How I Turned Student Loans Into a Real Estate Fortune – Mark Weinstein Story!
With Mark Weinstein — Founder, MJW Investments
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Navigating Real Estate with Mark Weinstein: From Law School to a $1.5 Billion Portfolio In this episode of No Vacancy, host Taylor Avakian chats with Mark Weinstein of MJW Investments, who has been…
Navigating Real Estate with Mark Weinstein: From Law School to a $1.5 Billion Portfolio
In this episode of No Vacancy, host Taylor Avakian chats with Mark Weinstein of MJW Investments, who has been in the real estate business for over 40 years. The discussion covers Mark's journey from a law student with no real estate knowledge to managing a $1.5 billion portfolio, comprising apartment buildings and student housing. They delve into the intricacies of the 2008 financial crisis, the volatility of property investments, and the importance of a strong team and investor relations. Additionally, Mark reflects on his philanthropic endeavors, the challenges of homelessness, and the private sector's role in addressing the issue. The episode offers market insights, practical strategies, and personal anecdotes, making it a rich resource for anyone interested in real estate investing.
00:00 Introduction and 2008 Real Estate Crisis
00:41 Meet the Host and Guest
01:29 Mark Weinstein's Early Real Estate Journey
02:48 First Property Purchase and Student Investors
05:34 Expanding the Portfolio and Philanthropy
08:07 Challenges and Lessons in Real Estate
15:30 Student Housing Ventures
21:13 Receivership and Asset Management
23:55 Advice for New Real Estate Investors
31:27 Off-Market Deals and Value-Add Strategies
32:15 Deciding When to Sell and Market Selection
34:14 Building and Growing a Real Estate Team
35:41 Strategic Initiatives and Property Management
37:41 Daily Routine and Work-Life Balance
40:06 Investor Relations and Market Trends
44:58 The Power of Mentorship and Personal Growth
49:32 Mindfulness and Business Impact
58:40 Philanthropy and Community Involvement
01:07:55 Exciting Future Prospects and Conclusion
my partner went 100% over budget I said well this is 2008 I don't think it's a good time to go into real estate 2008 was a bad dream the housing prices collapsed the mortgages couldn't be paid and the banks essentially became insolvent you guys have any student loan money you have any work money anything give it to me and we're going to buy this property how do you determine when to sell a property buy these properties hold them long term and I think values do eventually you know get back up again this is Los Angeles I mean you can't replicate it from around the
[Music] country welcome to no vacany where I share conversations with LA's top multif family owners investors and Visionaries I'm your host Taylor ven the founder of the group SI and I specialize in the sale of apartment buildings in Los Angeles on this show we cut straight to what matters Market insights and real world strategies straight from LA's multi family icons to help you navigate one of the most complex real estate markets in the world Southern California
enjoy welcome to the podcast my name is Taylor ven I'm here with a fantastic guest an incredible owner operator been in the business for over 40 years and uh Mark Weinstein from mjw Investments mark excited to have you on appreciate be here so we're GNA just dive right into it um I know you've been doing this for a very long time can you just give me a little bit about a little bit of the background and how you came to have a portfolio of over one and a half billion dollars asset under management and then um yeah why why we're here today
well start started very simply um when I I grew up kuker Park and went to undergrad at Center Barbara ran track and then when I was going to law school um what I saw was that people that could do philanthropy and do all the things that I wanted to do were owning real estate real estate seemed to be a vehicle upon which people became wealthy and independent and so while I was in my first year of law school I decided I was going to look for for properties even though I knew nothing about it I didn't have any money I had a negative net worth I went around and looked at properties and didn't really find anything and in my sophomore year or second year in law school I found a building not too far from school it was four units um and a house and I said
okay great I found something and there was an assumable loan on it so I figured well maybe I could talk the banker into letting me assume this loan because in those days you could actually sit across from a banker and and talk to them and so I went to school and I said to my fellow students I said hey you guys have any student loan money you have any work money anything give it to me and we're going to buy this property and we'll make cash cash flow and it'll be really good and so we got the money from students and other people you raised your First Investors were students they were students and it was a lot of their student loan money um and so there was one guy that his girlfriend was yelling him in the hallway don't give your
money to Mark that's ridiculous to buy this real estate you know you hardly have any money and but he did it George show it was his name he was one of my classmates and so we bought the building and we we ended up um fixing up ourselves painting being involved in it where was this it was in uh was on um West Morland by Venice bouard in like uh K Town in K Town it was in K Town in law school Lea law school is downtown also so so I lived at Burlington ninth in Burlington yeah 900 block yeah so that it was quite a um interesting neighborhood that I I was living in when I went to law school but yeah so we found a a five unit building and that's how it started what do you remember the price it was like aund and 20
128,000 and you had to raise what like it raised like 25 or $30,000 okay and and the loan was assumable I remember that I remember I I actually can visualize sitting um in front of the banker trying to convince him that even though I had a negative net worth he should have let me assume this loan you know literally I had I owed loans and I had no I had no assets you know so it was you you know those days they they it was really kind of they trusted you they they consume the loan yeah wow geez I know that the no do no no do or whatever oh I don't know about docs but I'm sure there were documents but it was it was more of a that a banker in those days really was a person that if they approved you you could get things it
fix it up or what was the yeah well I mean we just went through the units and upgraded the units and and made them nice and and then when tenant were leaving we were getting higher rents and you know nice cash flow and we held it for a few years and it's interesting um we decided that we might want to sell it a woman that I um that was kind to my my secretary she bought it so she bought yeah she in house yeah she she bought it and um yeah she still she still owns it to this day do you remember what you sold it for I do not remember exactly I think it was in the like 200,000 made a good return made a nice return on it and um yeah so it was good and then how
the country well um I practiced law for a couple years and while I was practicing law I was you know doing this syndication like where I'd get other people to give me money and we' buy buildings and then eventually after about three years of being a lawyer I went into it full-time initially full-time investing full-time investing initially I was doing uh these rehab units in in Pico Union area and my partner original partner was my best friend from Junior High Joel fiser who's a very great um Builder residenti he builds homes for people and um so he really wanted to build homes and didn't want to really do the apartment thing so we did a couple deals together we did well and then I went off to just keep on buying apartment buildings and refinancing and getting investors then eventually I was starting to get my own buildings
through um some of the refinance proceeds so I bought some of my own buildings I syndicated some and was growing my portfolio um and just kept on buying buildings and was the plan in school I wanted to be a real estate investor or how did you even get the real estate bug well really I I as I said earlier that I was really big on philanthropy I really wanted to change the world you know I did a bunch of stuff why what what was what wasted you it it was a burning desire I had gone to campest Kramer which is in Malibu camp that actually burned down into the fires wow um and I'm still involved with that camp and it really it taught me the sense of community and and giving back and I also had a cousin my grandfather's first cousin who was a holocaust Survivor
and he always did Charity and I watched him do all this charity I just said I really want to be like that I want to give back to the community make it a better place and I thought I could only do big things like that if I owned real estate I didn't think as a lawyer even though it's a great profession and you can make a lot of money I didn't think I'd make enough money as an attorney to really do the kind of philanthropy I wanted so I um thought real estate was a good vehicle to to get where I wanted to go and then why Apartments I understood them they you they were easy um I knew how to fix them up I kind of understood for the ground floor um and it just made they
were there any moments um early on when things were not looking very good or where you had difficult moments where you had to adjust or you know deal with some tough situations get creative things like that there were a lot
of tough situations um the first one that I can really remember was when I did a development in Oldtown Pasadena it was three historic buildings it was a livery stable um a residential hotel and an old jail that was in Oldtown Pasadena and we converted um we converted it to Lofts and but they were work live lofs where people would work and live and then the bottom was retail including a restaurant and what happened is that um I was on the loan and my partner went 100% over budget and I had to kind of get rid of that partner cuz you know he was kind of like a contractor type but he wasn't really contractor and I had to do the project myself and so I was left with this you know this big project to do and like
I said I I had to go raise a hard money loan to deal with the overages on the construction budget and get the project finished and it was stressful and you know getting the hard money loan wasn't easy and so it was it was a very trying time and uh finally was able to lease it up and eventually they sold the building my partner I had another partner and he ended up selling the building and uh it was yeah it was for a profit and everything but it was definitely a difficult time do
all those numbers were I think this was 1988 to through 2001 and I don't remember the interest rates they were they were high but they weren't were crazy high okay um because you've been through
does today compare to the previous Cycles Savings of loan 08 um you know how does this this little period that we're in compared to the other well during
the other periods I was a quar pointed receiver so besides owning apartments and and doing that kind of stuff I would work for the banks dealing with the foreclosures and what I saw is that these really you know famous real estate guys were losing their properties because even though they're really smart things had changed quite a bit and um economics weren't good so I so I went through those type of things and so instead of just sitting there and doing nothing during those time periods I created a whole business out of um managing for the bank the apartment buildings that we're going through forclosure um at one time we had up to 80 properties we built you know big we did managing for for banks and I did the maintenance construction um everything with the properties Property Management receivership and the only thing I
didn't do is I didn't sell um the buildings and and then in o0 after ' 08 during that crisis we actually worked as receivers and we actually we had been building and so we actually finished condo projects so they were broken condo projects so we would finish them and get them all approved and then actually sell the units um and so that was the the the eight time and now it's a little bit different now the banks aren't failing um the economy's you know performing pretty well overall in you know we're complaining about interest rates but they're they're not high on histo on a historical basis but they're definitely make it hard to transact and you know I think the biggest thing is people that got variable rate loans I think where the kicking the can is going right now is that there are a lot of variable
rate loans obtained by people doing uh value at Bridge loans and so far the lenders have just been extending them and extending them and there's going to be a come a reckoning coming soon where you know they're not going to be able to get new loans to pay off these Bridge loans and so I think that there might be a few opportunities when when when this occurs you think it's that we're still in for pain yeah I still I I still think there's going to be some pain um but multifam is pretty resilient so I don't think it's going to be a huge amount of pain but but definitely um you know people that are trying to right size the the loans from their variable rate loans it's it's tough because values have come down and so you have to put new Equity into these deals to
be able to get a new loan how are you tracking those opportunities or are you guys tracking those oh I have an acquisition team and they they track they track these things they talk to some of the lenders we're friends with with a lot of different lenders and so they kind of tell us that there might be an opportunity obviously Brokers like you hear about them either from the bank or from the uh operator that they need to get you know need to get rid of this property and but but everybody's been waiting for this to happen and it hasn't happened um I just I just believe that there's you know I'm not sure that you necessarily want to own in the places that the these are are happening but I'm always reading the trades that there are people losing properties and variable rate loans have have been a
to invest and I guess the way that you structure your deals so that situations like this where the rates jump up tremendously right and cause you to not be able to execute your business plan how do you structure your deals and find opportunities that don't put you
in those positions we'll try to stay with fixed rate loans we we only did like two two variable rate loans because we we had to under circumstances but for the most part our portfolio is long-term fixed rate debt like 10 year money seveny year money it varies between seven and 10 years I think a lot more seveny year money wish wish should done 10 year but I did did seven and 10 year okay um we were very fortunate that a lot of our long-term debt a lot of it was in the twos um wow and so still still we still have some in the twos and we have a bunch in the threes and lower four um that we have for at least seven years and so we try to we try to um have different debt maturity so that it all doesn't come due at once and yeah so
raising money and stuff does that well it's it's different a lot of the stuff we own ourselves we're very fortunate over the years personal balance stuff a lot of personal balance stuff a lot of stuff I own with one partner 50/50 and some of the student stuff and then there's also a lot of the student stuff and some of the multif family that we've syndicated but again you we're usually the largest minority investor in the deals and we've had a lot of long-term Partners um Family offices High net worth people that are investors with us can you
walk me through the the student housing because that's something that I think uh is interesting about what you guys did is you earlier in you know your career you guys went super hard in the student housing so can you tell me a little bit about how that came to be and why why student housing sure so we did a we
did a large development in Downtown LA we took 10 uh buildings and converted them into like a Soho of downtown and and there was there was retail and Retail Condo Association and and there was residential and residential Condo Association when was this this was between 1998 and 2007 we did this large development it was like 550 units W 100,000 ft of retail two creative Office Buildings so we developed this and we had to learn to get the residential and Commercial people to get along and so we said you know we're kind of in the hospitality business a little bit we're kind of in the residential you know bu uh building business but what about student housing student housing seems like something where our talents the things that we've learned through all the development management and everything that that would be good
for us and also it seems that even when the economy is bad people go to school and so I came up with this Theory we talked about it for years you know we were more of a development company at the time we were talking about our business plans and I said I think we should do student housing and we talk about every year then we'd kind of get sidetracked and finally in 2007 we started buying student housing and it was still a very cottage industry at the time it was very fragmented still a little bit fragmented and not it wasn't like a popular thing to do but I just really believed in it and uh so got into it and it's been very profitable for us where were the where was the first student housing purchase the first two were one was my alma
model UC Santa Barbara okay and other one was University of Oregon so so two great schools and that's where started 20072 2008 what are the challenges of
one's more like a Hospitality one's more like Property Management so student housing is not just a apartment building management and so you're you're catering to to kids you know their parents and it's more like I said there's there's a more Hospitality aspect to it you know you got to put on events you know more more so than you would for even your your regular apartment buildings and it's more of an operating business rather than you know because students are are having to renew their at least you have one shot you know to get them to do it and if you don't lease their space you you're out for the year whereas on apartments you could have a bad month and you can still make it up the next month student housing if you miss the boat on lisap you youve missed the boat for a whole year
interesting okay so you had to get really creative in terms of the marketing of how to attract tenants students the student tenants and and what they look for what amenities they look for what's the the rent balance there I'm sure picking schools was something that was very important very important right which one's growing which one's getting funding which all that which
is overbuilt which is underbuilt which is a lot in the pipeline you know how popular are these schools what are the um the Delta on operating expenses like I imagine that it runs a little bit more expensive it runs a little B more expensive but then also your income is is higher because a lot of times you're rting by the bed not the unit so like you know you might get $800 or $400 for a bed you know there might be several bedrooms you know in the unit there and some schools are are not by the bed but a lot of what we have is by the bed
right so with this student housing we we kind of had a pause during you know some of these downturns we we bought a bunch of student housing and we stopped and then we continue with our receivership work and then um we we looked at doing a fund and we we didn't do the fund and then we um eventually started buying more apartment buildings and then we got back into it big time in 2013 that's when when we really started um buying a lot more again and we we start started with one building at
uh BYU and we now have like 4,500 beds there we're the largest owner of student housing there it's been a great market for us it's difficult school but it was a great market for us especially because we because we really control the market and it's been great we we got good basis on our stuff we did some major rehabs um we had value ad and we got great red increases and uh yeah so it's been a good market for us so if anyone in BYU uh is it under the name mjw no it's under the LI a lot of them were called Liberty of Freedom Liberty on eth Liberty Square so they know if anyone's listening here's your landlord right here rain tree Greenwood yeah so yeah know by used to what's interesting is you'll find a lot of people in
the community that went to BYU you tell them that you own rain tree or Glenwood or these Liberty Square those three in particular and they go I I I I live there you know and then their kids live there and so it's it's it's amazing when people hear that you own a BYU and they said they went there virtually everybody you talked to lived in one of your complexes and they still remember it but we took those complexes and made them much nicer and uh you know so it's it's it's a good history K so uh
receivership I'm just curious to know like what does that entail how did you get into that obviously being a lawyer was able to have that but like what what is that and can you explain that to people sure
well being a lawyer actually you understand the process but it's absolutely not necessary I mean mostly to be a good Property Management person is required in receivership and also you have to be able to get the bank and the and the courts to appoint you so they got to think that you're qualified to do it and and definitely being a lawyer gave me a leg up and definitely being a property manager company gave me a leg up and also being an operator um so so basically what I saw in the 90s was you know I saw people losing their property I was a little scared um I wanted to create income I wanted to stay in the game and so uh what ended up happening is I was able to talk this one Bank into giving me one receivership in Van eyes actually on Irwin was it was the
first deal a small deal and from that we grew this business where you know in the 90s we had almost we actually did at one time had 80 different apartment buildings um different sizes not not necessarily large you know and we had a robust maintenance construction leasing we did everything so you were basically asset managers for the banks asset managers for the bank and we also did maintenance and construction so we were vertically vertically integraded so we did everything the only thing we didn't do we had a broker's license but we didn't sell the um buildings you know some of the some of the best broker relationships I ever made um and still have friends with you know even if they've retired with was through the receiver because there's you the these different people that um would would be getting all the the the listing agreements from the banks and
sometimes we' even co-market you know to the banks you know this is the broker I'm the receiver and we we actually went on road trips to different companies to not just Banks but also special servicers to um you try to get this foreclosure business yeah try to get their business did you ever buy any buildings from the ones that you managed I did but later okay you know I was having gone through and seeing some of your friends lose their buildings kind of freezes you a little bit I mean I I had a couple people that were really harassing me to say hey Mark you should buy more you should buy more and I wish that I had been a little bit aggressive a little earlier but I still got a fair share of them but I I
biggest mistake is that people make when investing in in real estate because a lot of people on here who listen to this are younger and either want to get into real estate investing or they already investing it's a small things I know a lot of people that I talk to my age are like how is it even possible to invest in Los Angeles the prices properties are so expensive like how how would you advise someone um to get started in
that well I mean Los Angeles has a lot of regulatory issues that are make it more difficult but it's all about basis if you if you can buy a building you know that somebody wasn't really managing very aggressively that has lower rents um over time people leave and you can raise the rents or you can buy them out there's there's procedures to the city if you pay them a certain amount of money you can legally buy them out and then you can raise your rent rates to Market um thank goodness those propositions that were just on the ball didn't pass because that would have changed the game dramatically but um I think there's still opportunities in fact you know you as a broker know know well that prices definitely came down from what they were a couple years ago and so in a lot of ways and a lot
of people got fed up with the city of La they they they got out of Dodge and so I think there's probably some opportunities especially on on buildings 20 units and below I think that it's more fragmented the sophistication of the owners is less um a lot of them got real fed up and so it might be a good time even now to to buy in in this market does it feel like from the
deals that you're seeing that it could be the the choice where the people who buy a bunch of buildings over the next you know 12 to 24 months will do really really well like the the pricing the the values are going to be coming back up to where they were or do you think LA's the regulations have just put a a stymy
on the growth I think in the long run La still has a lot of potential I think it's this is Los Angeles I mean you can't replicate it from around the country um you have to have good stomach to to to get into it now but I think is a big advantage to people that don't have the history and haven't gone through all the the headaches that you know they don't have all the negative baggage so it might be a good time to you know take advantage of people wanting to get out of Dodge buy these properties hold them long term and I think values do eventually you know get back up again so when you talk
about basis because I know we've talked about this too you are a big price or pound price or square foot why that um strategy why is that a big metric for you that you look for in buying buildings like buy box wise what about that specifically well the
basis is really important because if you buy a low enough basis you know over time it's going to grow and if you overpay it takes you a really long time to make it up so just a real basic thing is that is that's so much the price per foot so much or price per unit it's just the overall price that you know how it was historically and what you're buying it at um but but per per unit per square foot is is a good indicator buying below replacement cost you the other thing our strategies changed a little bit is even though we still do a lot of value ad deals in the last several months or maybe even last year we looked at buildings that were um more modern you know newer type buildings so that were mismanaged and just try to know cash flow play you know buy
something for a long-term durable cash flow because that you weren't getting paid you know weed to do a lot of the value ad you weren't getting paid for doing value ad it just and you couldn't you couldn't raise the rents very much didn't make sense to put the money in that you projected because it wasn't returning the the rent increases
that you thought they would what is the um irrs or how do you look at returns like what are the metrics that you look at for a good investment and where do
you want to go to um it it really varies for myself I look for C durable cash flow and buying it well and I'm holding it longer term so I'm not really irr driven I'm you know buy it right get the cash flow improve the cash flow you know i' like to have I always like to be able to raise the rents over time to know that my rents aren't at Market because otherwise you know like we've just gone through a period of negative rent growth um so so if your rents are a little bit below then you you have some Runway even if there's rent control and um so so I don't personally do the irrs I might do it on the back of the napkin when I'm buying a property he if I sold it in three years based on what we're going
to do here what's my ir and so for Value ad deals we're looking for 18 to 20% IR on on a deal level and then um for um core plus we're looking for a 10 to 14 okay IR but it really depends because it depends on how you know what ended happening with us we did really well but our ir and some of our IRS were you know 80 but but a lot of times ours like we we're selling a property right now in University of Michigan it's going to be a 21% IR but we held it for nine years oh wow you know so it's it makes it hard to have a real I mean a 21 IR after hold nine years is is is pretty good um but if we' sold in
three years it would have been a 40 IR or 50 IR you know so it's it's a misleading metric yeah it's a misleading metrics if because if you end up holding things and we we you even if we're uh getting a promoted interest you know being a GP or managing member on a syndication we're not we're not really in it to to make a quick buck and we're more aligned with the investors because we we want to be to a long term and so we probably waited a little while because we weren't really looking to make our profit we waited a while while before we sold a lot of the stuff
20 how do you structure your um waterfalls and percentages and GP Co LP um percentages and whatnot because I know it's different across a bunch of investors and when you're starting out you take less of The Upside versus when you're experienced and you've proven a track record you can ask for more because you've been able to do it how do you guys structurally set it
up so the way we do it we've do this for a while it's a one3 two3 where the limited parties get 2/3 and there's a 6% priority return so on this last deal I think we had a 7% priority return and that's just how we do it and it's real simple so you return all the capital
and then it's it's 66 and 33 right got it okay and um in terms of how you're looking at um the future right where do you guys want to invest how do you want to grow mjw what does that look
like well right now for example we just we we closed yesterday IDE deal 91 newer tow houses in Boise Idaho it was congratulations thank you it was it was a market we wanted to be in it we've been looking for a long time it's hard to scale there but we're going to look for more properties there we got an assumable loan 3.24% so that was really good this this was partly an exchange partly new capital and so that that was a market we had targeted and we got into another deal that we're doing right now for example is an Upland um they came to us really off Market from an unsophisticated seller and was just landed on our lap and it's it's a value ad deal where rents are like 1450 and Market rents even at the at the property newest rents are 2650 so it's huge Delta um there's
six units that are already at at Market and rehabed and we'll slowly go through and Rehab the the other ones and then um you know we don't we might hold it for a while we'll refinance pull some of our money out um return it to our investors and then decide whether we're going to hold a longterm or sell it in the near future how do you determine when to sell a property that's a good question actually we we we don't have a a formula I think that with my my staff now they're eager to do transactions because we do exchanges everything we sell we try to do an exchange we've done like almost 70 exchanges in my career and so um we're trying to we're trying to turn things a little a little bit more frequently than than I used to um to to get the capital reinvested and make
determine what markets like Boise you mentioned Oregon you mentioned how do you determine you mentioned that was that was a market you wanted to get into how do you find the markets that are EXC exciting to you what are what do
you look for in markets so first of all it's different with student and regular like Oregon was a great school you know I I don't know that I would buy an apartment building in Eugene I I own some there because it came with the portfolio that I that I bought but there are different markets for student um than there are for regular multif family as far as regular multif family I would say that we look at employment we look at um economics and the economy there we look at um building are they overbuilding or the underbuilding what's the supply look like what's the population growth just a lot of different factors we throw into the to the mix and then we rate the cities you know based on all these different criteria is and we we wait we wait things different like we give
10% to employment 20% to supply you know diff different numbers and then you know you tweak the numbers you can you can change which Market you're going so we're constantly tweaking things and we have a bunch of primary markets and some secondary markets and it changes and we're we're going through a process right now we're we're going to re-evaluate and see if if the markets that we picked are still the markets we want to be in how do you grow a team
and what are the most important um people on that team to grow like this actual private Real Estate Investment Company what what are the very important uh members of that team and how do you look at trying to structure it well you
know I think my coo was the Kingpin of it all Natalie Greenberg is my coo and she's been with me for four years and we've kind of changed what what we were doing in those four years and really really worked on culture you know we had a great culture when we we were developers we had you know 60 people at one point and really focused on that a lot and then kind of drifted a little bit not that we didn't have good people but we weren't focusing as much on it and it kind of drifted you it was it was still good but it wasn't a focus and now we're refocusing you know she's hired a a bunch of really great younger energetic people um very selective and crafted is to what what the mix is in the office we got some Business Consultants that
we're working with now to make our strategic plan and we're working on a you know a bunch of different things and initiatives and and she's done a great job orchestrating it all what is um
are should we do a fund and maybe for our value ad student housing um what type of people do we need to grow like for instance right now we we do our own property management in in LA in California but for our Washington properties Atlanta Boise all different places we use third party so we're going to be bringing more of it in housee and so we hired a new HR person we hired a supervisor that can also help with Washington we you know we're hiring a lot of lot a lot of new people we're hiring a new accounting person and so we're we're kind of growing the organization so that it can do more internal Property Management we are not going to do the student housing there's like almost 8,000 beds we're not oh jeez yeah we we have a proprietary relationship with uh one company
that has invested a meaningful but small amount into all our deals not all our deals a lot of our deals and so they're a lot more aligned with us this one thing I can tell you is that if you want to be aligned with your manager company make sure they invest with you oh interesting I've never heard of that before yeah so I think it's really important because I I think that a lot of people especially through the pandemic would be complaining a lot about the the property third party property man man business they they kind of they got frustrated a little bit because of all the regulations in the various cities and the Tendencies got worse the areas got worse in a lot of areas and Property Management you know had a really hard time hiring people and the quality and supervision is
going down and down and down and so um I think it's a big issue right now and so where where it's worked really well for us is in the student housing um area the main manager company we have is invested in a lot of our deals and is very aligned with us and they're paying more attention to stuff and and it's a meaningful investment for them so it it's it's a good way to find alignment what does your day look like like when what is your what does your day look like what's the typical day get up in the morning kids kids are probably making noise they have 11y old twins and I work out I I do uh work out for an hour hour and 20 minutes and I do a little Tai Chi and um a little meditation as as part of that um and
so so that's part of my day so it takes a takes a while so you know and then I get to work usually get to work after all that actually in my chair by 9:00 um Fridays I work from home I still do the workout and everything but I I don't have to drive to work and so I'm obviously working a little before 9: so that's the beginning of my day is the workout meditation you know play with the kids in the morning before I go um a little bit occasionally drive them to school but they but they go earlier in most days and so it's it isn't quite work to drive them and then I you know maybe have some meetings um I I'll spend some time you know going through my emails I get so many emails and I like something that
a younger person taught me is that you clean out your box so you you erase all the emails inbox zero inbox zero so I I never get the inbox zero but I get the inbox like six or seven for the day because I because I do go back and look at some of the stuff um so we get rid of a lot of my emails um we we often have meetings we have meeting on Monday for you know kind of what's going on we have meetings other days on the student portfolio we have meetings other days on the multif family portfolio we have acquisition meetings um dealing with current and future Acquisitions um sometimes we're working on loans and so be various things and we at lunch we have meetings with with various people whether it be investors lenders lawyers yesterday we had
lunch with some of our lawyers for manette Phelps is one of the firms that we use weuse scar kch um so some really good firms and we have lunch with them occasionally just really you know just to connect
strategy side or is it more on making people come to you with decisions that you have to make and you're like okay yes now like where are you at definitely
definitely more big picture strategy with the investors on on the Kingpin of of the investors the majority if not all the investors are relationship of mine or through networking that I do with with people that I know um and so that there's a lot of investor stuff that I do um making calls when there are deals to to investors what's what's one thing I'll tell you that's interesting is that the latest two deals that we're doing um we sent out emails telling people oh we have an investment and in the past we get flooded immediately with people um wanting to invest and this time we we noticed that it was a little confusing because we were setting out two deals at once and and so and it's also more the holiday time time of year Thanksgiving and things like that um but we didn't get the robust response that we
usually get where everyone is like pinging us and and wanting to you know actually they sent an email saying I'll do 500,000 I'll do a million I'll do 200 you know I I didn't have much it wasn't hard to raise it but I had to actually call the people and that's unusual that I have I mean I have but we had to call them they and for the most part they were um willing to invest and and happy to invest and and it's a relationship type thing but I found that a lot of people were more cautious with capital or out of capital for the for the balance of the year or tied up in capital you know it maybe they they're doing well in the stock market for a while and they don't want to realize their gains by selling it to put into real
do you think that um I I think it's more institutional I think that you're at you know some of the family offices are are are more willing to jump in but a lot of highet word people are more cautious now um yeah they're just they're not moving as fast as they were a couple years
ago because making good returns in the stock market and the risk reward versus putting it in an apartment building or maybe you know they can offset losses in different assets because some of their other Investments haven't been
doing well things like that I assume yeah I mean well first of all a lot of them have had a lot of Investments that aren't going as well um and it's predicted that the stock market is not going to continue this way so it's it's it's definitely going to you know our asset class you know being an alternative is going to be a really good idea for people to invest in going forward um but I think a lot of people are just cautious because the economy's been mixed and they've suffered losses in in different things and they're there're just I find people just more cautious and um I also found that they're more cash flow driven um the deal that we had that was in Boise was was a 6% cash on cash great property um but not as
much there's no no real value ad there there's going to be natural appreciation we'll be able to raise the rent sum but it's not like a scorching deal but it's it's a really nice property really solid cash flow suable Alan the other deal in upin was was a huge upside deal you'll still have a little bit of cash flow in the beginning and it was a value ad and but it wasn't 6% cash on cash from the beginning and I saw more hesitancy from investors want you know again it wasn't difficult get people but it what but I I found more of a resistance like if they had to choose between the two they were choosing the more conservative cash on cash one that didn't have as much upside the you know the one in Upland has huge upside and within a year or two
it's going to have the regular cash flow but um people weren't as interested in little scarred I guess from the the last couple of years yeah the the value ad didn't turn into value ad for a lot of people um especially the ones that got the varable rate loans so and instances like that does that change the way
at opportunities we try what we try to do is do different buckets we realize there are certain people that want just cash flow there are other people that are more sophisticated that that look at the total return and so they'll still be interested in your value ad plays but I I I find that that a large majority of your investors nowadays are more
cash interesting what have been the most impactful relationships throughout your career that if you look back and say wow that was really that's changed the trajectory or that's allowed us to grow or there was this one relationship where once we met then my something took off like what are can you think back to any specific relationships um doesn't be a specific person but a type of relationship Banks lawyers
investors well I never had a mental so one thing I'll say is that I was obsessed with with helping other people and mentoring and so I started our help start a mentoring program for the Jewish Federation and I've been involved in various um mentorship programs in a lot of different ways I spoke at campuses you know I think my inspiration has more been from energy I got from students and people I mentored um in fact I'll get tell you one one of the best stories so that's one one that I knew um through the Jewish Federation had gone to Anderson School business the MBA at UCLA when I was at the Equinox Gym and I heard someone yelling my name and it was this woman and she says to me you know Mark I want you to Mentor me and I said well this is 2008 I
don't think it's a good time to go into real estate and so uh I did Mentor her and after a few session she goes well Mark you've been so great to me what could I do for you and I said well why don't you find me a wife and she kind of laughs and says oh that's interesting and she took me seriously so she goes to her mom says to her mom hey mom you know that guy Mark that does all that philanthropy and he's in real estate and he's been helping me yeah I do well I want to introduce him to someone really nice and so the mom said well matter of fact I had a dream last night about my wife and my mother-in-law so she says to the my mentee why don't you introduce Mark to Farah and so I met Farah on
Thanksgiving and a year later I married her way so that was absolutely the most impactful thing that that changed the course of My Life um was was because I gave back because I mentored you know and I put it out there even though I was kind of kidding but I I didn't want to get married but I wasn't really looking for this mentee to find me a wife and she took it seriously and um I met my wife wow and So that obviously was extremely impactful um in every in everything it was the greatest thing that ever happened and that and having our our twins um were the two greatest things and it all happened from my being really open to mentoring and I mentored a lot of different people and I actually did learn a lot from my mes just and
their energy and the way they looked at things and they hadn't been through like some of the cycles and so they weren't scarred and they were less conservative than I was um you know having gone through some of stuff I sometimes would advise them well maybe you should you know take it a little easy on this don't go so fast and sometimes I was wrong because I was doing it based on my experience rather than you know they didn't have that experience it was kind of help them you know because they weren't saddled down by old
experiences what makes a good mentee like what makes a good uh if if people out here want to find a mentor and not necessarily saying that you but in general how do you become a you want to be Mentor do you want to do something great with your life how do you find a person and then what makes you good a good mentee
in that situation that's a good question um well I think a good mentee is someone who's open to learning who who doesn't have a set opinion of things who is you know made an effort to to get knowledge in the field like you don't you're not going to a mentor to say teach me tell me everything you're kind of already doing it it's it's it's more beneficial and it's definitely um better for the mentor is if you've been doing the the field for a while and you've been trying things and the mentor can help guide you with you know rather than if you if you're really basic it's hard for a mentor because you know they don't have the time to teach you everything you have you have to come with a basic basic of of knowledge and experience and
you talked a little bit about meditation and stuff um and that's interesting to me because that's something that I have been very interested in more from a mindfulness perspective and the fact that you said that you you realize you're aware that some of your beliefs were holding or were incorrect in terms of the advice that necessarily was best for that person is is is that mindfulness is that meditation is that something that you
I've been doing it for a really long time and I actually have a mindfulness coach really and I go um every other week U I actually a really prominent real estate Guy this is something I got from somebody in real estate you know introduce me to this guy and I've been doing it doing it over Zoom now they've been doing it for five years and it's really helpful it's it's helped calm me down mhm it's helped me be more relaxed and I can get centered it's some of the techniques they teach you is that you know if you're getting upset you you're using breathing in different things to calm yourself down you could be in a meeting with people you can prepare yourself before the meeting by doing some breathing exercises and the challenge is sometimes I forget to do it but but it works when you do it and
think that I'm more approachable you know because I guess I didn't think myself as being threatening or anything like that but I guess you know I kind of when I work I kind of intense and I kind of go in my little cave yeah so I don't look that approachable I think with the mindfulness stuff I think I've been more self-aware and I try to you know let people know that I can't be approachable and I try to be light with them not be so intense all the time well
it's interesting because the I've met a lot of very successful operators and it seems like a common theme that um runs through that is they are very intense they're very focused a type personalities they get [bleep] done like that is how they do business and sometimes that can be seen as or or have a lack of warmth right and wanting to I heard recently the definition of Charisma is warmth and competency warmth and competency and so someone could be very competent neon musk Bezos so you know people like that but the warmth side may not be as developed or it's not something that they have and I've always felt like the type of leader that I want to be is someone who is approachable who people can come to um for advice I love teaching and I love the fact that you find so much enjoyment in mentorship
too because I've been been so grateful in my life to have incredible mentors who've just shaped my career and given me pieces of advice that um once implemented like change literally changed my life uh so it's very interesting that that is kind of how you've approached it even recently in in your life in your career because you've been doing this for a long time right and so you're never too old to learn and improve and and grow and you seem like someone who constantly wants to improve and learn and how do you how do you continuously learn and and improve yourself well I think it's
important just for my kids and my wife I want to have great relationships with them and I want to have a good impact on them and you know it's like everything you say and do your kids notice they mimic and so a lot of what I do you my self-improvement um is to be a better father to be a better husband be a better son you know just so just work and be a better brother um and better employer you know just I want to be better for everybody around me because it it also rubs off I believe that the in I believe in energy and I think that when you have positive energy and you are impacting people it makes the
world a better place I couldn't have said it better it's so true energy it's you get in the rooms with people who just have this bright light and it's just takes a weight off your shoulders or you had something bad going on and you're able to just it's like this energy transfer you've been in the rooms where people who just Bri bring up the room they light the room and you're like ah I
um so work life balance that is a big thing in brokerage um specifically because a lot of people and I just had a post about this where our CEO former CEO of mine came in first week in the in the pits and he's like hey if this isn't the most important thing in your life then you probably shouldn't be here um which in the beginning there's this kind of you have to put in the work you have to kind of sacrifice a few things to get the ball rolling to get the flywheel so you can build a business that lasts because you're not getting paid typically and and what we do when you're starting out I don't I don't have a salary I have to pay employees like the only deals that I close are the ones that I close myself or with you know Partners or teams
real estate game well it's interesting it's it's it's ebb to flow over time I mean I can tell you that when I was in the height of my development in in downtown I was reading an article that the LA Times wrote about me the other day because we were we were going through in our office with they wanted to they wanted to see all the Articles over the years to learn more about me and the article was talking about how at like 4 in the morning I was leaving rambling messages for the this editor of the LA Times you know poetry and whatever because I was so wired and I was working like early in the morning what I would do is I go in early in the morning you know work for the on the development go to the gym do yoga then come back
and work some more and I wasn't married I did have girlfriends but still um the focus was my philanthropy and work and that's all I did and there wasn't there wasn't the good amount of work life balance on I didn't really you know I was always having fun and doing stuff but it but but I was working too much and a lot of stress and um you know I think I learned later especially when I had kids more about work life balance you know just I wanted to be there for my kids all the time and I was lucky because I was a father later in life and um was established already and you know didn't need to make it and so it was very easy for me to dedicate a lot of time for the kids whether they're sports or musicals or whatever they're doing I could
always go to or coach or or be involved in you know whatever my wife wanted me to do and and I have a lot of outside activities that I do and so I make a lot more time for it now and I think that um when people are starting out I think they have to work hard but they got to play hard and I think that you're more successful in your career if you can balance it and it's hard because you're trying to make it and you got to put extra time in but if you burn yourself out you you'll be no good yeah it's
and that's so because people I would imagine some people looking and they're like yeah he's he he was financially free he was financially set right there's more time to be able to focus on other aspects of life but let's take you back and let's just say that if you had to start from scratch you're 20 five years old right you haven't financially made it do you think that you would have chosen to spread your time differently like reflecting on it or do you think what you did in the beginning was worth where you are today I think it was
worth but I I didn't know any other way to do it at the time so it wasn't like I had a a choice yeah just but I didn't have anything so I came from nothing I didn't have anything so I had to work extra hard if I wanted to be an investor in real estate and also when I was a lawyer at first I had to do the law job plus after work you know do the real estate thing so just there wasn't really a choice I just think you know that if I if I could have met my wife earlier it would have been nice to share some of the journey with her though she shared a lot of Journey with me but thing earlier on I think it probably she she Mellows me out a lot and so I think that um that's one thing is that a
great relationship can be a good balance for you because you want to be balanced for that and you could still be successful you know they're your partner and so um that's my only thing is that uh I think that a good relationship could give you balance they're not mutually exclusive sometimes 1 plus one equals three in those exactly it gives you more energy to come back to work
for interesting um I want to talk about the organizations that you're involved in and then I know you have seems like a million of them can you tell me a little bit about that and then why you're involved in YPO um with the city council housing homeless housing obviously the mentor ship Jewish Federation like why why all
these organizations well um I get a lot out of them and they've been transformative organizations for me to be involved with you know YPO which is a young president's organization he been an organization that been involved with for over 20 years um presidents of companies of a certain size and they have a a form which is like 8 to 10 peers of yours where you meet like a board of directors one once a month for three or four hours and you share your personal and business stuff with them and in early on my form in one of my YPO chapters was a great in a sense that was a mentor for me because they they kept me in check I mean one one of the things was is that if I wanted to get married I needed to be
the person that my wife would want to marry and so one of the things that my formed helped me on a personal basis was really work on myself to be more self-aware you know to see it was in congruent saying you want to get married but you're dating these type of people
so you you have to have congruency so that was one of the things that I got out of YPO the other thing with YPO is that if IID brought my challenging deals to them sooner they could have helped me often I I really wasn't presenting when I when I needed the help but but but they but they were really great in brainstorming with me on on different things within my organization and growing my company so YPO was good for that and I and I was the chair of the YPO multifamily um group for YPO for four years and that was really enriching I met a lot of great people through that and I'm involved in a lot of different things in YPO that helped me with my family office helped me with philanthropy help me with um
Estate Planning and so that's YPO as far as the the Charities which has been the main thing I focused time on Jewish Federation is like kind of an umbrella organization that's like almost like the insurance policy for the Jewish people it you know there's no other organization that is able to do exactly what they do and they they've restructured over the years so they have various pillars of you know people Jews in need you know people that from the Holocaust people that you a lot of people that are lowincome that are barely making it you the Federation helps they have the mentorship programs they have the young adult programs and so they have a lot of different things that they do and they do it really well and and their overhead is low and I was in young leadership Capital which is the national organization within this
and got a lot out of that and you know I start helped start a mentorship program been a mentor on and off for 20 years through through Federation um so that's why Federation Camp had screamer burned down and we became the lead donor of um the initial campaign to to fix up the camp and now it's to rebuild the camp wow and and I got my philanthropy and Community you know background stuff from from from camp and so Camp was really important to me I think it's important for for for young people I support it both in the United States but also in Europe like in Ukraine and Poland where Jews aren't able to practice as being Jews and so the camp is the one time that they C they can be Jewish and so I do that um the homeless homeless stuff you
know I've try I tried to be really involved 20 years ago go in the city the city kind of rebuffed me in some of my ideas that I had to to help with homelessness and so I kind of got burned out on that got out of her for a while but then I then during the pandemic I got more involved with a few groups helped start a group that does transitional housing for the homeless and then um I also recently got involved with um a guy that's put together a bunch of nonprofits dealing with homelessness they ask me to be be on their Advisory Board they they do both they're doing a fund to to to build housing they're doing they do things to help the different um uh organizations that that deal with housing because when
you're doing with homelesses you're not just dealing with a person that doesn't have a home you're having to do with their mental condition you know everything every aspect of their life and and so there's more to it than just providing a home and so so really involved with the homelessness um I'm also really involved with APAC I was the chair of the real estate division of APAC um and help that helps elect candidates that are supportive of Israel also with the Jewish Federation I was on the board for 10 years I was the N the real estate chair and also the honory for their big dinner and so I did did full cycle at the Federation I'm still very involved and uh there's a bunch of other organizations you're doing it all I have a lot of organizations I'm involved
you're doing great work um I I want to touch a little bit on the homelessness like how do you think be because when anyone sees LA on the news it's rents are high or there's a homelessness problem or you know cost of living is going up like how do you think we solve the issue because building a million dollar unit per per unit apartment complexes for homelessness does not seem like the answer well there's a lot of ways to build units
for $250,000 there's this different organizations that have done it um and transitional housing the dignity moves a group I'm involved with is able to do temporary housing modular housing for around 880,000 a unit wow and it could be moved if it needs to be moved and so that that's one solution and there like I said there's a company called SDS which is the um company in La where they're they're they do private fundraising they don't get they don't get debt and they build the units for around 250 the modular I think they're modular 20 250,000 a unit and you know could definitely be done the reason why the other units are so expensive is there's unions involved and not that unions are bad but just that there's unions and all these fees and you know different regulations and it just it jacks up
the price and um there there's better ways to do it and I think the private sector I think the homelesses issue needs to be handled by the private sector um I think they should funnel the monies from the government into a private found or not Foundation private company that works like Private Industry and let Private Industry do do the housing use a lot of modular housing it's faster it's cheaper it's just as good it's it's beautiful and um you know 20 years ago when I was involved with the real estate I I was asked by the city controller with a couple other real estate guys to write a report on housing in LA and what what we recommend what we recommended and so the first thing I discovered when I was doing my development in downtown and I
needed parking the city didn't have an inventory of everything they owned so the first thing I said is you know we need an inventory of what real estate we own and we need to know is it being why should we be giving a nonprofit an office building that we own in Beverly Hills well it's not even near the nonprofit and so how do you monetize your real estate and so what I had suggested to the city was why don't you take bunch of these lots and upzone them instead of giving money to the developer take these Lots these various lots that that you that you have and upzone them and then you could do affordable housing without giving the subsidy and they have cheap land bases and also they could do a bunch more units you know and have a plan and and do that and um you know
I said do modular housing and so they rejected all that stuff I think I think lot of it came from the union was really pushing back on because the modular stuff and again I'm not an anti-union person but it often doesn't work in the favor of of of development when you're trying to do inexpensive housing yeah um so yeah so I suggested that to the city I came up with this whole plan wrote a report and you know that got blown off kind of and so I said this is ridic because I'm I'm going to spend my time elsewhere the city's not going to work with me um and I found it I found it difficult often to work with the city on a lot of different things but I also found when I was doing my development In fairness you know there was a lot
of positive things I I there a lot of the departments were really great I was able to get the different departments to to work with me and with our company and and I I had some real positive experiences but when it came to the political stuff of trying to solve um homeless housing I found it very difficult seems to be still quite
quite difficult for us moving forward and and doing all that stuff um before we wrap up just kind of last things is like what are you excited about what is most exciting for you and what are you looking forward to and for mjw
for yourself like where where are you at with that well my kids I love my my kids and wife are my are the apple of my eye and so you know my son's actually showing some interest in real estate so there go it would be great if my kids wanted to get into the business that that that would excite me a lot U but if whatever they want to do it's fine but I'm saying that that would be exciting um I think that some of the value at student housing stuff that we're looking at is is exciting um I think that um there's going to be opportunities with Apartments you know both both in LA and nationally um and so I'm just looking forward to to finding some good Investments I I would love interest rates to drift down instead of up that that would be very helpful but I
think that the new normal is going to be at a higher rate we got so spoiled you know like I have all these loans and 2% range just just not going to happen
in foreseeable future so it's just continuing on the path doing what you guys are doing growing the culture it sounds like you have a lot of very exciting and positive things uh coming down the pipeline for mjw for yourself for the family so I love to hear it I really appreciate you coming on Mark anything else before you want to leave the the viewers or listeners with
before we end up no my mother's actually calling me on my cell phone so so it's like I I still have that little kid thing oh Mom's calling me gosh I'm good just this is great having this conversation with you and uh
look forward to your continued success mark thank you very much appreciate it thank you for listening to this episode if you enjoyed the podcast it would mean the world to me if you could rate US five stars on YouTube Spotify and apple podcast it really helps us get our name out there and helps us get fantastic people like our guests to share their insights and knowledge with you again my name is Taylor ven I specialize in the sale of apartment buildings in Angeles in Southern California and I look forward to sharing more of these conversations with