a lot of work happening.
430
00:21:45,880 --> 00:21:49,960
In 2015, we started pursuing several
development projects.
431
00:21:49,960 --> 00:22:00,744
And around 2018, 2019 period of time, we
started getting calls from landowners who had
432
00:22:00,744 --> 00:22:06,984
development ambitions, but did not have enough
experience, not have enough knowledge to
433
00:22:06,984 --> 00:22:08,025
develop projects.
434
00:22:08,025 --> 00:22:10,904
And so they started calling us to see if we
could help.
435
00:22:10,904 --> 00:22:14,345
And in most cases, the reason they needed help
is because they talked to a lender.
436
00:22:14,345 --> 00:22:17,700
The lender told them they needed experience,
they needed more capital, which they didn't
437
00:22:17,700 --> 00:22:21,220
have, and so they need to bring in an
experienced developer to help them with the
438
00:22:21,220 --> 00:22:21,620
project.
439
00:22:21,620 --> 00:22:23,620
So that was really the premise.
440
00:22:23,620 --> 00:22:28,740
Other folks who needed help with financing,
they would call us and say, can you help us
441
00:22:28,740 --> 00:22:28,900
out?
442
00:22:29,535 --> 00:22:35,375
At the time, we had two parallel businesses,
construction and development, and we saw the
443
00:22:35,375 --> 00:22:35,934
niche.
444
00:22:35,934 --> 00:22:43,690
We saw that now we could get into development
projects before, or not before, into
445
00:22:43,690 --> 00:22:47,450
development projects where the land is already
acquired, where the permitting may be halfway
446
00:22:47,450 --> 00:22:49,450
done or close to be issued.
447
00:22:49,450 --> 00:22:55,394
So we get to skip through the entire
acquisition, early due diligence, early
448
00:22:55,394 --> 00:22:59,075
entitlement stage, and get into the project
that's ready for construction.
449
00:22:59,075 --> 00:23:04,115
And so that was attractive to us, and we
started pursuing more opportunities like that.
450
00:23:04,115 --> 00:23:13,140
And that's when getting closer to 2020, we had
several large projects that we were working on.
451
00:23:13,619 --> 00:23:19,539
And that was an interesting time in the market,
especially here in the Pacific Northwest, where
452
00:23:19,700 --> 00:23:22,740
it was literally impossible to find people.
453
00:23:24,065 --> 00:23:24,785
Okay.
454
00:23:24,785 --> 00:23:32,464
Construction construction industry got so busy
and got so expensive that the highest, most
455
00:23:32,464 --> 00:23:35,345
valuable commodity was human resource.
456
00:23:35,940 --> 00:23:38,739
And I'm not talking about just labors in the
field.
457
00:23:38,980 --> 00:23:43,539
Those were hard to find, but I'm talking about
project engineers, project managers,
458
00:23:43,539 --> 00:23:47,460
superintendents, you know, the guys that make
construction job happen.
459
00:23:47,460 --> 00:23:49,220
And I say guys because it's mostly men.
460
00:23:49,220 --> 00:23:49,460
Right?
461
00:23:49,460 --> 00:23:49,700
But
462
00:23:50,255 --> 00:23:50,335
Yeah.
463
00:23:50,335 --> 00:23:51,055
That's okay.
464
00:23:51,055 --> 00:23:55,214
We we we literally started hiring whoever we
could.
465
00:23:56,174 --> 00:24:00,494
As we grew, we started hiring, like, I mean, we
were joking.
466
00:24:00,494 --> 00:24:03,375
If you have a pulse, you can talk, you're
hired.
467
00:24:04,309 --> 00:24:06,309
Literally, whoever whoever was available.
468
00:24:06,309 --> 00:24:09,269
I mean, interns out of, college.
469
00:24:09,750 --> 00:24:15,109
So kids out of college with no experience but
with construction management degree would not
470
00:24:15,109 --> 00:24:15,750
work for free.
471
00:24:15,914 --> 00:24:20,875
I mean, still remember back in the day when I
would intern for free for a long time until I
472
00:24:20,875 --> 00:24:21,755
got my first job.
473
00:24:21,755 --> 00:24:26,875
Well, these guys would be getting something
like $25.35 dollars an hour as an intern.
474
00:24:27,595 --> 00:24:28,075
I know.
475
00:24:28,075 --> 00:24:30,160
You know, they don't work for free anymore.
476
00:24:30,160 --> 00:24:31,600
No one wants the interns
477
00:24:31,359 --> 00:24:35,359
Right to make this the market is a little bit
different.
478
00:24:35,359 --> 00:24:37,039
My daughter was actually just doing free
internship.
479
00:24:37,039 --> 00:24:39,359
I'm like, wait, Oh you didn't get them to pay
you.
480
00:24:40,080 --> 00:24:41,914
So, but yeah.
481
00:24:41,914 --> 00:24:46,714
And then straight out of college, they would be
getting something like between, I don't know,
482
00:24:46,714 --> 00:24:49,034
75 to $125,000 a year.
483
00:24:49,275 --> 00:24:52,394
I mean, kid no experience straight out of
college with a construction management team.
484
00:24:52,394 --> 00:24:52,794
Right.
485
00:24:53,275 --> 00:24:53,914
That's because...
486
00:24:53,914 --> 00:24:55,835
And it it was hard for us.
487
00:24:55,835 --> 00:24:58,289
I mean, we're still a small regional company.
488
00:24:58,289 --> 00:25:02,130
It was really hard for us to compete with the
giants that are building skyscrapers all over
489
00:25:02,130 --> 00:25:03,970
all over the region, all over the country.
490
00:25:04,769 --> 00:25:07,409
And so so so that's the setup.
491
00:25:07,409 --> 00:25:16,994
What happened in 2022, 2023, I forget now,
2022, is we lost two projects to foreclosure.
492
00:25:17,795 --> 00:25:21,874
And that was a big blow for us.
493
00:25:21,954 --> 00:25:22,914
That was...
494
00:25:22,914 --> 00:25:26,035
That contributed to the decision to shut down
the construction company.
495
00:25:26,035 --> 00:25:26,674
I mean, it's funny.
496
00:25:26,674 --> 00:25:32,589
My dad has been saying about when we set up a
new division, residential division of the
497
00:25:32,589 --> 00:25:35,950
construction company in 2015, he's like, what
the hell are you guys doing?
498
00:25:35,950 --> 00:25:38,029
I've been trying to get out of construction for
so long.
499
00:25:38,029 --> 00:25:39,390
You've seen how stressed out I am.
500
00:25:39,694 --> 00:25:40,734
And what did you do?
501
00:25:40,734 --> 00:25:43,855
You you created a new construction company like
you're a bunch of idiots.
502
00:25:43,855 --> 00:25:44,174
So
503
00:25:45,375 --> 00:25:50,894
So I guess that whole legacy about you're going
to get this, and it's gonna be passed down
504
00:25:50,894 --> 00:25:53,054
twenty three years ago changed.
505
00:25:54,309 --> 00:25:55,109
Right.
506
00:25:55,109 --> 00:25:55,750
I mean, he...
507
00:25:55,750 --> 00:26:01,350
He's getting he's getting older and wiser, and
the stress is getting to him, and he's like,
508
00:26:01,350 --> 00:26:02,150
this just...
509
00:26:02,309 --> 00:26:03,590
This industry is...
510
00:26:03,590 --> 00:26:07,830
He he would always call it a dirty industry
because you're always dealing with not just
511
00:26:07,830 --> 00:26:13,724
literal dirt, but you're always dealing with
all of the other crap that comes along with it,
512
00:26:13,724 --> 00:26:21,724
emotions, just human behavior, you know,
lenders, just all all of those junk.
513
00:26:21,724 --> 00:26:26,819
So so, yeah, that that was a huge, you know, it
it felt like being hit by a bus.
514
00:26:26,820 --> 00:26:29,779
You know, all of a sudden, we had two large
projects.
515
00:26:29,779 --> 00:26:30,580
One was finished.
516
00:26:30,820 --> 00:26:31,940
We couldn't refinance it.
517
00:26:31,940 --> 00:26:33,539
The other one was mid construction.
518
00:26:33,940 --> 00:26:36,565
But the the problem why the...
519
00:26:36,565 --> 00:26:40,725
One of the biggest reasons why those two
projects failed is they were cross cross
520
00:26:40,725 --> 00:26:41,445
collateralized.
521
00:26:41,445 --> 00:26:42,964
They were combined together.
522
00:26:43,045 --> 00:26:46,644
And so the failure of one project led to the
failure of the other.
523
00:26:46,644 --> 00:26:47,205
So the bank
524
00:26:47,684 --> 00:26:52,900
Oh, so you finished one So you finished one of
the projects, but you couldn't finish the
525
00:26:52,900 --> 00:26:53,460
other.
526
00:26:53,779 --> 00:26:57,059
So the other one killed the other deal.
527
00:26:57,059 --> 00:26:59,220
Now why couldn't you refinance it?
528
00:27:00,180 --> 00:27:04,984
The bank would not let us refinance the
finished project because the deal was
529
00:27:04,984 --> 00:27:07,224
structured that both projects had to be...
530
00:27:07,224 --> 00:27:10,904
Had to reach certain level of completion, and
they couldn't.
531
00:27:11,065 --> 00:27:15,384
So there was a legal hurdle, but then also
interest rates went up.
532
00:27:15,384 --> 00:27:20,629
So right around that time, that's when the
interest rates shot up and our numbers would
533
00:27:20,629 --> 00:27:21,989
not compute anymore.
534
00:27:22,309 --> 00:27:25,509
We needed to raise additional equity to
refinance.
535
00:27:25,990 --> 00:27:28,389
And, you know, and the lender was stubborn.
536
00:27:28,389 --> 00:27:28,710
They...
537
00:27:28,710 --> 00:27:29,589
It was a private lender.
538
00:27:29,589 --> 00:27:30,789
It wasn't a commercial bank.
539
00:27:30,789 --> 00:27:32,115
And they said, know what?
540
00:27:32,115 --> 00:27:33,154
We don't have to work it out.
541
00:27:33,154 --> 00:27:35,075
We'll just foreclose and we'll hold on to it.
542
00:27:35,075 --> 00:27:39,954
If it was a commercial bank, they would have
likely foreclosed and auctioned it off and
543
00:27:40,035 --> 00:27:40,515
Right.
544
00:27:40,755 --> 00:27:41,234
Took...
545
00:27:41,234 --> 00:27:42,835
Take taken a huge hit.
546
00:27:42,835 --> 00:27:46,059
But a private lender said, you know, we're just
gonna hold on to it.
547
00:27:46,059 --> 00:27:47,419
As far as I know, they still own it.
548
00:27:47,419 --> 00:27:47,659
And
549
00:27:47,980 --> 00:27:48,619
Wow.
550
00:27:49,579 --> 00:27:50,059
Yeah.
551
00:27:50,059 --> 00:27:52,539
Because the market has not changed since '22.
552
00:27:52,539 --> 00:27:57,500
I mean, all the ways, I think a lot of
developers are ended up in your same situation.
553
00:27:57,500 --> 00:28:04,654
In fact, we are looking for developers that are
in that situation to get some great class a
554
00:28:04,654 --> 00:28:13,190
multifamily apartments because what you
projected from the eye of 2021 is not where we
555
00:28:13,190 --> 00:28:14,150
are today.
556
00:28:14,470 --> 00:28:14,789
You know?
557
00:28:14,789 --> 00:28:16,070
And so that's...
558
00:28:16,070 --> 00:28:17,750
I mean, is that basically what hap...
559
00:28:17,750 --> 00:28:22,630
You know, where you projected to certain
numbers, you've got an MBA, you've seen a lot
560
00:28:22,630 --> 00:28:29,684
of market cycles, But no matter how well you
project, no matter how many cycles you've been
561
00:28:29,684 --> 00:28:35,045
through, you just don't know when the turn is
coming, and it comes out of nowhere.
562
00:28:35,045 --> 00:28:35,365
Exactly.
563
00:28:36,509 --> 00:28:37,150
Exactly.
564
00:28:37,150 --> 00:28:37,630
Exactly.
565
00:28:37,630 --> 00:28:45,549
And, you know, since then, we are recovering,
we pivoted, we switched more to a consulting
566
00:28:45,789 --> 00:28:47,710
practice with ownership.
567
00:28:47,710 --> 00:28:54,554
I mean, we're still developing, but we talked
many times about bringing back and rebuilding
568
00:28:54,554 --> 00:28:55,914
the construction division.
569
00:28:55,994 --> 00:28:59,355
But every time I look at it, I'm like, I
honestly don't wanna deal with it anymore.
570
00:28:59,355 --> 00:28:59,835
Right.
571
00:28:59,835 --> 00:29:07,340
Even when when I ran both companies, literally,
I kid you not, 95% of my time was spent on
572
00:29:07,340 --> 00:29:08,619
construction operations.
573
00:29:09,500 --> 00:29:10,059
Right.
574
00:29:10,059 --> 00:29:16,700
And where where it should have been spent was
on deal making, on financing, on marketing,
575
00:29:16,700 --> 00:29:18,380
looking for new opportunities.
576
00:29:18,380 --> 00:29:24,144
But the problem is because construction was
taking up so much energy and so much time, I
577
00:29:24,144 --> 00:29:26,704
didn't have time to worry about growing the
business.
578
00:29:27,345 --> 00:29:28,065
And so when
579
00:29:28,065 --> 00:29:28,384
So you
580
00:29:28,625 --> 00:29:29,184
two projects
581
00:29:29,505 --> 00:29:31,105
I'm sorry.
582
00:29:31,105 --> 00:29:31,424
Go ahead.
583
00:29:31,424 --> 00:29:31,664
Finish.
584
00:29:31,664 --> 00:29:32,625
I didn't mean to cut you.
585
00:29:32,625 --> 00:29:32,945
Go ahead.
586
00:29:33,019 --> 00:29:33,659
No.
587
00:29:33,659 --> 00:29:37,019
I was just gonna say when when the two projects
collapsed, we had no pipeline.
588
00:29:37,819 --> 00:29:40,859
And so we had to literally start from the
beginning to, okay.
589
00:29:40,940 --> 00:29:42,379
Well, what are we gonna do now?
590
00:29:42,460 --> 00:29:49,315
And now I spent probably 80% of my time doing
marketing and then 20% of my time doing
591
00:29:49,315 --> 00:29:52,275
everything else and actually watching the
operations.
592
00:29:52,355 --> 00:29:56,914
But operations is easy, you know, it's it's so
much easier for me to put together the team of
593
00:29:56,914 --> 00:30:06,970
consultants and pursue the entitlement deal and
focus on doing podcasts, focus on my...
594
00:30:06,970 --> 00:30:12,730
Just building the infrastructure, meeting
people, making deals that I didn't have time to
595
00:30:12,730 --> 00:30:12,970
do.
596
00:30:12,970 --> 00:30:14,889
And I, frankly, enjoy doing this a lot more.
597
00:30:14,889 --> 00:30:16,009
That's phenomenal.
598
00:30:16,465 --> 00:30:21,345
And I'm glad you made that switch, and you're
continuing to grow in your career even if it
599
00:30:21,345 --> 00:30:21,904
isn't.
600
00:30:21,904 --> 00:30:25,025
So it technically is still your dad's business.
601
00:30:25,025 --> 00:30:27,025
You're still in family business.
602
00:30:27,025 --> 00:30:27,184
Right?
603
00:30:28,319 --> 00:30:28,720
He's...
604
00:30:28,720 --> 00:30:28,960
Yeah.
605
00:30:28,960 --> 00:30:30,319
Mean, we have...
606
00:30:30,319 --> 00:30:30,799
He...
607
00:30:30,799 --> 00:30:33,200
I mean, he has exited on paper.
608
00:30:34,079 --> 00:30:34,719
Right.
609
00:30:35,119 --> 00:30:36,480
So on paper, But it's
610
00:30:36,480 --> 00:30:42,880
still in the company, like, the company is 40
years old, or is it a new company now?
611
00:30:43,835 --> 00:30:44,315
The...
612
00:30:44,315 --> 00:30:45,275
Well, I mean, we had...
613
00:30:45,275 --> 00:30:45,515
Yeah.
614
00:30:45,515 --> 00:30:48,474
We've transitioned through many legal entities
over the years.
615
00:30:48,555 --> 00:30:49,275
So Right.
616
00:30:49,275 --> 00:30:49,515
No.
617
00:30:49,515 --> 00:30:52,715
We don't have the legal entity that was created
many years ago.
618
00:30:52,715 --> 00:30:53,994
I think our oldest...
619
00:30:54,075 --> 00:30:58,809
Well, our development, GIS Development
Corporation, that's currently the primary
620
00:30:58,809 --> 00:31:01,450
company, was set up in 2013.
621
00:31:02,730 --> 00:31:03,369
Mhmm.
622
00:31:03,529 --> 00:31:10,575
The entity that I started working on in 2003,
we closed that and we restructured it.
623
00:31:10,575 --> 00:31:15,535
So, you know, how in real estate, every time
you have a new structure, you reposition the
624
00:31:15,535 --> 00:31:16,255
legal entity.
625
00:31:16,255 --> 00:31:18,575
So, yeah, we we were talking about it recently.
626
00:31:18,575 --> 00:31:24,440
We don't have the original entity that he
started back in the nineties anymore, but Mhmm.
627
00:31:24,440 --> 00:31:25,319
We continue the brand.
628
00:31:25,319 --> 00:31:30,519
The brand name and the brand identity of GIS is
the original brand identity.
629
00:31:30,519 --> 00:31:34,279
We've revised the logo about fifteen years ago,
which he was upset about.
630
00:31:35,315 --> 00:31:36,434
But we're like, dad, come on.
631
00:31:36,434 --> 00:31:38,035
You've had this logo for many years.
632
00:31:38,035 --> 00:31:38,755
Like, it's time.
633
00:31:38,755 --> 00:31:39,714
So Right.
634
00:31:40,515 --> 00:31:41,154
We we...
635
00:31:41,154 --> 00:31:41,555
Don't believe
636
00:31:41,634 --> 00:31:43,954
legacy the legacy continues.
637
00:31:43,954 --> 00:31:44,595
That's awesome.
638
00:31:44,595 --> 00:31:45,154
Exactly.
639
00:31:45,154 --> 00:31:46,515
The the legacy totally continues.
640
00:31:47,900 --> 00:31:48,779
That's awesome.
641
00:31:48,779 --> 00:31:55,179
Everyone sells this dream that development is
either easy or impossible.
642
00:31:55,419 --> 00:31:59,579
Give us the frozen pizza version of the truth
in the middle.
643
00:31:59,875 --> 00:32:00,275
Yes.
644
00:32:00,275 --> 00:32:04,994
That's my most common my most common
conversation with people.
645
00:32:04,994 --> 00:32:09,875
And I I talk about it on podcasts a lot is that
some of the people that I deal with think that
646
00:32:09,875 --> 00:32:11,234
real estate is so easy.
647
00:32:11,849 --> 00:32:13,049
It's a no brainer.
648
00:32:13,049 --> 00:32:18,250
Others think that it's so complex that they
would rather figure out how to launch a space
649
00:32:18,250 --> 00:32:21,049
shuttle than try to put together a development
project.
650
00:32:21,049 --> 00:32:23,049
And really, it's somewhere in between.
651
00:32:23,049 --> 00:32:30,105
What I always tell people is that unless it's
your full time job, if you think it's easy and
652
00:32:30,105 --> 00:32:33,865
you haven't done this before, prepare to take
on another full time job.
653
00:32:34,904 --> 00:32:40,740
I kid you not, I had this exact conversation
with a nurse a few months ago who owns several
654
00:32:40,740 --> 00:32:44,580
pieces of real estate, and we were talking
about redeveloping her parcel.
655
00:32:44,580 --> 00:32:47,539
And I'm explaining what I do, and she's like,
wait.
656
00:32:47,539 --> 00:32:48,339
I don't get it.
657
00:32:48,660 --> 00:32:54,634
I don't see why I need I'm like, well, I mean,
and I'm trying to, you know, explain what a
658
00:32:54,634 --> 00:32:58,875
developer does, you know, how we would do the
feasibility study, and how we would work with
659
00:32:58,875 --> 00:33:03,355
architects and engineers and the municipality,
and how we'd figure out the financing.
660
00:33:03,674 --> 00:33:05,755
And she's like, so what value do you offer?
661
00:33:06,369 --> 00:33:09,569
I'm like, I don't I don't know how to talk to
you.
662
00:33:09,569 --> 00:33:12,210
Like, it it sounds so, like, dismissive that
Right.
663
00:33:12,529 --> 00:33:15,890
You know, when asked that, I, like, literally
had nothing to say.
664
00:33:15,890 --> 00:33:17,730
I'm like, well, I guess you're fine.
665
00:33:18,065 --> 00:33:20,784
It sounds like you know what needs to be done.
666
00:33:20,785 --> 00:33:26,865
But my attitude is if you have a full time job
or full time occupation, and you also want to
667
00:33:26,865 --> 00:33:31,585
develop real estate, understand that it's a
full time job.
668
00:33:31,585 --> 00:33:37,769
The mistakes that you can make, you would only
recognize the mistakes in arrears when it's
669
00:33:37,769 --> 00:33:38,650
already too late.
670
00:33:38,650 --> 00:33:39,529
That's right.
671
00:33:39,529 --> 00:33:47,930
And and what I bring is twenty three years of
mistakes to help landowners avoid them.
672
00:33:48,565 --> 00:33:52,244
Now at the same time, it's not rocket science.
673
00:33:52,965 --> 00:33:56,005
And in fact, my team would always yell at me
because I tell them, I'm like, come on, you
674
00:33:56,005 --> 00:33:56,244
guys.
675
00:33:56,244 --> 00:33:57,045
It's not rocket science.
676
00:33:57,045 --> 00:33:58,085
We're gonna always figure it out.
677
00:33:58,085 --> 00:33:59,525
And they're like, shut the fuck up.
678
00:33:59,525 --> 00:34:00,884
It is actually complex.
679
00:34:01,880 --> 00:34:03,720
It is complex.
680
00:34:04,120 --> 00:34:11,880
It is complex, but what is important is to
build the right team that can help you.
681
00:34:11,880 --> 00:34:18,704
One person could develop a large commercial
project if they had the right team of not
682
00:34:18,704 --> 00:34:21,905
necessarily staff, employees, but the right
team of consultants.
683
00:34:22,385 --> 00:34:22,945
Now Mhmm.
684
00:34:22,945 --> 00:34:27,264
It's gonna be difficult for one person to
manage multiple projects like that, but you
685
00:34:27,264 --> 00:34:30,224
have to surround yourself with a team of
experienced professionals.
686
00:34:31,039 --> 00:34:34,079
And then, yeah, and then many things become
possible.
687
00:34:34,079 --> 00:34:43,199
I often compare development work to conducting
an orchestra, where you have this large room of
688
00:34:43,199 --> 00:34:44,159
professionals.
689
00:34:44,804 --> 00:34:47,525
Everyone knows their instrument really well.
690
00:34:47,764 --> 00:34:50,405
Everyone knows how to play their part really
well.
691
00:34:50,644 --> 00:34:55,444
Like, every one of those musicians in the
orchestra is a professional with many years of
692
00:34:55,444 --> 00:34:56,484
experience and training.
693
00:34:56,484 --> 00:34:57,925
Many of them started when they were kids.
694
00:34:57,925 --> 00:34:58,005
Right?
695
00:34:58,849 --> 00:35:01,010
But it still takes a conductor.
696
00:35:01,010 --> 00:35:01,730
The the most...
697
00:35:01,730 --> 00:35:06,610
Like, the best orchestra you take in the world,
there's still a conductor who's out there
698
00:35:06,610 --> 00:35:12,605
making sure that the time is kept, that, you
know, that the emotions, that all all of the
699
00:35:12,605 --> 00:35:15,085
details that go into conducting an orchestra.
700
00:35:15,085 --> 00:35:16,605
It's exactly like this here.
701
00:35:16,605 --> 00:35:20,445
You're working with all these professionals,
but without making sure that they're on track,
702
00:35:21,804 --> 00:35:27,700
making sure that they communicate with each
other and that they don't forget what the goal
703
00:35:27,700 --> 00:35:30,660
or the objective is, is what the developer
does.
704
00:35:30,660 --> 00:35:36,739
So what separates the landowners who
successfully develop from the ones who get
705
00:35:36,739 --> 00:35:37,619
swallowed by it?
706
00:35:37,619 --> 00:35:38,980
Another very good question.
707
00:35:38,980 --> 00:35:45,295
I think the main thing that separates them is
one, recognizing that development is going
708
00:35:45,295 --> 00:35:45,855
to...
709
00:35:46,335 --> 00:35:47,775
Thank you, Apple, for the thumbs up.
710
00:35:47,775 --> 00:35:52,494
Development is going to take time and money.
711
00:35:53,375 --> 00:35:55,614
That no matter what...
712
00:35:56,199 --> 00:35:57,320
A lot of people say, hey.
713
00:35:57,320 --> 00:35:58,280
I've got this piece of land.
714
00:35:58,280 --> 00:36:00,039
I don't wanna put any more money towards it.
715
00:36:00,039 --> 00:36:01,239
Just find the investors.
716
00:36:01,480 --> 00:36:02,280
And we can do that.
717
00:36:02,280 --> 00:36:02,519
Right.
718
00:36:02,519 --> 00:36:05,480
So there's plenty of investors that are
interested in doing this, but you have to
719
00:36:05,480 --> 00:36:09,800
recognize that this is going to take time and
it's going to take money.
720
00:36:10,199 --> 00:36:16,994
Another another thing that successful
investors, successful developers recognize is
721
00:36:16,994 --> 00:36:18,595
that there is risk.
722
00:36:19,474 --> 00:36:19,954
Right.
723
00:36:19,954 --> 00:36:25,635
No matter how much work, how much homework you
do, how much you try to hedge your risk,
724
00:36:25,635 --> 00:36:26,755
there's always risk.
725
00:36:27,369 --> 00:36:30,329
And there are going to be things that are
unforeseen.
726
00:36:30,409 --> 00:36:35,849
And so when you plan for it, you have to plan
for those unforeseen, while recognizing that
727
00:36:35,849 --> 00:36:37,210
you can't plan for everything.
728
00:36:37,369 --> 00:36:43,324
That there may be, you know, popular phrase
recently, the black swan event that happens
729
00:36:43,964 --> 00:36:45,405
that you did not anticipate.
730
00:36:45,405 --> 00:36:47,085
That's the saying earlier.
731
00:36:47,324 --> 00:36:47,885
Yeah.
732
00:36:47,885 --> 00:36:48,764
It just always...
733
00:36:48,764 --> 00:36:49,565
It happens.
734
00:36:49,804 --> 00:36:51,484
You don't know when it's gonna happen.
735
00:36:51,644 --> 00:36:57,085
These cycles are generally eight to ten years,
and I think that's that's the average.
736
00:36:57,085 --> 00:37:02,420
Sometimes it's shorter, But that black swan
event comes out of nowhere.
737
00:37:02,820 --> 00:37:03,300
Right.
738
00:37:03,300 --> 00:37:05,219
And you just don't know what it is gonna
739
00:37:05,059 --> 00:37:06,179
It's it's funny.
740
00:37:06,179 --> 00:37:07,139
You know, it's funny.
741
00:37:07,139 --> 00:37:11,780
In 2018, we finished one of our projects, and I
said, you guys, I don't wanna start new
742
00:37:11,780 --> 00:37:12,420
projects right now.
743
00:37:13,065 --> 00:37:13,464
It...
744
00:37:13,464 --> 00:37:20,505
We've in 2018, from 2008, we had a roughly ten
years of growth, and I'm like, it's time for
745
00:37:20,505 --> 00:37:21,545
another recession.
746
00:37:21,545 --> 00:37:22,905
It's going to decline.
747
00:37:23,864 --> 00:37:24,505
Right.
748
00:37:24,505 --> 00:37:26,184
And it and it didn't decline.
749
00:37:26,184 --> 00:37:26,505
Right?
750
00:37:26,505 --> 00:37:29,599
If it wasn't for COVID, who knows?
751
00:37:29,599 --> 00:37:34,719
But even COVID was like this weird time when it
seemed like in 2020, it seemed like the world's
752
00:37:34,719 --> 00:37:35,440
gonna end.
753
00:37:35,760 --> 00:37:40,400
But then not even a year later, real estate is
booming, and there's just money flowing It's
754
00:37:40,400 --> 00:37:40,640
weird.
755
00:37:40,640 --> 00:37:41,680
Left and right into deals.
756
00:37:41,680 --> 00:37:41,760
Yeah.
757
00:37:42,425 --> 00:37:46,264
You know, I I thought also COVID, I had that
same attitude.
758
00:37:46,264 --> 00:37:48,105
I didn't know what to do, to be honest.
759
00:37:48,264 --> 00:37:54,585
We were in the middle when COVID hit of two
remodels, one in New Jersey and one in The
760
00:37:54,585 --> 00:37:54,984
Bronx.
761
00:37:55,150 --> 00:37:58,110
And, they were both four family remodels.
762
00:37:58,110 --> 00:38:04,909
And I think we sat still for about a week and a
half, and then we said, yeah.
763
00:38:04,909 --> 00:38:06,110
I'm going to Home Depot.
764
00:38:06,110 --> 00:38:07,710
And guess what?
765
00:38:07,710 --> 00:38:09,585
Home Depot was packed.
766
00:38:09,585 --> 00:38:16,465
Everybody who decided to to work, we were all
at Home Depot and no one else was moving but
767
00:38:16,465 --> 00:38:19,425
all the people that were, you know, in
construction.
768
00:38:19,425 --> 00:38:22,385
A lot of people were working on their their
individual homes.
769
00:38:22,385 --> 00:38:24,469
So how are...
770
00:38:24,469 --> 00:38:27,989
So let's talk about the future of development
and AI.
771
00:38:27,989 --> 00:38:35,109
I mean, how are you using AI to move faster on
feasibility, codes, and analysis?
772
00:38:35,109 --> 00:38:36,309
How am I using AI?
773
00:38:36,309 --> 00:38:37,349
This is my favorite question.
774
00:38:37,944 --> 00:38:41,385
I'm basically an AI operator these days.
775
00:38:41,385 --> 00:38:48,344
So my my backbone of the business is all set up
in Codex, which is, you know, the the...
776
00:38:48,344 --> 00:38:52,505
Their new rebrand is now all in chat GPT work
or whatever they call it.
777
00:38:52,505 --> 00:38:54,269
But we...
778
00:38:54,269 --> 00:38:59,309
It it became a religious debate between clot
code and codex.
779
00:38:59,309 --> 00:38:59,630
Right?
780
00:38:59,630 --> 00:39:02,510
It's it's like iPhone and Android, like Mac and
PC.
781
00:39:02,510 --> 00:39:02,990
Yes.
782
00:39:03,070 --> 00:39:03,949
But Okay.
783
00:39:03,949 --> 00:39:04,269
We...
784
00:39:04,269 --> 00:39:08,164
We've been we've been using codex for the last
several months, and
785
00:39:08,324 --> 00:39:08,804
Nice.
786
00:39:08,804 --> 00:39:10,164
It does pretty much everything.
787
00:39:10,565 --> 00:39:12,005
So we have custom...
788
00:39:12,005 --> 00:39:18,885
When new leads come in, we have an automation
setup that would automatically do a pre
789
00:39:18,885 --> 00:39:24,319
feasibility review for them, look up their
zoning, look up all of the parameters, what can
790
00:39:24,319 --> 00:39:27,920
be built, maximum size of setbacks, parking,
all those things.
791
00:39:28,239 --> 00:39:32,400
And within a few minutes, automatically shoots
them a pre feasibility report.
792
00:39:32,400 --> 00:39:32,639
Wow.
793
00:39:32,639 --> 00:39:37,974
Then we we have an automation set up that would
be following up with people to schedule
794
00:39:37,974 --> 00:39:38,614
appointments.
795
00:39:38,614 --> 00:39:41,494
Then, so that's on the, marketing side.
796
00:39:41,494 --> 00:39:49,655
As far as feasibility work itself, once we sign
a new relationship or a new client, all of the
797
00:39:49,655 --> 00:39:54,200
code research due diligence is all done by AI.
798
00:39:54,280 --> 00:39:55,239
And, I'm...
799
00:39:55,239 --> 00:39:59,800
I was super impressed with the recent ChatGPT
model 5.6 SOL.
800
00:40:00,199 --> 00:40:02,920
It is extremely powerful in codex.
801
00:40:02,920 --> 00:40:03,480
It could...
802
00:40:03,480 --> 00:40:10,355
If you use their ultra mode, it creates sub
agents and cross checks, so then does super
803
00:40:10,355 --> 00:40:13,714
detailed research, and then, puts together
reports.
804
00:40:13,714 --> 00:40:18,835
One of the parameters that we programmed is,
everybody's afraid of AI hallucination.
805
00:40:19,230 --> 00:40:25,869
Also, we created a hallucination checker
essentially that would review the report and
806
00:40:25,869 --> 00:40:30,510
verify and check every assumption that the
report made.
807
00:40:31,309 --> 00:40:37,704
And and and then on top of that, in addition to
the report, whenever it references a code, like
808
00:40:37,704 --> 00:40:42,984
a land use code, it has to put a footnote with
a link to that code, and then we created a
809
00:40:42,984 --> 00:40:49,239
separate agent that would check the report and
cross reference the code, click on the link, go
810
00:40:49,239 --> 00:40:53,960
through the code section that it's referencing
to make sure that it's the accurate code.
811
00:40:55,079 --> 00:40:56,360
And, I mean, it's funny.
812
00:40:56,360 --> 00:41:00,684
Like, a few months ago, we started working on
this project Washington, which is a small town
813
00:41:00,684 --> 00:41:01,965
south of Seattle.
814
00:41:02,364 --> 00:41:08,525
And we had, I think it was Gemini, do some of
the early code research, and I found a few code
815
00:41:08,525 --> 00:41:10,125
sections, and I started reading them.
816
00:41:10,125 --> 00:41:10,764
I'm like, oh, wow.
817
00:41:10,764 --> 00:41:11,484
That's interesting.
818
00:41:11,484 --> 00:41:14,525
Then I click on the link, and it opens the link
of Des Moines, Iowa.
819
00:41:14,820 --> 00:41:15,940
I'm like, nope.
820
00:41:15,940 --> 00:41:17,220
Not the right city.
821
00:41:18,420 --> 00:41:19,220
I see.
822
00:41:20,099 --> 00:41:20,660
What happened...
823
00:41:20,660 --> 00:41:21,300
Okay.
824
00:41:21,460 --> 00:41:22,579
So Gemini...
825
00:41:22,980 --> 00:41:27,140
So you didn't have that backup for the backup
in Gemini, but you had Right.
826
00:41:27,140 --> 00:41:27,460
No.
827
00:41:27,460 --> 00:41:27,780
We didn't.
828
00:41:28,105 --> 00:41:28,664
Okay.
829
00:41:28,664 --> 00:41:29,385
Got it.
830
00:41:29,305 --> 00:41:29,465
But...
831
00:41:29,465 --> 00:41:29,625
Yeah.
832
00:41:29,625 --> 00:41:30,905
But in Codex, it's...
833
00:41:30,905 --> 00:41:33,785
We are able to do the checks and balances.
834
00:41:33,785 --> 00:41:34,664
I mean, we were...
835
00:41:34,664 --> 00:41:38,105
We switched all of our accounting to Codex.
836
00:41:38,265 --> 00:41:42,105
We went away from QuickBooks because we had
quick...
837
00:41:42,105 --> 00:41:43,625
QuickBooks running all of our entities.
838
00:41:44,159 --> 00:41:50,480
We installed an open source bookkeeping
software on a virtual machine, and we have
839
00:41:50,480 --> 00:41:55,199
Codex do all of the bookkeeping so that we
streamline all of that.
840
00:41:55,199 --> 00:41:55,920
What else?
841
00:41:55,920 --> 00:42:01,655
Every contract review before we even call the
lawyer, scan through the code, we scan through
842
00:42:01,655 --> 00:42:05,335
the pros and cons, and we sit down, we
negotiate deals.
843
00:42:05,574 --> 00:42:06,934
And in many cases, we don't know.
844
00:42:06,934 --> 00:42:08,454
We need to engage legal.
845
00:42:08,454 --> 00:42:14,449
So, yeah, I mean, pretty much pretty much
everything, even podcast editing now is all
846
00:42:14,449 --> 00:42:16,289
done by Codex.
847
00:42:16,289 --> 00:42:21,889
We describe the the best feature that it
created is it can watch you do a project.
848
00:42:21,889 --> 00:42:30,105
So our editor would edit a podcast while Codex
was watching and recording it, And then it
849
00:42:30,105 --> 00:42:36,265
saved all of the steps that the editor takes to
create its own its own automation.
850
00:42:36,505 --> 00:42:39,465
And so now all the podcast editing is
automated.
851
00:42:40,344 --> 00:42:44,219
Now we have also automated our podcast editing.
852
00:42:44,219 --> 00:42:46,539
And we did it in Cloud Code.
853
00:42:46,539 --> 00:42:47,019
However...
854
00:42:47,019 --> 00:42:47,260
Yeah.
855
00:42:47,260 --> 00:42:50,460
And I noticed you just mentioned about the...
856
00:42:50,860 --> 00:42:52,059
You just mentioned...
857
00:42:52,940 --> 00:42:54,860
I love what you're telling me about Codex.
858
00:42:54,860 --> 00:42:55,500
This is awesome.
859
00:42:56,204 --> 00:42:58,045
Because I I just assumed...
860
00:42:58,045 --> 00:43:01,405
I still use ChatGPT every day, but you're
right.
861
00:43:01,405 --> 00:43:06,285
Since Claude came out and then Claude Code and
now you have Claude Design, I'll tell you what,
862
00:43:06,285 --> 00:43:13,380
I just did for the first time a presentation
with Claude, a presentation deck with Claude,
863
00:43:13,380 --> 00:43:15,940
and it is absolutely stunning.
864
00:43:16,260 --> 00:43:21,860
I sent it out to everyone, all the partners,
and they're like, oh, you've been doing your
865
00:43:21,860 --> 00:43:22,260
homework.
866
00:43:22,434 --> 00:43:23,554
You've been doing this.
867
00:43:23,554 --> 00:43:24,914
My god, today, today.
868
00:43:24,914 --> 00:43:26,275
And I'm like, no.
869
00:43:26,275 --> 00:43:26,755
It's not.
870
00:43:26,755 --> 00:43:29,154
Able to plug in Gamma.
871
00:43:29,154 --> 00:43:30,835
So I plug...
872
00:43:30,835 --> 00:43:33,875
So there's a Gamma plug in and a Canva plug in.
873
00:43:34,114 --> 00:43:35,074
And I don't know.
874
00:43:35,074 --> 00:43:37,795
And actually, it didn't even use the Gamma plug
in.
875
00:43:38,519 --> 00:43:42,840
But, yeah, we are, doing a lot of that.
876
00:43:42,840 --> 00:43:44,679
And thank you for the tips.
877
00:43:44,679 --> 00:43:47,000
Those tips are phenomenal.
878
00:43:47,000 --> 00:43:48,360
Absolutely phenomenal.
879
00:43:48,679 --> 00:43:48,920
Yeah.
880
00:43:48,920 --> 00:43:54,635
We ended up canceling we ended up canceling
Gamma, and I think I have a prepaid Canva
881
00:43:54,635 --> 00:43:56,875
until, like, November.
882
00:43:56,954 --> 00:43:59,994
But I'm probably gonna cancel Canva because I
haven't used it at all.
883
00:44:00,315 --> 00:44:00,795
It...
884
00:44:00,795 --> 00:44:06,760
Between Image Generator and its own scripting
and PowerPoint that I already have, The
885
00:44:06,760 --> 00:44:11,880
presentations are good enough for me that I'm
like, I don't really need to pay for other
886
00:44:11,880 --> 00:44:12,360
tools.
887
00:44:12,360 --> 00:44:15,720
What I have is plenty sufficient for my use.
888
00:44:16,280 --> 00:44:19,735
How much money you think you're saving with AI
now?
889
00:44:19,735 --> 00:44:24,934
I mean, my $200 a month that I spend on Codex
is probably replacing one.
890
00:44:24,934 --> 00:44:27,574
And I know that we're replacing at least two
VAs.
891
00:44:27,574 --> 00:44:27,815
Mhmm.
892
00:44:27,815 --> 00:44:33,099
You know, those folks from The Philippines used
to cost us about thousand, $1,500 a month.
893
00:44:33,099 --> 00:44:38,619
And I mean, just that alone, bookkeeper, you
know, we don't need to spend thousands on a
894
00:44:38,619 --> 00:44:40,380
bookkeeper because it's all automated.
895
00:44:40,380 --> 00:44:43,099
Now, it does take more of my time.
896
00:44:44,085 --> 00:44:50,085
But honestly, the the questions that it asks
me, like, it's reconciling my bank
897
00:44:50,085 --> 00:44:50,965
transactions.
898
00:44:51,125 --> 00:44:55,765
And it would print up a list of transactions
that it doesn't know that it needs help coding.
899
00:44:55,925 --> 00:45:00,250
Well, any bookkeeper would have done the same
thing because a third party or even a staff
900
00:45:00,250 --> 00:45:00,809
would Call you
901
00:45:00,809 --> 00:45:00,969
and they
902
00:45:00,969 --> 00:45:01,609
ask you.
903
00:45:01,530 --> 00:45:02,489
Doesn't necessarily...
904
00:45:02,489 --> 00:45:02,969
Right.
905
00:45:02,969 --> 00:45:03,769
And they ask me.
906
00:45:03,769 --> 00:45:10,489
But maybe they would ask me, you know, once a
day for like five minutes, and so in my mind
907
00:45:10,489 --> 00:45:13,849
doesn't take time because it's just one
question, I quickly answer it and I move on.
908
00:45:13,994 --> 00:45:19,595
Here, when it's done, it sends me a report and
says, here's seven transactions or eight
909
00:45:19,595 --> 00:45:21,835
transactions that you need me help coding.
910
00:45:22,555 --> 00:45:27,115
And so now I have to open a report, I have to
look at it, so maybe it takes me half an hour.
911
00:45:28,010 --> 00:45:30,170
And sometimes I'm like, I'll deal with it
tomorrow.
912
00:45:30,170 --> 00:45:31,210
And, you know, and it's stuck.
913
00:45:31,210 --> 00:45:32,329
It can't continue until...
914
00:45:32,329 --> 00:45:32,809
And it's funny.
915
00:45:32,809 --> 00:45:36,089
It says, operation blocked until Eugene answers
these questions.
916
00:45:36,089 --> 00:45:37,050
I'm like, shut the hell up.
917
00:45:37,050 --> 00:45:38,089
You don't tell me what to do.
918
00:45:38,089 --> 00:45:38,650
That's good.
919
00:45:38,650 --> 00:45:39,609
Oh, that's so funny.
920
00:45:40,085 --> 00:45:41,045
My goodness.
921
00:45:41,045 --> 00:45:48,804
So for a landowner or young developer afraid AI
is changing the game, what would you tell them
922
00:45:48,804 --> 00:45:49,444
this week?
923
00:45:49,444 --> 00:45:50,005
You know what?
924
00:45:50,005 --> 00:45:50,565
It's so funny.
925
00:45:50,565 --> 00:45:56,250
College grads these days, I I mean, I hear it
from, like, my nephew to just things I read on
926
00:45:56,250 --> 00:46:00,329
the news that, college graduates are extremely
against AI.
927
00:46:00,329 --> 00:46:01,369
And I'm like, you know what?
928
00:46:01,369 --> 00:46:04,329
It's like being against an excavator, you know?
929
00:46:04,329 --> 00:46:04,969
Yes.
930
00:46:04,969 --> 00:46:08,545
You could shovel the dirt or you could use a
machine.
931
00:46:08,545 --> 00:46:09,265
It's a tool.
932
00:46:09,265 --> 00:46:13,344
And if you don't know how to use tools, you
know, you could reject Excel all you want, but
933
00:46:13,344 --> 00:46:14,465
you have to use Excel.
934
00:46:14,864 --> 00:46:18,945
You can reject, I don't even know, Internet all
you want, but you have to use Internet.
935
00:46:18,945 --> 00:46:20,065
The same thing with AI.
936
00:46:20,420 --> 00:46:23,700
It's a tool if you don't know how to use the
tool, if you don't adopt the tool, then
937
00:46:23,700 --> 00:46:26,500
somebody else is, and you're gonna be left
behind.
938
00:46:26,739 --> 00:46:27,700
There's still...
939
00:46:27,700 --> 00:46:29,219
People are still gonna be needed.
940
00:46:29,219 --> 00:46:31,300
AI can do things on its own.
941
00:46:31,300 --> 00:46:33,059
I experimented with it myself.
942
00:46:33,059 --> 00:46:33,860
I said...
943
00:46:33,860 --> 00:46:34,900
I created an agent.
944
00:46:35,075 --> 00:46:37,474
I said, you are my marketing director.
945
00:46:37,954 --> 00:46:40,595
You do whatever the marketing director has to
do.
946
00:46:40,675 --> 00:46:41,474
And it was just...
947
00:46:41,474 --> 00:46:44,355
It was a couple months ago when they first
released or maybe last...
948
00:46:44,355 --> 00:46:50,030
When they first released 5.6 Ultra, I said,
create as many sub agents as you need, delegate
949
00:46:50,030 --> 00:46:52,989
tasks, you run the marketing for GIS
development.
950
00:46:53,630 --> 00:46:54,750
Go.
951
00:46:55,789 --> 00:46:58,269
It's been running things for like three days
straight.
952
00:46:58,269 --> 00:46:59,949
It ate up all of my tokens.
953
00:47:00,510 --> 00:47:04,030
I came back, I'm like, what the hell did you
what the hell did you do?
954
00:47:04,030 --> 00:47:05,125
I still don't know what the hell it did.
955
00:47:05,125 --> 00:47:05,284
Right.
956
00:47:05,284 --> 00:47:06,644
It created a bunch of documents.
957
00:47:06,644 --> 00:47:07,764
It it did something.
958
00:47:08,005 --> 00:47:10,005
So it's not autonomous.
959
00:47:10,005 --> 00:47:16,324
You can't treat it as as a person who would run
the business, come back and report, and it's
960
00:47:16,324 --> 00:47:22,369
it's still a tool that you give task, and then
you ask for feedback, and it has to be
961
00:47:22,369 --> 00:47:24,130
iterative, and so use it as a tool.
962
00:47:24,130 --> 00:47:24,690
Right.
963
00:47:24,769 --> 00:47:25,489
Absolutely.
964
00:47:25,809 --> 00:47:26,130
Yeah.
965
00:47:26,130 --> 00:47:28,929
I see that we're all thinking in the same way.
966
00:47:29,089 --> 00:47:35,945
So I developed a PR or we're in development of
a PR agent.
967
00:47:35,945 --> 00:47:37,704
And this PR agent...
968
00:47:37,704 --> 00:47:40,265
So I'm trying to get the head agent.
969
00:47:40,265 --> 00:47:42,985
And, actually, I'm on my second iteration of
this thing.
970
00:47:42,985 --> 00:47:50,105
So it's PR, and then you have someone who's
marketing podcasts, finding sponsors, doing
971
00:47:50,105 --> 00:47:50,425
that.
972
00:47:50,425 --> 00:47:53,920
So it bought a lot of stuff yesterday that I
didn't know.
973
00:47:53,920 --> 00:47:58,960
I entered a contest, a podcast contest that I
didn't even know anything about.
974
00:47:58,960 --> 00:48:04,184
So I found that, and it found a bunch of new
platforms to add the podcast to that I didn't
975
00:48:04,184 --> 00:48:05,224
know anything about.
976
00:48:05,224 --> 00:48:09,945
And, then I'm going to have, you know, for the
other part...
977
00:48:10,105 --> 00:48:16,905
Well, actually, the first iteration, I wanted
it to create blog posts from stories within the
978
00:48:16,905 --> 00:48:23,630
podcast and create blog posts and then go out
there and find other periodicals to put it in.
979
00:48:23,630 --> 00:48:24,030
It...
980
00:48:24,030 --> 00:48:30,670
What that ended up doing is just creating the
the post, but not going out there and sending
981
00:48:30,670 --> 00:48:31,964
it and everything.
982
00:48:31,964 --> 00:48:34,764
So it's still, like, so manual.
983
00:48:34,764 --> 00:48:36,684
So then I was going to hire...
984
00:48:36,684 --> 00:48:42,925
Actually, I'm hiring my, daughter-in-law to go
and do the stuff that it did.
985
00:48:43,005 --> 00:48:43,324
You know?
986
00:48:43,324 --> 00:48:46,329
Like, you still need a human hand to go.
987
00:48:46,329 --> 00:48:47,530
It made the articles.
988
00:48:47,530 --> 00:48:47,769
Okay.
989
00:48:47,769 --> 00:48:52,889
So now because there's no way I could really
get it to make phone calls and do...
990
00:48:52,889 --> 00:48:58,170
You know, in in all the PR that needs to be
done, but it's pointing us in the direction of
991
00:48:58,170 --> 00:48:59,929
what PR needs to be.
992
00:49:00,644 --> 00:49:03,204
So, you know, like you said, it's a tool.
993
00:49:03,204 --> 00:49:10,405
So give me three things someone sitting on a
piece of land can do this week to find out if
994
00:49:10,405 --> 00:49:14,804
it's even feasible to hire a land developer
like yourself.
995
00:49:15,050 --> 00:49:21,929
Well, short of calling me and asking me about
it, you could open your favorite tool.
996
00:49:22,170 --> 00:49:23,369
Honestly, it doesn't matter.
997
00:49:23,369 --> 00:49:24,489
I've tried them all.
998
00:49:24,489 --> 00:49:31,925
They can all give you the basic answer from
Gemini to Grok to Chad GPT to Claude to
999
00:49:31,925 --> 00:49:32,885
Perplexity.
1000
00:49:32,885 --> 00:49:34,724
I think these are the five majors right now.
1001
00:49:34,724 --> 00:49:35,204
Right?
1002
00:49:35,445 --> 00:49:36,885
Ask this basic question.
1003
00:49:36,885 --> 00:49:38,325
I have this piece of land.
1004
00:49:38,644 --> 00:49:40,724
What can I build on it?
1005
00:49:41,300 --> 00:49:42,420
What are the zonings?
1006
00:49:42,420 --> 00:49:43,619
What are the restrictions?
1007
00:49:43,699 --> 00:49:50,420
What is the history of this municipality
approving similar things?
1008
00:49:50,500 --> 00:49:57,594
And you could also ask what it would cost to
build it and what the potential outcome If you
1009
00:49:57,594 --> 00:49:59,595
wanna sell it, what can it sell for?
1010
00:49:59,675 --> 00:50:01,994
If it's a rental, what can it rent for is?
1011
00:50:01,994 --> 00:50:10,280
Use their deep research thinking mode, you
know, the the most advanced, newest model, and
1012
00:50:10,280 --> 00:50:11,559
it will give you the answer.
1013
00:50:11,719 --> 00:50:16,679
In a most simplistic way, that's probably the
basic prompt that I would put in there.
1014
00:50:16,679 --> 00:50:20,920
But, yeah, I mean, other than that, go and
visit your city hall.
1015
00:50:20,920 --> 00:50:27,364
Come up to the permit desk, and you'd be
surprised how open those folks are to talk to
1016
00:50:27,364 --> 00:50:30,324
citizens and answer basic questions.
1017
00:50:30,324 --> 00:50:32,565
I have this land, what can I build on it?
1018
00:50:32,885 --> 00:50:33,684
And that's gonna be your
1019
00:50:33,764 --> 00:50:34,005
That's
1020
00:50:34,164 --> 00:50:35,204
most common question.
1021
00:50:35,204 --> 00:50:37,284
If you're a professional like me and walk in
the...
1022
00:50:37,284 --> 00:50:38,324
And walk to the permit...
1023
00:50:38,324 --> 00:50:42,000
Walk up to the permit desk and ask a question,
you're gonna get yelled at because they expect
1024
00:50:42,000 --> 00:50:43,200
you to know the answer.
1025
00:50:43,280 --> 00:50:46,720
But as a citizen, they're they're gonna be
super nice.
1026
00:50:46,720 --> 00:50:50,640
You know, that is a thing that people don't
realize still exists.
1027
00:50:50,640 --> 00:50:55,505
You gotta go down there to the zoning
department or city hall or whatever it is in
1028
00:50:55,505 --> 00:50:59,105
your town, and they love to see people over
there.
1029
00:50:59,105 --> 00:51:03,345
I mean, it's not as busy as it used to be,
because everything's online.
1030
00:51:03,585 --> 00:51:08,429
And I think people don't know they can go and
talk to those people, and they they just
1031
00:51:08,429 --> 00:51:10,429
absolutely love talking to people.
1032
00:51:10,429 --> 00:51:12,829
I know I've been there, done it several times.
1033
00:51:13,550 --> 00:51:14,030
Exactly.
1034
00:51:14,030 --> 00:51:15,710
And they'll sit there and they go, oh, yeah.
1035
00:51:15,710 --> 00:51:19,630
We got this going on and that going on, and,
yeah, if you usually talk to this neighbor,
1036
00:51:19,630 --> 00:51:20,510
they know a lot of stuff.
1037
00:51:20,815 --> 00:51:21,375
Oh, yeah.
1038
00:51:21,375 --> 00:51:22,815
And and a cheat code.
1039
00:51:22,974 --> 00:51:28,655
A few times, we had plain reviewers get busy
and not get back to us in the time that we
1040
00:51:28,655 --> 00:51:29,375
would expect.
1041
00:51:29,375 --> 00:51:33,054
And we would call, leave messages, we would
email, and get no response.
1042
00:51:33,460 --> 00:51:39,219
Well, what I found out is that they rotate
their desk time or their their counter time.
1043
00:51:39,219 --> 00:51:39,860
And so...
1044
00:51:39,860 --> 00:51:41,940
And most municipalities have published...
1045
00:51:41,940 --> 00:51:44,019
Or do publish their counter schedule.
1046
00:51:44,179 --> 00:51:49,894
So what we would do sometimes is we would look
up the schedule when that reviewer is working
1047
00:51:49,894 --> 00:51:53,335
at the counter, and we'd go and visit them and
be like, hi.
1048
00:51:53,655 --> 00:51:54,375
Remember me?
1049
00:51:54,375 --> 00:51:55,894
I've been trying to get ahold of you.
1050
00:51:55,894 --> 00:51:59,175
And sometimes they get annoyed, but, you know,
at least you get a response.
1051
00:51:59,750 --> 00:52:00,949
Absolutely.
1052
00:52:01,030 --> 00:52:01,670
Absolutely.
1053
00:52:01,670 --> 00:52:03,589
Go visit them in person.
1054
00:52:03,589 --> 00:52:07,349
So this show is called Change and Triumph.
1055
00:52:07,349 --> 00:52:13,030
Looking back at everything you've survived,
everything you've learned, and everything
1056
00:52:13,030 --> 00:52:14,469
you're building right now.
1057
00:52:15,215 --> 00:52:20,494
What has been your greatest change and what's
been your greatest triumph?
1058
00:52:20,494 --> 00:52:25,535
I think the greatest change and triumph
together was that I...
1059
00:52:26,255 --> 00:52:32,690
You know, it's been 20, over twenty years since
I finished MBA, and it took me this long to
1060
00:52:32,690 --> 00:52:37,170
depart as far away from what I learned and then
come back.
1061
00:52:37,329 --> 00:52:40,690
And I think that's been the biggest, you know,
the biggest...
1062
00:52:40,690 --> 00:52:45,235
I mean, I could have probably created an MBA
course with everything I learned.
1063
00:52:45,235 --> 00:52:50,675
A lot of times I see job job openings and they
say MBA required and twenty years of experience
1064
00:52:50,675 --> 00:52:51,155
required.
1065
00:52:51,155 --> 00:52:52,275
I'm like, you guys are stupid.
1066
00:52:52,275 --> 00:52:54,675
Somebody has twenty years of experience, they
don't need an MBA.
1067
00:52:56,090 --> 00:53:01,130
You know, you want you want an MBA with with
fewer years of experience because now it...
1068
00:53:01,130 --> 00:53:02,170
It's a concentrated way.
1069
00:53:02,170 --> 00:53:06,570
But I think that's been the biggest thing is
that I remembered what I learned.
1070
00:53:06,570 --> 00:53:13,934
I remembered how to apply it, and now looking
forward to the next chapter of my personal
1071
00:53:14,014 --> 00:53:22,574
growth and company's evolution is that we're
now back to the basics of business strategy,
1072
00:53:22,734 --> 00:53:25,960
marketing, finance, like all of those things.
1073
00:53:25,960 --> 00:53:27,159
And I think that's the...
1074
00:53:27,719 --> 00:53:32,359
Honestly, sounds silly, but it's the biggest
accomplishment, whether it's developing land or
1075
00:53:32,760 --> 00:53:34,119
working on other tools.
1076
00:53:34,119 --> 00:53:40,065
We have a few small site projects that I've
been spending time on, but we'll get into it at
1077
00:53:40,065 --> 00:53:41,105
some later time.
1078
00:53:41,105 --> 00:53:41,905
But, yeah, that's...
1079
00:53:41,905 --> 00:53:45,025
I think that's been that that's been the best
triumph.
1080
00:53:45,025 --> 00:53:47,184
And, you know, I'm still proud of the projects.
1081
00:53:47,184 --> 00:53:50,819
Even even the project that got foreclosed on,
I'm still proud of that building.
1082
00:53:50,819 --> 00:53:51,779
It's still there.
1083
00:53:51,779 --> 00:53:52,099
Yeah.
1084
00:53:52,099 --> 00:53:56,739
It's it's got these bold, bright red colors,
and every time I drive by, I'm like, you know
1085
00:53:56,739 --> 00:53:56,900
what?
1086
00:53:56,900 --> 00:53:58,099
I don't give a fuck what you guys think.
1087
00:53:58,099 --> 00:53:58,980
Built that shit.
1088
00:54:00,900 --> 00:54:01,699
You know what?
1089
00:54:01,699 --> 00:54:03,059
Well, your name is on it.
1090
00:54:03,059 --> 00:54:03,380
Right?
1091
00:54:03,380 --> 00:54:05,684
I mean, you guys were the original developers.
1092
00:54:05,925 --> 00:54:06,405
So...
1093
00:54:06,485 --> 00:54:06,965
Well, not...
1094
00:54:06,965 --> 00:54:09,204
I was thinking architect, you know, but...
1095
00:54:09,525 --> 00:54:09,925
Yeah.
1096
00:54:09,925 --> 00:54:12,724
Something something like that happened to me as
well.
1097
00:54:12,965 --> 00:54:13,285
Yeah.
1098
00:54:13,285 --> 00:54:20,369
In 2009, we were in the middle of remodeling a
four family property in the Bronx.
1099
00:54:20,369 --> 00:54:27,809
And, you know, with all the GFC crash and burn
and divorce in a mess, I ended up letting that
1100
00:54:27,809 --> 00:54:28,929
property go.
1101
00:54:29,010 --> 00:54:29,730
And I...
1102
00:54:29,730 --> 00:54:30,849
It was just too much stress.
1103
00:54:31,614 --> 00:54:33,215
Funny enough, it actually...
1104
00:54:33,215 --> 00:54:36,414
When you let something go in New York City,
they don't.
1105
00:54:36,414 --> 00:54:39,375
They don't foreclose for, seven years.
1106
00:54:40,255 --> 00:54:40,494
And I
1107
00:54:40,494 --> 00:54:41,615
didn't know that.
1108
00:54:42,335 --> 00:54:42,735
Wow.
1109
00:54:42,735 --> 00:54:45,535
So someone bought the property to me.
1110
00:54:45,535 --> 00:54:48,280
Now it was a weird thing that happened.
1111
00:54:48,760 --> 00:54:49,800
Weird karma.
1112
00:54:49,960 --> 00:54:55,000
We opened in a real estate office and not too
far from the property.
1113
00:54:55,000 --> 00:54:57,880
And someone came in, we were doing a lot of off
market deals.
1114
00:54:58,295 --> 00:55:02,775
Someone comes to me and they go, oh, well, we
know you guys like off market and we're doing
1115
00:55:02,775 --> 00:55:08,454
this and we're getting these properties and
we're doing these homeless overflow, things.
1116
00:55:08,454 --> 00:55:13,575
Now what they didn't know is at that time, I
said, that's what I was gonna do a few years
1117
00:55:13,575 --> 00:55:13,735
ago.
1118
00:55:14,510 --> 00:55:21,069
They drive me to a few of the locations, and
the first property that they showed me was the
1119
00:55:21,069 --> 00:55:25,869
one that we finished, still had the paint that
I painted, still had the...
1120
00:55:26,349 --> 00:55:28,525
That we did, they just finished it.
1121
00:55:28,525 --> 00:55:30,125
We couldn't finish it same as you.
1122
00:55:30,125 --> 00:55:30,605
And we...
1123
00:55:30,605 --> 00:55:32,364
And it was like, oh my god.
1124
00:55:32,364 --> 00:55:34,045
I said, look at the last owner.
1125
00:55:34,045 --> 00:55:35,885
It's it's this company.
1126
00:55:35,885 --> 00:55:36,125
It's...
1127
00:55:36,125 --> 00:55:37,324
It was our company.
1128
00:55:37,324 --> 00:55:38,525
Look at who owns that company.
1129
00:55:39,819 --> 00:55:40,460
Right.
1130
00:55:40,460 --> 00:55:41,019
Right.
1131
00:55:42,059 --> 00:55:43,900
It was so nutty.
1132
00:55:43,900 --> 00:55:44,460
And so...
1133
00:55:44,460 --> 00:55:44,699
Yeah.
1134
00:55:44,699 --> 00:55:48,619
I mean, you know, sometimes you win some, you
lose some, and you keep on trucking.
1135
00:55:48,940 --> 00:55:49,500
Exactly.
1136
00:55:50,219 --> 00:55:53,260
Thank you so much for your time today.
1137
00:55:54,144 --> 00:55:56,945
It has been a phenomenal conversation, Eugene.
1138
00:55:56,945 --> 00:55:58,865
I think a lot of people get a lot out of it.
1139
00:55:58,865 --> 00:55:59,345
Okay.
1140
00:55:59,345 --> 00:56:00,224
So Thanks, Eugene.
1141
00:56:00,144 --> 00:56:01,825
Is there any last words?
1142
00:56:02,704 --> 00:56:03,664
Last words.
1143
00:56:03,664 --> 00:56:07,840
Well, I guess, you know, what I always say, if
you're sitting on a piece of land and thinking
1144
00:56:07,840 --> 00:56:10,239
of exiting, don't sell it, develop it.
1145
00:56:10,239 --> 00:56:15,599
Even if you just went through the entitlements
and got permits and decided to sell it at that
1146
00:56:15,599 --> 00:56:19,039
point, you would already increase the value of
your land.
1147
00:56:19,039 --> 00:56:21,760
So what I've what I've been telling people is
don't sell your land, develop it.
1148
00:56:22,074 --> 00:56:27,195
And if you ever have any questions or just
wanna talk shop, you know, just wanna run
1149
00:56:27,195 --> 00:56:27,755
through the...
1150
00:56:27,755 --> 00:56:30,635
Through my opinion, happy to take a look.
1151
00:56:30,635 --> 00:56:37,594
What I always say to folks, and I say it on
social media, is that I don't charge for
1152
00:56:37,050 --> 00:56:38,809
advice, I charge for implementation.
1153
00:56:38,809 --> 00:56:42,010
So if you just wanna talk, if you wanna ask a
question, have...
1154
00:56:42,090 --> 00:56:46,809
You know, ask for my opinion, go to
giscompanies.co.
1155
00:56:46,809 --> 00:56:47,690
That's our website.
1156
00:56:47,690 --> 00:56:51,449
Or connect with me on LinkedIn, social media,
and I'm happy to take a look at your deal.
1157
00:56:52,554 --> 00:56:53,514
Awesome.
1158
00:56:53,514 --> 00:56:55,114
Thank you, Eugene.
1159
00:56:56,074 --> 00:56:57,034
Thank you, Janae.
1160
00:56:57,034 --> 00:56:57,434
Okay.