BiggerPockets Real Estate Podcast - 98: Value-Add Investing and Doing $1 Billion in Real Estate Transactions with Allan Glass

Episode Date: November 27, 2014

What does it take to buy, sell, and broker over $1,000,000,000 in real estate? That’s what you’ll discover in today’s podcast episode when we sit down with Allan Glass, a real estate entrepreneur from sunny Southern California. In this hour long interview, you’ll learn how Allan used his skills as a commercial real estate broker to build his own portfolio and “piece together” deals that are truly “win-win-wins.” If you are looking to take your business to a whole new level, don’t miss this show! In This Show We Cover: How Allan got started as a commercial broker in LA Thoughts on obtaining a Real Estate Finance Degree How Allan was able to profit despite getting started in the worst time to have career in real estate The two “book ends” Allan looks for to decide where to invest. How Allan shifted from an employee to starting his own business in the restaurant industry Why you should always have a backup plan The importance of continuing education and taking up a Masters in Real Estate Development Why functional obsolescence is vitally important to an investor How Allan manage to invest in numerous different property types How to add value to real estate and profit from it How Allan finds deals in any market. Allan’s ‘secret sauce’ of real estate investing Mistakes real estate investors make (including Allan) And lots more! Links From the Show Loopnet Costar Books Mentioned in the Show Brandon Turner’s The Book on Investing in Real Estate with No (and Low) Money Down The Reluctant Metropolis: The Politics of Urban Growth in Los Angeles by William Fulton Lucky Or Smart?: Fifty Pages for the First-Time Entrepreneur by Bo Peabody Connect with Allan Allan’s BiggerPockets Profile Allan’s Website Allan’s Facebook Allan’s LinkedIn Allan’s Twitter Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast. Show 98. 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 height, 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, everybody?

I'm Josh Dorkin. host to the Bigger Pockets podcast here with my co-host. Mr. Brandon Turner. What's up, Brandon? I'm just trying to throw you off by making some fun faces about the camera. You're killing me. You're killing me. How you doing?

I'm good. Happy Thanksgiving. Happy Thanksgiving. Yeah. Yeah. Today is our Thanksgiving show, 2014. Yeah. Which is the vast majority of people listen to this.

It's not listening on Thanksgiving, but whatever. Well, deal with it. You know, is it better to listen to? to you and I or to listen to the bickering that's happening at the dinner table. That's true. Or the football game to go watch Dallas lose or something. I don't know. Yeah. Yeah. I mean, I personally choose me. So there you know. Mom and dad, if I'm not there, here's why I am. Yeah, man, things are, things are good. We got a pretty, pretty cool show for everybody today. I'm definitely excited about it. Before we get into that, actually excited about a few

other things over here at Bigger Pockets. We've been adding some new folks. And so, you know, definitely I want to give a shout out to all the new Bigger Pockets family members who've joined up in the past few months. I am thankful to everybody who has come on and joined our team and begun working for us. It's been really exciting watching this company grow. And so I'm just thankful to all of you. And actually, to you in particular, Brandon, who last week celebrated two years working for us here at Bigger Pocket. So, you know, it's, you know, for all those people who think you're one of the founders, that's just not true. Stop spreading the lies. And no, I really, I'm very thankful to have you. You're an amazing asset. And all of our visitors and listeners should be

thankful to have you here as well. Well, thank you. I am thankful for this job. This is a good thing to be doing every week. I wouldn't want to be doing anything else. So that's awesome, that's awesome. Moving on. Well, cool. Well, let's let's move on and kind of talk about our guests, Our guest is a man named Alan Glass. Alan has been in real estate for quite a while. He's been doing this for a few decades now. And in the Southern California, Los Angeles area, from pretty much everything from commercial to residential flipping,

you know, he's pretty much done it. He's done it all. And he's got just a ton of amazing insight on some advanced topics that we really haven't covered. before. And I'm super excited. You know, there's a big focus on creating value out of real estate. And so if you don't know what that means, then I definitely, definitely recommend listening. And even if you do know what it means, you know, this show might kind of should give you a few things to think about. So I certainly recommend paying attention. And that's what I got.

Brandon, you have anything you want to add? You want to do our quick tip? Yeah, let's do our quick tip. What is it? Today's quick tip is go tell somebody today you're thankful for them. That's it. Oh, that's really sweet. You're such a nice guy. It's not true what they say about you. It's not true. My mom loves me. All right. That's the quick tip. Yeah. Nice and quick today. Did you know your house gets bored when you leave? I can't actually prove that, but it probably

misses out on the action. The footsteps, the late night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark. thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real host. hosting experience to handle it all.

A co-host can handle guest communications. It can manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more time enjoying your trip. You can relax, knowing guests are taking care of, and your place is in good hands. You travel, your house works. Everyone wins.

If you're ready to host but could use some help, find a co-host at Airbnb.com slash host. Here's the thing about traveling. If you buy food at the airport, a burrito, salad, bag of peanuts. You start wondering if you should have opened a savings account for snacks. So wouldn't it be great if you could actually earn money while you're traveling? Well, you can.

Airbnb has something called the co-host network. While you're away, you can hire a vetted local co-host with hosting experience to help take care of things, communicating with guests, preparing your space, managing reservations, everything runs smoothly while you're off making memories. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. Most investors spend all their time talking about their high-level returns. But that's not the number that actually matters.

What actually matters is what you keep after taxes, and that's where multifamily real estate quietly stands out. With built-in advantages like depreciation, the right deals can generate steady cash flow while reducing the tax drag. Bam Capital structures its multifamily investments around those fundamentals, pairing tax efficiency with disciplined operators in a long-term approach. This isn't about chasing hype or guessing market timing. It's about building durable, tax-aware wealth over time.

Learn more at biggerpockets.com slash bam. All right, guys. Well, let's get this thing going. Let's bring on Alan. Alan, welcome to the show, man. It's great to have you here. Thank you very much. It's a pleasure to be here.

Great. I'm really looking forward today's show because a lot of times we talked to the guys who were just getting started. Like last week we talked to Kyle, who was just getting started. You got started a long time ago, though. I mean, not like, you know, in the 30s.

But I'm not calling you old. I'm just saying you got started. Right out of the gates. Right. Like you were doing real estate when I was, you know, still probably in, I don't know, diapers was the right word. 30 is old to Brandon. So let's, you know. So yeah, let's talk about your story.

When did you get started and, you know, kind of what got you into real estate? Tinker toys and Legos. Nice. You know, it's honestly, it was, well, I started out in college as pre-med major and learned very quickly after, well, halfway through my first semester that nine years of studying biology, chemistry, and physics just wasn't for me. So I went through a bit of an identity crisis. And my grandfather had been in the business. And so I'd been around the trades, you know, since I was a little kid and always enjoyed, like I said, playing with tinker toys and Legos and building things. So it was a natural progression

for me to find the real estate side. I thought at first I wanted to go into architecture. But realized that it's five years and all of the work that I had done my first semester would basically count for nothing. So lucked into to the business school and found a real estate finance degree and started out there. Nice. Nice. And so you were at USC and ended up with a real estate finance degree, correct? Yeah, exactly. And then from there, it was all roses my freshman and sophomore year. And by the time I graduated, we were in the midst of the last great recession back in the early 90s. And everyone was dealing with foreclosures, losing properties, trying to figure out what to do, a lot of people losing their job. So as a lot of people would think, I guess,

that would be the worst time to graduate and try and find a job in real estate. Yeah, yeah. I think actually it turned out to be one of the best times and a lucky turn for me. That's great. That's great. That's Great. Well, so we haven't actually talked to a lot of folks who have finance degrees in real estate. And so I'll just take this chance to ask you. I mean, was that something that you've found to give you a distinct advantage at all? Or is that kind of par for the course for getting into the commercial space? No, there are a lot of people that have varying degrees. Not everyone has a finance degree. And coming out of the gates, you learn all the fancy formulas and ways to analyze, real estate and got a quick punch in the face on my very first, what I was hoping would be,

you know, a big positive presentation with the top brokers in the company and gave them financial management rates of return, you know, along with cap rates and yields and all that stuff. And the one of the senior guys looked at me and just said, you know, what is this nonsense? And back to cap rates and internal rates of return and all the simple stuff that most everyone that's at least on the finance side of real estate understands. Gotcha. Gotcha. So would you then recommend, I mean, do you think it's something worthwhile for young folks?

I get emails, by the way, from people from 16-year-olds, 17-year-olds, 18-year-olds, who always ask me, you know, what should I do? Should I, you know, focus on this in school, or should I just worry about it afterwards? So what would you say? I think it's definitely a positive. And it's what I found, again, going back to the fact that I came out of real estate when everything was in the tank, is it gives you a bit more of an arsenal to figure out what something is worth or how to add value to real estate. So for me, it was a tremendous advantage.

It was a great time to come out in real estate, again, sort of contrary to what most people would think, because you couldn't luck into success. You really had to figure out what to do with a piece of property that was vacant and boarded shut or was functionally obsolete and needed to turn into something else in order to add value and do transactions. I think that's an interesting point about like when you get started, when you get started in a market that's climbing very rapidly. Like imagine getting started in 2005 in real estate, right? Like everybody is a genius in a bull market.

Right. The quote, right? Absolutely. Yeah, so they do really well for three years. And they go on a speaking tour around the country about here's how you make millions in real estate. And I mean, I think that's great. I mean, it's one of the things I hold is one of the, I don't know what you call it,

like the benefits. I don't know. What's the word? I'm looking for it. Whatever, whatever, whatever. The things that, like, I got started in late 2007, right? So, like, I learned from everything falling apart. I mean, that was my lesson. And it sounds like you're the same way. And I think a lot of investors that are still around today that have been doing this for a long time are like that. Can I ask a little bit more about, like, when you got that first, you got out of college and you got into real estate? Did you start buying your own

properties at that point? What were you doing? Were you working for a larger company and helping, you know, analyze? Or what was your role then at the beginning? Yeah, I, my first, My first job was with a company called Cushman and Wakefield, which is one of the largest commercial brokerage firms in the United States. And I ran their industrial market research department and was bored out of my mind. What does that mean anyway? Well, I lasted, I think it was nine months. But just to give you an example, the guy that trained me was the guy that had my job before me.

And he said, well, really, this is a job that takes about two days a week to do. but if you just kind of slow yourself down, no one will bother you, and you can make it stretch out and last a week. So I knew I was going to look like an all-star following that guy. Nice. But, but yeah. No, we'll keep that one's life. But so the way I started was just really kind of trying to fill out those extra three days of the work week and find out. what other opportunities were there, getting to know all the brokers, the senior guys,

asking them what kind of deals they were working on and trying to figure out the type of real estate that I wanted to get into. So I actually ended up meeting one of the senior brokers that owned a bunch of shopping centers, and of all places, Arizona. And the problem he had is that he'd put a tenant in, pay commissions, pay for tenant improvements. And then within a few months, the tenant was out of business and he hadn't even broken even on the cost to get the tenant in there. So the idea that I had was from actually one of the shopping centers around USC, a guy that would get involved with the entrepreneur program and mentor these guys that were starting new businesses, give them space as his investment.

And it sort of helped them move along and become more successful or get a greater chance of succeeding out of the gates. So I got the opportunity of all things to pitch a restaurant to someone that was looking at restaurant space. And I had been a bus boy for a few months when I was 16 or 17 years old. And that was pretty much the experience I had. But made the pitch anyway. And the guy liked it and said, okay, well, if you put together a business plan, I'll be your investor. So being as wise as most people are when they're 21, I quit my job with no money and moved to an restaurant tour, though.

Right, exactly. I had these great plans. And sure enough, I moved to Arizona. I lived in a fishing trailer and showered in the spigot outside the warehouse records, wrote my business plan. The guy put me off for several months until finally I couldn't wait any longer. And I just decided, you know, there's no way I was going home with my tail between my legs. So I pulled out every credit card I could, learned how to collaborate by finding engineers that were willing to trade, or excuse me, electricians that were willing to trade work for beer and food and got my restaurant up and running. And that was really my first real estate deal.

It was more of an entrepreneurial venture, but it came out of real estate. And so. So did that, your investor fell through. I mean, the guy never showed up. Guy never showed up. So we funded it ourselves, myself and my partner, with like I said, every credit card that we could coax a bank into giving us and, you know, all the trade that we can do.

Wow. And I'd like to just like chat on that for just a second because I've had a couple conversations in the past few days with people who have been, you know, come to me about investors who've talked to them and said, hey, you know, they've expressed to me how excited they are that these investors have said they want to get involved with them

and they want to work with them. And I guess I just want to kind of put it out there to folks who may not know this. Just because somebody says that they're interested in working with you doesn't mean that they're interested in working with you today. Or they may never really want to work with you. They may just be polite. They may be excited for the moment.

But it happens. a lot where you know you talk to somebody and they say hey yeah listen that sounds great that's a project i'm really interested in and in the end it never happens so i think there's this expectation thing that i tend to hear from a lot of people how super excited they are about stuff and the money falls through and they're just they're lost they don't know what to do their life is over because they put everything into this money coming and and as somebody who's been in the business as long as have, I'm sure you've seen this many, many times. And I guess I'd love to hear your take and maybe some encouraging words to folks who, you know, A, don't set your expectations too high,

you know, but what else would you say? Well, I agree with you. You come to someone with a good idea. It's a rare person who says, wow, that sounds spectacular. I'm not interested. Right. Right. But if you're going to put all of your eggs in one basket, then it's really kind of on you. you know, if it doesn't work out. So I believe you should always have a backup plan. It kind of goes back to what I was saying about coming out as a finance major and understanding various ways to analyze real estate. If all you know is how to, you know, figure out a cap rate, and that's the only way that you can figure out value, then you're kind of limited in the scope of what you can do. But just like starting a business and finding capital, if you know you're looking

for backup plans, if you're looking for second, third equity, invests, several lenders that might be interested or if that all falls through what's an alternative way to finance something, then you stand a better chance of success. Yeah, yeah, for sure. Well, can you tell us really quickly about the restaurant, what happened, how to go and then I want to kind of move on to more of the traditional real estate. The real estate. Yeah. So once we got it up and running, I, you know, I didn't want to run a restaurant. I just wanted to learn how to start a business. So about a year into it, I moved back to Los Angeles and met back up with one of the top brokers that I actually had interned for when I was at USC. And he at the time was getting

into REO real estate. This was still in the very early 90s. So REO was a fairly new thing, especially on the commercial side of real estate. And what was different back in the early 90s is commercial brokerages in particular didn't want to handle or deal with the junk, which was what REO property was. So since this guy has, had really focused his efforts on that. They kind of gave him the ultimatum. You can stay and work on commercial real estate that, you know, we feel as appropriate for our company, or you can leave. And he chose to leave, and that happened to coincide right about the time that I was looking to come back and get into real estate. So the two of us left together and basically started a brokerage

company on our own in downtown that focused on REO properties and in particular commercial REO properties. Nice. Nice. That's great. And how did that go? And I know eventually, you know, you went to New York and you got a master. So, you know, maybe you could kind of transition to there. And then we're going to probably just start beating you on the head with all sorts of commercial real estate questions. Sure. Yeah. I mean, I guess fast forward through the next force to eight years. You know, I moved out of brokerage. You know, we were doing 50 plus REO deals a month at one point as brokers until finally I got to a point where I had saved enough capital to buy my own property and started investing, rehabbing, and selling.

And towards the end of the 90s, I started to notice that the spreads that our profits were starting to shrink as investors got a little more aggressive or rehabbers got a little more aggressive in the way that they would price themselves into a deal. And that was typically basically pricing in appreciation, assuming that the market was going to continue to go up. Which sounds a lot like today, what we see today with investors paying more and more. Exactly. And, you know, unfortunately, that didn't work out.

Well, I mean, I guess it worked out well, but not as well as it could have. I sold everything that I owned investment-wise in 2000 and cashed out to go and get my master's degree in New York, Masters in Real Estate Development. But over the course the next three years, if I had held onto that property, I would have seen a nice run-up, but just, you know, my mind told me that it was starting to get too aggressive, and that was time to sort of price myself or move myself back out and stay conservative. Then when I came back from Columbia, I got back into renovating again, rehabbing properties just by accident, bought a property in North Pasadena and sort of falling in love with all the

historic districts that, I don't know if you guys are familiar with Pasadena where the Rose Parade is held every year. But they have beautiful homes, craftsmen homes, Spanish-style homes that were built in the early 1910, 1920s era, and started restoring those and working on the brokerage side with larger developers in Los Angeles, focusing on downtown Los Angeles and the adaptive reuse ordinance and turning around old, functionally obsolete office buildings into loft apartment buildings. All right. So let's kind of examine some of the stuff. First, let's talk about functional obsolescence for those people listening who may not know what that means. Can you kind of fill that in a little bit? Sure. It's when,

you know, originally a building is built for a specific purpose. An example might be a warehouse building. And as time goes on, several things can change, either where it's located is no longer suited for that type of use or just the actual building itself is no longer functionally able to, you know, handle warehousing the way that modern warehouse buildings would be. So you're left with a building that has less or no value. And you need to come up with a new idea on how to repurpose that building for something that would provide value. Is that a complicated process? I mean, you have to work with the city, I'm assuming, to do a lot of that stuff, correct? Yeah, you need to know where it's encouraged. You can't just go into an industrial zone, for example, and decide that you're going to

build housing. Right. So, you know, you need to understand the appetite for that from the city's planning side. But you also need to sort of understand the way that consumers are going to view it. A lot of times you'll go into a particular area and people just don't want to live there or live there yet. So you've got to watch both sides of that to really be successful at it. What data do you look at to make those determinations? I mean, it seems like it's almost as much of a bet like an appreciation play as, well, it's almost similar to an appreciation bet. You're you're kind of rolling the dice a little bit based on certain data, right? So what data are you actually analyzing for something like that? Well, I try and find the path of progress. And I

always talk about bookends. So I look, when I'm looking at a particular market, I look for two particular bookends or neighborhoods and areas that are already thriving, whether they're new and have been turned down or they're just traditionally strong areas. And then I watch how the market's sort of growing out from those centers and try and fill in in the middle of those bookends. An example of that in Los Angeles would be downtown Los Angeles and the west side of Los Angeles. West side obviously is where all the higher end homes, where the beaches are. Downtown, obviously, is the old commercial center, which is turned around quite a bit lately. So in between, there's a freeway called the 10 Freeway, Santa Monica Freeway, that connects it. And those neighborhoods in between,

over the course of the last 20 or so years have fallen into disrepair or become less desirable. But as that 20-year period has sort of moved forward, you can see that those neighborhoods edge out from those particular bookends and fill in and properties go up, property values go out. Right on, right on. All right. And I know we're jumping around and I'm sorry, but, you know, brain is stimulated. We got a lot going on here. I want to jump back really, really, really quickly to the master's and ask you the same questions that I asked you about the undergrad. Is a master's, was your master's well worth the time and energy spent getting it? For me, yes. And really more so by the networking connections that I made, the people that I went to school with, less so about

the book smarts or the lessons that I got sitting in class. Okay. You know, my purpose for going across the country to New York is everything I had done from my education to all the deals I had done had been Southern California-centric. And I wanted to know, well, how do they do real estate in the East Coast? And is, is it any different? The answer to that is no. It's not any different, you know, which I guess you get a lot of confidence from knowing that you can understand how to do things in different markets and different areas. Yeah, right on. And then the other thing I was going to ask, give me kind of a broad picture of, you know, for everybody listening. I mean, it sounds like you were rehabbing properties. You've done commercial deals of various sorts. You know, what else have you

done as an investor for yourself? I mean, have you done buy and hold properties, Malties, office? I mean, give us kind of the really quick synopsis of what you've kind of accomplished. And then we're going to start really digging in on some of these things. Sure. Yeah. We've floated through different product types. property types. Really, the focus in my practice is value added or opportunity-driven real estate. So, you know, we've bought anything from boarded shut crack houses in south central Los Angeles. Yeah, to, you know, small apartment buildings that we assembled together for larger development sites, you know, to small retail commercial properties around Los Angeles.

Nice. Right on. You know what just kind of comes to mind when you're talking about that is, you know, I'm a, I don't know, I'm residential only, right? That's all I focus on. But you seem to focus on a wider variety of things. I guess, do you have any, I guess, advice for me? I mean, like, should I be looking at commercial as well? Look at whatever's out there? I mean, I guess the line between commercial and residential is usually pretty strict, but with you, it's kind of blurred. So, why is that? And any thoughts on that? Yeah, I guess the first bit of advice I'd give you is just to, to understand that it's not that different. So I know a lot of people get intimidated. when they talk about the jump to commercial versus residential.

And it really isn't that different. It's certainly not that much more difficult. It just, I would say that there are a lot, not that the residential side doesn't have very professional people working in it, but the expectation, or at least in Southern California, I'm not doing this all over the country. So I don't know if it's different there. but the level of expertise is typically a bit higher.

The process of figuring out what something is worth is pretty much the same. If you're going to hold it for income purposes, you're figuring out what you can rent the property for. You're figuring out what it would cost to renovate it and put a tenant in there. And the calculations are the same to get from your gross income down to your net income. Yeah. You know, you use the term opportunity driven real estate value ad. definitely make sense on what you're talking about in terms of changing the purpose, right,

of a property. How else can somebody add value to real estate? And maybe, again, for some of the novices listening, how does that increase or improve your portfolio? So commercial is very different than residential, right? It's not based upon general comps. Valuations come out of something else, right? Yeah. Well, just sticking to the residential side, you know, this type of market, I think, is a perfect example of where you add value and differentiate that from distressed. Everyone understands how to rescue a distressed property, somebody that's upside down on their loan, something that's bank-owned, something that's boarded shut, and add value to it by making it pretty and selling it to a homeowner. Yeah. But there are other ways to find opportunity, and it becomes, I think,

think very important when you're in a market like this, whereas, you know, short sales and distress properties are starting to diminish to figure out other ways that you can make something more valuable by one example is the one I just gave you about assembling a site together for a larger development site. An example there is where they're putting in mass transit in Los Angeles, which is a fairly new thing. And they have these light rail trains that are, one in particular, that's running from downtown Los Angeles to the beach in Santa Monica. So the city is encouraging more density around those train stops. And we were able to find a site that was underutilized, a very big piece of land that only had, you know, it was actually four different properties.

One had a six unit, a two unit, a three unit, and a four unit on it. And what we did is basically assembled the site together, bought one piece, got the other owners together, and help them realize that we could essentially, if they were interested in selling, sell their property for double what it would be worth as one development site. Gotcha. And so that's how we got to a higher price and added value there. We ultimately sold that property to an affordable housing developer that's going to build 72 units on the site for veterans and seniors.

That's great. Very creative. Yeah. And another one is, again, City of Los Angeles has encouraging density come up with a new ordinance. They call the small lot subdivision ordinance. And essentially what it does is allow you in commercial or multifamily zones to build multiple dwellings on one particular parcel number. And it's sort of a compromise between building condos and building single family homes. So you can build essentially a 600 square foot footprint and sell it fee simple like you would a single family home with no homeowners association.

So I bought a duplex on a very large piece of land that also had an alley locked piece of land behind it. And instead of just having two units on it, we're about to tear it down and build what will be about six small lot or townhouses. Nice, nice. Again, very, very creative. Yeah, that's great. And it's interesting hearing this stuff again, because on the show, at least, we don't talk about a lot of this stuff. And I think we need to do a better job of doing so. You know, it seems like as you kind of expand your knowledge base, there's obviously a lot more creative things that you can do than just, you know, simply slapping pain on a house. And it's great to hear those different things. You're still a commercial agent, correct? Yeah. And now, do you recommend that as a means for entering the business for people? Is that, you know, something that novice investors should do? Did you get a lot out of that in terms of your knowledge in doing deals? Or I know I've asked you, again, two questions on the masters and the other stuff. People are always trying to figure out how do I get into the business? How do I learn it? Is that a great way to go? Yeah. You know, again, well, we do both commercial and residential on my brokerage practice. But, I encourage you, you know, to, you always want to add value to the transaction, right? And anything that you can bring to the table to add value is going to help you out, whether you're looking to buy on your own account or partner with somebody who has the money or someone who's going to buy a piece of property and get a taste of it so you can then spring out and go on your own.

For me, it's been tremendously important. It's how I learned to value property. It's how I meant most of my investors. It gives me an opportunity to at times wholesale properties. So if it's something that I pass on for one reason or another because I have a brokerage practice in longstanding investment relationships with other buyers, I can typically put something under contract and find somebody that would be willing to take that over for me in short order. That's cool.

It's nice to see a lot of wholesalers are brand new, just trying to get started. with no money and nothing down. It's nice to see an experienced guy. You still wholesale deals if you can. Absolutely. And I'll tell you, to me, there's a very big difference. There are some guys out there that consider wholesaling, just taking a look on the MLS and calling people up saying,

hey, would you want to buy this? Again, add value. You should always be bringing something to the table. And if that's just something as simple as being the guy who tied it up under contract, that's worth something. Yeah. You know, but, but yeah, I mean, that's cool. I'm a deal junkie, so I like to do deals.

And if I'm not buying it myself, odds are I certainly know somebody, at least in Los Angeles, that would. That's great. That's cool. Yeah. What is your typical, I mean, again, you do stuff that's different than most of our guests have done. I mean, you're doing a lot of stuff. So what does your typical day look like? I mean, a day in the life of Alan.

What's that like? Well, I wake up, Brandon. I like to listen to Diana Ross record. Right? I'm trying to think of something that sounds very sexy and entertaining, but, you know, really it's looking at deals. I think that that's really the job. If you're going to be an entrepreneur, that's your job is rainmaking. So, you know, in real estate, that means constantly looking at deals, constantly calling people that are looking at deals. And, you know, to me, that's other brokers, wholesalers that I know are very active and are delivering deals. and the other investors that I know in town that are actively marketing. I do a lot of reading, and it's not just the nuts and bolts, the real estate reading. I'd like to get into the social side of it. If you understand where people are going, what people are interested, it kind of gives you, again, a leg up,

trying to figure out where the next spot to invest will be. I read the other day that the average CEO reads 60 books a year. I thought that was incredible, right? It was like the top 500 Forbes, whatever. Yeah, 60 books a year on average. It's crazy. I don't read anywhere close to that, but yeah, it's something to work towards, but very cool, very cool. Yeah. Hey, so I've got a question. I mean, you do all these different things. What excites you most? I mean, what in real estate gets your juices going?

I love solving problems and doing deals. So when somebody comes to me and says, I don't know what to do with this or, you know, how do we make this? This, this work, that that's what gets me going and gets me excited and figuring out how to put a deal together with somebody that either doesn't want to sell from the beginning or doesn't really understand the value they have in an asset that they own and conveying that to them. Those are the things that get me excited. Yeah. And is that, you know, that's not something that somebody who just jumps in can do, right? I mean, that's something that comes with a lot of time and experience. You know, I don't know if that's necessarily true.

I think that, I mean, certainly the more understanding you have of the nuts and bolts of real estate, the better you're going to be at recognizing the immediate value that you can add to a particular piece of real estate. But, you know, if you know where people want to go out at night, which neighborhoods are turning around and becoming more attractive to a particular demographic, or, you know, you saw a cool building that somebody did or a new, innovative way of using a piece of real estate, and you're able to convey that, whether you're an architect, you know, a finance guy, a banker, a teacher, or have worked in a restaurant, I think those are, you know, you can certainly recognize. recognize where to add value and be successful. That makes sense. Makes sense. I think that's cool. I mean, yeah, no matter where you're at, whether you're just getting started or whether you've been doing this for, you know, 20 years, there's definitely room for value in most

deals. So that's very cool. I want to know, like, you talked about finding deals. You mentioned, you know, talking to their brokers, talking to wholesalers. Do you have any other good, I mean, are you finding things on the MLS? Are you finding them on LoopNet, on Co-Star? I mean, where are you getting these deals from? Is it just the brokers and wholesalers?

Yeah. Every day, I'm on the MLS. I'm on LoopNet and I'm on Co-Star. And, you know, I have different types of searches set up to return property to me. So, you know, I see anything new that comes on the market. But other than that, yeah, it's reaching out to in Los Angeles, you know, it's a pretty saturated market. So there are no shortage of guys that, you know, they're probably 200 that just focus on Venice Beach. You know, there's no shortage of guys that will wholesale properties. And as I said, you know, that's just network investors that I've worked with very closely that, you know, again, sometimes we'll pass on a deal. They'll put it under contract and wholesale it to me. Yeah. You know, so that's the way you do it. It's building relationships. Yeah.

That's very cool. Yeah. So I guess let's look at the last year. I mean, you've been doing it for, as Brandon says, about 100 years. So we'll focus on the last year. Thanks, guys. Because clearly you're not going to remember anything from before that. So his words not mine.

I didn't say that one. Josh said that one. Just, you know. When did I become the old guy? I'm a, I've been starting to ask myself the same thing, you know. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late-night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave.

It's sitting there in the dark thinking, I could be. contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications. It can manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more

time enjoying your trip. You can relax, knowing guests are taken care of and your place is in good hands. You travel, your house works. Everyone wins. If you're ready to host but could use some help, find a co-host at Airbnb.com slash host. Here's the truth about passive investing. If the strategy isn't right on day one, the returns won't save it. Multi-family real estate offers structural advantages. Many investors are overlooking, including depreciation that can help offset taxable income while cash flow continues. Bam Capital builds its investment with that reality in mind. They are focused on solid operators, tax efficiency, and long-term performance. For investors who want real estate exposure without being landlords and who care about consistency over hype, this is a smarter way

to allocate capital. Learn more at biggerpockets.com slash bam. Tired of traditional lenders holding you back, host financial is here to change the game. They've ditched the DTI restrictions and they zero in on what really matters, your property's income potential. So no more chasing papers for tax returns or personal income statements. Think about it. A lender that values your property's worth over your paycheck, that's the host financial difference.

Approved in 47 states, they are ready to help you make your next big move. Curious if you qualify, just head over to Hostfinancial.com and find out. Stop letting outdated lending practices hold you back. That's hostfinancial.com where your property's potential meets unlimited financing. If you think property management is expensive, try mismanaging a vacancy or an eviction or a maintenance issue that turns into a five-figure problem because no one caught it early.

That's expensive. A good property manager isn't overhead. Their protection against small mistakes turning into big losses. And that matters more than ever. in this economy. That's why I like Mind. Unlike other property managers, Mind manages your property like an investment. They obsessively measure the things that matter for your bottom line. Things like occupancy, delinquency, and net promoter score, and they have the results to prove it. Go to mine.com slash show me to see how mine performs and get your first month free, which is much cheaper than learning

the hard way. All right. So in the last year, in the last 12 months, what's your favorite deal? What's the one thing that really you loved that you tell everybody about, and let's talk a little bit about it. My favorite one that just happened, we actually closed it in February, is the land assembly site that I'd mentioned earlier on. That took quite some time to put together, and it was fun the way that we found it and figured out how to add the value. There was a lot of risk that was involved in putting that together. So to see it come to fruition, especially, it lasted through the entire recession. So to see it come out the other side, fruitfully, was a big positive for me. So how'd you find it? So there was a listing broker that got the listing for the three unit

and the four unit that was owned by one property owner, but didn't really include the duplex that was right in the middle. And he was marketing it as a development site. And my partners and I at the time were, you know, again, an anticipation of the trains coming in, the light rail, looking for sites that we could add value to around the transit stop. So this was literally across the street from one of the stops on the Expo Line train. And when I drove the property, I realized that there was that big donut hole in the middle. So I'm trying to figure out, you know, how is this a development site when you don't own the piece in the middle?

So I called the broker and he said, well, yeah, I haven't really approached the lady in the middle yet, but yeah, I don't know. I guess I could call her and see if she wants to sell. So immediately I drove over, knocked on the door, and the tenant gave me the owner's phone number. I called her up and asked if she'd want to sell. She goes, yeah, well, you know, I'm actually surprised. I thought the broker that's selling the properties on each side of me would have reached out to me. So got lucky and wrote an offer and got it accepted.

and then approached the broker about possibly selling the two together. And he put me in contact with his principal. And the guy said, you know, I actually thought about taking it off the market because I'm not really sure what I want to do. So he let that listing expire. And as time wore on, I kept in touch with him and got him involved and willing to basically come to the table with me as a principal. and market our sites together. And then I figured, well, the guy that was on the other side of him was a six-unit building and had front-in-john-in-alley. So for a development site to have an additional street front-end or access point, it gives you a lot more options on how you can lay out

the site and get more units. So called the guy up and got him willing to sell. And, you know, again, I always start with the question, what do you think your property's worth? And, you know, he felt it was worth somewhere around the 575, 650 mark, and I ended up getting him a million 250 for his property. Wow. Wow. You must have been very happy with you. Right. So that was simply because together as a development site, it was worth more, you know, than it was individually. Wow. Yeah. So you're, I mean, that's, you're like a packager when you're doing that, right? I mean, you're, you're, you got to see the big picture and then you're really trying to work with multiple parties to kind of bring it together. But now you're at the point where you got all these properties. So how does the developer come in?

And how do we finance that? And how does that whole thing come together? Yeah. So this was a market where it really was a transitioning area and the cost to develop a property and get market rate tenants really wasn't there yet. So we figured that the best avenue to go was someone who did subsidized development, affordable housing, senior housing, that sort of thing. So we found at the time the one and only developer in town that had done transit oriented development that was subsidized, affordable housing, and ended up getting into contract with them. Everything was going swimmingly. At the time I had been invited, we have neighborhood councils out here in Los Angeles, which is basically a group of residents for each particular neighborhood that get together and talk about land use issues.

and safety and sort of help give the council members the direction that they'd like to see their neighborhood go. And having owned a bunch of properties in this neighborhood and been invited to be on the land use committee, all I heard was, you know, the neighboring Culver City, which is a little more upscale and more expensive, was starting to push into their neighborhood. And a lot of new development opportunities were coming in, but nothing was geared towards affordable housing. So everyone was concerned about, well, what about us? We're getting pushed out of our neighborhood. So I thought that they were going to be ecstatic when I came in with an affordable housing developer that was going to build 72 units of affordable housing, and it didn't quite

work out that way. They were appalled that we would come in and build a project in their neighborhood and bring people that were, you know, whom they in their minds had created as the ones that live in affordable housing to live amongst them in their neighborhood. So it ended up being a attracted education. I'm not going to say battle, but negotiation back and forth to get the support of the neighborhood. But we unfortunately didn't know it at the time. We're up against a financial collapse. The recession? The recession. And when 2007 hit, it killed most all new development in Los Angeles and our project being one of them. So you own the property though at this point, right? You actually. Yeah, I owned one of the pieces, the Keystone piece I called it that was right

in the middle. And so it was just a few years. And luckily, we bought it at a level that allowed it to cash flow. So, you know, we held on to it. I managed relationships with the other owners, managed personalities in the neighborhood. And we retooled. And as the market started to cover, back, we found another opportunity with actually the project manager for the initial developer had gone and started working at another company. And we were, you know, kept in contact and ended up, you know, getting together one day and talking. And they made an offer and basically started up again. And at this point, the way that a lot of affordable housing developers get their funding is through redevelopment agencies or had been through redevelopment agencies in Los

Angeles. Well, Governor Brown got rid of those. So another stumbling block is that it became very difficult to finance these projects. So you had to have particular directions you took them, really niched directions in order to get funding sources. So that's when the idea and the opportunity to provide veterans housing came about. And that's how they ended up ultimately financing the project and get done. Did you say the veterans like administration that who's financed it or who ultimately ended up financing it? Yeah. The way that affordable housing works is you typically have a fairly large capital stack or stack of where you get your money to do the deal. So some of it comes from private equity. Some of it comes from, you know, the housing department

funds in the city. Some of it may come from the state level. Some of it may come from, in this case, a fund that's set aside for transit oriented development on the state level. And then the balance of what you need comes for specific groups or uses. And this in particular was the Veterans Association that has money set aside for developments that will specifically go towards housing, returning veterans. So your job, again, and I called you a bundler before, you kind of gripped everybody together. I mean, again, on this type of thing, this is very different than doing a flip or wholesale of residential property.

I mean, there's a lot of additional moving parts here. You're doing all the work to bring all these parties together to basically lock some kind of thing in so that your little piece of property, that little keystone property that you own gets acquired. That's kind of the end-all BL. Did you end up owning a stake of the actual development project that came on top or no? No, we decided to step aside. And when the opportunity came, we had pursued that and thought about that during the recession just to figure out another exit strategy. But when the affordable housing developer came in, that ultimately ended up buying it. Those are typically situations where you step out as a market rate developer or investor.

So your piece, I mean, you did all this work just to really flip a little piece of property. I mean, is kind of the end all be all, right? Yeah, exactly. And so I don't know if you're able to. I mean, is there any way, can you share those numbers with us on what it looked like? Yeah, absolutely. We bought the property for, it was somewhere around 420 or 430,000. ultimately sold it for a million 75. Not bad. And that's like how many years? We closed escrow this year, so 2014, and we bought it was 2006.

Wow. So it was a long hold, long haul. But your cash flow during that time, you said. Yeah, it covered the property. And, you know, very different. I'm actually going through the process of getting a retail loan right now. It's one of the first ones that I've done that's been, you know, other than hard money or private equity into deals. And I'm realizing how hard it is to get loans for the average consumer now.

Oh, yeah. But very different back then. It was, you know, it was still at the point where as long as you had a pulse and knew which numbers are right on the form, you know, pretty much anybody could get a loan. So that's fascinating. And it's pretty cool. I mean, to just think you had the video. to see that, you know, that more could be done. Had you had you not, I mean, your property, you know, if you take appreciation and what would that thing have been worth if you were just

selling it based on land value or the value of the property itself? On its own, not as a development site. Well, during the throes of the recession, we'd be lucky if we'd have got 200,000 for it. You know, earlier this year on its own, maybe somewhere close to break even. Yeah. So having the wherewithal to see the big picture allow you to create all that value, and that's amazing. That's amazing. And a lot of luck, you know, it really, it really is. Yeah, for sure. Really quick. You had talked about land use meetings and throughout, you know, you've talked about just kind of knowing the law, knowing what's happening in the area. It seems to me that that's something that's giving you a distinct advantage, maybe not over other sophisticated investments. but probably over what a less sophisticated investor would be able to do particularly like a case like this one.

You know, somebody without the foresight to see all the big picture would have bought the property with the intent of doing something, but not seeing that they could package it. You know, they're not going to get that much value out. How much of your special advantage? What's the word you use branding? Your secret sauce, you use a word that's unfair advantage? Your unfair advantage that you have comes from going to land use meetings, really understanding what city council is doing and understanding what's happening in these areas that you're focusing on. Yeah, well, I think that what's difficult for a lot of people, especially when they're just getting started in this, any, I would imagine, business is that you focus on the nuts and bolts of whatever is specific to that industry.

You know, you read all the real estate books, how to flip this, how to flip that. and you miss sometimes the bigger picture. So if there's a secret sauce on my end, it's always trying to take a couple of steps back to really understand the bigger picture, understand how people are moving through the city, understand what's not working right, and the ideas of what people would like to see to fix it. You know, that's, I guess, the secret sauce. There you go. Awesome.

Awesome. So you mentioned private equity earlier, raising money, part of the money that for the development and for things you work on. It comes from private equity. Can you talk about that a little bit? What is that and how do you do that? Yeah, it's, well, anything other than debt, money that's not your own. So, you know, there are various ways you can do it.

And now, actually, those opportunities are larger than they've been in the past. There's crowdfunding, which a few websites that basically allow people that, you know, have small amounts to money, small amounts of money to sort of pool it together with other people that have small amounts of money to put it into a bigger pile and do bigger projects that they otherwise wouldn't have been able to get a piece of or be a part of down to just finding accredited investors or essentially guys that have a certain level of net worth that are looking for places to put that money in order to earn a return. Do you have any good recommendations on, you know,

how do we, maybe how does a smaller guy, somebody who's newer at this game, how do they track that kind of financing? Is it even possible? Yeah, absolutely. Money finds good deals. And what they really want to know is, well, people are going to be interested in your track record. But I think equally important is your organizational skills and the fact that you're, you know, you show them or you demonstrate to them that you're not doing this part-time, that you're not trying to turn a quick buck, that you didn't just come out of one of the, you know, how to get rich quick seminars, but rather you've taken an interest in really doing real estate,

and you've done your homework, and you've put a plan together. If you go to people and say, look, these are the types of deals that I'm going to go after, these are the types of returns that I'm going to target, and if I find something that fits these criteria, I'm going to need money to help me get it done. It's, you know, if you come in and pitch an accredited investor that way, you're going to find far more success than if you just wait until you have a deal and then cross your fingers say, please come on. This is a great deal. Come on. Don't let this, you know, don't let this pass. Yeah. Well, I, yeah, and I want to drill on that a little bit more then is when you pitch an investor. I mean, what does that even look like in your world? I mean, like is how, how is. How is. How is. How? serious do you take these things? Like, you sit down, you have a meeting, you sit across the table for them? Or is this like, hey, let's grab Starbucks and talk. I mean, how do you pitch an investor?

It's different. There are some investors that, you know, they just want you to write down a few numbers on the back of a napkin and sign it. And, you know, those types of investors come with longer-term relationships and longer track records of success. And some of them are far more formal and they'll want to see you put together a full projection of financials on, you know, where you expect the market to go, support it with comp, sometimes in appraisal. They're going to want to see other projects that you've done in the past that are similar to that so they know you know what you're doing and an exit strategy. Oh, so what do you show them? What do you give them? You know, what you could just make stuff up,

can't you? Can't you just say, hey, I did, you know, this deal and that deal? How do you prove to somebody that you've got a track record. Well, you proved to somebody you have a track record by showing them what you've done, but in their... Oh, that's yours. Same guy. Mine's easy to shut off. But short of a track record, you know, you show them that you have a plan and an understanding

of what you're going after, and you try not to deviate from that plan. And, you know, you can have different plans that meet different criteria, but, you know, you can have different plans that meet different criteria. But you just got to be consistent in what you give somebody. You don't go to someone and say, look, I'm buying something that, you know, only properties in these types of neighborhoods that I'm going to fix and then sell right away. And we should get returns of X. And then a week later, come to him and say, hey, I've got this great apartment building that I'd like to buy and hold, want to invest. You know, that tells the guy, wait a minute, this guy doesn't really know what he's doing or what he wants to do.

you know so you've got to stay focused you've got to come up with a plan and you've got to be consistent yeah makes sense makes sense so you know this is i think brandon's question i'm gonna i'm steal it but how can it how can a new investor compete with you i mean you're you know i don't know man you're you seem like a pretty smart guy how do i get in there and and get a piece of the action when there's guys like you out there well in southern california there plenty slices the pie. And, you know, so there's enough for everyone if you know where to find them. It's not a market where you're going to, you know, get up in the morning with your cup of coffee, go on the MLS and you're going to see 80 new listings that are priced well below the market

and be the only guy that's chasing them. Yeah. But, you know, the way that you compete is you find your niche, whatever that may be. And in a market like Los Angeles that is, compact and so large, you can be very hyper-nached and still have quite a bit of opportunity. So the way you compete is you just figure out what you love, what you're willing to do when it doesn't feel like work. You know, you're on your downtime and really go after an investment strategy that suits that. That makes sense. That makes sense. Well, before we move on to the fire around. I'm just curious if you have any other last tidbits that you might want to share, just kind of general knowledge or like, you know, craziest thing you've done, anything like that.

Craziest thing I've done. I can share my mistakes. Yeah, that'd be great. Love it. Love it. So, or the mistakes that people make actually wrote these down. So on the by side, I think the biggest mistake that people make is not knowing when to pass. And especially if you, you're, your value-added real estate or if you're someone that likes to solve problems, it's sometimes hard to just figure out, you know what, no matter how you skin it, this isn't going to work and to move on to the next one. And that's hard. That's hard to get emotionally involved.

Yeah. At least some of us do. I do. Those of us who have emotions, Brandon. On the rehab side, one of my early lessons is force feeding, not to force feed. What do you mean? It seems like a lot of new investors will figure out or think that they've figured out what everybody else wants. And particularly someone that grew up or lives in one of the more expensive neighborhoods going into a more affordable neighborhood and thinking, well, I would never live without this or without that.

And making sure that they spend the extra money to put it in only to find out that after they close us, growth, someone rips it out and puts something completely different. The way that that had played out for me is I'd been, you know, again, back in the 90s restoring historic homes in North Pasadena, which was a higher price point than one of the other markets I had moved into, but found this beautiful craftsman home. So I took it upon myself to make sure that I got only the right paint colors that you would use that were appropriate for that time, put in certain kitchens, that I felt were, you know, appropriate for a craftsman home, landscaped it. Again, the way I thought you should for a craftsman home sold the house.

A month later came back. The entire outside landscaping was torn out. The house was painted a completely different color. And the cabinets that I had put into the kitchen, this period-specific cabinets, were torn out. And they didn't even have the courtesy of throwing it in the trash. It was sitting on the curb for the trash man to just come and pick up or anyone else that driving the neighborhood. So what you feel is appropriate isn't always necessarily what the market feels appropriate. So you got to be aware of what's selling. That's a great one. Yeah, a lot of people,

especially I think newer rehabbers tend to over rehab as well, you know, not just get the style, you know, assume the style is going to be what they want, but they kind of, you know, they overdo it. And it's the same thing. You know, don't make that assumption, upgrade to the level that that property is that because otherwise you're just wasting money that you don't need to waste. Yeah. Yeah. And then another really big one on the selling side is forgetting to qualify your buyers. I've seen so many people make this mistake that in thinking that the highest price that comes in is automatically the best deal, let's go to escrow with them, only to find out 30 to 45 days later that that buyer couldn't perform. It's extraordinarily important to qualify

your buyer before you tie yourself to them in an escrow or in any type of contract to get yourself out. So I guess the obvious follow-up question to that is how does one do that? Well, what we do, first step is we have preferred lenders that we work with that I know will be very candid with me and won't sugarcoat whether or not somebody is financially capable of closing a deal. And so I ask everyone to cross-qualify with my preferred lenders. They don't have to use them to get their loan, but at least then I know, usually within a few hours or a quick credit reference, whether or not this person can actually get themselves qualified. And what price point are you talking, do you make people do that?

I mean, are we talking, you buy a $200,000 house you're going to make the buyers do that? Or if you're trying to sell it $200,000 house, are you talking only for multimillion dollar, you know, properties? At any level. It's especially important at the more affordable levels or on the FHA level. You hope that the real estate professionals or the brokers that buyers are working with at the higher price points will do their own qualifying. But it's equally as important at that price point as well to make sure that if someone says they can spend three, four million dollars on a property, they have the financial wherewith all to do it. Yeah, I think that's great.

I think that's really good. I mean, I've had that before. I've had my properties tied up several times and then they back out a month later because I just, you know, I mean, the most average. do is I'm like, well, are they pre-qualified? Yes, okay. You know, this as far as I ever push it, I never even look in. So, yeah, that's a really good tip. Even on the investing side, you know, if you're selling something to an investor or something pre-renovation, understanding the difference on whether you're getting into bed with a wholesaler or an investor, you know, asking somebody, well, what have you closed or how many deals have you closed in the last month or two months? What are

the addresses, checking on those addresses? Not to say, that going to a contract with the wholesaler is a bad thing, but you got to know what you're getting into. And if you think you're getting into a deal with an investor only to find out that someone's trying to wholesale a deal, it could be disappointing. Yeah, that's great. Yeah. Cool. All right, well, hey, let's kind of start to wrap things down here and move on to the... It's time for the fire round. These questions come straight from the Bigger Pockets forums, and we're going to fire the match, Alan. Okay. All right, number one, what do you? your thoughts on short sales, do you go after them or do you avoid them? I've done about my team and I,

about 350 short sales over the course of the last few years. So yes, we go after them. They're great opportunities. And again, if you're a problem solver, they're a great spot to be. But it takes a lot of work. It takes a lot of patience. And it's really, you know, two different transactions that you're working on. One is selling the property. The other is figuring out a settlement with the bank. So they're very involved. I would think that going forward from this point, you're probably going to see very few. And even if people are still upside down in their properties, banks are going to be less motivated to settle short, you know, versus carrying it out through a foreclosure because odds are, or at least the way the market's moving right now, property values are going

up, not in the other direction, which is part of what helped. you know, push a bank towards a short sale decision. Hey, Alan, how big is your team really quickly? I'm big on collaboration. So a lot of the people that I work with are separate companies that we just have joint ventures with. Sure. My team and my company is three people, someone that does accounting. I have a field person that goes out and looks at properties and that sort of thing in myself. But, you know, the group of people that I work with, you know, I've got attorneys. when we were doing a lot of short sales, I had a team of three different people that all they did

is call the bank all day long from the moment they got in the office till the moment they left at the end of the day, calling and negotiating, making sure that files were moving forward. Gotcha. I think that's an interesting point too about not having to hire every single person to actually be a W-2 employee just to work with them. I mean, there's a lot you can do just by hiring other companies.

I think that's great. Yeah, for sure. next one. All right. So next question on the fire round is, here we go. With tight inventory, how much of a discount can an expector? I'm having a hard time here. Let me try again.

With tight inventory, how much of a discount can an investor expect to get? You got it out. Yeah. Yeah, thank you. And my answer to that is, you know, I have no idea. And the reason is for me, I don't really look at a disqualification. discount because I rarely agree with the market value that someone brings to me when they, when they show me a property. So I look to hit a particular return. And for me, if I, I turn my

rehab project around in about six months, I look to hit an eight to 10 percent return every six months. So anywhere from, what is that, a 16 to 20 percent return annually. Okay. Okay, cool. What are the best ways to find investors is to fund your deals? We kind of talked about this earlier. But yeah. Yeah, like equity partners? Sure. Yeah.

What's the best way to find them? Well, I think to get deals done yourself and start or come up with a plan, like we said, if you don't have a lot of deals under your belt. But short of that, I go to investment club meetings. Sometimes they're not as fruitful. Sometimes they are. If you can walk away with one business card that's worthwhile, to me, that's a worthwhile trip.

I'd like to look at comps in the markets that I'm in and find out. out who it is that's buying and renovating these properties. Call those investors, get to know them, find out who their partners are, who their hard money lenders are. And really, it's getting to know your competition, getting to know what they're doing and what successes they're having and asking them just straight out, you know, who invest was with you. Nice. Nice. All right. Last question. For someone new to rehabbing and no money to start, where would you say is the best place from them to get the funding or should they even move on and try and rehab when they don't have their own cash? Well, that's a tough one to answer in general. I would say that if you have a construction

background, the answer is going to be a bit different than someone who doesn't know how to wield a hammer. If you can bring the skill to the table, if you're an architect and you can bring the design element to the table, then you can go out there and find the financial partners to partner with you. and that would be, I would think, the smartest way to go out and put a team together. If you have those skill sets, go out and find something that you feel you can add value to. Again, put together the financials on what it would take to get there, and money will find good deals. And what if you don't? What if you have no skills like Brandon?

You know, I think that you're going to have to find a skill or bring your own money to the table, you know, and you can always learn. You can learn how to spot a deal. You can learn how to put something under contract. That's a skill, that's a value add in itself. If you, you know, if you've locked yourself into a deal and nobody else can buy it out from under you, you know, like I'd said earlier, that's bringing something to the table that has value. Yeah. I think I said that line in the book that we came out with recently was like there may be such thing as no money. down, but there's nothing called no investment down, right? There's always an investment of something, whether it's capital or creativity or experience or whatever. I think that's kind of summed that up well.

By the way, I've got to ask this question. I saw it in my notes. My notes tell me that you've done upwards of almost a billion dollars in transactions throughout your career. Is that an accurate assessment? That's correct. Holy smokes. What's the biggest deal that you were part of? I'm just just curious what, you know, what was it? Let's see. Put you on the spot here. Yeah, I know, right. Dollar volume size.

A dollar volume size, yeah. Office building downtown Los Angeles is $23 million. Okay. And you were the broker on that? Yeah. Right on. Cool. Wow. Was that exciting being part of a deal of that size or same as everything else?

Yeah. Actually, it's an empty building that used to be housing, or excuse me, used to be an office space and is now going to be housing with retail on the bottom. So, you know, again, it's functionally obsolete building or maybe not functionally obsolete, but something that had a higher and better use if it was repurposed for something else. So a lot of fun. Right. Yeah. Watching the transformation of L.A., I moved out there in 2000 and just seeing how it's changed over the year. years. And I mean, you know, some of these projects, it's unbelievable. I mean, it's happening across

the country now. But it's, it's a lot of fun to watch these things and knowing that we as real estate investors and, you know, commercial brokers are are playing a role in the changing face of our cities. And I think it's, it's amazing. Yeah, it's fun for me. I'd love being a part of it whenever I get the opportunity to. Yeah, right on. All right. Hey, let's move on to the world famous. Famous for These questions we ask everyone every week, so let's see what you've got to say. Number one, what is your favorite real estate related book? Let's see.

I'm less about the books that are nuts and bolts real estate and more about stuff that's, you know, a bigger picture, more about planning and understanding what moves. So my favorite book is very Los Angeles specific. It's called Reluctant Metropolis. and it's written by a guy named William Fulton, and it's all about all of the political aspects and other policy making

that's happened over the course of the years in Los Angeles to sort of create both the problems and all of the successes that have happened in the city. Nice. Nice. What about your favorite business book? My favorite business book is actually, I think it's only about 80 pages long. And it's written by a guy named Beau Peabot. who started a company called Tripod. That's his real name.

Bo Peabody is his real name. And it's called Lucky or Smart. And he again started this company that was basically allowed people to build websites back in the early 90s, which was a very novel thing. Sold it to a company called Lycos and ended up being locked into his, instead of getting cash for the investment, it was a $50 million buyout. He got stock in Lycos and was forced to hold onto it for a certain number of years. I think it was like three years.

It went actually just the opposite. It ended up going up tenfold. Oh, wow. He sold it just before the collapse of the Internet bubble because he wanted to buy a house and he didn't understand stock. So he put it all in bonds. So the book is about as an entrepreneur recognizing the difference of when you're lucky and when you're smart. Gotcha. Gotcha.

Lycos was like, that was the Google of the day. That was a great side. I used to love that side. There was a little dog, wasn't it? Yeah, I think you're right. I think that was the dog's name was Lycos. Yeah, something like that. Cool, cool.

Well, it sounds like an interesting book. Hobbies. What do you do for fun? Well, I've been surfing since I was a kid. So I still do that when I get the opportunity to. Where do you surf? I grew up down in orange. County. So my preferences are still Huntington Beach or if I can find the time to get down to

trestles, which is closer to San Diego. I am trying my best to be consistent and find the time to get a pilot's license, which is something I've wanted to do since I was in college. Nice. And it's kind of dorky, but started beekeeping about a year ago. Really? Oh, cool. Yeah. That's cool. It's great. It's great. My brother does that. So it's kind of an interesting hobby. Yeah. And for a real estate guy, watching bees and how they move around the hive and the things that they do is, it's really fascinating. That's cool. My next door neighbor has a bunch of, well, my next door neighbor died yesterday actually. But he had, yeah, he had bees. He's old. He's 98 or something like that. But he had, he has a ton of bees in his backyard. So we get the benefits of the flowers and the garden. Like we have like the best looking, my wife has like the best looking garden in our area because the bees.

I don't know. It's great. Excellent. Cool. All right. Let's move on to my last question of the day. Alan, what do you believe sets apart successful real estate investors from those who either give up, fail or never get started in the first place? Tenacity is certainly something that is going to set you apart.

You know, it's, and that kind of plays in, I guess, to the other thing. and that is being dedicated to it. If you come out, and again, it's so easy to spot the guys that went to the Get Rich Quick seminar over the weekend, calling you on Monday, Tuesday, whether they're calling you as a broker, are calling you to pitch you a deal.

There's a difference people can tell when you're just trying to make a quick buck versus trying to really add value in real estate. So I think that that's important is really understanding where you can add value to the transaction and really looking at it from that perspective rather than how quickly can I turn a buck.

That's great. Yeah, that's great. Well, Alan, before we let you go, where can people find out more about you? I know you've got a website. You want to share that with us and anything else you got? Yeah, my website is A-S-G-R-E-I-N-C-com or Alan-Shon Glass Real Estate Inc.com.

And then, of course, I'm on all of the social media sites on Facebook, LinkedIn, Twitter. Bigger pockets. Bigger pockets. Of course, I'm on bigger pockets. I'm just checking. I'm just sorry. I had a cough, you know.

Yeah, I couldn't control myself. Good job. Yeah. Awesome, awesome, man. Well, listen, we really, really do appreciate you taking the time. And we thank you for all the fascinating insight. I think you definitely opened at least my eyes to a couple things. And my head's starting to spin, which is a beautiful thing.

So thanks for being on the show. We do appreciate it. And we will certainly see you around. Of course, I had fun and I appreciate you guys. Thank you very much. All right. Thanks, Alan. Take care.

All right, guys, that was Alan Glass on show 98 of the Bigger Pockets podcast. You can check out the show notes at biggerpockets.com slash show 98. This was definitely a cool show, Brandon. I mean, we haven't done a ton of commercial shows and the ones we've done. I mean, I really like this one because, again, of that concept of driving value and not just the concept of driving value, but finding creative and clever ways of doing it. And Alan's story about, you know, buying that lot and, you know, just kind of being really smart about what he did with it and, you know, increasing the value by multiples was phenomenal. What I like about it, too, is that that strategy kind of shows the whole, like, mentality of bigger pockets than that. there is no like recipe book on this is exactly how you do a deal like there's no book called how

you to put together a deal with like four different properties combine them together and bring in equity partners and bring in the VA and I'm actually writing that book right now good yeah good I'm glad you are so yeah I thought it was great I thought it was excellent yeah awesome awesome well if you guys if you guys want more like this keep listening if you haven't listened to any of our previous shows definitely get out there and check them out you could listen on iTunes on Stitcher We're starting to upload our shows to SoundCloud. And we're also putting older episodes on YouTube. So we're all over the place if you're looking for a different way to check us out.

There's quite a few methods to do so. Beyond that, just come join us on Bigger Pockets. Bigger Pockets is the place that investors hang out. Guys like Allen who've done a billion dollars in transactions, spend time on bigger pockets, down to guys who are just getting started. So, you know, we definitely recommend you give it a shot if you have. haven't already. Get on and get started. Otherwise, check us out on Facebook, Twitter Gplus, LinkedIn, all the other various social networks and, you know, keep paying attention. Be good to your friends

and family this Thanksgiving and thank you for spending your time with us. And again, I am thankful to all of you guys for being a part of our world and for being part of bigger pockets and the audience of our show. So thanks for listening and we'll catch you next time. I'm Josh Dorkin. Signing it off. 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. Be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online.

Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. form. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calicoke content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing.

You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.