BiggerPockets Real Estate Podcast - 414: 1300 Units in Real Estate Development at 30 years old with Evan Holladay

Episode Date: November 5, 2020

The harder the problem, the bigger the reward... and real estate developers who can solve affordable housing problems can do very, very well. Enter today's guest, Evan Holladay, who reached 1,300 units before the age of 30 through a combination of focus, relationship-building, and a deep understanding of the rules of the game. In this high-level episode, you'll learn how Evan and his team apply creative financing techniques to multimillion dollar projects; how they takes advantage of tax credits and grants and put together public-private partnerships; and why patience and persistence can lead to huge profits in the development game. Whether you plan on getting into bigger deals in the future or not (Evan wants 100,000 units!), this episode will inspire you to start thinking like a big-time investor, strategist, and leader. In This Episode We Cover: Listening to "what fires you up" when getting started Evan's apprenticeship for a student housing developer What a public-private partnership is Using tax credits to make a profit building affordable housing How he creatively finances big multifamily deals How he manages risk Why “it’s more valuable to control real estate than to own real estate” Why development is such a big opportunity in markets where "it's too expensive to invest where I live!" And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Shirt How to Invest In Real Estate With Only $1,000!? BiggerPockets Podcast 353: Turning $5K Into $5K/Month and Retiring at 40 with Tim Rhode LoopNet Check the full show notes here: http://biggerpockets.com/show414 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is The Bigger Pockets podcast, show 414. You know, the whole idea of finding your blue ocean, this is exactly what this is, because it is so hard. It's huge barriers to entry. But once you've figured it out, it's really the sky's the limit. There's millions of affordable housing units needed all over the country, and there's not enough developers to match that demand. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com.

Your home for real estate investing online. What's going on in one? It's Brandon Turner, host of the Bigger Pockets podcast here with my co-host, Mr. David Green. David, question for you. What problems do you see in the real estate world today? We're starting deep. What problems do you see that you could address in the world today? That's so good.

First one is that there's a shortage of good agents, just straight up. If you're trying to buy real estate and you're scared, you're nervous, or you're doing it from a financial perspective, not just a traditional, I want a cute house to live in. There's not very many people that understand how to help you. So you have to be, you have to know what you're looking for. Not all agents are the same. There's another problem I would say that with inventory,

right now. There's a huge housing shortage and that is causing the price of existing homes to become very unaffordable because there's too much demand and not enough supply. All right, good. Now, the reason I ask that, because I want everyone listening to the show to be thinking the same thing. Like, what problems exist in the market, in the world, in my own life? I mean, this is how great entrepreneurs start any business, right? Is they see a problem like Josh Dorkin 15 years ago, 14 years ago, was like, hey, hey, there's no place to get free information on the internet about real estate. So we started a little forum called Bigger Pockets, right? We find a problem. problem when we solve that problem. So I love thinking about big problems because that's where there's

a lot of money to be made. Today's guest is actively solving a really, really big problem. And so today we're talking with a guy named Evan Holliday who is solving a big problem. And that problem is we've got a lot of people in this country and around the world who can't afford to pay their bills anymore because the cost of housing is so expensive. So he's figured out a strategy that brings in like government help alongside private help. They call public private partnerships to put together these deals that can make a lot of money for the investor, but also do a lot of good for the world, for the local economy. And anyway, we dive all of that today.

Now, today's show, I'm going to warn y'all, it's a little higher, like, I don't know what you call it, what we call it, David, like higher in depth, maybe. Like, we go deep into this topic. And some people would be like, well, it doesn't concern me. But I want to encourage you to listen all the way through because even though the stuff might not apply exactly to your situation. It's the mindset I want you to pull out of Evan today more than anything. You agree, David?

Yeah, this is one of those things that even if this isn't what you want to go pursue, this strategy, what you learn here will help you and what you do want to pursue. And I think that's what you're getting at, Brandon. You know, I'll probably, right now I'm not buying mobile home parks, but every time you tell me about a problem you're having and how you solved it with mobile home parks, I immediately see a parallel with the ways that I am investing or the businesses that I'm running. And that's what's so amazing is that Evan ventured into waters that,

very few people do. And he solved problems that very few of us will even see. So I would rather learn from what Evan's already done than have to go figure it out myself. Yeah, so good. So good. So that's today's show. We're going to get to it in just a second. But first, let's get to today's quick tip.

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Let's get to today's show. I think that's all we really got before we jump in. Anything you want to add, David, before we bring in the interview with Evan? Oh, let's grab Evan. Bring him in. All right, here we go, guys. This is Evan Holiday teaching you how, as a 30-year-old, He's able to pull off some over 1,300 units built in the last few years. You're going to love it.

Here we go. Evan, welcome to the Bigger Pockets podcast, man. Good to have you here. Yes, so glad to be here. Yeah, so let's talk about your story a little bit. You do some really interesting, I'm going to even call it fancy things with real estate that we have never talked about it in 400 and some episodes of this show. So I want to get into that.

But first, people are going to listen to that and go, like, how do you get to that point where you're doing these crazy, awesome investments. So how did you get started? Why real estate and what was kind of your introduction to it? Yeah. So it is kind of a crazy niche to be in and kind of a roundabout way of getting there. But basically, I was in college, we went to University of Louisville, was doing the pre-med route and realized very quickly, I hate science, I hate chemistry, saw this big development

on campus announced. It was just announced. I was like, man, something about that gets me pumped up, gets me excited, gets me going. And so I figured out a way to connect with the developer. And it ended up being like a $55 million student housing, mixed use development. And he's like, well, I'm not going to just hire you. You need to impress me or do something to help us. So I ended up bringing a few hundred people to his groundbreaking,

basically convinced some buddies of mine, gave him pizza, and they handed out flyers for me. And so impressed him enough to get a job. I ended up working in development and property management. in college. And then from there, loved it so much. I was like, man, just like being able to change a neighborhood, literally change the face of a neighborhood,

change the experience for the people that lived there. And then on top of all that, myself and four others, we started a modular development company in college using houseboats to actually do the modular development. And that's what really got me kind of geared towards workforce, affordable, attainable housing. And being able to do that in a really quality way. And we were originally working on it,

in the modular sense, but it really just kind of like was a deep dive into creative financing, public-private partnerships, like cities out there really need this development. And there's not a lot of people that know how to do it or want to do it or want to learn how to do it or deal with all the headaches that come along with it. And so that's when I just, I got like just really passionate about it because I'm like, man, I can build new buildings and be able to do good with it and create massive impact to not just build super high-end, high-in, like $4,000 a month apartments. Yeah, so this is what fascinating.

There's already, we're going to like zero to 100. I love it. We're getting right into this thing. So I want to unpack a little bit of what you said. So I love the idea. First of all, I want to bring up that you said, like, it's almost like you don't even know why. Somehow, some reason, like the idea of that development where you were just like, oh, that's

awesome. That sounds cool. I'm going to, I'm going to lean into that. I'm going to move toward that. The other day on my Instagram, somebody asked me, I made this video and then we put it on YouTube. It was called like how I would spend $8,000 getting started investing in real estate or something like that. You can find on the show notes. I think what is it? BiggerPockets.com slash show 414. Anyway, so I have this video out there on on how to spend money and somebody sends me an Instagram message and they said,

yeah, but you didn't mention, I don't know, some other way, tax deeds or tax liens. Why didn't you mention tax deeds? And I was like, because it just doesn't appeal to me. Like, I'm sure, like, we've interviewed people on the show who love tax deeds and they go all into that. But like, I never had the fire to pursue that. right but what fired me up in the beginning was like i'm gonna buy a duplex that was or i'm gonna flip house those things fired me up so you were fired up by this idea of this big 55 million dollar development project which is super cool so i guess the first people of advice i want to tell anybody i'm just pulling out of this is it's like follow that fire like if you're feeling it like i have

no idea why you were into that and why i was into whatever and why david was feeling the fire about being a cop and then later into buying you know houses in san francisco and then later long distance real estate. Who knows why we have that fire put inside of us, but we have that fire. And like when you follow it, it doesn't really feel like it's work as much it is. Like, that's what you're supposed to do. That's what you're meant for. So right, first point there. Second thing I want to ask about is this this guy you just connect to it. Like, oh, it's just, you know, the developer of a $55 million project. I just wouldn't talk to him. Like, let's go into that. How do you just go and talk to the guy? How did you find the guy?

How did you figure out who the guy was? Was it a guy? Like, I mean, like, tell us that. Let's unpack that a little bit. Yeah. Yeah. Yeah. So it was actually, so I was in a fraternity in college, and I was talking to one of our alumni. I was very well-connected guy. And I didn't think anything of it other than I was like, you know, hey, that development seems really cool. Just down the road, they just announced it. He's like, oh, really? He's like, you're interested in that kind of stuff?

And one thing leads to another. He's like, oh, I'm actually good friends with the developer. And so for me, that was the gateway, right? Like that got me in the door. But it just getting in the door isn't the whole thing. It's like once you get in the door, you still have to impress. you still have to follow through. For me, follow through was probably the most important thing there.

But a big chunk of the story that I didn't say earlier is that I impressed him with the groundbreaking. And I was like, after that, I was like, all right, he's got to hire me. Like, it's a no-brainer for him to not hire me. But then he didn't return my calls for like six months. So I had to like, I literally called the guy like once a week. He probably hated me at the beginning. He's like, man, this guy won't stop calling me.

But I was just like you said, like I had this passion. I didn't know why. but I was like, that just seems really cool to me. And, you know, it was an old, like, run down a restaurant building on a huge parking lot. And they were going to build this massive five-story building with underground parking and 12 stores. And they were going to use new market tax credits and just all these crazy things going on. I was like, man, something about that gets me fueled up. And so I just couldn't let it go.

So I think like that. And then also we had this entrepreneurship department that in our school program that that's what pushed us to start the company. I think those two things were probably what, what literally like shaped my trajectory. That's cool. And I was going to say, David, you kind of,

I remember back in the day, you went and worked for, wasn't that Tim Rhodes, like what door knocking or put up signs or something, right? We had him on the show back. I don't even know Tim. I'm searching Google.

Tim Rhodes, bigger pockets, podcast. I don't know what episode it was. Yeah, I got. Yeah. Go ahead. You find it.

353. 353. 353. He was my original mentor. And that was back when, people were getting foreclosed on, but they still had equity in their house. So I would get these notice of default lists and I would call them all. And when I found somebody who said, yeah, I might want to sell.

I would go to knock on their door or even if they didn't take the call, I would go to the house and say, hey, we know you're losing your home. Do you want to sell it before it's gone? And your credit doesn't get hit and we can get you some cash rather than losing it completely. And that was what sort of baptized me into real estate. I didn't catch this huge bug. I didn't go light the world on fire. I just got a seed planted in me.

I went and I did the other things in life. Like you said, Brandon, that was great. You follow your fire. And then when the timing was right, I kind of loop back around and started buying rental property. And I'd love to get your two cents, Evan, on that apprenticeship model in a sense. It's kind of gone away. We don't do that in America anymore.

We've got minimum wage. We have all these things that make apprenticeships tough for companies that want to train somebody. But my opinion is this is the best way to learn, period. You're never going to learn better. and if you force somebody to pay you, they're not incentivized to teach, you know? And I feel like the six to 12 months you might take learning a job and you don't earn that much money is nothing compared to what you're going to do when you get going.

So do you mind sharing with us, like what that experience was like for you and what you learned from that so that the listeners can have an idea of what opportunities might be open to them? Yeah. And that actually makes me think of, so one of the summers in college, I got a job with student painters and I was, you know, was selling the crap out of it. I was doing really well. And, but I got to a point, I was only like a month or two in. I think we'd just started painting houses and I'd had a bunch more clients lined up. I'd already sold. And I was like, you know what? I'm just not passionate about this. Like I can't get excited about painting houses. It's just not me.

And I'd been talking with this other developer to basically work with him as an intern. And I had the possibility of making with student painters like 50 to 60 grand in a summer if I really sold everything. And so I literally turned that down to work a $10 an hour internship because I knew exactly what you said. I was like the knowledge that I'm going to gain working for this developer and I'm literally going to share an office with him. I'm going to go on site visits. I'm going to go talk to politicians. I mean, I was like 19 or 20 at the time. I think I naively kind of jumped into that just thinking I would learn something. But looking back, I was like, that was, and the other experiences I had in college, those were pivotal for me because it gave me

this momentum at a young age and helped me find my passion along with, like, literally just peeling back the curtain and being like, hey, this is how it's done, here's all the numbers, here's how you apply for credits, here's how you get public support, here's how you work with general contractors. Like, I got like a crash course and all of that. So I tell everybody, I'm like, if you can, if you have the opportunity, I highly recommend it's like you don't need to start day one working for yourself. I went on after we did the modular company, I worked for another development company who ended up, they were, they still are the number one affordable workforce housing developer in the country. They weren't when I started there, but over the seven years I worked there,

we were doing deals all over the country. And they just threw me right in the deep end day one. They're like, literally Monday morning, I started, they're like, all right, go find deals in South Texas. And I was like, I don't know anything about South Texas, but I'll figure it out. That's really how I learned so quickly was kind of trial by fire and learning from my mentors and taking that apprenticeship approach. Yeah, the apprentice model is just so underutilized today. I mean, people will go and pay for four or five years of college and go 100 or 200 grand in debt and then go and work a $9 an hour job they don't like for the next couple years until they finally get at a company that they can make 35,000 a year at and then work up to 60 or 70. So after 10 years now,

they're making a decent living maybe out of college. When you could just go, and work for like the actual business you want. Even if you're making $10 an hour there, who cares? Work there for a decade. You'll move up there and you will learn and then you'll get out of that thing so much further along. Like I'm just such a big proponent of the apprentice model today that it's just, again, overlooked.

I'm curious, did anyone try to talk you out of it? Did you have family members or people that said, why would you ever work for free? Don't go do something. I hear a lot of that from people that are meaning well, but don't really understand the industry that talk people out of apprenticeship. situation. Was that an issue for you? You know, I think I was, I was kind of lucky. I was surrounded by people that really supported me, which I think is another important thing, part of the equation,

because if you don't have that, you're fighting an uphill battle with your own mind. Because people, especially in your formative years, like, you know, your early 20s or teens, like, you have a lot of pressure from your friends and your family. But no, I didn't really, I was fortunate. Well, and if you are in the position where you don't have the people around you that are supporting you. And honestly, even if you are in that position where you have people around you. It's still why like David and I are huge fans. I know Evan, you are as well, of like getting together with other real estate investors, like form a mastermind group with three, four, five other people that are working towards the same thing. Like,

get together people who can help encourage you and push you and help you grow. It's like, it's not enough just to listen to a podcast like my, you know, like this one or like yours, Evans. Like, like those are helpful. But what people need to do is get into the real world. People that can like let them continue moving along like on their on their business. So yeah, definitely everyone go ahead and. do that if you are not in a mastermind group. And by the way, we are launching next year. We're doing a little bit more. We have right now mastermind groups at bigger pockets. Like, if you buy the intention journal, that we're taking to a whole new level next year. I'm not going

to talk about it now, but something kind of cool is coming to bigger pockets sometime in the next few months. So keep an eye out for that. But I want to go into, so you went to this like houseboat that we said house like? Tell what was that? Like in college? What were you doing? Yeah. So that was quite an experience in it of itself. And basically like we had a class. and entrepreneurship, and they're like, hey, you need to start a business. And it wasn't really like you had to go start it. It's more like you just had to put a plan together. But we being who I was, I was like, no, we got to take this a step further. We got to really do this. I just got so excited about it. You know, we were deciding ideas. And I was like, hey, guys, I'm really passionate about real estate. And I was working for that student housing developer at the time. And so we ended up, we're like, what can we do that is unique, that is impactful, that helps others? and we get to do development out of it. And so we ended up hearing that another school, University of Kentucky, they were putting together these plans called Houseboat to Energy Efficient Residents, H-Beer.

Basically, they were like, how can we put these 1,100 skilled workers in Southern Kentucky, Somerset, Kentucky, how can we put them back to work and use the same facilities, literally the same dormant facilities that they were using to build houseboats, and create modular housing, both single-family and small-family and multifamily. And so they were actually at classes where they developed all the plans, the students and the professors. And then they ended up building some single family version and we're like, hey, this is a great idea. Like I love the concept, both putting together, recreating jobs that had been taken away and being able to create something that was more

energy efficient and quicker to market. And so we got the rights from the school. All the plans they'd already created for multifamily, we had gotten the rights and then put together business plan, put together our investors, put together our board of directors, and started pitching this thing at business plan competitions. And we started winning a couple of competitions. And that's when we're like, hey, I think we're on to something. And then so we were taking that a step further in trying to do our first multifamily development. And I was looking for partners. And then that's when I met the development company that I ended up working with. They were like, hey, how about you come work with us? And I was like, you know what? These guys have combined a hundred years of experience

in multifamily affordable workforce housing development. I was like, I could probably learn something from these guys. And so that was kind of the tail end. But man, that was like crash course, amazing experience. Because it was like looking back, I was like, man, we knew nothing. And we like went full steam ahead. And we're just so naive, but but so energetic and passionate. And it was contagious.

It just kept building on itself. And it led to where I am today. You are following the fire, Evan. That is awesome, man. Yes. All right. Let's unpack a little bit about affordable or attainable, as you called it earlier. And I want to unpack that phrase a little bit.

Attainable housing. I want to have you define a few terms because some things, again, we haven't covered this topic very much on the show here. You know, most people start with they buy a house and then they buy a duplex and then they buy a triplex and they buy another house. And maybe they flip some houses and do some wholesaling. You're like, I'm going to go work for some development companies. And then I'm going to go develop these large properties, which we're going to get to here in your story in a minute. But first, let's talk about what development. First of all, let's go very basic.

What is development when you talk about development? So development can mean a million different things, but it basically is the creation of new housing. It's where you typically new construction ground up, anything that you are building and developing. And really, it's the act of like wearing 100 different hats and being able to kind of pull everything together at the right time and get it all done. Okay. And then what is when you say like attainable housing? or affordable housing? What is that? And what's like, why is that where the fire is at in your life? Yeah. So attainable housing, the reason why I said I like that term is because to me, and I actually

heard this from a groundbreaking that we did in Lake Charles, we did 264 units, multifamily, attainable housing. The city had desperately needed workforce and affordable housing. They had $76 billion of economic development in this smaller town and nobody was building any workforce housing. for all the people moving there. And so we had the groundbreaking, and the mayor said, he's like, you know, I just don't like the word affordable. And it doesn't do a good job of explaining what this really is. Because at the end of the day, what we're building is quality housing.

I mean, it's brand new. It's maybe one step below a class A community. And he said, I think we should call this attainable housing. And the reason he said this is like, you know, this is something that any working person can reasonably pay for and can reasonably call it attainable. in their eyes. And that just stuck with me ever since. I was like, all right, that's what we need to rebrand this as because this isn't the kind of the stereotypical definition of, you know, affordable housing or Section 8 housing, kind of this negative stigma that a lot of people have of this

1960s kind of like cinder block style housing that's all in the same row, you know, 10-story buildings, all facing the same direction. That's not what this is. This is on par with Class A new construction. and we're building it at an attainable price point. So Nashville, for example, where I'm at, we're doing brand new construction, 1,000 to 1,200 square foot units, and we're renting them for $800 to $1,200 a month, depending on the bedroom size. And these are for families making roughly $35,000 to $75,000 a year. So you can imagine there's a lot of people that fit into that income bracket and who are

currently being priced out of Nashville and other like crazy growing metro areas all across the U.S. So Nashville has 24,000 units that they need right now of just workforce attainable housing for those making that income range. And yet I hear that most of the building. I mean, when we got in the mobile home parks, we studied this a lot. And it seems like most of the development is not in that price range, right? Exactly. Yeah, that's the biggest thing. It's all supply and demand at the end of the day. I mean, it's just economic. where not enough people are building at that price point. And everybody's building at the high end because they know it's where the highest margin is.

And so you're just, the market is left with this huge gap. And so what do renters do? They move to the cheapest available option, which is on the outskirts of town, which is where land is more available and more cheap. And so you just have this like mass exodus of the actual workforce, which is like the backbone of your community,

which is hopes your economy thrive, which gives people jobs. And so it's just, it's a domino effect of where people don't have quality housing in the neighborhoods where they work, they're living paycheck to paycheck. So if their car even breaks down, a lot of times they can't afford to even get to work. They lose their job. And then all, you know, it's a downward cycle. And so that, my why kind of started with the modular development.

And when I learned about how much housing affects a family's ability to survive and thrive in this world and how important it is just like a shelter over your head, a quality home, a quality, like stable place to call home is so important to a children's development, to a family's development. And so for me, I just got like so passionate about that. I'm like, man, we can really actually make a difference in people's lives if we can provide brand new housing for a fraction of the cost of what a normal market rate community is charging. You know, and why I love this idea, again, why I got into mobile home parks and why you're doing affordable housing, I'm sure, is very similar, is that we're looking down the road.

Like, I don't, I've said this before on the show, but I don't invest for tomorrow necessarily. I might flip houses and make some quick money or wholesale, but mostly I invest for 10 years from now, 20 years from now, 30 years from now. I also love investing in things that, like in problems, right? We've talked about that on recent shows as well. We like to invest in problems. And so when I think, what is a growing trend or problem in America over the next 20 or 30 or 40 years, it's very obvious to me that a huge problem is the fact that there's just not enough housing in America

for that huge segment of the population. And so I like to be in areas that there is a huge demand and there is a big problem we can solve it. Now, the problem, though, with development as I see is it, I mean, can you correct me if I'm wrong, please here. But my understanding is it doesn't cost that much more to build an A class that you're going to go rent for $2,000 a month in Nashville as it would to build. build what you're building that rents for 800 to 1,000. So why would I as a developer ever think about workforce housing? Why wouldn't I just go and do it at the top of the scale?

That's what most of the developers are doing. And that's why they're doing that. So how are you able to make money or make a profit doing it at the lower price point? Like how does that make logical sense? I guess to summarize, explain it to me like I'm five. You know, like what is this you're doing? And how does this work? Yeah, it is honestly, it's hard to boil down.

But in a nutshell, basically we couldn't economically do what we do at the price points we're doing without some help. And so that's where the public-private partnership plays into this. So we are typically, there's different ways to create attainable housing, but the majority of our work is within development of we use tax credit financing. So we get either grants, loans, and tax credits from the federal government. They typically come into the state housing agency who has. helps create attainable housing throughout the state. And so they partner with us as private developers.

There's nonprofit, for-profit developers that specialize in this. And they give us the credits, which cover anywhere from 40 to 70% of the project costs. And that delta, that credit that they give us, basically is immediately goes into the project as equity that in essence, their return, because we end up selling these credits to investors, actual banks and private investment groups, their return is the tax credit that they can take and then wipe out, you know, dollar for dollar off their taxes. So in essence, it allows us to cover the delta of our value. Because if you think about any apartment community, multi-family community, your value is based on your net operating income, your NOI. Sure. And so we're obviously going to have a lower NOI based on our lower rents,

but that delta has helped cover by, we're basically getting that equity in the form of almost like free equity that we then sell for a cash infusion into the project. And so you combine the credits with grants or loans that we also get from state and local governments. And plus we also do tax abatements. We're basically you're thinking about this as like a capital stack and you're saying, okay, out of 100%,

you have maybe 40% covered by credits, 50% covered by a loan. and the last 10%, that's always what we're trying to go after is the 10% because that is the hardest to come by. So that's grants or tax abatements. So like in Nashville, they have this pilot payment in lieu of taxes. They have all kinds of acronyms, but pilot basically allows us for 10 years, we get 10% of normal taxes or close to 0% of normal taxes. And that helps us be able to borrow more money for that 10 year period. So we use a lot of creative finance. financing, different unique tools that are out there for affordable housing. There's also special,

like we have private lenders that will do 40-year debt. We also do like tax-exempt bonds so we can basically pass those on as a loan for tax-exempt bond instead of a normal loan or a normal loan where somebody's paying interest on that or they're paying for the income that they're making on that. Tax-exempt bond, they won't actually pay any taxes on the income that they're making off of that loan. Okay, so if I'm going to explain this like I'm three, I'm going to go even more basically. You're basically, you got this big project and the government in several different ways, whether it's giving you a discount on your taxes, they give you a bunch of money because they

just write you a check. I don't know if that's probably not a check, but you know, they give you some credits, whatever. Yeah. You can buy all, you get a loan from this bank, you raise the money from this person. And all of that combined together allows you to go and buy this property. or build a property that then I'm assuming the government has some conditions. Like you can only charge a certain amount of rent, right?

Like they have some kind of thing in play. Is that right? Right, right. So in essence, we are working with state, local, federal governments, public-private partnerships, bringing all that capital together, building the community. And in return for basically getting the free tax credit equity or lower taxes, we agree to cap our rents. and it's all a product of the area median income.

So Nashville area median income, I think is $88,000 for a family of four. So we have to be, to get credits, we have to be anywhere from 60 to 80% of the average. So that's why we're depending on your family size, we're anywhere from 35 to $75,000. And so it depends based on your metro, but we have to cap our rents for those income ranges. And then basically to consider it not overburdened. a family, HUD and the federal government have said that any family should only be paying up to 30% of their monthly income for their housing expenses. So we can't charge any more than 30% of that income range. That makes sense. That makes sense. So they want to keep it attainable for all

these people, which is a lot of sense. Exactly. Yeah, I like the fact that like, you know, this stuff works in markets where people are like, well, it's too expensive to invests in real estate here. What you just did is you just figured out a way to invest in real estate in those markets that, like, people think it's too expensive, which is just super cool. Is it easy? Of course not, but it's like David and I always talk about on the show. Like, we run towards things that are hard. This sounds super complicated and hard. Yeah.

But that's because there's a million steps. Like, what's that phrase we talk about like? Like nothing's hard. It's just like steps you haven't defined or practiced enough. So like, yeah, it sounds hard because I don't know what the first steps are. I don't even know how I would start this process. So why don't I ask you all to say? expert. Evan, I want to start working. I want to explore the idea of private public

partnerships here in Maui, Hawaii. It's crazy affordable housing issues out here. I know the government is willing to work with me because I don't really want to do this, but I know they'll work with me because everybody understands the problem, affordable housing here. And they don't, politicians are right around like a chicken with their head cut off trying to figure out how to solve it. And they have no solutions. So what's my first like what's what's my step one, step two, step three to be able to start exploring this idea besides go work for another company doing this. Yeah, great question. I would start by saying echoing what you said. And I see this niche within real estate as a blue ocean. You know, the whole idea of finding your blue ocean. This is exactly what

this is because it is so hard. It's huge barriers to entry. But once you've figured it out, you know, it's really the sky's the limit. There's millions of affordable housing units needed all over the country and there's not enough developers to match that demand. And so if you really are interested in getting started in this, I think 1A is soaking up as much as you can about affordable housing, which is honestly another thing that is hard to find, which is why we're working on. We're working on a book right now and a mentorship program to help more people because we want more people to get involved in this. I don't want to keep it to myself. I want people to know about this. And beyond that, I would say finding a mentor, doing exactly what we talked about earlier,

like showing your passion, you know, giving it you're all, delivering, being persistent, adding value to that person. And then once you have that base level knowledge and you have that mentorship, I would say the next step really is finding your target market, finding a hot area. Like you said, like Maui, like Maui has massive, massive demand because so many people want to live there. And there's not really enough development to match that. And so there's a massive affordable housing problem there.

And so I would start with, once you've learned the financing, which you understand how all these tax credits work, start talking to city leaders, start talking to council members, start talking to the mayor's office, economic development, community development, housing authority. Like those, if I'm going to a new market, you know, those are the first people I talk to. I try to figure out what is their appetite for affordable housing?

Are they going to be supportive? Because at the end of the day, like there's so much demand all over the country. You don't want to waste your time working an uphill battle where the political leaders and the community leaders are not even on your side. Because at the end of the day, they are probably your biggest advocate. And in what we do, you can't really get much done without them. And so I've learned the hard way that you don't want to go against them at all. You want to find allies and you want to find them in every part of the government because

you're going to be working with a city council member. They're going to help you do your rezoning. They're going to help you with your going through the entitlement process, getting your land zone for 200 plus units. That's a big deal of it, in and of itself. And then the mayor's office and economic development, they will help you with the pilot and getting the tax abatements. And then all the way up to the state housing agency, they're going to help you with the tax credits and the tax exempt bonds that you need to finance this. So I think hands down mentorship, soaking up as much as you can, getting that base knowledge, once you have that, finding your target market and doubling down on making relationships with the city leaders and the civic leaders. I think that's where the real magic

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Check them out at biggerpockets.com slash dominion. Again, that's biggerpockets.com slash dominion. So let's dive a little bit into your business. How many of these properties do you currently own? So to date, I've completed just over 1,300 units, mainly in Tennessee and Louisiana. All right. Now, on a deal like that, can you share with us a little bit about what your profitability is like and then maybe how you're measuring it?

Yeah. So the way they incentivize developers, because like you said, Brandon, it's like, you know, it's like, why would I do this if I could do a market rate development, get the top of the market rents and not have to deal with all this regulatory, you know, crap that we have to deal with. And that's a good question. But the one of the biggest things is we don't really have to bring that much capital into our own deals. That is the beauty of this deal is that we get 90. We as this. developer, GP owner, our group and our partners, we get 90% of the cash flow. We get a 15% developer fee. And they want to incentivize you to do this. So they put those financial incentives in place. And so we can also, once we've got it built, we are required to keep it affordable for 15 years. But really after that 10 to 15 year period, our tax credit equity investor, they actually went out of the deal. And so at that point, we can own the deal 100% and just let it.

it cash flow, even keep it affordable, and let it cash flow, and we get 90% of that. And that's after we've collected our 15% developer fee. Now, we usually have to defer some portion of our developer fee. That's, that's more or less our equity. But our main risk on these deals is that we are in the development space. There's a lot of unknowns. And it takes 12 to 24 months to get these things out of the ground. That pre-development before, before dirt moves, that's our biggest risk. Once we get under construction, There's still more risks, but it's not nearly as risky as a high-end luxury community where the market could turn tomorrow and your demand could dry up. You know, that's not our risk.

We know that there's built-in demand, so we know we just have to get this thing built and it will lease up. So our main risk is on the front end. And so typically per deal, we're risking anywhere from half a million to $2 million. And we get all that capital back at closing, at construction loan closing. Okay. And are you raising money from private lent? Like, kind of, you know, I have a fund, right? So we raise money from a private investor. Are you doing the same thing and now they're part of your thing or is, it's just you guys and then it's all a government money and loans besides that? Yeah. So we, it's different every deal. We do some on our own. We do some JV where other groups bring the capital

and we co-develop it together. We've had ones where we've partnered with the land owner and their land could be used as the equity. And then we also are starting to do more fundraising, where we actually fundraise per deal. And then 2021, we're going to do, just like you, Brandon, we're going to do a fund. Nice. You mentioned we in that conversation. Are you doing this with a lot of partners, with one partner? How is the partnership structured? Yeah. So to give you an example, one development we're working on right now here in Nashville, It'll be, it's a really unique project. It's 193 units just in phase one.

We're partnered with a nonprofit who is rolling in the land. So they're a partner in the deal. And in return for contributing the land as equity, we're actually going to build a brand new facility for them. They do substance abuse recovery. They're located right near downtown Nashville. And so we're going to build them a brand new facility in the process as part of the development, doubling their space.

and then we have another partner. Basically, we're just, we split tasks, we split capital, we split risk. And so we have partners like that per deal. So right now we're working with four different partnerships. And are you doing on every development you're picking different partners based on the skill set that they bring, or do you have like a core group of you that are all doing this together? That's a good question. It really depends on the deal.

Like one of them, for example, we're working. on right now a senior affordable development here in Nashville. And that partnership just came about because I knew the developer and he wanted to do affordable. He had no experience in affordable, but he already owned the land. So he was very good at the new construction, the luxury housing, but he didn't know affordable. And so we have our core three to four partners, but that's actually something we constantly talk about is how do we make those partnerships as efficient as possible? because it's a lot of work working with other groups and partnering with others. And that just adds another layer of complexity to each deal.

It's my last question before we get into the deal deep dive here. You brought up a good point and I want to kind of unpack it for the listeners. You sometimes will go find a specialized partner is what you're mentioning that brings a specific asset or skill into this deal. Like you mentioned, this person knows how to develop land. They have connections with city council here. there may be a rezoning specialist. But then you're also going to have this core group of people that you probably split tasks up. And I think that's a great point to highlight that you can have

a core group with a deal finder and an analyzer and operations person. And you basically split those tasks up amongst each other. And then you go bring in a fourth or fifth partner on individual deals when they can bring something to the table. And I think that there's a lot of people that get pigeonholed into this idea of thinking, this is my partner, this is the person I do every deal with when that person isn't ideal for the situation. Did you have to learn that lesson the hard way? Can you share some of the lessons you learned along the way? Yeah, definitely. I'm glad you brought this up because I think a lot of people overthink this and sometimes make the wrong decision, including myself. So I learned first from my mentors previously, the company I worked at,

it's just, you know, partnerships. Sometimes people are on different levels of the partnership. And over time over 20, 30 years, you know, people are just doing different levels of work and contribution. And so that, that to me kind of raised my eyes like, I need to be careful about who I partner with because at the end of the day, you are literally marrying somebody in your business. You're sharing finances. You're sharing decision making. You're sharing everything with that person. And so that was another thing, too, I learned where sometimes you make wrong decisions about

partners and maybe you don't get things written down at the front. end, which happened to me on a partnership deal where, you know, I thought we were on the same page. We had verbally agreed to something. And then we both started working and committing and committing a lot of time and a lot of money to things. And then the pandemic happened. And then things changed and ideas changed. And so I think just doing your due diligence, doing your homework on partners on the front end and making sure you put things in writing, even if you know for a fact, this is a great person, we're going to do great things together. I think always getting things. in writing, getting references, learning as much as you can. Do not just dive right into things.

Learn as much as you can about your partners. Because at the end of the day, anything that they put their name on that includes that deal, they're putting your name on that too. So I think that's a huge, huge takeaway. That's such good advice. I think people need to like listen to that over again, because that applies whether you're trying to buy a two unit or a 50 unit or develop a 100, you know, unit, you know, it doesn't matter. Like that knowledge is so important for like being able to vet your potential partner. Like I love partnerships. You know, David and I talk about us a lot on the show.

I love them. I use a lot of partnerships. But you have to be very, very careful. And so, yeah, good stuff. Let's move this over to the next segment. I want to get to the deal deep dive. Because we're talking about the private public partnerships a little bit, developing this stuff.

I want to get a tangible example of it. And by the way, I've got a both a weed whacker and a leaf blower right outside my door my studio right now. So anyway, if I get a little bit loud and, you know, obnoxious, don't mind me. All right. So the deal deep dive is a part of the show where we dive deep into one particular deal that you've done. So you got something ready, Evan, that we can dive into? Yeah, let's do it. All right. So we're going to ask you a series of eight specific questions about that property. Number one, what kind of property is it? More of the same. It was workforce affordable multi-family development. It was called Buffalo Trail. Buffalo Trail. I like it.

And how did you find this deal? The good old fashion way, loop net. Okay. All right. Let me ask this question. How did you, what was it when you found it? Was it, it was raw land or did you demo in something? Like, what was it when you found it? Yeah, it was raw land we put under contract with an option of purchase. Okay. All right. And then how much was it when you bought that land? 1.75 million for 18.88 acres. Okay. How did you negotiate that price?

So I think in summary, it comes down to four things, education, relationships, experience, and show not tell. So quickly going into that. So we actually had a groundbreaking on another development, another workforce affordable housing development, right around the same time we were looking at this site. And so we invited the selling brokers, to the groundbreaking. Before we even had it under contract, we had been talking to them.

We wanted to show them what we were actually doing and show them that, you know, educating them on what we do, how we do it and all the relationships we've built and how important that's going to be to getting their development done. We also brought the council lady whose district it was and brought her to the groundbreaking and then had a meeting with the sellers brokers and the council lady all at the same time right after groundbreaking and just immediately got everybody on the same page because of that. And so that allowed us to get a two-year option on that land, which is not easy to convince people to do, but combining all of that, the experience education relationships is really how we were able to do that. So can I, this might sound a couple,

a couple questions on this. I know we're going really deep in here. But so you had an, so you put an option on the land. You didn't buy the land and then go and do all this work try to develop it. You get an option on it. So that way, if you spent all this time and it doesn't work out, the city just says, no, we're not going to prove it or whatever, that you're not, you're not in for $1.8 million right then. Is that correct? Yeah, exactly. That's something my mentors taught me really early on was you're, it's more valuable to control real estate than it is to own real estate. Because at the end of the day, you, you, you don't need to buy it right away. You actually don't want to buy it. That's a liability because it's non-cash flowing. It literally

costs you money every month to own something like that. And you can buy an option for it for 10 to 20 grand and have the right to purchase it for two years, which is way more valuable than owning it for two years. Why would the seller do that? Why would I as a seller agree to just have a property? I can't sell it now for two years. It's just going to be sitting there. Is it because it's the only option? Yeah, that's usually, so there's usually two to three reasons why people will do that. One is nobody's given them any offers. Two is because we're going to pay them top dollar, but we need time to usually rezone it and entitle it. So, you know, there's a tradeoff. We say usually it comes down to time or money, which one would you prefer? So, you know,

sometimes we give people two offers. We say, hey, we'll close in six months, but we'll give you half the price. And so that's usually what it comes down to because time is valuable for us. So we're willing to pay people a little bit higher than others. And typically, too, we're kind of on the emerging markets, the redeveloping corridors. And so they don't have as many market rate guys, unless you're in big towns like Nashville or Austin. Sometimes we do actually compete against the higher end guys. But that's usually we're on the redeveloping areas.

So it's less competitive. I was going to say, I believe that's a J.D. Rockefeller quote. Which one? He was the own nothing, control everything, that that's the way. Because when you own it, you have to take liability onto you as opposed to controlling it, which has all the benefits of ownership. without the risk. So high-level stuff right there. That's some black belt investing advice. Next question in our deal deep dive is how did you fund this deal? So total development cost,

49 million. The biggest piece was a $35.9 million loan. We worked with Key Bank and basically we were able to get a bigger loan on that because of a 10-year pilot. And then we had 13.3 million. Remind me what pilot is again? Payment in lieu of taxes. It's just like a 10-year tax abatement. And then 13. $1.3 million in 4% tax credit equity. Okay, can you remind, can you, I know, we're going deep here. I'm probably deeper than most people care about, but I, you know, whatever, my show, I can go deep here. How does that tax credit thing?

I mean, so, like, when you say tax credit, like, does that mean the government is writing you a check at that point, or how does that, like, what is that money? So the, basically, of all of your development costs, so of the $49 million, there's a certain amount of what they call eligible basis. So there's certain things you can't get tax credits on. There's certain things you can. So like land, for example, they won't give you tax credits on because they, I think mainly they just don't want to people to sell land to themselves and get a bunch of credits on it. So you can't get credits on. So there's certain things you can get credits on. So they, once they verify those costs, then they give you a certificate called an 86.

There's all kinds of acronyms. But basically, they give you a certificate and then you go out and you have the ability to sell that certificate of credits for actual equity, like cash installments into the development by private investors. Typically, banks, insurance, private equity. There's a whole group of companies that their sole purpose is to basically find, buy that equity from us. And then they have a group of investors who want those credits. Okay. So they give you this thing that says, here's $13 million in tax. credits. Right. And you're going to make, they say you're going to make 4% of this money. So instead go give this to key bank or, you know, whatever, US bank, some bank. And now they get 4% and they're

going to pay you $13 million for this. And you get to put that into the deal. Am I kind of tracking there? Almost, almost. So 4%. It isn't the return. It's actually just the name of the tax credit. Okay. Kind of confusing. But it basically means you get roughly 40% of the eligible basis. You get 40% of that in credits. So that's why we like our capital stack is typically, 30 to 40% tax credits. Okay. Okay. Let's make it a little more sense to me.

So if I'm understanding you're at, you're saying this is how much we would normally have to pay in taxes on this property, you are going to get 40% of that back as an incentive for taking on this project that we have rubber stamped and said, yes, we want you to do it. But you can sell that like an asset to someone else and they can take the credit. So conceivably, some company that's making more money that wants that credit because it's worth more to them can pay you for it. You can get cash up front and it's more valuable to them. It would be to you because they're saving more. Is that fair? And there's also, there's one other layer

to that is banks are actually required to invest in tax credits. As part of the Community Reinvestment Act of 1986, basically like to stop redlining, which if anybody knows is like redlining neighborhoods was a big deal. Banks wouldn't invest in the lower income parts of town. And so this, Oh, I get it. CRA Act said, hey, it would keep liquidity in the tax credit market. Because if the government's giving you a tax credit that you can't do anything with, it's no good. So if they require banks to buy them, then people are going to sell it to the bank.

And now they have more incentive to actually go to low-income neighborhoods and put these projects together. That makes sense. Because if you got a tax credit that no one wanted, then you just kept it for yourself, it wouldn't be as valuable. Okay. Yeah. I think we got you there.

Thank you, Evan, while our minds are all swimming with this good information. So next question is, what did you do with this property? So it's actually, it's currently wrapping up construction. It's 240 units. And I think they're starting to deliver like one or two buildings right now. And so it takes 18 months to finish out. And we started in July of 2019. So we're leasing up massive demand and also wrapping up construction at the same time.

That's cool. All right. So then the outcome, like what do you expect the outcome to be after the thing? All of a sudden done. Do you refinance then? just go get a normal loan? Do you keep it? You're already good on the loan part? You just hold it forever? I mean, what's the long-term plan with us? Yeah. So the tax credit program makes it requirement that you have all of your permanent financing lined up at construction closing.

So we actually lock the rate and lock in our perm loan on the front end. And then, so we'll basically go through after about 36 months, once we've had a full lease up, we have 90% for 90 days. we stabilize into our permanent loan. We go out of construction loan, which is recourse into non-recourse, and that's a 17-year term. And so we can refinance any time after that, but we'll typically hold that for at least 15 years,

at which point we'll probably buy out our equity partner and probably refinance about year 15. Wow. Are you going to buy them out with the refinance? It depends. I mean, you can buy out in any tax credit deal you can buy out your equity partner after year 10 because they only get tax credits for 10 years. So you get 10 years of the same amount every year. And those certificates that we sell to them

are worth that amount for 10 years. So after 10 years, their incentive to be in the deal is really the tax credits and the losses and the depreciation. And most of that is burn off. And the credits are over. So after 10 years, they're not really incentivized to be in the deal anymore. They don't want cash flow. They want losses and appreciation. This is like a tax right off in essence. They're trying to offset a bunch of earnings. Isn't that just an amazing concept that I need to buy somebody's loss? That's really what you're doing is you're like, we're just doing so well. We're making so much money. I have to buy somebody else's loss so I can put it against my books. Yeah. It is why I tell people it's like this is like everything you learn about like syndication or

investment or, you know, properties, flipping properties, like this just throws all that out the windows. Like, no, your investors actually don't want to return. They want the losses. They want the credits. They want everything, right? Because if they're paying 35, 40 percent on the money they're making, that tax credit is worth a lot more to them as a loss than it would be if they could make a 12% return, especially if you adjust that return because they're going to get taxed on the money that they made with it, right? If you start thinking the way that wealthy people think is for them to make 12%, they're going to keep, you know, 7% out of that 12, as opposed to being able to take a 40% loss on money they've already made. That's really, really big. The concept of depreciation,

it's pretty wild. Okay, my last question for you here. What lessons did you learn from this deal? I would say biggest one, patience is key. This took me about two and a half years just of pre-development to get that done. And it takes about two years to build and two years to lease up. So you're looking at like a five to six year period before you actually get a stabilized asset. set. Persistency and consistency above all else. Hands down, that's how you get these deal done, is you one inch every day or one percent every day. It's daunting when you look at a piece of dirt, and you're like, man, I'm going to have to work on this piece of dirt and see nothing move for two years. And then all of a sudden, everything moves at once. But it's just putting in the work

every day before that. Also, entitlements and rezoning are a little known way to really increase value in your land. What do you mean with that? So entitlements and rezoning is basically we took an agricultural zoned 18 acres and in a very redeveloping part of town, but it was zone agricultural. So we went through a six month long process of many, many community meetings, planning commission meetings, metro council meetings, and a lot of coordination with the city and the community to allow for the approval of re-review.

rezoning, changing it from agricultural to we changed it to be zoned to allow for 240 multifamily units. So we had it under contract for 1.75 million. We had it appraised for almost, I think, a little over 4 million by the time we closed. Just the land was worth that much. And so that literally just comes from you going through that. Again, it's arduous. It's like mind numbing sometimes. And it kind of like baffles you sometimes at like the,

things you need to put up with with communities and politicians and going through that process, but it's hugely valuable if you are willing to go through with that process. So we're going through that on a few other projects right now. And it also allows you, you can borrow against that higher value if you were to purchase that land. So it's just, it's another way to really unlock value. And even if you want to just know that you're taking risk out of the deal, because you're already have built in equity in the land.

And that's why you need to use the option because there's so many uncertainties, variables in this that you don't know if you're going to get it rezoned. You don't know if they're going to prove it that if you were to just buy it, nobody would ever buy this because there's too much that you don't know. That's the only way it's going to be sold. Yeah, exactly. I've actually three different council people in three different cities, two of them being Nashville and New Orleans, I actually had council people basically put moratoriums on my own. multifamily development because they heard I was working on something. And I was just trying to be transparent and work with them.

But in the process, they're like, nope, don't want any multifamily. Even if you're already zoned, I don't want it. And that can happen to you all the time. So that's why I always say look for council people who get it, who understand it, who know the need and know what their community needs and are willing to work with you. That's awesome, man. Well, look, we got to move on this show. But man, I can spend like five hours talking to you about this stuff.

Where are you headed in the future? Like, what do you see the next few years? And then follow up question to that is how can our audience provide value to you? Like, what are you looking for right now deal-wise or people-wise or whatever? So, yeah, where are you headed and what do you need? Yeah, I love it. I appreciate you asking that, man. The biggest thing, where we're headed, I mean, our 20-year goal, a lot of what, like, you did, Brandon, like vivid vision, once you recommended that book to me, I dove in, I loved it.

combination of that and traction are like kind of like my Bible for our company holiday ventures and we you know i have it on my wall we go over it every monday uh as a team we say okay we're going to get in 20 years we're going to have the impact of creating or preserving either buying or building 100 000 workforce affordable attainable communities across the country that is our goal and then above and beyond that we we really i mean i just know there's such a big need out there. Like, I don't want to just make a small dent in affordable housing. I want to make a big dent. You know, I want to be able to help people all over the country. And then even above and beyond that, we're working on right now, creating a nonprofit that will operate at each of our

properties and create a resident empowerment program where we will help educate on health and wellness and mindset, on, you know, creativity, you know, doing art, just different things to get people out of their element, get people learning, get people excited about life. And we don't want people to be in affordable housing forever. We want people to work their way out. You know, maybe eventually, I mean, the dream for me is that we have residents that, you know, start out in our communities in workforce housing and work their way up to owning and investing in workforce housing and helping the next round of families. That to me is the dream. I'm like, man, that would, that just gets me excited. So we're always trying to push the needle on how can we really 10x this every day so we can

hit that crazy, big, hairy, audacious goal of 100,000 units. That's awesome. And what do you need to make that happen? What can our audience bring you? Yeah, yeah, I love that. I would say the biggest thing is we're always looking for impact-driven investors, those that really want to make a difference with their capital, not only get a, you know, a very competitive or, you know, even recession-resistant, return and be able to have a real impact in communities. That's number one. And then the biggest thing, too, is if anybody's interested in learning more about how they can do this too, we're starting to mentor because we've had really so much demand and we're like, man, how can we 10x this? It's by teaching other people how to do this. And so they can either reach out to me or

connect on our website. But I think those are the biggest things because I want to teach people how to do this. It's crazy complicated. But once you've figured out, you have your blue ocean and you you don't have to, you know, for those listening in the multifamily syndication world, it's like, it's getting so competitive out there. And even a lot of real estate, you know, niches, it's just getting so competitive. And so this allows if you put in the time and the work, then you can really have a blue ocean and do good with it. That's so cool, man. Very cool.

All right. Well, let's move on to the last segment of the show. It's time for our famous for. This is the part of the show where we ask the same. four questions every week to every guest and so we're going to throw them at you. But before we do, Evan, let's first hear what's going on this week over around the Bigger Pockets Podcast Network. Hey, it's Ashley from the real estate rookie.

And last week we had on Gary, he works at a gym, found a mentor who is one of his clients, and now he's investing in real estate. Two duplexes under his belt and looking to find a quadplex. Make sure you guys go back and listen to last week's episode. And with that, let's get to this famous four. Question number one, current favorite real estate related book. What you got, Evan? All right.

I bent the rules. I have three. Better places, better people, James Rouse, raising the bar, the life and work of Gerald Heinz and Powerhouse Principles, George Perez. You can't pick three books I've never read. Come on, man. They're all, they're all like big time developers that I just like, they're my idols. And it's just, each one of them dives into their personal.

stories and also what they learned along the way. And it's so cool. I mean, James Ross literally built a city out of nothing, Columbia, Maryland. Like, that one I would recommend to read first. Better places, better people. All right. So normally we would say what's your favorite business book, but would that be included in those three?

Traction. There we go. Yeah, 100%. Brandon, good job. Spreading the gospel of traction. Spreading the gospel. I don't know if you hear that from me. And vivid vision you said was the other book we mentioned earlier.

By the way, just FYI people, if you want to, that was a good one for like casting that 5, 10, 20 year vision for your business. Cool, Evan. Okay. So what about some of your favorite hobbies? Anything outdoors, spending time with friends outdoors and just being like physically active outdoors. Like we, for my birthday, we just went out to Colorado when ATVing in the Rockies and hiking. and that was like, that's my ideal version of a weekend.

That's awesome. Well, yeah, you got to come out to Hawaii sometime and come hang out. We'll do some outdoor activities here. Yeah, let's go surfing. Yeah, yeah. I was out yesterday morning, actually, with Josh Dorkin out there in the water, like, in his girls. It was phenomenal. It was phenomenal.

Anyway. All right. Yeah. Next question. Last question for me. What do you think separates successful real estate investors from those who give up? fail or never get started. I think we dove into that a little bit.

I think it's find your, find your wife, find your passion, find your fire, and get clear on it. I think for me, reading traction about a year and a half ago was a pivotal moment for me because I knew vaguely what I wanted. I knew vaguely the direction,

but I took that book with me to Costa Rica, two weeks there, you know, read it frontwards and backwards and did everything they said to do and wrote down everything they said to write down. and visualized everything they told me to visualize. I just followed their program. And now I am crystal clear.

And now everybody on my team is crystal clear. And now all of my partners are crystal clear with where I'm going and where Holiday Ventures is going. And that, I think, is the game changer. If you can get clear. And I think a big thing for me is like putting down your phone, Costa Rica, I didn't have a choice because we didn't have great internet. So it was perfect because I didn't have distractions.

I think we get too caught up in our phone and our, you know, all the million distractions. So I think of people, even just like a Saturday morning, just set aside three hours and think about where you want to go and visualize it. So good, man. So good. All right, dude. Well, thank you so much. David Green.

You want to get a thought of here today? We got one more question. If people want to find out more about you, where's the best place to do that? Yeah. Yeah, monumental podcast, which we had Brandon on recently. That's Evan Holiday.com. If you're interested in investing or mentoring, that's Holiday Ventures. And then, of course, at Evan Holiday, social media, biggest on Instagram.

So send me a DM. And Holiday is not, as you'd imagine, it spelled, right? How do you spell your last name? Yes. It is Holiday, H-O-L-L-A-Y. Holiday. It's like Hollaback girl, but with Holladay. That's how I think of that.

Halla. All right. Very cool, man. Well, now, David, you can take us out of here. Thank you. That was hilarious. All right, Evan, this was awesome. I think you made both of our heads spin, but you brought a perspective.

I don't think we've ever had on the podcast. So thank you very much for sharing something that isn't talked about very often, but it has some huge upside if you have enough patience. This is David Green for Brandon, Ancho Hollaback Girl Turner. Signing off. You're listening to Bigger Pockets Radio. Simplifying real estate for invest. large and small. If you're here looking to learn about real estate investing, without all the

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