Taylor Avakian
How the hell did you do 200 deals in a city like Los Angeles?
October 29, 2025 · 1 hr 14 min
How to Actually Make Money in Real Estate (Not What You Think)
With Brandon Hance — Real Estate Investor
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What this conversation gets into
Brandon Hance did 180+ real estate deals in Los Angeles in just 7 years. Sounds incredible, right? But here's the truth: he wishes he'd done fewer deals and made MORE money.
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Episode show notes
Brandon Hance did 180+ real estate deals in Los Angeles in just 7 years. Sounds incredible, right? But here's the truth: he wishes he'd done fewer deals and made MORE money. In this episode, Brandon opens up about his journey from tech startup founder to one of LA's most prolific developers - and why the "hustle harder" mentality almost destroyed him. He shares the brutal lessons he learned scaling too fast, the health crisis that nearly killed him, and how he's completely rebuilt his approach with his new company, Angelino Development. If you're thinking about scaling your real estate business, this conversation will change how you think about growth. You’ll learn: ✅ Why doing MORE deals often means LESS profit ✅ The hidden costs of high-volume development in LA ✅ How to systemize your development business for scale ✅ Navigating LA's complex zoning and permitting process ✅ The importance of quality of life in building wealth ✅ When to say no to deals (even good ones) Whether you’re chasing big goals or recovering from setbacks, this conversation is a raw, honest look at what success really costs — and what matters most after it’s gone. CONNECT WITH ME: EMAIL: taylor@thegroupcre.com WEBSITE: www.thegroupcre.com This episode is sponsored by AI for CRE Collective - an exclusive community built for real estate professionals using AI to close more deals, manage properties smarter, and scale faster. Whether you’re a broker, investor, or property manager, join over 400 members already transforming their business with AI tools and strategies. 🔗 Learn more at [www.aiforcrecollective.com](https://www.aiforcrecollective.com/) 📈 Connect with me: Website: https://www.thegroupcre.com/ Email: taylor@thegroupcre.com X: https://x.com/TAYVAY_ LinkedIn: https://www.linkedin.com/in/tayloravakian/ #TheGroupCRE #BrandonHance #Entrepreneurship #TaylorAvakian #FaithAndBusiness #WealthBuilding #Resilience #Leadership #StartupJourney #BusinessMindset
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Episode transcript
This 15,246-word transcript is matched to English (Original) automatic captions. Timestamps seek the episode player to the matching passage.
0:00–10:00
Brandon Hance
There were many times that I would look back and reflect at the end of the year and say, "Man, if I just did fewer, bigger, better deals, I probably would have made more money." I want to make sure we don't get lost in the vanity metric side of that either. So, what would it look like to build a vertically integrated urban home building company? The goal was to do 80 deals in 2020, and we're extremely proud of, but it's extremely difficult to scale.
Taylor Avakian
Real quick before we hop into today's episode, I am so excited to share that we have a sponsor for today's episode and that is AI for Siri Collective. This is actually a community that Jake Keller and myself started because we were tired of getting left behind with AI. We're nerds about it. We love to dive into it. Jake is a master at crafting these prompts and I'm very heavily invested in trying to be a better broker and use all of the tech and tools that I can to make myself just that much better. And I will tell you this since starting this community and exploring the workflows and the things how to use AI effectively in my business. 25 listings at the moment. We're closing four or five deals a month. It's been incredible. So, if you want to learn, if you're in commercial real estate, how to use AI
Taylor Avakian
in your business, whether you're a property manager, a broker, an investor, really anyone, we have a huge group, over 400 people in this community. And the website, if you want to go check it out, is a forcollective.com. So, appreciate you guys. Now, back to the episode. Welcome to the podcast. My name is Taylor Avakian, and I am here with my esteemed guest, Brandon Hance. Brandon, thank you for being here, man.
Brandon Hance
Fired up.
Taylor Avakian
Thank you for having me. Let's go. Okay. So, you've done how many deals in uh in Los Angeles?
Brandon Hance
Uh, as a sponsor, I've done um just shy of 200, like 180, 185, and then I've probably done 30 to 50 for uh for other clients, other developers or
Taylor Avakian
homeowners. And what time frame is this? Uh since 2017. So, like seven, eight years. Yeah. 200 deals.
Brandon Hance
Yeah.
Taylor Avakian
Which Okay. Okay. So, you got to tell me how because everyone that I talk to who's in development, doing deals, renovations, stuff like that, LA is notoriously hard for getting deals done. How the hell did you do 200 deals in a city like Los Angeles?
Brandon Hance
Uh, brute force. U not sure that that was the smartest approach, by the way. So, we can talk about that if you'd like. But uh there were many times that I would look back and reflect at the end of the year and say, "Man, if I just did two or three, cherrypicked fewer, bigger, better deals. Uh I probably would have made more money and I certainly would have had a higher quality of life." So, uh yes, I'm proud and there's some cool stuff to talk about, maybe some lessons learned in terms of the volume, but I want to make sure we don't get lost in the vanity metric side of that
Taylor Avakian
either. Interesting. So your perspective reflecting on that is like more of a Warren Buffett approach would have been better than someone who's just churning and burning and trying to get volume. Is that what you're saying?
Brandon Hance
Based on uh our results, results I've seen from other developers who have pursued kind of a a high volume model in the city of LA, I would say yes. Yeah.
Taylor Avakian
Interesting.
Brandon Hance
Okay. Which is disappointing. That's not what I that's not the answer that I want to give. Uh when I first just maybe a little bit of background when I first got into the space um it was a childhood friend of mine was flipping houses and he was doing that for about 10 years doing three four five deals a year.
Taylor Avakian
And what year is this?
Brandon Hance
This was well he was doing it probably from 2006 to 2016 say. Okay. And during those 10 years I built and sold two technology companies. So I had nothing to do with real estate. There were two venture funded businesses and literally knew nothing about real estate. And when I sold the first business, I said, "Hey, this would be kind of interesting to invest with my buddy and also give me the opportunity to kind of learn the the A toz process." And it doesn't matter if it's a billion-dollar deal or if it's a small little house in the hood, it's real estate and the mechanics are the same. So, I thought, okay, this would be a great opportunity for me to learn. Mhm. Which I did. Um, and then investing became advising, advising became part-time, and then ultimately I decided to do it full-time in 2017.
Brandon Hance
Um, but during that process, I realized, man, you're only doing three, four, five deals a year. Great. You seem happy, you're making money, but what what stops you from adding a zero to that? And the first question I asked was like, okay, who are the big competitors? Like, what can we learn from success leaves clues? And he literally couldn't name one. I'm like, well, there's got to be somebody who's doing this is Los Angeles. There's a multi- trillion dollar single family residential market. Yeah. And he couldn't name anybody. And I thought, this is super interesting. And so I began doing more research and very quickly realized that it is completely a cottage industry, right? It's all mom and pop operators. More recently, you've had Thomas James and us, maybe a couple other people give it a run. Um, but it's it's almost entirely composed of
Brandon Hance
of small mom and pop operators that are doing, you know, a couple deals a year. So I said, "Okay, well, if you can't learn from that model, what else can you learn from kind of an adjacent categories?" And says, "Okay, the traditional homebuilders." And traditional home builders fundamentally are built on suburban expansion. And I thought the more compelling trend line was urban contraction, right? And so if you look at a market like LA, 70 or 80% of all of our homes were built in the 50s or before kind of small cracker jackack World War II, you know, houses and everybody wants to be back in the urban core, but we don't have great housing inventory to offer. So, okay, this this fact pattern of itself seems super compelling. So, what would it look like to build a vertically integrated urban homebuilding company?
Brandon Hance
And that was kind of the vision that I had um in the beginning of of you know the the formation of the business. And so um
Taylor Avakian
what was the business called?
Brandon Hance
Avenue Homes. Okay. Yeah. And so um you know I got my broker's license, got my contractor's license, my wife became an interior designer. So we vertically integrated the platform. Uh, I raised some kind of venture capital, not from traditional VC, but from other kind of high net worth investors who invested in my previous businesses. Got it. To help build a tech stack that did some of the data stuff that we talked about, but then also um kind of integrated the full life cycle of a transaction from underwriting through dispositions. And we were rolling and we raised a bunch of capital and we were scaling up and we were doing, you know, 20 25 30 and I think 35 40 deals a year is what we did in 2019. The goal was to do 80 deals in 2020 and uh specifically single family and these were like4 to7
Brandon Hance
million um you know West Hollywood Mar Vista Hills ground up all ground up because again it was it was production it was like we're going to do the same thing over and over and over again and really build the machine and um you know again there was aspects of that that worked beautifully well and we're extremely proud of but it's extremely difficult to scale and so the idea of we have this model home that we can do over and over again. Sounds good on paper, but the reality is is that every single deal is unique, right? Everyone has some stupid easement issue with the next door neighbor. There's a fire hydrant right here or a power line there or you name it. That seems relatively small, but it's a new issue that has to be dealt with in a very hightouch way.
Brandon Hance
And so, you know, in order to scale things, you have to really create standards and then push down delegation through the organization. And there's so many oneoff things that really require like management level decisions that it's just difficult to
Taylor Avakian
scale.
Brandon Hance
Got it.
Taylor Avakian
Can we um I'm going to walk back about technology companies because that's when I hear that I'm like well why didn't he just start another technology company because you basically grew two and then sold them which seems like a successful thing. Again I don't know the whole story. Can you tell me about the technology companies?
Brandon Hance
Yeah so the first one um was called Audio Life and this will date myself. It goes way back to when MySpace was first started.
Taylor Avakian
Okay.
Brandon Hance
And so this was the time. So I was a music business major actually at USC.
Taylor Avakian
I studied entrepreneurship. You were a football player at USC and also doing music and entrepreneurship.
Brandon Hance
Okay. Yep. Exactly. So I studied entrepreneurship with an emphasis of the music business is technically what my what my degree says. But um but that was a music industry was fundamentally imploding, right? Like Napster and all that kind of stuff. So to work my way up a structure that was fundamentally imploding made no sense. And so I said, "Okay, I'll take the entrepreneurial path." and artists just began promoting themselves through social media. So we were really like the first wave and kind of the pioneers of social commerce. So we allowed musicians to sell their music and merchandise directly to their fans on a MySpace page. That was like the original MVP product and obviously that evolved over the years but fundamentally kind of served the same purpose which was to allow musicians to directly monetize their online fan base. So that evolved into mobile apps and we we
Brandon Hance
ultimately had like 500,000 independent musicians that used our platform and then we had four of the five major labels. So we were doing all anything online direct to fan for Eminem, Rihanna, Green Day, Beasty Boys, like you know, whatever all the biggest artists in the world. Um because we had the the front-end technology and the backend fulfillment capabilities. So if you wanted a one-click buy within a YouTube page, with a Spotify stream, on a Facebook feed, whatever, like we were the backend that that did that. So that was the business that I sold in 2012. Okay. And then um when I was selling that, it was a time that uh my aunt had just passed away from breast cancer and my now wife, girlfriend at the time and mom were doing a walk which was the Susan G. Kleman breast cancer, you know, walk.
Brandon Hance
And I noticed that everybody there was wearing some type of custom merchandise. And so I I saw that during the sale process and I negotiated kind of a carveout to our technology platform that said, "Hey, you can have all this, but I want to keep this technology platform with the exclusive use in the nonprofit sector." And so in the um in the nonprofit world, they call them ths, like a walk-athon, jumpathon, whatever. And they called the run, walk, ride top 30. That's the the 30 largest fundraising events in the country. And so I went and um secured 23 of the top 30 in the first year. And then there's two major technology platforms that kind of run all of foundations and event management and so forth. Uh, Blackbottom Convo. They're both public companies. And then we went and created the exclusive merchandising relationship with both of them.
Brandon Hance
And so it became kind of a B2B TTOC,
10:00–20:00
Brandon Hance
if you will, platform where we integrated our platform into theirs and then they could offer that as a product to all their customers. So it's a tech platform. There's a tech platform. Yep. So I I did that all really fast. It was just like, let me tie up the customers, let me tie up the distribution. And I sold it to Zazzle. Um, which you may or may not familiar with. They're probably three, four, five billion dollar um, uh, a year
Taylor Avakian
company. Were both those exit successful?
Brandon Hance
Um, yes. I mean, they were both successful exits. Uh, I made money from both of those. I learned a lot. Everyone was generally happy with the end of it. It wasn't like a multigenerational I mean the beach you know and my great grandchildren live on the beach but it was a great way to start and you know I was in my 20s and uh it was a good way to
Taylor Avakian
get it's everyone's dream you build a company you sell it and you make a bunch of money and you're just like damn this is awesome. Okay so then why not do that again?
Brandon Hance
Yeah. Um well I I actually was planning to so I was I was um tinkering with a variety of ideas at after that I was doing some angel investing. I was doing a lot of advising with other companies. I was kind of incubating some ideas. Just nothing really quite got me going. I also, you know, through that 10-year experience built a pretty, you know, robust network of entrepreneurs. These are like brilliant people, wellunded, working their ass off. And you realize like very few of them ever make money. Um, and if they do, that three or five year window became like a 10-year window. So the idea of like there maybe being a treasure chest on the on the distant side of the rainbow just became kind of less and less compelling for me. Uh obviously you hear about this the
Taylor Avakian
story the AI the the 23-year-old in uh Lucy Guo or something like that who just became the youngest woman billionaire. Yeah. And she bought a $40 million house. Like that's the stories you hear and everyone sees that and that's the 0.1% of people.
Brandon Hance
And you saw that firsthand. Firsthand. And again, like I I could name dozens of people that are truly like brilliant with great ideas with strategic capital with like world-class leadership teams that were early to market had plenty of runway that failed or even worse and frankly more even more common is one in terms of building building a successful business, but then the liquidation prep and the capital stack and the dilution and it's crazy. I sold it for $900 million and I made 12 bucks. Like that's just not interesting. um particularly for all that you have to sacrifice along the way, income, stress, time, etc. So if there was an idea that I was extremely excited about, I would have pursued it. Just nothing quite lined up. And then this idea to me became very interesting because it was less about a real estate play.
Brandon Hance
And in my mind at the time, it was just another entrepreneurial opportunity. I thought, man, there's multiple trillions of dollars of single family home value in LA and not a single person who's figured out how to scale infill development. That that that on itself just seemed insane to me. So, it was a very similar creative and and kind of entrepreneurial energy that drove me. And looking back, I'm like, "Oh, why'd you decide to do real estate?" That there really wasn't clear to me that that was the decision I was making.
Taylor Avakian
You can, and we talked about this, you consider yourself an entrepreneur, right? You're an entrepreneur. So, you find whatever opportunity makes sense and then you use your skills that you've built up scaling companies in whatever vertical that may be, whether it's tech, music, real estate, right? Did you have a technical background at all? Like, do you know so how did you create tech companies? Like, are you really good at attracting talent? Can you spot what the business plan is? How do you come up with your vision? Cuz you you built a tech platform for the real estate stuff. You built a tech platform for the music stuff and the nonprofit. Like, how does one build something if they're not technical, a tech platform?
Brandon Hance
Well, I think you just need to be creative and just be a producer, just somebody that just makes [bleep] happen. So, um, I never had an internship before I started my first company. So, not only was I not technical, I had zero business. In fact, when I was at USC, um, Coach Carol set up a call, it was like my junior years. You started thinking about life after football, after college, what do you want to
Taylor Avakian
do?
Brandon Hance
And so, he set up a call with this kind of high-powered agent at the time, uh, Jeff Quatnets. And, uh, I was, "Oh, this is awesome." And we had this call. It's such a silly story, but I remember it so vividly because at the end of this 30, 45 minute like introductory call, there was this word that just like, man, that just sounded so awesome. I literally wrote it down and I went to go Google what it meant afterwards. Revenue. Swear to God. I'm like, revenue? That just sounds something about that like sounds awesome. And uh that's just gives you a sense of where my mind was like two years before starting my company. So yeah, I had no idea what the hell I was doing. I was just a dumb jock. Uh but you had balls, man. You just got to go for it. It was exciting.
Brandon Hance
And you know, you just keep pulling on the yard string and uh meet people, people get excited about your vision, ask questions, be humble, and you know, just take it one day at a time, I So you have in all these companies did you have co-founders?
Taylor Avakian
Did you have people who were or were you like the sole main owner and you hired people? How did that work?
Brandon Hance
Yeah, I would say I was the original founder in all of them and that I you know would bring in people kind of a co-founder you know second third role and that I'm from a team sports background. So even the idea of a co-founder like I think we're all founders like we're all in this together. We're on a team. So yeah, there was absolutely people that were brought on early that were instrumental in all of the areas that I lacked, which was pretty much all of them. Yeah. Uh but yeah, in in the um in the first company, I had two co-founders. One was my childhood best friend who was a musician. So the idea was that we were trying to solve problems for independent musicians, kind of democratizing the music industry, if you will. So he kind of became the in-house use case.
Taylor Avakian
Got it.
Brandon Hance
And then uh the two of us were brainstorming this idea at the USC library and it was like 2:00 in the morning on a Tuesday and we're walking down and there's we could hear this music and we look in the room and there's like 10 Indian dudes having a jam session and we're like all right library Indian dudes music like someone in there has got to know how to build something. And so they go in, they're like, "Hey, we're brainstorming this idea. Do any of you guys, you know, anything about software development, technology, whatever?" And they're all, of course, like PhD, you know, software developers, geniuses. And so, um, and so, and long story short, one of those guys became our third, no way. Third founder of the company. And he was from India and, um, right when we graduated, we, uh, moved to India for 6 months.
Brandon Hance
Um, started a development shop, hired like 35 engineers. You moved to India? Moved to India. Yeah.
Taylor Avakian
Why? Okay. Why?
Brandon Hance
Uh well that was where he was from and obviously you know talent is quite a bit cheaper there than it is here. So there was an aspect of cost but frankly there was probably more of an aspect of just like network and speed and we can put something together real quick cuz his father and brother were in the industry and so they were like hey we can find a facility we can recruit talent and like let's get this
Taylor Avakian
thing. So you're building it all in India the whole tech platform everything.
Brandon Hance
Yeah. No [bleep] Yeah. So that's wild there. And yeah, that was a crazy experience.
Taylor Avakian
Okay, let me give you an example. I want you to So if you had to like today, right, you've built multiple companies. If you had to start a brand new company today, like what are the first things that you do? How would you try to build a successful company right now?
Brandon Hance
Yeah. I mean, today it's so easy, so fast, so cheap relative, you know, to to that time frame. Yeah. I I think it's so it's relatively straightforward to u create an MVP right through AI through no code or low code solutions or assuming there's some kind of a tech platform and it's relatively efficient both from a time and cost standpoint to drive demand you know traffic to test demand user acquisition cost and is that through ads yeah through ads social whatever even through your own direct network it doesn't take a ton of data to get a sense if the dogs will eat the dog food right like is your product really solving a real problem.
Taylor Avakian
What are the metrics you look at to know if a product market fed is right?
Brandon Hance
You know, a lot of it at the very early days like before you have like a dashboard and you're kind of quantifying metrics um that would reveal a path to a sustainably profitable business. A lot of it is just emotion, right? Like you can just see in the physiology of somebody if you are with them in person and you present the problem, can you feel this is a real problem, right? And then you're like, hey, here's the solution.
Taylor Avakian
Can you feel that?
Brandon Hance
Oh my god, this would change my life. Right. Um, and just at that level, you're like, "Okay, I'm on to something." Right now, you have you'll have to figure out forever on exactly what the offering is, how to position it, how to market it, how to price it, and so on and so forth. That's just operations. But I think fundamentally to figure out that product market fit is like what's your problem and can I give you a solution that you're like, I can't live without
Taylor Avakian
that. Are you the type of leader, the type of CEO who is more on the numbers, the data, the are you really good at Excel? Do you look at all these dashboards? Are you more of a you can rally people together and bring them in this shared vision? Like what do you think is your superpower when it comes to being a cedar a leader and a CEO? Because that's something that I've I had a coach for a while uh who was like a leadership coach. We did some sales training and stuff, but I would say I'm definitely more of a solo like by nature. I'm very much independent in what I do and think I played team sports growing up, but I'm a leader who's like show and then by example, right? and then hopefully have people can see my example and then learn from that, right?
Taylor Avakian
There's other leaders who are this servant leadership, right, where it's all about, okay, we're doing the training here and we're building this and we're doing that. We're going to have these um, you know, parties together and we're going to get really close. Like what would you say your leadership style is?
Brandon Hance
Yeah. Uh, well, first off, I really want to understand like what anyone on my team or even before they come on my team, like what are what are your dreams, right? like how can I really understand the unlock for you and then figure out how do I align your dreams with our needs and hopefully there is an alignment there and if there is phenomenal we can kind of change the world together and if not it's probably just not a right fit. So first is like this has to really unlock a lot of energy and excitement for you and if it does then I can figure out how to kind of put you in a position where you are genuinely excited to go to work every day and uh knowing kind of exactly how to align that with what the company needs most. So I
20:00–30:00
Brandon Hance
think most people don't kind of look for that. If you can do that, then I think by definition, you're bringing somebody in who's going to
Taylor Avakian
have some degree of initiative, right?
Brandon Hance
So, they don't need the handholding, the SOPs, the training, even the the the the dinners and the events. Not to say that those aren't useful for other reasons, but they don't need those, right? They're there because you're giving them the opportunity if if you do it right, you're giving them the opportunity to
Taylor Avakian
do exactly what they want to do, right?
Brandon Hance
M so and that's the other thing for me is I've never looked at it like you know when employees leave they've screwed me over they're being disloyal I actually expect and want them to in a perfect world they stay with you forever but sure but by the same token if you're bringing that type of person in they're probably not the fire in the belly let's go light the world on fire type people. So I would rather bring those types of people into the culture and then really understand what they want. And if they're like hey I want to go start my own brokerage or I want to create my own team. I don't look at that as, oh well then screw you because you're gonna come take all my ideas and leave. I look at that as, okay, amazing. This person has fire.
Brandon Hance
So now, if I know that's what you want to do, let's just partner on that and let's give me like a a tour of duty commitment. I'm going to show you what I know, you're going to give me the best that you got and we'll just have an honest relationship with each other. So when it's time for you to go, not only will I support you in that, but like I will applaud you for that. And if you if you have that viewpoint, the two, three, five years that they're with you, you're going to get the best years. And then when they leave, they're not leaving submitting their twoe resignation and then you're screwed. They're like, "Hey, we're already on board. We've been talking about this for a long time. We're going to plant the seed. I'm going to build out this amazing transition program.
Brandon Hance
I will not only train the person, I'll recruit and train that person. And then when they leave, they're going to, you know, sing your praises." And then you have another partner in the ecosystem, right? So that's that's kind of the approach that I've always taken.
Taylor Avakian
Did you learn all this stuff? Was this natural in you? Like how did you gain these skills?
Brandon Hance
I I think I don't know learning exper you know exposure there's a lot of influence that I've had even just like from from Pete Carol like USC. Yeah. Um so I was at Purdue for two years before I transferred to USC and Purdue had an unbelievable run. We won you know a couple of Big 10 championships. Um I replaced Drew Brees as the quarterback there. So he obviously put that school on the map. Um and um and so I only say that to to not discredit Purdue and the value there. But they had a philosophy and a culture that was like the traditional old school football. So like I graduate of high school early, I get to Purdue, a California kid, get to the middle of Indiana in January, freezing my ass off. And the culture was, "Oh, you can't wear long sleeves. You can't wear a hand warmer."
Brandon Hance
Like don't be a [bleep] I don't know if I could say that, but uh that was the vibe. And I'm like, this is just dumb, right? And so I transferred to USC. And by the way, we had 5 a.m. workouts and trash cans lined up and down the field. And if you weren't throwing up, it means you weren't trying hard enough. Just like dumb. Yeah. So, we get to USC and they weren't quite on the map yet. It was just at the beginning of the Pete Carol era. And um the practices or like the offseason conditioning programs were like 45 minutes and I'm like these guys are soft, right? And that was my initial kind of take at it. And then what I realized was no no it was fully intentional, high intensity designed around recovery and it was really meant to make you perform at your peak. M.
Brandon Hance
So I'm like, "Oh, so this is meant to break you down and this is meant to build you up." And so, um, I it took me a while cuz they weren't good yet. And then we didn't lose a game for 3 years. Um, and it became, you know, arguably, you know, one of the best programs in the history of college football. And I attribute a lot of that to the culture that Coach Carol brought to the team. And just to touch on that for a second, you know, he came from an unbelievable kind of lineage of coaches. Mhm. Um, Bill Parsons, I mean, just all all the greats. But he never really found his philosophy. So, when he was at the I think it was the the Patriots fired, then I think he went to the Jets, got fired, he took like six months off
Brandon Hance
and said, "I need to do some soularching and really kind of lean into what are my philosophies, like what is it that I actually truly wholeheartedly believe?" And then if anybody ever gives me another opportunity, I'm going to go all in and do it my way. And so USC was basically his petri dish to implement these ideas and uh and I think they were remarkably successful and a lot of those ideas I think have kind of permeated you know pop culture now and he's changed the game. I don't think anybody is doing it to the full extent that he did at that time. But um but yes there's a lot of that that I think has um has had like a pretty profound impact on the way that I look at the world.
Taylor Avakian
Were you at the Texas SC? Were you I graduated the year before. Oh my gosh, dude. I remember I had some best friends who uh they cried that day. I remember watching the game and I was like, "Holy crap, there's like there's love for this." He created this culture and I think it was permeated through the team cuz cuz the fans and the people who were supporters of Essie, they were finally winning and it was like this he was he was also good at I think there was this marketing aspect to what he did too to bring the fans into the team and the cultures and then the players put that out there as well. there was this style, the swag, this Pete Carol, you know, that was super super interesting, which it sounds like you've there were
Taylor Avakian
lessons that you've learned from that and then trying to create that and implement those in in the companies that
Brandon Hance
you've built. Yeah. And part of that is like it was fun. Yeah. Right. Like you were playing loose, everybody was authentic, like it
Taylor Avakian
was smart, right?
Brandon Hance
It wasn't just, you know, so there was so many aspects of it that to me kind of seemed like common sense and obvious now, but at the time it was like profound and it was really a different approach. You know, even the following coach, which I won't name, I'm sure we all know who it was, who literally came from that staff like took the total opposite approach and like wouldn't let players onto the field, lock practices, like all the whole celebrity Snoop and all the guys would come out like couldn't come. It was like what are we doing? And then all of that soul was stripped and then they lost and never were able to kind of figure out how to get that
Taylor Avakian
back.
Brandon Hance
Yeah. Yeah. So he did a remarkable job of of looking at the team in the broadest sense. The team wasn't just like, you know, him and the starters or him even in the football team. It was every fan, every alumni, every administrator and frankly like everybody in the city of LA.
Taylor Avakian
And he he brought everybody into that culture. Man, that is uh that is an epic thing to be able to be a part of. Um, can you walk me through I want to jump back to Avenue Homes. So, you're 2017, you guys are building a bunch of properties. Um, walk me from then to today. Where are we at today with Avenue and what's that look like?
Brandon Hance
Yeah. So, man, so we kind of fast forward from 2017 through March of 2020 and that
Taylor Avakian
was essentially a build, right?
Brandon Hance
So we went from ideiation to um raising whatever nine figures and planning to do um 80 acquisitions in 2020. At that time we had about 60 employees and we were vertically integrated as I mentioned for architecture, interior design, construction and brokerage. COVID hit and um our investors um at the Propco and Opco level uh but the OPCO in particular were very concerned that high-end residential home values would drop off a cliff. I had you know nine figures of personal guarantees on the line. Had never been anything you know through anything like that before. And so I kind of you know said okay first of all he who writes the checks writes
Taylor Avakian
the rules.
Brandon Hance
So to an extent, you know, even though I had a vote, um, you know, my board, if you will, ultimately decided that we were going to, I'll never forget, cut off the legs, cut off the arms, and preserve the body. Um, and the idea of that was like just absolutely minimize expenses to the fullest extent possible. And so what that meant was, you know, we laid off 80% or furled, whatever you want to call it, of of the of the team. I spun out the construction company, which was a wholly owned subsidiary of Avenue. spun that out, which we can talk about in a second, which is a company that I I still own and operate. Um, and divested, at least from a new acquisition standpoint, on any spec homes. And so we began to augment uh or really kind of launch the double duplex or small format multif family
Brandon Hance
program. um thinking that that would be a more kind of a durable product that would attract more capital and be more um insulated from COVID and any other kind of market uncertainties that were on the horizon. Mh. So that was a dram I mean just an absolute bloodbath and heartbreaking and demoralizing and really really tough.
Taylor Avakian
Um how fast did that happen? Two months.
Brandon Hance
Okay. Yeah.
Taylor Avakian
So yeah, we know what happened in 2020.
Brandon Hance
Yeah. I don't think prices went down. They absolutely did not, right? No. If we would have just stayed in, in fact, we we were fire sailing deals that if we would have just waited a month or two or three, we could have sold at a 10% or 20% premium.
Taylor Avakian
Looking back on that, does that what lesson do you take from that?
Brandon Hance
Well, a lot. Right. So, some of them are well, there's a bunch. I think that fundamentally the what hurt the most about that is I was thinking about building a business right and we were really trying to build enterprise value and a platform that could endure this type of market uncertainty and market uh volatility and so I was very disappointed that we didn't have the support at that time to kind of play through um because I thought that what we I knew that what we built operationally ally, culturally, technologically, um was uh powerful and um and really had staying power. So, in that regard, that really really hurt. In terms of what we learn about the market, you know, there's something to be said about being vertically integrated. Mhm.
Brandon Hance
Um you know, it's a really interesting idea. So, if you're the investor in the project and it's just me as the developer
30:00–40:00
Brandon Hance
and I go and I hire a u an architect and a contractor and so on and so forth through the value chain and let's just say those costs are a million dollar um or I say hey I can do this all internally um and those costs would be $800,000 and it'll be faster with higher quality and more efficiency and more influence and all that kind of stuff. Um which one would you like? Well, obviously I'd want the other one. It's like, okay, great. We are aligned, right? We are both investors in a project. That makes more sense. However, as soon as I'm like, cool, we need to charge fees to be able to cover that. And it's still going to be $800,000, right? But we have obviously mouths to feed and offices and software and all the expenses and we need to charge reasonable fees. And at that time,
Brandon Hance
you know, most of our investors were less sophisticated, not like institutional investors. It was more country club money, family office, ultra high net worth types who originally began the relationship like, "Hey, I put I put in the money, you do the work, and let's split it kind of thing." Uhhuh. And so it became very difficult to um negotiate a fee stream that would actually cover our overhead or even cover like 80% of our overhead, which which is the which was the target for us. And so I only say that to say that if there's a blip in the market um and you're carrying which we did were at that time you know seven figures of fixed overhead uh two months hurts pretty bad. Got it. So I found that there was massive alignment on the execution but total misalignment on you know making the necessary investments to realize
Brandon Hance
the benefits of vertical integration. So that
Taylor Avakian
um do you think that you can if that was handled in the front end, right? Is there a way that you could have mitigated that?
Brandon Hance
It's very tough. The capital structure is very tough because I think you kind of have to have um OPCO and Propco money like you would need an investor that was investing in your OPCO and in your Propco and you had full alignment up and down the the stack. Um there really isn't capital that falls into those types of buckets, right? this is a total needle in the hay stack. So we had investors who invested in the company and then we had investors who invested in the project and it became very difficult to align the two. Even though I knew with certainty that doing so was in the best interest of the project, it still was just like a little bit of an atypical structure and I found myself um almost at odds with my LPs which was very bizarre cuz even they knew that it was demonstrabably better. Yeah.
Brandon Hance
Um, so that was a little bit of a takeaway there just from a reality of how capital markets work in a conventional sense. I mean, real estate investors, um, you know, relative to, you know, venture investors, um, do not reward innovation. They they reward, you know, you've done this for 30 years and we're going to do it exactly the same way because we know that it works. Yeah. So, the idea of disruption and innovation is generally not very wellreceived and is really an uphill battle. So, I would say if you're going to do that in the conventional real estate, you know, GP space, like choose wisely. Yeah. I think that was something for sure. Um, you know, and I think that, you know, when it comes to real estate, um, if you're a merchant builder, um, you are, um, fundamentally exposed to the market, right?
Brandon Hance
As opposed to if you are a long-term investor. Of course, you have some degree of market exposure, but if you have patient long-term capital and you have relatively low leverage on the property, you can play through. And ultimately, I think that's where real wealth is generated is in holding great assets, great locations for the long term.
Taylor Avakian
Just kind of the simple stuff. So, walk me back through March of uh of 2020. So, you guys end up selling all this stuff and then what happens next? What happens until we are today?
Brandon Hance
Yeah. So um we went from roughly 60 people to basically six with a handful of independent contractors that we were you know kind of le and you were trying to finish these products or sell the existing ones or part of them. Yeah. I mean we had what 50 deals or whatever that were at the pipeline. So the six uh that remained were um very committed, very hardworking, down for the cause and and you know we tried to kind of rebuild the business. Um, we began doing the double duplexes and um, you know, depending on which cohort you're looking at, some were remarkably successful, some were kind of neutral and the most recent batch um, really just had the gauntlet of uh, early on in construction like in the 2022 time frame had exposure to massive construction inflation, right? 20 to 40% increase there.
Brandon Hance
I mean, I remember we were building double duplexes and the lumber packages were like 90 grand and then they were like 250 grand, right, within a few months, right? And that's the biggest line item in the budget. Uh, that was an outlier. Yeah. Um, but still that was a pretty big new
Taylor Avakian
[bleep] up your business plan.
Brandon Hance
So that was you know kind of in 2022 2122 we had the major you know construction cost inflation and then you know mid22 is when interest rates began going up and then 23 you had cap rates start to expand. So it's like if you were in that batch that um you know it had to kind of run through the triple gauntlet there uh it's not a great outcome at the end. Um so we had other ones that were like amazing freaking
Taylor Avakian
perfect. The timing was was good. It's it's yeah the triple threat of everything stacking up against you really makes a deal that one expectation was was X and it ends up being Y. It's like there's not much you can do because again takes a long time to get [bleep] done. It's not like you can flip it in six months.
Brandon Hance
These take years to make happen. And that's the thing you know that that we've experienced and obviously the recent years have been I think exceptionally volatile. Yeah. Um, but either way, I think what I've learned in starting in kind of the uh trustees and then short sales and then speck homes and double duplexes and now more in the affordable housing sector, you know, all of the good ideas only last for like two or three years. And so if you really wanted to build an organization of scale, as we talked about, I mean, that takes time to get aligned and be ready to execute at scale. And then as soon as you do that, there's some shift in the market where that strategy um isn't necessarily the right one. So I've kind of rethought that from a, you know, from coming at it from a more conventional company building standpoint.
Brandon Hance
I'm like, I'm not sure that approach is the best approach to building like a development shop. There are aspects of that, but so we've tried to take, you know, a a much different approach and keep our overhead and team like very lean, like sealed team tactical, like you're going to own this and be best-in-class, but then we're going to outsource. We're going to try to find best-in-class independent contractors. Uh, which again, I don't think is necessarily the best for the project, but I'm positive that that's best for the the sponsor for
Taylor Avakian
us. Got it. So, yeah, tell me about Angelino. This is your new uh your new company, right?
Brandon Hance
Yeah. Yeah. So, in that time frame of going through kind of the multi-year triple gauntlet, um I don't think I'm unique in saying, at least for LA developers, that nothing made sense. There's literally nothing pencled. And so, I I had heard about affordable for a long time. And um most of it was capital A affordable with lit and municipal bonds and, you know, union wage labor and it just felt like a black box and very um complex and a little bit of like a good old boys network there. I'm not sure how you tap into that. Yeah. But um but I kind of needed to find a new uh idea so to speak and this was around the time that ED1 had kind of just come to surface and a variety of state bills. So I I deep dove for probably six or eight months
Brandon Hance
to really try to understand every as you know every aspect of the program and um ultimately determined that that was um by far the most compelling opportunity in the landscape today. Uh there was also aspects of it that felt like very purposeful for me. Um like being in a city that is the least affordable city in the United States, arguably the least, you know, supplier, the most under supplied in the United States. Um and just kind of seeing the the challenges that people in Angelino face, it started to kind of just align with me on a more personal level. Mhm. Um and so I thought based on our experiences, both successes and failures, we could kind of, you know, take uh another, you know, approach at this thing and um and do it with a little bit bigger scale. I mean, that's part of the other issue that I
Brandon Hance
learned is, you know, um doing small projects, it still requires a project manager and a superintendent and an analyst. Um and so yeah, for the most part them, they do the exact same work on bigger projects. So there's an element of that um that that I kind of learned from and and yeah, so we we've acquired 10 sites um
Taylor Avakian
for these ED1 projects. Yep.
Brandon Hance
Right.
Taylor Avakian
And can you explain to people uh who aren't familiar like what are what what's ED1? What are the projects? What are the numbers look like?
Brandon Hance
Give me a give me the whole gambit. Yeah, I would say um just to kind of understand that the backstory of it. Uh again, affordability is uh a major challenge in the city of LA. um both Caruso and Mayor Bass ran on the campaign promise of solving that and making that their number one issue. And so when Karen Bass was um you know put into office, the very first thing she did was enact ED1, executive directive number one. That was the number one thing she did. And at the time it was just a 90-day ordinance. And the backstory behind that is, you know, to oversimplify, she basically went and spoke to a bunch of private market developers and said, "We desperately need you to get into this space. What do I need to do to compel you?" And it was like, well, and there was a long laundry list.
Brandon Hance
Uh, and frankly, the the list that was, you know, given to her seemed like an absolutely unthinkable list, and maybe if I get a couple, I'd consider it. But she gave all of them. Um, and so waved parking, increased density, you know, uh, remove permit fees, removed um, utility cost, and not only utility from a cost standpoint, but instead of that being the end of the line that you might be waiting a year, which I'm waiting 15 months
40:00–50:00
Brandon Hance
for a project right now just to get power. um it's the first thing you do in the submitt process and there's an entire department within LEDWP called Project Powerhouse. They'll run the whole thing. They do it first at their cost. There's there's a bunch of of of incentives uh on the front end to streamline um entitlements um and to reduce cost. Also on the back end, welfare tax exemption. So you remove your number one operating expense, which is property taxes. Uh from a permanent financing standpoint, you go from 30 years to 35 years. cuz you're probably 40 to 50 bips inside of market rate agency debt. So it it's just very very very compelling. So she put that into an emergency directive, renewed that renewed that and then ultimately put that into kind of permanent code. Mhm. So, um,
Brandon Hance
you know, the the first wave of that were mostly what I would call like land developers, and that's probably a generous term for for the people that I'm referring to, who who rushed into South LA, um, and said, "I can get dirt cheap, and I'm going to build seven stories, micro units, and I'm going to go get these covenant rents or these voucher rents." They're way out of line with the market reality. And so you'd have I think I for I have all the data on this but I forget like an ungodly amount of submitts to the planning department and Mayor Ma Mayor Bass starts cheering that oh my god look at all this this is such a successful program and then not a single person pulled a permit because they realized that what they designed was like fundamentally unbuildable. So I think there was this huge um
Brandon Hance
enthusiasm around the program and then it felt like there was this major swing in the other direction just from a sentiment standpoint especially people who are kind of on the sidelines like ah yeah that's that's a mess that'll never work or whatever but the reality is is that there is an approach within that that you know we continue to to have great conviction around that we think is is a really exciting pathway forward both for the city but also you know for ourselves and our investors.
Taylor Avakian
And what's that approach?
Brandon Hance
Our approach is more of a um we're focused on quality B markets. Okay. So, it began I would say kind of wave one as I mentioned in South LA overdesign tiny little units uh and banking on covenant or voucher rents that they'll never receive. Mhm. Um the city and HUD on a federal basis really want to incentivize developers to build in areas of opportunity because the concentration of affordable housing is almost all in you know lower um uh you know impoverished communities with very little opportunity. So um so they increased the voucher payment standard which you could get for section 8 effectively in the higher tiers meaning the higher areas of opportunity. everybody went in that direction and then the most recent um change to that that happened about a month ago drastically cut those.
Brandon Hance
So now all the people that went in that direction um are now kind of screwed frankly. Got it. So they feel like they got screwed at least once if not twice and there's other little nuance things that I haven't mentioned yet. We just kind of stayed right in the middle. So our business plan on paper was uh you know the financial returns were lower than the South LA stuff. They were lower than the high tier stuff, but it was something that we always believed made good common sense, good locations, good product, and not bake, you know, baking in the overhang of vouchers, but just going on covenant rents, being in areas where the covenant rents are 10 or 15% below fair market rents so you're not exposed to lease up risk, and then making sure it's like a really quality product. Like ours have in-unit washer, dryer, rooftop decks.
Brandon Hance
Um, and we're very, very intentional about parking. I think that's one of the other major issues about ED1. Uh because you just because you don't have to park it doesn't mean you shouldn't be thoughtful about parking. So we're in all TOC3s, so there's, you know, great access to public transit within an eighth of a mile. We're also in areas that are all, you know, residential are so we're not in like Ktown as an example. So there's an abundance of street parking and we're in areas where there's actually permit street parking. And so if you can imagine a neighborhood that's, you know, predominantly single family homes and even without the street, you know, without the the uh permits, there's street parking everywhere. But this is even more to the point, you can't park there from whatever it is, 9 to 9, 9
Brandon Hance
to 7 um uh 7 days a week unless you have a placard. And everybody that lives in a single family home typically doesn't live on the street or park on the street anyways. So all of our units would have two placards per unit. So there will be an abundance of street parking there. and our larger sites, we're parking about 50% of the units on site anyways. Wow. So, we're even though we can't park all of it, obviously that will create some challenges, but we're doing the best we can. And I think on the net, that's that's a I think an appropriate and fair balance that works for the tenant, works for the neighborhood, and works for us and our
Taylor Avakian
investors. What are the size of the deals that you guys are building? Like 40 to 80 units. 40 to 80. Okay. And is there a specific reason why? Is it because the the parcels that you have to buy to build? Maybe they're not, you know, you got to get a triple lot. it's harder to get. You can build these on a double lot or single lot or what's what is the constraints I guess?
Brandon Hance
Yeah. So, we we look at all of them. So, we we've designed the prototype kind of took the very similar prototype ccentric approach that I described on the single family side. Um we built smaller threetory without an elevator, fourstory type five with an elevator, fivetory type three, and then kind of up from there for six and seven stories, podiums, you know, and so forth. and uh with and without parking, on-grade subterranean. We kind of just looked at all all the variables and um to us what made the most sense was fourstory type 5 with an elevator. Um you're able to get enough density to justify the land basis, but you're able to build at a price per foot where your hard cost, you know, makes sense relative to the rents. Mh. Um, and so, you know, if you're a large institutional developer that just has
Brandon Hance
to deploy more capital and you're okay, you know, dealing with a, you know, 150 bit, you know, lower return on cost, like, God bless you. Excuse me. Go, go build that. You know, we, um, that wasn't for us. We were really trying to optimize returns. We were also trying to, you know, do what we thought was reasonable for the neighborhood. And so um you know doing a sevenstory hundred unit building with zero parking in a neighborhood that just didn't feel right to us. So even if you could do it and even if you knew that it was profitable it's just not what I wanted to do no disc to the people who are doing it but it's just not not didn't feel right to us. So just trying to kind of balance all those things the 40 to 80 unit um seemed to be a sweet spot.
Brandon Hance
And also from an execution standpoint that felt very much in our wheelhouse to execute from a construction standpoint. And so one of the ways that we can control cost and and control is by being the builder ourselves. Um and so we have experience building that product type at that scale. Um the next level, you know, it would be a challenge that I'm sure we'd be able to figure out, but it wasn't something that I had full conviction that we could do on day one.
Taylor Avakian
What are the current return metrics that you guys are underwriting to or are anticipating in terms of like what is the what's the yield look like? What is uh cost of construction? What are all the detailed numbers right now?
Brandon Hance
at least how you're looking at it. Yeah. So for um covenant rents, so assuming no overhang, no voucher, um if we're in um kind of the best markets that we operate in, call it like Palm Sautell, Mar Vistda area, you know, our minimum threshold is a 7.5 return on cost. Um Wow. Most of our deals are um higher than that, high sevens, low eights. Um, and if you assume whatever some degree of a voucher premium, then obviously it goes up from there. Um, the the delta between covenant rents and vouchers a couple months ago was much wider. It was like 150 to 300 bips because covenant rents were 9% lower. We just had a huge increase there and the vouchers were actually higher. Yeah. So covenants went way up, vouchers went down and so now that the the delta between them is pretty narrow depending on which tier that you're
Brandon Hance
in.
Taylor Avakian
Okay.
Brandon Hance
So that made us kind of double down even more so on covenant rents and say, "Hey, if we get vouchers, great." But otherwise, we're just building, you know, workforce housing.
Taylor Avakian
Yeah. So interesting. And so, um, where are you guys in the process? Cuz And is the exit plan to sell these things? Is it to hold on to them long term? Like what is the business, I guess, full cycle plan for you, at least right now?
Brandon Hance
um build them uh put great permanent debt on them and pass them on to my kids. The goal is to keep them forever. Okay. And that's one of the other big challenges um you know aligning with institutional capital is most institutional investors are operating within their own fund structure and they have to exit in three, five, seven years whatever it may be. And um you know just given the market right now with preps where they are and cap rates like you're working for free. Yeah. Um and I just know that the way to actually generate real wealth is to hold on for the long term. Yeah. So um I made that um my top priority in looking for capital partners in this venture to learn from the mistakes um that I made and the successes and um really try to build a portfolio that
Taylor Avakian
I could hold on to forever. And where um have you guys started building these are mid construction? Is it your full entitlements? You're just waiting for the right thing to happen. Where are you in the process for the project now?
Brandon Hance
Yeah, so we have um we own 10. We have three in escro to acquire. Okay. Uh we just put our first shovel in the ground on our on our first project uh this week. And then the plan is basically to start one project per month for the you know from now to the
Taylor Avakian
Olympics. And when do you think what's the typical timeline going to be to actually complete these things?
Brandon Hance
So we're doing a threetory for a client um that we finish in seven months. Seven months. Yeah. From trenching to completion. We don't we don't have a final sign off. We're waiting for switch gear. Um so maybe technically it'll be 9 for you know but you would go there now and it's a completed project. We're just waiting for the equipment to come.
50:00–1:00:00
Brandon Hance
So that's unusual. Uh our projects will be you know larger with elevator and frankly we probably just got lucky and everything went right on this one. Um we underwrite 18 months.
Taylor Avakian
I think our real target is probably 14. Okay. Okay. So you you'll know more about things and hopefully when the market gets better too, right? I mean, we're both anticipating or at least everyone who I talked to is like rates are going to come down, right? And so, in a perfect world, that means that uh values are going to go up because cap rates are going to come down and then it'll look better for you in terms of a refinance, right? And and long-term debt. And um the covenant stuff, I think that's interesting to me. So the way that it works is they put these 55 year covenants which means the rents or the is it the renter that has to be in there for uh a certain amount of AMI or medium income. Is it like give me the example of what the covenants mean for the
Brandon Hance
property. Yeah. Yeah. So um the building must comprise of tenants 80% of which are at 80% of AMI or below 20% that are of 120% of AMI or below. And so as a single person in LA, uh I believe that's like $93,000 now is uh 80%. And then as a dual income household, it's like 80% of that or you
Taylor Avakian
know combined.
Brandon Hance
So it' be like 160 grand or somewhere thereabouts. Um so the these are these are not impoverished people, right? These could be young professionals and or anything else. Um so and that rides with the building for 55 years. Well, there's another piece of it. Yeah. So it's deed restricted for 55 years. Okay. And then there's another layer on that which is the the rent schedules. So that's what I'm referring to as covenant rents. Okay. So HUD basically, you know, does a rolling 5-year history of income levels, runs through their algorithm, and then stipulates what's the maximum amount that a affordable housing project can um charge for rent, right? And so let's just say that's $2,000 for easy math. Yeah. um these land developers, as we called them earlier, just said, "Oh, it's $2,000. That's what you can charge." It's still a market, right? That's just the max you can charge.
Brandon Hance
So, if you're in South LA and market rents are $1,500, you're not going to charge $2,000. I mean, you can charge, but you're never going to get it. Yeah. What we're doing is we're we're going to market in areas where market rents are $2,400 and then offering 2,000.
Taylor Avakian
Got it. Right.
Brandon Hance
Got it. So, that's a big difference. Now, your um that is your max. So, it does set your cap and that creates a lot of discomfort for investors because a true market. The one thing that I'll say is you know this probably better than I that rents have been flat in LA for the last few years and yet the covenant rents have gone up 6 to9% per year for the last 5 years. Yeah. Um and the way that they do that is they do it on a 5year rolling history. So even if this year and next year fall off the cliff from an income standpoint, which they aren't, um you would still have the four previous years. So we did the math yesterday, and even if income went down 10%, which is like the biggest that it would be since the crash,
Brandon Hance
um covenant rents next year will still go up by 6.3%. So, and we we only underwrite the normal 3% of So we've gotten very comfortable with that. And um you know obviously there's some drawbacks to it but we believe that the incentives far outweigh the cost.
Taylor Avakian
And uh so so then for Angelina are you do you want to scale this up like you you envisioned Avenue doing? Are you is this going to be like more of a mom and pop smaller like you know a couple deals a year kind of situation? How do you envision you growing Angelino?
Brandon Hance
I can't help myself but to want to do things you know kind of bigger better.
Taylor Avakian
Yeah.
Brandon Hance
Um, but there there's definitely an aspect of it that's more measured. So again, we're not vertically integrated in Los Angeles. I do I have a construction company. So instead of it being owned in the same, there's we've kind of deconentrated the risk because the construction company also builds for other clients. Got it. Right. And the investment company doesn't have to bear the full cost load of it. So that's just kind of one um difference. Um, yeah, there's a variety of differences that we have, but I think I think that our kind of biggest headline goal is we really want to deliver 2028 units by the 2028 Olympics by the time that the torch is lit in LA.
Taylor Avakian
That's our that's our target. Epic. And how uh what needs to happen for you to get there?
Brandon Hance
Just keep doing what we're doing. And we're kind of on pace to do that now. So, if we're able to do that again for 26 and 27,
Taylor Avakian
then we'd be on pace to deliver that in 28. How many deals is that total? or how many products I guess would that be?
Brandon Hance
We are starting to do larger deals. So the first eight we're all about 40 units. Okay. Um and we're we've just been very fortunate to find more double and triple lots that are more going to be in that like 60 to 90 unit range. Okay. So the the number of projects obviously has gone down with that. But yeah, we can kind of do the math from there. It probably end up being like 3540 projects.
Taylor Avakian
And what um so you've in and developed and invested a lot in Los Angeles. Is it easier to develop? Is it harder to develop? What are the headwinds that we're dealing with? And does that impact you at all in the way that you're thinking about this from a long-term perspective? Do the fundamentals of Los Angeles make you feel comfortable in this? Like give me a little bit about your macroeconomic view of Los
Brandon Hance
Angeles. Yeah. Um, I'll start with saying it is very difficult to develop in Los Angeles. Uh, the headwinds are real. There's a lot of fake news out there, but I'll tell you anything about developing in LA, that is not fake news. It is freaking hard, uh, every single step of the way. And I can give you as many war stories as you want, but it is absolutely legitimate and challenging. Um, full stop. Uh, I also believe that LA has um, as we've talked about, incredible demand. It is incredibly under supplied and will continue to be for the foreseeable future. Uh, we are a hub and a destination on an international scale. And, uh, I don't think that's changing anytime soon, nor will the weather or the pretty girls or all of the dynamic economies that we have, kind of microeconomies within the city. So while you know the overwhelming majority
Brandon Hance
of GPS and LPS kind of fled Los Angeles uh and we considered doing so we ultimately kind of established a counter thesis to just double down on LA u which is why we named the company Angelino um doing it with open eyes by no means with rosy color rosecolored glasses that it's the easiest best place today but believing that it is a kind of a durable undersupplied market with high demand that um I think we believe will pay off in the long
Taylor Avakian
run. Uh are you involved in any of the rebuilding that's happening in the Palisades or Altadina?
Brandon Hance
Not not yet or and not in any meaningful way. We have a couple of of homeowner clients that we're building homes for. Um we've been very focused on just the Angelino side affordable housing and there really aren't many opportunities if any to do that specifically in Pasadena. We haven't looked in Altadena much. Uh I looked into it a bit from a home building standpoint. M and I I just had far too many questions um that I I just don't know how it's all going to work. And I've really kind of dug into it pretty hard uh at various points like immediately and then a few months later and I go check it again a few months after that.
Taylor Avakian
And how does insurance play out? Do people stay or leave? How quickly does it get built? Um what will the demand be on the back end? Is that three years or five years or seven years?
Brandon Hance
I I just don't know how that's going to play out. M so you know I'm I'm open to doing it when we have more bandwidth from a service standpoint you know through our construction company as an example um but I've not been able to like identify a thesis that makes sense to take capital risk.
Taylor Avakian
Got it. It makes sense. Yeah. There's so many uncertainties with uh insurance and it's it's just kind of a weird I remember maybe three or four months after the fire happened people are like okay where's the opportunity right? like and I think there's uh I just heard this recently that there's bond funds or something that you could get if you're within 5 miles of of the fire zones or something like that. Are you familiar with with that?
Brandon Hance
I'm I've read about it and I've heard people talk about it. It's kind of one of many examples where I heard about this, I heard about that, but I don't really know what is true. There's so many things that I've kind of, you know, chased that ultimately didn't come to fruition or um, you know, was a compelling headline, but when you really double clicked to get the substance behind it, it's like, ah, all these catches and caveats. So, I'm I'm positive there will be opportunities there. I think anything um that you would do there would be like deeply purposeful because it's a unbelievable neighborhood and it absolutely deserves to be rebuilt and reimagined to the fullest extent possible. So, from like a creative and a purpose standpoint, it would be really fulfilling work.
Taylor Avakian
It's just not where I've prioritized my time. Do you feel like real estate is still an industry where information asymmetry exists andor do you think it'll continue that way or do you think it'll be democratized with the use of AI and the use of a lot of tech tools and I mean, it seems like you're pretty forward thinking when it comes to use of technology in real estate. I've had the experience of it being a majority mom and pop and it being very much like back of the napkin spreadsheet, you know, if they're lucky, they're using Excel, right? Kind of situation, which allows for this information asymmetry, allows you to have a business model, a plan, someone doesn't want to do the work and they're willing to take a discount on the the potential value of a property because of that, right?
Taylor Avakian
Do you feel like real estate's going to continue to have that? Do you think it's going to become less? What is your vision long term? Yeah,
Brandon Hance
about this industry. I don't think there there is an industry that is, you know, insulated from technology and automation and so forth. Um,
1:00:00–1:10:00
Brandon Hance
so without question, if you are not embracing AI and technology, like you will fall behind, you will be competitively disadvantaged. Period. Full stop. I'll also say that real estate is hyper local, boots on the ground, relationship driven, and I think it will continue to be that way forever. So ultimately um you know the people that really are successful I think are the ones that I just described. They're the ones that know this corner, this neighborhood, this restaurant, this subcontractor. You know, I know that what buyers or renters are looking for like they know it. And that comes from I think instinct and relationships and felt experience. Um uh so they're both important, but I think if people only overindex on the AI tech side, they're going to miss the
Taylor Avakian
market. Are you using any AI, any tech in what you guys are doing right now?
Brandon Hance
Yeah. Yeah.
Taylor Avakian
All of it. How are how are you using it?
Brandon Hance
Well, you know, I go back to that that um um database that we created that parcelized, you know, every lot in the city of LA was incredibly cumbersome to query. Now all of it is on LLM. So before it was like this big pain in the butt and data hygiene was really challenging. Now it's like super clean and you would you can use it like chat GPT. So you just ask any question you want, spit it out to you. It automatically integrates into our CRM, you know. Um we don't have um our acquisition team like looking at MLS feeds. It automatically comes in. It'll scrape it based on our our criteria, put it into kind of a pre-quall list that someone in the Philippines does. They do a little bit of digging on it.
Brandon Hance
kind of put all the pertinent information so that our acquisition person can kind of see it. So there's there's all kinds of stuff that we do from a efficiency standpoint. Um and then if you kind of go through the life cycle, you know, all the way through even to like investor reporting. So um we can pull out um photos or schedules or budgets or financials and kind of autopop populate our monthly reports now which were just absolutely a bear to do every single month. Totally. and now they're like better, faster, more polished, more professional. Um, and it just takes basically an editor at the end to make sure that it all makes sense and doesn't sound like a robot. Um, so there's examples like that that are more kind of operational and administrative that have really allowed us to um kind of reinvest our time
Taylor Avakian
in areas that move the needle. Is there anything exciting that you see on the horizon where you're like, if we can unlock that, if that can become something where it's like, ooh, um, that's going to be cool. like is there something on the horizon or if if you had a wish list of what could be created?
Brandon Hance
You know, I think that there's been I believe that modular, off-site construction, prefab, whatever, just that whole category. Even robotics. Yeah. Um is more of a when, not if. So, I can't wait for that to happen. That's just something I've been I' I've experimented with all of the ones that I just described to varying degrees of success. none of them in an infill Los Angeles um context I've experienced to be better, faster or cheaper or at least two of the three of those. Yeah. Um and I think that's just a matter of time, but I can't wait to I mean I've seen like PY and a variety of these other large home building companies like are drywalling with robots and then now they're doing tile and they're doing paint. So um just as small examples like those are incredibly compelling uh
Brandon Hance
in every regard in terms of time and cost but also you know we have a very legitimate um scarcity of of skilled trades. It's really really difficult to find the people. Obviously we have a lot of uh political challenges now that make you know candidly I think that in the residential sector residential meaning single and multif family that are non union labor the people that are on job sites swinging hammers I I would be shocked if they're not 80% or more um illegal. Mhm. Right. Mhm. So imagine how those people feel every day going to job sites. So scared out of their minds, man. They're driving like this or swinging hammers like that. So that is not sustainable. And obviously, you know, young people generally speaking, are not going to trade schools. They're not wanting to get into the profession.
Brandon Hance
What's interesting about that is how many white collar jobs are being eliminated, right? If you're in marketing, content, software development, all these fields that you know, young professionals of the last decade went into with enthusiasm and highpaying jobs and really cool companies, like those people are out of work and the next batch of them have no chance of being hired. No. So, you know, it may flip where the blueco collar jobs um you know, are become a much more compelling pathway for the next generation and we'll need that. You can't you know, back to um you know, the yin and the yang, if you will, of the tech versus the the boots on the ground. You need a plumbers, you need electricians, you need framers, we need all those people. And um and you know, my hope is that um there will be
Brandon Hance
you know, compelling professional opportunities for those people to like look at that as a real career the way that people, you know, did in the
Taylor Avakian
past. We need it for sure. Um let's talk about social media really quick because I've been noticing uh that you and the team have been going hard. I'm going to say they're going hard in the paint in terms of social media, right? What was the shift? Why did you did you see something? Did something happen where you're like, "We got to go.
Brandon Hance
We got to hit this." Yeah. I'd say it started with me just on a personal level. It wasn't a professional thing or even within the context of the company. Um I I can't remember who I heard say this or maybe it was bits of people that I've kind of put together, but by so I I never posted on Facebook or Instagram like literally one post in my entire life. And so the whole idea of it just felt very unnatural, douchy, imposttor syndrome. Just all of it just didn't feel right. Um, but the things that I heard started to make me realize that uh writing, at least for me, really helps me clarify my thinking. And so there's a lot of things that I think about that I don't have a need to fully finish my thought or articulate them in a way that feels complete and resonant for me.
Brandon Hance
So that is a is a huge benefit. The second is if you're talking about things of value like corporate culture as an example or personal growth and performance or whatever by writing about those publicly, it almost creates an accountability infrastructure for yourself, right? You're saying, "Hey, here's the things that I value." And you kind of feel a little whisper that you have to live up to those. Um, so I think that's a net positive. And then thirdly, um, is that it it kind of forces or or pulls, if you if you believe in that, really interesting people into your life. and um both people that are are in your life but maybe you're not haven't talked to for a while or about things that you're really interested and then of course new people as well. So that's ultimately for me those three things when I really
Brandon Hance
thought about them in a logical way with that perspective to clarify my thinking increase my own accountability and dramatically increase the communic the relationships I have with people in my life that totally um kind of outweighed all of the other you know things that have pulled me back from the past. So on my birthday, I said, "Okay, I'm gonna just write a post every day for the year and just see where it goes with no real objective other than the three that I mentioned." Yeah. And so I'm two and a half months into doing that. And it's just been um it's been a lot of fun. I've really enjoyed that. And I've felt the benefits in each of those three areas and more. And so as I began to do that, you know, we had conversations as a team about like, hey, here's what I'm doing. Here's what I'm learning.
Brandon Hance
Um you know, can I invite you into this process? And um to the extent that you have things that you want to talk about personally, phenomenal. Like that's that's on you. But here's kind of an idea and a vision about what each of you, you know, what your roles are within the company. And going back to really trying to align like what do you want to be like? Forget what your job is here. Like what is your dream?
Taylor Avakian
What for your career? What do you want to be in one, three or five years?
Brandon Hance
And how can we kind of come up with a content plan that is fully in alignment with that that helps the company, helps you, we all win. And so we've all been kind of having fun with it.
Taylor Avakian
And what do you know?
Brandon Hance
It works. And so obviously we're sitting here today.
Taylor Avakian
Yeah.
Brandon Hance
Because you took a similar journey and because we kind of reconnected through that.
Taylor Avakian
So here it is. It's amazing. It is really amazing the the the pulling the doors opening. It's just I've experienced it firsthand of just like really incredible things with sharing your thoughts that you keep in your head, right, but don't actually want to share with the world. And being vulnerable I would say in a little bit has allowed people to resonate with that where at scale that is really not possible any other way right and you find attract people who are like you which is the best part about it like the people who don't vibe with whatever I post cool like we weren't going to vibe in real life anyways but if you vibe with me on social like ideally that's the person that I am and reflecting that back on there
Taylor Avakian
people can be like oh I like that person or I want to work with them or or I want to get to know them better Whatever it may be, you seem to be a person who is pretty self-reflective and I would say maybe a continuous improver. I I consider myself like constantly trying to learn anything and everything I can. I love learning new things like love trying to be better at the every other day, you know, every day get better and better. Is that true for you? Are you someone who does a lot of reflection, a lot of trying to see how you can improve X YZ about your life?
Brandon Hance
I mean, yeah, fundamentally I believe that that is our purpose. I think that we are here and you know, fundamentally our job is the work of becoming better on ourselves and our duty is to become the best versions of ourselves and ideally do that with kind of a serviceoriented mindset. like there's no uh kind of more noble or spiritual thing to say be the best version of yourself and then make sure that you're doing that in a way that benefits your people, right? Whether that's your family or your community or, you know, more broadly the
1:10:00–1:20:00
Brandon Hance
world. So um yeah I think if you take that commitment seriously and you really believe in that at a deeper more fundamental level then it's your obligation to be reflective and objective and continually improving yourself in all facets of your life.
Taylor Avakian
What is your process for for that for yourself?
Brandon Hance
Yeah. So um it's funny you asked that because since I've you know I mentioned I just started just for fun.
Taylor Avakian
Yeah.
Brandon Hance
And then as I um as I've been doing this, I've actually begun designing a system um that is not done, but I've really felt that I've like you learned so much, read the books, attended the seminars, listen to the podcast, but so much of this information is like all over the place. And so it be kind of kind of become shelf help, right? Hey, read it, throw it back on the shelf. Yeah. As opposed to really figuring out, you know, what is a system of continuously working on yourself? Um, and so that's that's kind of what I've been in the process of doing now and trying to figure out, you know, what are those habits on a daily, weekly, quarterly, annual basis that you can, you know, you can come back to to try to kind of balance structure and flow so you can live in the flow of
Brandon Hance
a day-to-day life that feels more playful and present, but also knowing that at the appropriate intervals, you're going to step back, reflect, ask yourself the right questions, and kind of re-evaluate and reset the plan. So, that's that's what I've done. um somewhat intuitively or kind of inconsistently from a tools and timing standpoint and something that I really want to kind of codify moving
Taylor Avakian
forward. Last thing before we wrap up, what are tools like things, technology, whatever that you use every single day or that you could not live without that are super instrumental in in that system and your business system. Like I'm just curious to know, are you an ASA guy? Do you use, you know, Google Drive? Like what are the tools that you use in your day-to-day?
Brandon Hance
Um, I certainly use Aauna and Slack for sure. Um, and WhatsApp. Uh, my assistant uses Superhum. So, I spent a ton of I was addicted to my email. Um, and then, um, decided to completely outsource my email to my assistant and she uses Superhum and that's been a really awesome collaboration tool. Um, I have my Whoop, which even if it doesn't work in terms of like the calorie tracking step, like it's usually just feels off, but just having it is a physical reminder to prioritize health and sleep and recovery and and movement. So, um, I love looking at it even when I know that the numbers are off. I created a little um kind of a nightly um journal scoring system called one score that I just kind of named up for myself
Brandon Hance
um that I do every night that really helps me kind of be reflective of how I showed up in the day, what can I learn, how do I improve upon, and then ultimately how do I set myself for for success the following day. So that's like a ritual that I
Taylor Avakian
is that written or is that on computer?
Brandon Hance
I create it like on a Google form. Okay. So, it's digital and it logs it all out and then at the end of the week I'll kind of look at it and then I'll set my plan for the following week, you know, based on that information. Okay. Um, so that's that's been great for me. Um, yeah. So, those are those are the few things that kind of come to mind.
Taylor Avakian
I I'm such a nerd about that [bleep] because uh I don't know. I I find myself having a lot of chaos and a lot of open loops in my life and sometimes it can be hard for me to find the space to be reflective and to like you said, it's there's a million things shelf everywhere, right? you're like, "Wait, I remember someone said that and then I should be doing this, but I'm not consistent at that." And you and I both know if you're not consistent at anything, it's it's not going to happen, right? Um, well, Brandon, this has been incredible. Um, I'm very excited to see where Angelino is going to be going because I think the mission makes sense. I nerd out about systems and operations and clearly you guys have a vision for what that needs to look like.
Taylor Avakian
And so I believe in people who have that as the base foundation that they're really setting themselves up for success. So I'm wishing and hoping you guys have incredible success and uh hopefully we can do some deals together.
Brandon Hance
And dude, this has been awesome. Awesome. Love it, man. Thank you so much for having me. Of course. Appreciate it.