August 20, 2025 · 1 hr 9 min
With Mark Bolour — Multifamily Investor & Operator
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How do you continue to find winning multifamily deals in one of the toughest markets in recent years? In this episode of No Vacancy, Taylor Avakian interviews Mark Bolour, a multifamily investor and…
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How do you continue to find winning multifamily deals in one of the toughest markets in recent years? In this episode of No Vacancy, Taylor Avakian interviews Mark Bolour, a multifamily investor and operator who’s made his mark with smart acquisitions and disciplined asset management. Mark shares how he identifies value-add opportunities, navigates challenging debt environments, and structures deals to deliver long-term stability. You’ll learn: - How to find and evaluate true value-add deals in competitive markets - Strategies for securing financing in high-interest rate environments - The importance of tenant relationships and operational efficiency - Balancing short-term pressures with long-term investment goals - Navigating today’s market cycle with a disciplined approach Whether you’re an operator, investor, or just curious about multifamily real estate, this episode delivers actionable insights from the trenches. Subscribe and Stay Ahead! Stay informed and empowered in the multifamily real estate market. Subscribe to the channel for exclusive insights, rental updates, and expert analyses on the Los Angeles market. 🔔 Don’t miss out on the latest trends and tips to maximize your property's potential: https://www.youtube.com/c/TaylorAvakian 📈 Connect with me: Website: https://www.thegroupcre.com/ Email: taylor@thegroupcre.com X: https://x.com/TAYVAY_ LinkedIn: https://www.linkedin.com/in/tayloravakian/ #NoVacancyPodcast #MarkBolour #MultifamilyRealEstate #ValueAddInvesting #RealEstatePodcast #TaylorAvakian #ApartmentInvestor #RealEstateInvesting #OperationalExcellence #PropertyManagement
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The land use side of real estate sort of takes you away from the numbers and makes it about the people. Can you quickly foster those relationships? We were able to convince everybody that this was right for the community. We bought it for about 9 million. 2 years later entitled we sorted sold it for about 46 million. But I think it's flatter. I think it's more liquid. and I think it's product agnostic.
Welcome to the podcast. My name is Taylor Avakian, multif family broker here in LA and I'm honored to have my esteemed guest on today, Mark Balor.
Mark, thank you for coming on.
Thank you. Okay, so you have a very interesting path into real estate and one that you've self-proclaimed as uh kind of a default. So, can you explain to me your path into real estate and how you became to now have multitude of different businesses within real estate, but a big portfolio nonetheless? So, what's that default? What do you mean by that?
Well, my my path into real estate really started um without knowing much about real estate. I got out of college, studied real estate finance, but didn't go out and work in real estate. I was more interested on the tech side. Um, so I started to think about how to get involved more in tech. And when you figure the mid9s tech was just starting to take off. And um, and it was abstract. It was unknown. And that's what excited me was that unknown and that, you know, new new frontier that that that you could attack. But um I really didn't have the I think the experience, support, um it was a wild wild west and I couldn't really tap into it.
Mhm. So I tried a lot of different things. uh went to China for a while, was looking to export products from America to China, then export products from China to America. And ultimately I got my tech itch um uh itched uh when I wired a building in the early 2000s, took an empty building in downtown LA, historic building on Sixth Street, wired it, took shares in a bunch of companies that were tech companies, and then.com crash hit and you know, everybody emptied the building. So was able to was lucky enough to be able to experiment with a lot of different things and then ultimately um learned from that, become humble and realized I got to start out on real estate from the bottom.
And I started to do some property management work, some asset management work. slowly started to trade some assets and realized that the land use side of real estate was probably the most interesting part to me because it had that abstract capabil that abstract factor to it where it wasn't fully defined and you could create um you could create
opportunities alpha there's alpha in that you're always looking for where that alpha is and did you have family in real estate or was like What was the you know you studied it in school but was there exposure to it before that?
Yeah my father was a passive real estate investor. Okay. So um he ran a operating business uh till he was around 50 and then sort of semi-retired owned some real estate and you know long-term hold didn't buy and sell much and uh so there was some exposure to real estate from from that sector more like a
family office you saw he was able to kind of retire at 50 and you know live a pretty good life you know feed feed the family you guys go on vacations kind of stuff and that's how it all At least in my experience, how people they're exposed to it once and they're like, "Wow, how can I do how can I live my life
like that?"
Like that's that's pretty sweet. You know, you're at the kids games, you're able to go on vacations, you know, you're kind of you're not really sure what they do, but they're on the phone all day and then they come home and you got a great dinner on the table and you're like, "Huh, that's pretty, you know, pretty sweet."
So, there's some exposure that way. There's some exposure, but there was and and I think you learned both positives and negatives from that exposure. I when my father retired I was five. Oh wow. Yeah. I was super young. So um I didn't get to see a role model that was Got it. You know pushing and growing. Yeah. It was a much more um passive and I think a lot of what made me super aggressive to get out and was that I didn't like that pass. Got it.
You wanted action. I wanted action.
Forward movement as you say.
Forward movement. So, um, you obviously have a tech mind, forward thinking, and you look at real estate in a very creative way, which is kind of where the land use comes into. Can you give me some examples of creative thinking or situations where you had to use some of that alpha edge or how you found that alpha?
Yeah, I think I think the land use side of real estate sort of takes you away from the numbers and makes it about the people, right? Makes it about how are you dealing with the head of planning?
Do you have those relationships? Do you have the right relationships with lawyers on your team? Do you have the right relationships in the in the world of unions? Do you have the right relationships in communities? Can you quickly foster those relationships?
And I think that that's very different than how most people think about real estate, which is, hey, I'm buying an apartment building. Let's say it's a five cap. I'm going to clean up the units, and now I'm going to get it to a six cap. Um it's it's it's very clear, but land use um allowed me to get really creative in how I thought about things and how I approached them uh really without
any any boundaries. What were some examples of some maybe some first land use deals that you did where you saw an opportunity?
Yeah. So, um I'll give you an example of a project I did in the arts district where uh one of the things I learned early on was that because of the complications with zoning laws in California, uh which are improving, but it was, you know, 20 years ago, uh it was very difficult to um to do anything different than what the underlying zoning of a of a property allowed you to do. So when um so there was a deal we ended up buying in the arts district that was zoned Mzone, which only allows you to to uh build industrial on it. But we had worked we saw that someone else before us had worked with the city and still had found a way to get 120 units approved to be built on that site with 10,000 ft of retail.
So we bought the site in 2013 in the downturn entitled and then we looked at it and we saw we have a 2acre site. Usually on a 2acre site we feel we can get about 100 you know probably 240 to 350 units. Mhm. So we started looking into it and said, "Well, why did they just design 120 and started to think about what was their process?" And their process was a little bit of a complicated one because they used a adaptive reuse ordinance, which is for rehabbing old buildings to get their entitlements, which was super odd. Mhm. But planning department wanted units in that market so they went along with it. And that's where I think some of the creativity and some of the li
you know lack of limitations comes in where we looked at said well if they got 120 units approved what's stopping us from getting 360 approved. So we then went and was said what's stopping us if if somebody objects to the project or else planning is willing to utilize this law to allow for units to be built. So met with planning, they were on board to go to 360 units. Uh met with the community, uh met with all the different groups and uh we were able to convince everybody that this was right for the community and we ended up doing extremely well on that project. We bought it uh for about 9 million. two years later entitled we sort it sold it to Greyar uh which is a national multif family builder for about 46 million.
Um so yeah so you know it that that capability now my relationships in that area whether it's with my land use team my land use lawyers uh understanding how to deal within the community that was slowly built on smaller projects over a long period of time because you really have to trust your teams. You really have to to trust not only your own instincts but the the information they're giving you. Our won't mention who our land use lawyers were. But they said don't do it. Yeah. And and our our land use consultant said well it's only six months and it's going to improve your you know it's going to get your amount $50 million more.
Why shouldn't we?
Yeah. It's a it's a asymmetric bet.
Yeah. That's super interesting.
So yeah. So it so you saw an opportunity where others may have missed because your thought process is what can I unlock or what what skills do I have that other people are missing and it seems like you look at a lot of deals that way which land use was more of an opaque industry that wasn't as clear-cut because there's different it's the land use code in itself is so convoluted you almost have to have a PhD to understand everything which is where the opportunity is when it's more
difficult it's where the opportunity is and we knew institutions don't want to take that risk. So it enabled us to purchase pieces for a long time in the city and then understanding what institutional real estate groups wanted, we were entitled to that with flexibility so that we could then exit to them because we were we're a builder of smaller projects up to 100 units, but the larger projects it's it's not our wheelhouse to build. So we we usually sell them.
And is that because uh why?
Um for a lot of different reasons. You know, at our core, we're value ad real estate investors. Now, once in a while, we'll you know, develop sites. Uh we have a vertical operation where we design and build in house. And you know, like I said, up to 100 units, that works for us in California. But, uh, anything bigger, um, you're you're operating in another ecosystem, whether it's how you finance the projects, who the contractors are that come in to build it, um, where the equity comes from, you know. So, it just it's a it's a completely different uh, ecosystem and it's not one that we have found interesting to enter. I think when our projects are ready and we sell them to merchant builders, uh we're I think getting such a premium that it almost doesn't make sense for
us to build the projects most of the times. Got But on the smaller projects, I think we're nimble. We're versatile. Uh we do a lot of value engineering up front. That allows us to um to build projects. I think about 10 to 15% better than if someone traditionally went out, hired an architect, hired a contractor. Got it. didn't know, you know, what they're doing is
you you know your niche very well and you know your core competencies and you want to stay within those core competencies.
Exactly.
Because you have a competitive advantage in that. Do you a lot of people are saying right now that land and entitlements people aren't paying for entitlements. Um well it's very hard to develop anyways for deals to pencil. Are you seeing that in today's market?
Well yeah I mean we we see it from multiple dimensions. So our business today is broken down into three components. We have a family portfolio that we've owned now and has grown consistently for almost 40 years. Okay. Uh and we're constantly every 101 15 years we'll buy uh we'll trade an asset. We'll add to that portfolio. Um so that's one component of our business. Majority of family's money, our family's money. The second component is our debt platform. So we became a private lender around 2013. Okay. And we recently that platform we felt with where the market is uh we felt it was a good time to expand on it. So we took it into a reach a private reach structure did a roll up and expanded
the our our uh our footprint to about 20 states around the country that we lend in.
So let me pause before you get into the third one. Can you explain private REIT and then explain how the structure of that was in terms of rollup like go a little bit further into
that. So when we first started uh again going back to our roots we're value ad real estate investors. Yeah. But in 2013, what we realized was that we had the capability to tap into the debt side um because of a lot lot of regulation that came in when Obama came in on banks, banks start to really pull back on lending and it opened up a whole um a whole opportunity for private lenders. Pretty much all your major debt funds were really born around 2010, 2011. uh that have grown into massive debt funds today. So we saw an opportunity there but we kind of stuck to our core competency which was you know we want to invest in deals we understand now we may end
up adding value like entiling them and selling them. We may end up building them but we never thought about well what if we start financing them. So instead of buying a piece of land for $20 million, if we're not comfortable with where we are in the cycle, what if we gave a loan on it for $14 million, $15 million? That way, we're still staying in the game, but we're getting in the game at a lower basis. So even as a lender, we were thinking about things from the perspective of a value ad investor. Got it. Once we got into the lending business, we realized that with good portfolio management, healthy structuring, we saw times where we were hitting 14, 15% returns on
debt. Wow. Now, we use leverage sometimes to get there on our debt, but we also use leverage when we buy properties. Mhm. So what's the difference between using at the end of the day our basis in a debt instrument was lower than our basis in a property and if we're hitting higher returns we start scratching our heads going why are we buying real estate in certain parts of the market. So what started to happen from 2013 till about 2 years ago was we were investing in the product. We understood and we invested on the equity side, on the preferred equity side, on the mess side, on the debt side and we were able to create as you say alpha um
through really creative structuring. As our business grew, we started to see that to scale into the next um chapter of the company, what we were doing was super lucrative but very complicated. So, we broke that's when we decided about two years ago that we're going to break up sort of how we run the company. We have a long-term portfolio that belongs to the family. our value ad deals that we do that are three to fiveyear deals. Um projecting to hit about a 20% irr on those and then our debt platform that we set up which we project to hit about a 12% return annually to our to our limited partners in the fund.
Got it. Now why did we go into a fund structure? Well, after you do something for about 10 15 years, you get feedback from investors. And we we um have over about 100 investors today in our debt fund, all family offices, high net worth individuals. We don't like institutional capital because it limits us and we are a tad bit contrarian because we're still a real estate company playing in the debt space. Mhm. So we learned from the feedback we got. One of the feedbacks was, "Well, when I invest in debt with you, Mark, everything you pay out in interest, even though it comes to me quarterly, it's ordinary income." Well, one of the things about a REIT structure is that you get a 20% federal tax reduction because of the
structure. So moving our platform into the structure was beneficial
for the investors.
for the investors. Um the second part of it was some of our facilities were uh to the fund or or some some of our a lot of our debt was recourse to me personally and I realized that the fund structure allows that. So it was beneficial for us as a general partner also because you're okay we're okay we were okay taking that recourse for some time but then as things grow you want to you want to avoid it protect yourself and also a consolidate portfolio gets us better rates. M uh the other part for why we why we did it was pure diversification. You know, the capability that if we have an asset we're foreclosing on now each, which is rare. We've done over $800 million in loans over the last 15 years, foreclose on three assets.
Wow. So, we're we're pretty good at picking what we lend on. Um but at the end of the day the geographic diversification which we saw was super important when COVID hit um the product diversification which again uh you see constantly in real estate you have a darling product and then suddenly it's poof. Yeah. So the fact that we can bring that diversification into our platform allows us to create a more consistent return
and consistent cash flow to our investors. And what's the goal now? Is it to continue to grow each of those evenly? Are you spending more time on the debt side? like where
the market right now is an interesting place where it's still you know debt market from a national level is still pretty high compared to what it was which leads to better returns from you know lending on on the private side like what is your goal right now with the
companies so our goal with the debt fund is really multiplefold we we committed to not taking institutional capital we want to grow that platform to about a billion uh a billion ion dollar portfolio across hopefully 30 35 states. Um what so so that geographic diversification we like it a lot and we like learning about new markets and and exploring them. Uh we're very conservative. We for at least two three years we explore we look at deals in the market before we start doing them. We have legal teams that we set up due diligence teams we set up in those markets. So um so one expanding the markets, expanding the size of the platform um creating more diversification um and also with our
capital being mindful of having a nice diverse base of investors that um that allow that allow us to actually um do other things with them. You know, I have investors that invest on our debt side and we're doing JVS with them developing their properties. Uh we have people whose kids launched companies and I'm investors in those companies. So I think you know it's more longterm in the relationships you build the way we're building our business. Um it allows us to be a little more contrarian than the market and I think it provides more stability.
What do you mean by contrarian specifically for you guys? What what is your contrarian view?
So, for example, if you go to any bank today, and I would tell you probably most debt funds, and you tell them that there's a deal on California Street in San Francisco, it's an office building. Probably was valued at a$1,000 a foot before COVID. It is potentially being foreclosed on, let's say, in the next month, and there's a buyer for it at $400 a foot. The buyer is a family in San Francisco, has been in the office sector, owns office, knows how to manage it, and they want a loan for $270 a foot. You don't have a lot of people who do that deal. Now the reason we do it is because we understand a lot of the business plans that are because being a value
ad investor and not just a lender. When someone brings us a business plan, we're going to we're going to evaluate that business plan very differently than if you're a bank, the business plan is being evaluated based on how the Feds are going to come in and audit your books. If you're a debt fund, you're looking at it in a different way. We're looking at it as a basis. Our basis, even our borrower's basis at $400 a foot, $350 a foot, buying that building, bringing in fresh cash into it. They're not going to they're not going to, you know, lose money on that. Now, their approach may be to hold it long term. They may not be IRR driven. They may be okay. Maybe a family that wants to be in San Francisco for the next 30 years or an investor.
So, it's a little bit of a different approach in terms of who the buyers of some of the assets are today. Um, but I think that when I say contrarian, no one's a lot of lenders won't go into that market, you know, or on the flip side, for example, on our equity side, I think a lot of people are running away from Vegas industrial, there's a over supply. Um, there's a lot of Aclass built. It's not getting absorbed. We're leaning into it because we think there's value there.
Why?
A lot of institutions have gone in and built. They have to get their money back, go invest it somewhere else. So, they're taking discounts and building that was trading for 250 a foot. Probably cost 150 a foot to build. We're potentially under contract to buy for about 110 115 a foot hopefully. Interesting, right? because and we're okay in our long-term family portfolio dumping that asset knowing that over five 10 to 10 year horizon that's a $250 asset. The Vegas industrial market's not going to go away. Yeah. It's only going to continue to Yeah.
So you see opportunities in situations like that and because of the way that you're structured, you can really go a bunch of different ways. You can go on the debt side, you go on the equity side, right? You can you value add it like you have those those different arms. terms of the business to really be able to take on almost any situation which then allows you to see more opportunities because people can come to you for almost
anything. Exactly. And we do it with like-minded capital. M majority of our capital are family offices from around the country, investors out of New York, the Midwest, who and you know anyone from groups on the tech side who have sold businesses to other real estate investors that aren't don't have their own debt
platforms. What do those investors care about? Is it is it do they want to see a check every quarter? do they want to like what what makes a good LP I guess and and what makes a good GP?
So it's it's it's a little diverse. Okay. So we've actually done a good job tapping into the tech sector and a lot of the guys on the tech sector, you know, tech guys made their money in tech. They sell their companies and then suddenly they're like, "Okay, I'm going to go put more money in tech." And then their financial advisors tell them, "Hey, you don't have a job. You're buying a plane, you're buying a lot yacht, and now you need cash flow." Yeah. So suddenly, you know, working with a group like us where they're getting that 12% return on their money, 10% return on, whatever it is that that quarter, um, starts to give them some really consistent, safe cash flow that they're not going to get in another place. On the real estate side, I think there's a lot of interest from groups that
are investing with us because we can do a lot of different things together. So, we'll have families who invest with us and like I said, we'll, you know, they're not developers, but they are they have substantial real estate portfolios and we can think about how to work together from that end. So, it's really more about building partnerships with the groups that invest with us who are real estate families. Got it. Um, then you have your, you know, other groups that are just, you know, multigenerational families, uh, who just want fixed income and want to invest in alts. You know, it's whole another lingo. You know, we're an alt, right? So, who want to invest in alts, but also when you look at what's out there, you know, from your Blackstones and those other groups,
uh, their returns are much lower than ours. Interesting. Okay.
Because they're bigger.
Yeah. Because it's it's they're less they're less nimble typically. And they're less nimble. And I think the people we work with care about the relationships.
They want to build the relationships. It's important. the trust in this business is like the I would say one of the biggest factors in in raising money or or keeping money, right? Because you it's one thing to raise money, but it's it's another thing to keep that keep that relationship going. You want to keep long-term relationships where people will continue to recycle and invest further and okay, we made some money. Reinvest that in your next opportunity, right? Like you're you're producing for us. We we want to reward you for that by giving you our money to go and make more money with, which is very important. What do you see as the best opportunity? You were talking about Vegas, you were talking about San Francisco. Where do you see the best opportunity right now in this market?
I mean, you know, with us, I think we still on a lot of our investments are California-based because we understand this market. Um, we're buying anything from value at supermarket anchor shopping centers because we think cap rates are going to go down on those centers over the next 24 months. Uh we have a construction company um uh that does a decent amount of tenant improvement work and TI work uh that really helps us both in terms of starting and stopping construction being more fluid with how we do construction um which I think um becomes super costly when you're working with a a third party contractor but uh if you own the company yourself Um, so we
still feel like California has a lot of opportunity. I think basis is low right now. So I'll give you some examples from a supermarket anchored shopping center in North Hollywood that we're revamping to large 70,000t industrial facility in Pquima that we're buying now and turning it into a multi-tenant. We're chopping it into 7 10,000 square foot uh spaces. We see a lot of demand still for smaller space uh and a market with less than
1% less than 2% vacancy factor. Um so the product's been sitting because it's large but we feel that you know uh multi-tenant facilities are kind of the darling right now the industry sector. So, uh, working on that. We're working on a couple of industrial projects in Vegas, uh, which I mentioned, um, all the way to strip retail in Hollywood that's rents are low and doesn't look cool and we're going to make it look cool and hip, uh, and, you know, retenanted. Um, how do you how do
you continuously learn about where the next opportunity is? Cuz you seem like someone who's pretty forward thinking and and trying to find out where the next opportunity is before other people. How do you find those? How do we do it?
Yeah. Okay. So, one of the things about a lot of people again who run debt platforms, they're running them to make loans. We run debt platform, our debt platform to make loans and to make money, but we also run it to build relationships. Uh we get about some crazy number $40 billion of deals that go through. We mostly work exclusively with mortgage brokers. It's very rare that we're working with anyone directly. So um our tentacles have completely gone into the debt markets over the last 10 years with the majority of the of the mortgage banking firms on a national basis. JLL, CBRE, Walker Dunlop, we we work with everybody. So when you have those relationships across the
country, um even what you may do for your own portfolio will incrementally improve. you'll make a incremental better decision. Mhm. Uh so that's one area. Another area is um we have a we we underwrite our debt deals like we underwrite our equity deals. So when you're looking at deals in a lot of different markets in multiple product classes, you're able to kind of see
inconsistencies. you're able to see. I'll give you an example. I had a borrower in Houston in in 201 I think 134 that I gave him a small loan. It was actually the first time I had lent outside of California. Um gave him a small loan, got super interested in the market, spent some time there, and after about 6 months, he paid me off. And I was scratching my head going, "How is this guy paying me off after 6 months?" went down to Houston again, spent some time with him, took me through what he did, and I saw a really talented guy and and I said, "Hey, do you have any more money?" He goes, "No." I go, "You want to partner up?" So, we partnered up and we ended up buying about 5,000 units there, all distressed. Crap. In 2013. And it was because in the research
we did at that time, we started to see why distress was occurring. I'm not going to get into it now, but there's there's imbalances that you can see when you're not honed in and focused only in your own world. So, when before we left California, we were just looking at California. But when you go to every major city and you see, oh, there's a downtown, oh, there's an arts district, there's a Dallas arts district, there's Atlanta arts district, there's a LA arts district, you start to see that a lot of the major cities have a lot of similarities in how they were developed, how they work, how they function. But then they also have differences and they have and there's opportunity in those differences. you combine capital markets that that operate more from a national
perspective versus a local perspective, right? And you start to see these um these opportunities and the fact that we're seeing, you know, 600 deals a month in our on the lending side of our business. We're seeing about 100 deals on the equity side of our business. Um, and we've built ways, communication mechanisms within the company for that information to get shared. So when we're ready to do a loan, it is not just me and the investment committee, our acquisitions team is also sitting in and listening and understanding why we're doing that loan. So that capability to educate both our lending team based on deals that we purchase and also our acquisition team
on on where we lend builds a knowledge base within the organization that allows us to be much more um uh entrepreneurial um move on information act on information that we get.
So, how do you think about operations in the back end? Because it sounds like you've built a system that really is unique in that structure where it is kind of, you know, parallel across every part of the business. How do you think about that or how have you guys built that?
Yeah, that's a that's a great question. We've we've suffered a lot uh in building it. I mean, imagine when we were investing on in every part of the capital stack. I mean, try to hire an analyst and explain to him you're going to underwrite multiple different products and you're also going to underwrite them in different states and you're also going to look at opportunities and alpha and different parts of the capital stuff. These guys were putting up their bare hair. Yeah. Um, couple of different things I think have really helped us. Um, one is we embrace I think unlike a lot of older real estate firms, we embrace the technology that's out there and we're constantly integrating new technology and we're constantly thinking about how to build the base of things in the company around all of our business sector.
So, I'll give you an example. Um we about a year ago we started to realize that um something as simple as our underwriting model. Acquisitions had their own, lending had their own, development had their own and everybody had their own underwriting model and then we have someone who handles all of our debt and then they they have their own model and then we have our accounting system and and our accounting system is tied to our underwriting models. And we looked at and said, "Hey, this is super inefficient. Let's take a step back and let's build a base model that then can be can go into all of the different sectors, our asset management team. So today, whether it's our chart of accounts and our accounting system and how it ties to the models and specific models, maybe we have
seven different ones for different parts of the company. Mhm. But the backbone and how they work and how they're built and how they look is all the same. So that then allows us to also do things like utilize resources from different departments. So suddenly if we start to see that our uh acquisition department needs some help, it's very easy for an analyst, our lending department to jump in because the tools all work the same and it's fluid. M so I think a lot of good planning around systems uh a lot of good uh clear clear uh tools that are built to be
used companywide starts to build more consistency and allow for that operational efficiency to occur even though you're running multiple different businesses.
What are the tools that you guys use specifically to to run a business this big? Because I'm sure maybe people think, you know, most people they got an Excel model and uh maybe some people use Argus sometimes and maybe they use QuickBooks to to keep the stuff like what do you guys use?
No, we we we have to use we use two different accounting systems, but Yardi is one of them. Um we don't do any accounting anymore. We have a third party group that handles all of our accounting. So we also took out what way what we felt doesn't add value and we and we outsourced it out of the company. Um we we build a lot of stuff that's proprietary. Sure. Um but right now we started to see for example in our lending business with the number of deals that come in and the amount of information we want to we want to extract keep utilize for research utilize uh we start to realize that that's inefficient and we were starting to outsource it to the Philippines but then we realized that we're we're wasting our time and we got
involved with a group uh that's building a whole AI platform that allows super efficient uh intake of our deals. Mhm. Preliminary assessment uh getting information out of whether it's packages, memorandums, emails, consolidating it all together for our analysts, uh saving it in our CRM systems. Um so that's a project we started about nine months ago and it's sort of in its initial
stages of implementation. Yeah. Uh so that's like something interesting when I think uh you know a lot of you know a lot of real estate companies they I think I feel like they don't either want to make that investment they don't want to make the investment in the time. Cost I don't think is a big deal but it's just another way of thinking. Yeah. And when you're building a company, you have to operationally build it for the future.
So, let's dig into AI a little bit because I'm I'm a nerd about AI. It's just um it's almost like the the the first conversation you have with chat GBT, right? People are like, "Okay, what's this AI thing about?" And they go and type something into chat GBT and it's like, "Wow, okay." That was a light bulb moment for me where it started making the wheels turning and thinking about my own business of where can I become more efficient? Where can I start getting alpha is is the phrase I'm going to use to be better at what I do. What do you see now currently as you talked about the infrastructure but also the future of where you're trying to implement this tech into your own companies to continue to give you that
edge. Yeah, I think it's going to I I think it's going to come in the area of anywhere from deal intake all the way from to deal approval. You're going to see an integration uh the capability to integrate data that comes in into information systems and contact management systems like Salesforce that that's easy. And then how do you then take that the data that you have and then further integrate it into into um your underwriting models? There's a lot of companies that are popping up that we're talking to that'll be able to create that integration. Mhm. Uh and then from there um if for example we have uh um uh we have investment committee memos that get uh produced
uh where you're taking everything from the results of your phase one and your appraisal and uh and we feel that within the next 24 months max the 80 to 90% of that work and that integration will be AI generated. Wow. So when you think about it, we in our business, we used to on the debt side, uh we used to think about, hey, one originator for us was going to do with, you know, our average deal size about 8 to 10 million, uh is going to do about $150 million with two analysts. We predict in the next year that'll go to 250 million of production with two analysts.
Wow.
Yeah.
So that only and and how big is the current team? How many people do you have working for the company? We have about 35 people right now.
Okay.
So I mean if you think about that from you have a billion dollars but you basically have the capacity to do almost double that with the same amount of people and overhead is a big you know a big one of the biggest costs for a lot of companies. So, if you can save on that, then the margins become that much juicier and it just becomes this endless cycle of like optimization and really being able to squeeze everything out
of it or like we have in-house legal because we do a ton of we're anytime there's always 10 15 leases our working on and so we figured out a system uh to be able to generate our leases much quicker using the ai platform and he's starting to implement that now. Wow. So we're assessing it across the whole organization. Um you know techn is out there. It's just about
implementation and you obviously to to take a different angle from it. You have this tech mindset. You wanted to again get in the tech industry did get in the tech industry and shift that to to real estate. And so it seems like a lot of you still have that mindset of wanting to have integrate the new technology of these big companies but into this ancient business that is real estate and combining those to make something that is truly unique and your structure and give you that advantage. Now as you as a person right what lights you up? What is it about that or what you're building that gets you excited? What's what's something that for example like you are so excited you can't even you know your alarm goes off but you're already up because you're ready to go and do something. What is that currently for you?
Um
honestly when my alarm goes off because I got two kids going off to college is to go to their room give them a big hug and a kiss because I'm not gonna be able to do that in a year. So that that's that's what fair enough. But but from a business perspective, you know, it's building a building a company that is a real estate company that's super advanced in terms of how it works, in terms of its processes. Um you you got to understand is every time you implement new technology, you also have to have a team and people that are willing to adopt it and utilize it. And when they're doing their own work and they've learned how to do it, you know, for 30 years, you cause disruption in your workflows. Mhm. So, we're causing disruption our workflows
continuously. That is not how most real estate personnel and companies operate. So, you have to hire people that like that, that enjoy that. Um, so and and and are okay with it and see the advantage of it uh in terms of their career. So we talk to our in-house lawyer all the time where you know I'm 52 I think he's like 52 53 and I'm like you're going to be a dinosaur in the legal world world or you can hopefully you're here or leave here in two years and you can be a rock star. Which one do you want to be? Because it's not going to be about your legal skills. It's going to be how efficiently you can get things done. You have the legal skills. Yeah, totally.
It's the systems. It's the systems. And I think we're headed towards creating a great amount of efficiency around things. Um, and I see major opportunity to do that in real estate. So, that's what that's what excites me. Got it. I've been doing this for almost 30 years. I've bought deals. I've made money. I've sold deals. I sold deals I never thought I'd be able to sell for what I sold them. I bought things. So, I've I've that transactional high.
Uhhuh.
Yeah. It wears off. Yeah. It wears off. Yeah. Uh but I think uh when you build a company, you develop people, you uh watch them grow, watch them succeed. Um I think that's what excites me the most
today. What's the biggest risk that your company's exposed to? What is the thing that you think about that could disrupt what you're doing andor that you need to keep an eye on?
You know, it's interesting. I think most people would in real estate would answer this from a market perspective. Um, we're not a highly leveraged firm in terms of our family portfolio, in terms of our value ad portfolio. Um, uh, we're diversified. Um, I I don't worry a lot about the economics because I've I've seen that if you don't have a solid team, and this is what not this is where I'm where I see risk. I don't believe I have the risk, but this is what I'm most conscious of. You have to have a solid team. And when we see cancer, which sometimes creeps up in a company, um someone who's, you know, doesn't share your values, uh doesn't see the world the same way, doesn't know how to work with
team members. Um I think that's the number one risk I see is that the ship's getting bigger. I may still be at the helm, but as it gets bigger, you need a great team. Yeah. To work together to push it forward and I think for me it's all about am I making the team better every day.
Interesting. So which actually brings me to something I'm I'm also curious about like what does Mark Bolure's day look like? What does a typical day look like for you?
Oh wow. Typical day I typical day I starts out you know most days I work out in the morning. Okay. Um, uh, I start my phone calls on the way to the workout because we have people, you know, in New York and
who are you talk what are you, what are these calls about? What are you talking about?
partners on the east coast that I want to check in with on a 15minute drive that I just know throughout the day it's going to be more difficult, you know, get a good workout in, go back home, get ready, and um I'm all over the place, you know, uh I have great staff that's constantly moving things along. That's dayto-day. Um, but I'm doing everything from thinking about the review system in the company and how to improve it to stopping by a construction site. I look at where I see there may be a void because of the growth that's getting created and I
just try to jump in and see how to better build systems to get rid of those voids. And sometimes you can't do that unless you're in the middle of it. Yeah. But then I go and I figure it out.
I delegate it out to one of my people.
Kind of the Elon Musk method, right? But I but I feel like I I don't know what Elon Musk's method is, but I got to
be it's a bottleneck theory. Basically, you you you're this is my perception of it, right? When you get to a point where you don't have a necessarily day-to-day responsibility, maybe you're signing checks or anything, but your job is to make sure the company's moving in the right direction. And so, you get to see a bird's eye view of everything
that's happening.
So, you can spot where a bottleneck is or when an inefficiency is or when something does not look right. And you can go and try to tackle that problem, fix it or tell someone how to fix it, delegate that and then step back in your bird's eye view and continue to monitor the whole situation and go where you're needed where it seems like you've built a business at that point where you're not necessarily required for any one thing to keep moving, but your job is to make sure that when situations done do come up, you can come in and make sure that they continue to grow and and
work. Exactly. And and you know the other area is a lot of the projects we have around LA because they're in LA, they're close by. Um especially the way we do things, it's very dynamic. Um unless you go onto a job site and you're there with the team, there's certain things you don't see. M and we like creating great spaces whether it's a in a medical building, in an office building, in a retail. Um we have a lot of vision and we kind of believe you build it and they'll come. Mhm. So, it's a little different, you know, where we're trying to predict what the consumer wants when a lot of real estate landlords are sitting there going, "Well, when the consumer comes and tells me what they want, I'll then build it for them." Got it.
So, we flip it on its head. We flip it on its head and it's been very successful for us. Um, again, not with super large spaces, but um, like in the office sector, we spec everything below 10,000 ft. Most people think we're crazy. Yeah, we we feel like we can create great spaces and they'll rent.
We'll uh we'll circle back to that, but I want to ask you, what do you think your superpower is in terms of what do you think makes you unique and what you do and what what what do you think you do better than anyone else?
Basically, I I'm very good at seeing where communication is broken or can break down and implement and um I'm sorry and um impede execution.
Can you give me an example?
Um yeah. So, let's say you have a architect and a contractor on a job. I I'll I'll give you a better example. When I hire my lawyers, I tell them always, if we take the lawyer out of you, we can work together. Um, what do I mean by that? Lawyers, they think in a certain box. And if they don't start to think, I'm talking about my in-house lawyers. And if someone's in house, you really what makes them a great in-house lawyer is being able to or general counsel is being able to really see both perspectives, that legal perspective and that business perspective and bring them together and finding solutions. Okay. So, you know, I can't with I would say hundreds of documents going through my office every month.
I'm not capable of sitting there and reading every one of them. Yeah. But I know how my different lawyers think and I know where their weaknesses are in terms of being able to connect certain things both on from a business and legal side. They're all great lawyers from a legal perspective, right? But if you're you have a situation where you have one day to produce a PSA and seven days to close and you have a great lawyer, well, that great lawyer may bottleneck because of their greatness, create a bottleneck. So, do you have a lawyer that that understands how to how to shift or are they so risk adverse and so concerned because they feel they have to protect you? It's not they just want to they want to protect you. They're not trying to be a Right.
Yeah. So, if you really have that guy who's just trying to protect you all the time, but you have a deal that you got to, you know, do do DD in 24 hours and and make a decision because you're buying it at 50 cents on the dollar. Well, I'm very good at seeing that disconnect and being not not just jumping in and taking care of myself, but walking that lawyer through M right. Yeah. Walking it through it and supporting them through it. A and just knowing that look, no one's perfect, but I'm going to be needed to bridge that communication gap. See it a lot with architects and general contractors, right? Uh you'll see it um uh cross departmentally in a company,
you know, like different silos. You're really good at being able to be the bridge between different silos because you see everything, right?
But not just also on a very big picture level. Yeah. And understanding how communication systems need to be put in to mitigate around those
things. What makes a good CEO leader?
Um I think first and foremost you have to care about the people who work for you. starts there. If you don't care, I don't think it it
works. What does it mean by caring?
Um, I think I think to be able to truly care, you have to have enough capacity and enough space within yourself to see things from someone else's perspective and then to be able to join them where they are irrespective of where it is and help them. M so and I think that a lot of times when people are running companies or you know you can always be authoritative you can always you know dictate delegate but being able to take a step back and say okay I have a great person nobody is perfect I have a great person but they lack this one thing how do I shift that in them how do I work through um how they're dealing with their
teams to help them overcome that deficiency, how they're um delegating things to their team, how they're working with their uh with their people. Um and I think you have to care to improve people. If you don't care, then you're not going to make them better. Yeah. Um, so if you are in a system that's a growing system as a leader and and it's moving fast and changing fast, you what gives people who work for you the courage to change is I think if they know that leader
cares. Totally 100%. Um, if you Mark, if you had to start over, right? Um, you're 20some years old. You have the knowledge you have today, but you had to start over from scratch. What would you be doing? Where would you be focusing? Like, give us 2025, 25year-old Mark.
Yeah. What are you doing? I would have I would have I I wouldn't have done anything differently. I love the fact that I explored and I had the opportunity to explore a lot of things um before I got serious and found my niche. I think everything I did developed a part of me that needed to be developed to become successful. Um, so starting out I wouldn't have done anything different but I would tell you the focus shift making that shift from being a transactional junkie to being a leader and building a company. If you told me one thing I would have liked to do sooner, it would have been to be able to see
that that side of the business and the value of building platforms, the value of building a company. Um, I think I was so dealocused for a long time and it was it was great. That's that's what was needed at that time.
But there's a shift in it.
But there was a shift and I don't and I think that I could have made that shift
earlier.
Got it.
What about today? You're 20, right? Let's let's say not what you would have done, but like you're you roll back. You're 20 years old right now. Like are you going into real estate? Are you going into tech? Are you um you know, you're talking exactly to a 25-year-old right now. Like what are you telling them to do? What are you telling them to learn? What are you telling them to focus on?
So, I'll give you a super good example. My my own son Yeah. who's going to Cal.
Y um he made a choice to go to Cal versus UT Austin for example that he got into and some other schools where purely it was because Cal and Stanford are at the heart of the tech industry and you when you're in that ecosystem things happen. you start to it it starts to get embedded in you and it's a different ecosystem. My son's doing a program at Cal where um it's a biotech entrepreneurial biotech program uh which is a combination uh of the program with you know studying business at HOS. So, um, in retrospect, I would have taken a little bit of a of a different route. Um, and so with my own kids, that's what I'm pushing them into because I
think I think I think the best real estate investors are people who know how to build businesses. Okay. the when you go onto that tech side and you're creative and you fail and you fail and you fail and then and you're aiming big. Mhm. Right. You're thinking about real estate from you're thinking about it from the perspective of multiples and valuation and how you build a company. And I think that even if my own kids go into real estate, I I'd love for them to go at it from the perspective of not I'm going to buy an industrial property and I'm going to sell it and make x amount I you know 20% irr, but I'm going to buy
700 industrial properties because it's the right time in the economy to do that right now and I'm going to be able to put a proper platform together where that platform ultimately has enterprise value. Yeah. Right. 100%. So that is where um where I think real estate's more and more interesting is you don't have to just set up a set up a company for the purposes of um you know doing deals. You can build companies that have value. And I think people who go on to that tech side that's on steroids.
What do you think the next top operators, the next billion-dollar operators or real estate owners, investors, what does that look like? What is their You kind of dug into a little bit, but what do you think the next superstar in real estate looks like?
What company are they going to build? What is it? are I think about this a lot so I'm just curious to know and
it's definitely a tech component I think enterprise value is huge definitely tech component I think there's another I think the world the capital markets are becoming more international and I think that when you think about um where capital comes from what source it comes from I I mean 10 years ago, 20 years ago, someone would have told you there's a RAIA who's partnering with a developer to build a building.
What you know?
Yeah. Um I think how you raise capital is just shifting in so many different ways. Um there's a company we participate with on our loans. So if we have a very large loan, we'll participate with them. They raise approximately $120 million a month on an average $100,000 check from accredited
investors. Is that Janover?
No, it's called Yield Street. Okay. They're out of New York. Okay. Um that's fascinating. Yeah. Wow. $6 billion aum. Majority of the money is raised on the internet. Geez. Right. So I I think that the companies that are able to tap in from a capital markets perspective, smaller checks in terms of how they raise their capital, utilizing the technology to make that process more efficient. I think I don't know if you've heard about uh this concept of tokenization. Yeah. So I I think you start to combine raising a tremendous amount of money in small
increments tokenization and being able to utilize that technology being able to then slowly there are some secondary markets that are creeping up slowly. Uh so that's going to create more liquidity. So, I can't tell you exactly what it would look like, but I think it's flatter. I think it's more liquid. Um, and I think it's product agnostic. You could be I I I think what's going to make that group successful is not going to be about being in Georgia or Arizona or California or in multifamily or it's how they how they source their capital and how they run the
company. So interesting to me because I thought about the tokenization with the blockchain and everything and it's it's I always came back to like real estate is there's tenants, right? And there's termites and there's toilets and there's things that actually someone's got to manage that and someone's got to deal with those situations. And there's nuances where if an investor from Georgia came and tried to buy a rent control building in Los Angeles, like they'd probably get their ass beat because it is freaking hard. It is very hard, right? And so you kind of need that special skill. And so my thought was, okay, there's this tokenization stuff, but you still need an operator
to run it.
And then how do you what percentage of the building is tokenization? How do you create liquidity? It's it's again I don't have the answers but it's just very interesting to me because it does feel like you know eventually real estate is going to be traded like stocks. Um yeah at a certain at a certain level right
so the tokenization is easy. There's companies already doing it. Yeah. Black rocks you Yeah. Um that's not the difficult part. That's the technology. Um there's the SEC and the regulation part which is getting resolved right now because the new Treasury Secretary is very Yeah.
Regulation B it's where you can raise there's like an easier way to see if someone's accredited, right?
Yeah. Yeah. So you have that component that's being worked out and then I think um the secondary markets can't form until those issues work themselves. Got it. So the liquidity will come and I think that's going to enable a lot of capital to be raised in smaller increments and the technolog is already set up now to do it. And I mean when we talk about Yield Street, you know, you're not talking about someone who's investing in funds. Yeah. This money is being invested in individual deals. Geez. Right. So that's a that's a phenomenal platform. I mean from a diversification of investor base you know uh to
product it's uh and that's just I think the beginning.
Can you tell me a little bit about your angel investments and what your philosophy is on that? You said you invested in some companies and some things. Do you is that for fun or is
that It's for fun. I would say to you that it's in all sorts of sectors. I just like I bet on people. Yeah. The horse. Yeah. It's all about the horse. Yeah. And um and I'm good at that. And I think that's why I'm a good lender because still today uh our volume is at a place where I can meet the lenders. I can, you know, go out to the markets myself and I do that because I learn. Mhm. Um but you know, it's a joke in our office where I could tell you who's going to default the day we make a law. Yeah. Uh because once you just understand people, you're able to see those
things. Mark, this was incredible. Thank you very much. I appreciate this. This was I'm sure we could dive so much deeper into all this tech stuff. Maybe we'll have to do a round two, but I appreciate you coming on.
Yeah, my pleasure. Thank you. Thank you.