Alright guys, so a lot of people access how do they make a podcast? I'm let you in on a secret on the easiest most productive way to start a podcast and get it up and running and that is the app called anchor is free. They have all kind of cool creation tools that allow you to record and edit your podcast right from your phone or computer. They will distribute your podcast for you to all of the major Outlets including spot.Why Apple Google many more and you can make money from your podcast with no minimum listenership is everything you need to make a podcast in one simple easy place. So if you're interested in starting a podcast Go download the free anchor app or go to Anchor dot f m-- to get started. Let's do it. Alright guys, so we got some exciting news breaking news alert breaking news alert, Atlanta Georgia. We are on our way January 25th and 26th ATL shawty. We got a lot of stuff planned for y'all. It's a two-day event to Day weekend event. We coming to take over your city. Yeah, we can take over. So the first part will be January 25th Saturday. We are going to do a live podcast. We will have following that we will have Private dinner will have a private networking event open bar confirmed guests for the podcast right now real estate extraordinaire realtor Keanu Watson superstar superstar realtor, and we got one of our most prestigious alumni the king of culture cultural curator. Kenny Burns will be in the house to do a live podcast with us, man. We birds will be in a building and we got one more slot open that we going we can't get something. So yeah, we do not give them to you. Then following that experience on Sunday. We have a workshop and the workshop. We have eyl alumni. So we're going to type those when our guy Andy from Y2K Credit Solutions going to talk about credit everything. You need to know about credit. Yeah. We got our boy mg. The mortgage guy coming to talk to you about real estate for first-time homeowners. That's a fact then we have our guy Alex good energy Lana's own the trucking who rules going to give the breakdown on the trucking industry how to Involved in trucking everything you need to know about getting money and trucks. Yeah, man, Atlanta don't miss out don't play yourself, right? But the head and Honda we can't forget. Oh, well, I'll most recent UIL alumni Our God accepts Maxwell. The king of wholesaling will be in the building for the workshop. So we going to cover everything from wholesaling to credit to financing real estate deals to trucking to day experience. Take over man. Well, like I said don't play yourselves Man 2 tickets are all the information will be out this week. Make sure y'all go to earn your leisure.com and hit the events tab get yours early y'all ready. So what happened in DC? It won't be a situation like hey, man. Yeah. I got anything left. We playing it out early letting y'all know early grab them while you can and learn to see you soon. Peace. All right, guys, welcome back ey o Hometown Heroes addition. It's right for sure tells us I'm sure for sure so we are in DC right now. This is been Chris just finished up crazy crazy event. We had Topgolf got like 200 people there was crazy. You know, somebody said they were like, yo man, this is crazy everybody. I follow on social media is in this room right now how y'all doing? Hey shout out. Shout out to shout out to everybody that came to the event. Don't shout out to our God's Irani for sure capital capital capital event group capital offense crew shouting the boys around he is a he's an amazing man. So if you in DC and you need an event planner curated get the contact follow me on Instagram, which I'm sure will put a post up about it. You took care of us man, DC would not be the same without him. Yeah. Thank you for the hospitality row appreciate it and it's going to basically we will let us go ahead with networking. With network is and Atlanta your next January 2015. We 26. We're going to take over the whole city big big big big big can't play around with a lamb everything on the pull-up. Yeah, every time we say a lineage of also, if you know, you know man shot to the great city of Atlanta. Can't wait to touch the town. I'm gonna be releasing details soon details might Have already been released by the episode comes out but we gonna yeah, we're going to do a really really big so we have a dope episode plan today and it is yes Hometown Heroes even though we're in DC. It's not DC Hometown hero, but it's yeah he did I hear it's a Milwaukee, Wisconsin Hometown hero that lives in DC and Milwaukee. Oh, so my man Brandon will I was interesting because like I think you had the article we buy black. It went viral and then my Troy sent it to me. Yeah, I did somebody else sent it to me. Yeah, and then body and read it in full transparency just like it cause he said that seven articles a day does but like by the time a third person ready to send it to me. I read it. I got it. I'm like, yeah, we should probably interview. He's like, yeah send it to you two weeks ago. So what are you interested in coming like? Yeah. Somebody actually just told me about your project. So it was like this is like one of the quickest turnaround. Yeah, like two weeks ago. I was like yo, this guy's dope man came from Detroit hit me like yo, this guy's dope. I'm like, yeah just read about them and then like the next week. It was like yo, he's gonna come on some like oh, yeah great. It's easy. One, two, three. It's okay. So Brandon Brandon is dope. He's 31 years old and he's a we talk about real estate a lot. I most of the time from our podcast is Real Estate Investors, which is dope wholesaling buying flip stuff like that, but he's a developer right? And he's young. He's 31 years old. And he most of his developments are in Milwaukee, Wisconsin, right and he has 40 million dollars of affordable housing currently under his belt as far as development and then a hundred eighty million dollars in the pipeline. Yeah, and that go over your head. Yeah. Sure. Just please I just got awarded a huge 41 million dollars forty 1 million for the first place for the first fading million in a second and that's going to be for a grocery store in the first thing you're gonna do is go thousand scoop. One square foot grocery store with a hundred and fifty apartments above and the parking garage. Yeah a parking garage. Yeah. So this is going to be a high-level conversation. It's going to get in the weeds if you want to. Yeah, so first and foremost, thank you. Thank you for having me. I appreciate it. Appreciate appreciate appreciate sure. So, all right. So before we before we even get into the nitty-gritty of what you've done, how did you get started as an interesting story? Because if people don't know who the legend people And that's unfortunate. That's where my son's it's really unfortunate situation if you think about it because it's like everybody knows who's Lebron is right? Everybody knows who's Lil Wayne is right, but this guy has definitely more money a little way not show the tools. No disrespect but probably like almost the same amount of money on LeBron, maybe more money than LeBron right? Like he he's in twenties weight close to being a billionaire, right and he's black developer from DC from DC and not a lot of people are really familiar with him. So did he kind of I bring him up because he kind of he's a start of your real estate Journey right and just see at lien and do see for sure. So yeah, what's your what's your path in real estate? And what's your path to coming to DC from Milwaukee for sure. I'll just start from the beginning for real so from Milwaukee, but I was actually born in Los Angeles, California. So I was born in LA and in 1994. I was in the earthquake the Northridge Earthquake at the time. It was the worst natural disaster and financial know. Worst natural disaster financially in American history so over a billion dollars worth of Damages one of that being my home. So we lost everything slab outside for a few days. Remember vaguely like being outside of the Walmart and just not having any resources the highways were broken everything. So my parents are high school sweethearts from Chicago. My dad was like I'm with this we going back so my grandfather was living in Milwaukee at the time. We ended up moving to Milwaukee into his attic as we got back on our feet couple. Months later rented the house and then move forward. So from that point forward, I grew up in Milwaukee and if anyone knows anything about Milwaukee, it's actually the worst place for black people in America right now Google it. It'll pop up and many articles many reports. I saw a statistic was like specifically Madison was six percent of the population is black but 50% of the people incarcerated a black. Oh, yeah, he's crazy easy. Yeah Madison is ridiculous to pricing is ridiculous to Milwaukee is actually closer to 40% black, but we have No problems, which is not natural resources, very similar to a Detroit very similar to a Baltimore but no one's really looking at you don't hear about black folks from Milwaukee. Like people don't leave. It's just a thing average. I think median income in Milwaukee for a black person is $28,000 a black fan. Yeah, $28,000 family like family of four times to the family Perry a black family this a two-parent family 3 to 4 is not always to parents but $28,000. Is that average for a Family in Milwaukee and that's very much. So what me my friends my family everybody. That's my roots. That's who I am. That's where I'm from but I needed to break that so I went to school all of my all my family were influenced by my grandfather who was a very successful Street pharmacist. And yeah, we know I love the language is important. It's important that go we're going to file that where we had returning citizens. Yeah. Yeah. I'm sure that's going in that same boat trying to Citizens any checks any doubts. He actually was first person. I heard ya I am trying to Citizens. But yeah, so he was a street pharmacist. Yeah, and he influenced my entire family. He was an entrepreneur. He was really, you know, as far as millionaire in the family by the time I came he got hit with the RICO law and we didn't have any money again, so I didn't really have that benefit, but I said, I to say I was the one that wanted to change the trajectory of the entire family, so I went to school Did it a different way I was always like the chosen one. It's like okay cool. You got one out to school grew up in the Milwaukee Public School System was actually one of the worst in the country as well wear it on my sleeve because you know, you can come from any environment and make it right after the fact so went on to school went on to Marquette University study economics minor in sociology. So I think that kind of gave me the background that I needed and real estate economics understanding capitalism. A lot of people think money is bad when really is just a tool. It's Sort of Leverage in a way that you do any other tool right so study economic but also study sociology. How do people fit within this how to how does the people from the hood fit within this capitalistic, you know society that we live within so that was my Foundation then my senior year junior senior year fourth year. I took a program called the Edgar program which stands for Associates in commercial real estate and that pretty much expose me to what commercial real estate development. Was because like many other folks here real estate in like you think of a broker you think of a realtor but there's so many other things when it comes to real estate you like so many professions. So when you think about a development process a civil engineer environmental engineer geotechnical engineer architect a contractor a developer A lender, there's so many different avenues that you can get into so that program exposed me to that and then it's like, okay well developers make a lot of money. I want to Financial Freedom. And I want to some flexibility. So I was like, okay. Well, I think I want to do this and then that's when I started on my real estate path while doing that. I got my hands on a book called The People's principles which was written by down people's down people's billionaire like developer from DC. That's where he started the moved on to Miami and went to Vegas and now is based in New York and read this book really was inspired by the really technical things that he said within it's like this. This is how I became what I became and I was like, oh, this is great. Okay. Well, I'm a follow a similar path, but just doing my way. So in 2017, I got my 2016. I got my first low income housing tax credit so affordable housing developments in the past were financed through Section 8. So if you think about a Section 8 property Cabrini Greens in Chicago, you know, some of these really large Berry Farms in DC really large complexes 3 400 units and really just clusters of poverty. That's how that's how they were financing him. But now they use a tool called section 42 IRS code which is a tax credit. So we are given a tax credit that we sell to an investor and use that to finance the project. Can you explain that a little bit because yeah we Section 8, I think most people know what section 8 is right where it's like it's government and they subsidize housing, right and what sent you that you don't have to live in the projects like you can have a house. So there's two different types. Okay. There's Section 8 Project based voucher. Oops, so projects got the Section 8 assistance, but then there were also like people baseball right where you can take that teasing you going to like a house and a pay the landlord, right? So so what's the new Way section 42 is the primary tool for affordable housing. There's still some Section 8. Yes. I'm still some vouchers but section 42 just really high level if you think about a building and you think about developing a building it may cost forty million dollars to develop a Right typically in order to fund that building you need rents that will pay you enough. To then get a bank to give you a loan. So you need a construction loan and then you need permanent financing. So in order to get the construction loan one of the threshold items is hey, how much is the loan to value of this projected property? So if your value based on rents being at $1,500 a month equates to 40 million dollars, you can then build who's doing the assessment of how much each one is worth each unit the market kind of determines that okay, so drilling deeper into Let's say 1500 prior equates to 40 million dollars. Let's say now you're in an area that rents can only be seven hundred and fifty dollars per people still need to live but we still need additional housing in order to build that the government created a tax credit that subsidize Developers for the difference. So if the 750 gives me 20 million I effectively are going to get I'm going to get 20 million in a tax credit to them make it balance and make it work. So they So they'll pay you the developer. They pay the project. It's a project a penny more. Not you personally, but they fund the project. Yeah, and they allocate a tax credit to the developer to sell on behalf of the project. So they pay the person paid 700 in it $1,000 if it was seventeen hundred thousand dollars is being paid through through the tax credit up front Okay, and in exchange for the tax credit, you have to restrict the rents for certain amount of time. Okay, 15 years 30 years etcetera and the rent to like Market. Yeah, so it's based on the area median income. So that's really like how they determine it and they have different thresholds. So 30% unit is like very low income a 50% unit and a 60% unit is what we will call Workforce or affordable housing and then you have 80% units as well that can be financed through this tax credit and that's based on so take a DC $100,000 area median income in DC 50% unit is $50,000 if a person makes $50,000 in DC they can qualify for affordable housing under this first row, you take 30% of the income divided by 12 months. That's how you come out to the rent amount that you can pay. Okay, so, okay. So a little deep sir. Nah, that's right. He yl that's what we do. That's the hold this right right right in line with our content. So you meet you meet Don people's right and how does that go? Yeah, so 2017. I jumped out he was speaking at a conference in DC and I was like I have to meet this guy. So I still buy the door very tenacious. I'm an ambitious guy by Nature a-type personality if I want something I'm gonna go get it and I wanted to meet him. So I went introduce myself. I just received that tax credit. That's why I wanted to get a story just received a tax credit. I was about to develop my first project. Hey, Don, what's up? I'm Brandon. I got my first project in I got a couple more in my pipeline would love to To connect and he he was impressed by what I was doing because my age I think I was 26 27 at the time and his first project. I was 27. He was awarded his first project the 27 as well. So I was on that path. It's like okay. Yeah. It's the only black billionaire doing what I'm doing. I need to meet him. So we met had a phone call about a month later and the biggest takeaway. I took from that phone call was he said work on larger deals? So at that time I did was 12 and a half million had another deal I was about 10 million and add another dude. I was like 7 million. The 14 million dollar deal was a market rate units. It wasn't a affordable housing development actually never went through. I'll talk on that too. But I needed to raise about one and a half from Equity investors in order to finance the project and you just you know, go out to folks get a hundred thousand here 250 there, you know cetera et cetera, and he pretty much just put it in perspective for me said I just raise 500 million dollars in New York. And this is the easiest money. I raised because institutional Capital the demand on that it's so it's so much so so much less than a man on every day individuals and Investments because you can invest in stocks. You can invest in bonds. You can invest in a different real estate project. You can invest in your kids college fund individuals have so many options but institutional Capital needs places to put this money, so he told me to work on larger deals and said about three months later I moved to do so. That reminds me of three stories. So I'll take them one by one. Well first off, you know how one of the people that really got people's into the game Marion Barry. Yeah for sure. You know that Lucy Legend DC Legend Rest In Peace So, that's one story The Second Story is that that also that what you said reminds me, I watched the interview with Magic Johnson and Maverick called a child to both of those classes and Magic told Maverick. He said the same amount of time that it takes to do a deal for 1 million. It takes to do a hundred million hundred percent. So 100 million at the same energy same energy same energy same thing. It's not like I thought you have to do additional energy. It's the same energy output is just you're focusing your energy on a small guy level. Uh, yeah, you can focus your energy on big so you can focus your energy on small. Yeah. The third one was Byron Allen. Okay. He was on The Breakfast Club. Yeah. He just said what you said as far as like what especially institutions a lot of times they have a problem where they have to stay have to spend money. They have to they have to spend money. They raised it. They have it exactly has to go on looking for they have whole team's devoted to look for opportunities. Right which means they have whole team devoted to look to say where can I give money away to different deals and how can I position is because I have 500 million dollars at that. Look at this is so great you just 500. So it's real raise your hand, please. So by trying to understand that the key to that you have to understand their language. It's a language of Finance. That's the way I look at it. It's no different from English verse Spanish. We all know English some people know Spanish some people don't Finance. It's just a language and if you understand the language and if you understand what they are saying and what they are looking for you can make it work. So how did you I'm interested to know this because you started in the game very young 20 early 20s and 2323, you know humble beginnings you like your family was in real estate. So, how do you get your first? How do you learn a language? How do you get your first deal? In real estate as a developer. Like how does that he walk me through that process like your very first deal. Like how does that happen? So my first did was actually four unit investment. It was a real estate investment type. Okay. It was a her home on the northwest side of Milwaukee by whole. Yeah. I just sold it about a year and a half ago. Okay, so I bought that when I was 23, so let me rewind FHA FHA. Yeah, three and a half percent down. It was only $85,000 and I sold for like 160 nice. So that was like well You know, it makes sense. So that was that was my entry entry point but rewinding so once I finish the acre program, I'm like, okay this real estate thing is cool. I think I want to figure out how to be a developer. I spend a lot of time trying to put the pieces of the puzzle together. So I started going to events. I want to a ton of conferences a ton of seminars Galas all type of things. I was just searching for people and information and knowledge and I quoted it to like putting together a puzzle right? It's like Like if this is the real estate puzzle, how do I find a pieces? And then how do I put them together? So I met a guy by the name of Keith broaden? No first. I went to an awards banquet called the many awards as Community Development Awards in the city of Milwaukee. I'm actually up for I'm a finalist of the real estate World. Okay, you're too so congratulations. Thank you. Thank you. I'm sure you'll win. Yeah, I appreciate this episode this episode this awards banquet and A gentleman by the name of women Winston women Winston was executive director of weeda weeda is the Housing Authority that administers the low income housing tax credits. So I was like, yeah, I want to be a developer Exciter excited. He was like, well, if you want to be a developer come to this conference, this is the developers conference. It's going to be all developers. There's going to be lenders is going to be Architects indicators. Anyone that plays in this arena in the state of Wisconsin will be here at the conference conference is like a couple hundred dollars. I didn't have it ended up getting sponsor somehow I think guy like figured out a way to financial way up here. So I you know, I threw on a suit I had a little nappy fro at the time and I just was meeting everyone I can meet and I ran into this gentleman who I just saw a few weeks ago Keith brought next he was working at Great Lakes Capital, which is now called Saint are there syndication for him, they raise funds and then they administer they pretty much purchase a tax credits on behalf of investors and he gave me my first pro forma. So a pro forma is essentially An Excel document that pretty much is the business plan for Real Estate development and what that does it allows you to understand how much this will cost to build and how it will perform over the next 15 or 30 years. So he gave me this pro forma and I had no clue what it was. I wasn't really a finance guy was it you can economics major but I wasn't a math or Finance guy really? So I was just diving in and I tried to figure it out. So I would like Google every turn. No, Google University is a thing. It's a real dancer fell YouTube University thing. You know, I was Googling every single time trying to understand. You know, what else today UIL University. I will talk about that later on. Let's go even better. Yeah. I was just Googling all the terms within this document and I just started to work in it. So I was working at the bank of the time. I was working at PNC Bank as a personal banker making $23,000 a year now. I was like And I can't this is the my life. Like I'm not about to just be wearing these nice suits getting up at 6:00 in the morning get home at 6 p.m. Doing this for the rest of my life. I can't do it. So I would then get off work and then go back to work from 7:00 to midnight 7 172 every single day. I was in that pro-forma working for years educating his educated myself in that no articles no pump. No, press no publication every no payments every single day. I was working. So what then happened was I realized that I was only making about 1,500 after taxes per month and then I came across his for unit. That was $85,000 in Milwaukee and Milwaukee. So I put three and a half percent down. I was running out there. I think the rents were about 600 apiece maybe 625, you know do the math on that 24. My mortgage was about a thousand. So I was clearing 14 just off of this when I was only clearing. At the bank, I quit my job the moment. I bought the for unit. I couldn't quit before because I needed to show the income to buy the for you Ray. But once I once I close I quit I was out of there that thing gave me the freedom to dig deeper into this real estate thing. I spending the entire set all my time energy and effort was going towards real estate development specifically, I know investing was cool. But I wanted to figure out how to be a developer because the fees associated with it are great, you know, just to break it down for real. Upper doesn't get a 40 million dollar payment or anything like that, but you on the market right side, you may see three to six percent of the total cost. So if you working on a hundred-million-dollar do do the math on an affordable side, you get about 10 to 15 percent tennis is really on the total project cost. Yeah, so you so if so, if so if you do a 40 million dollar deal you get 10% - four million dollars. Yeah, correct. Yes, it's in the 10 to 15 percent depending on how he took the ladder somewhere solo, but we don't love anymore around it lower on this respect. It also respect them. So so so to that point it was like, okay, let me figure out how to do this development thing. I worked in this model boom. Boom. Boom. Boom. I saw the numbers. So I'm like all day making some real life money in this thing. So figured it out. So I start Working I met with him again show them. It was terrible you help me met a consultant that does development consultant and she was actually a CPA as well Charlie Brown based out of Atlanta. She helped me hone my skills when it came to my performing my motto. So what we did was just I would I would try to work in it. I would send it to her she would edit it send it back and eventually I got good. It's like okay. Yeah. I know how to do a project. So then I started looking for a project. So are you doing this on a platform? What's the Excel Microsoft Excel I was on my computer. You can $100 computer from Best Buy. Yeah, download exhale and you working. That's it. I said you don't need anything else. So I'm just teaching myself all the language teaching myself how to do things. So I start swinging that projects and I was missing but it was one. It was a city on RFP request for proposal very similar to the one that I just wanted Madison that one I ended up pitching it. To a developer and I'm like yo, let's code developed this project. Here's my model for it. Would you guys be willing to split the developer fee in the ownership top bottle is what's it? What's the motto is a another name for the pro forma. My bad. What's the performer? The pro? Forma is the business plan for Real Estate development. Also in the excel in my mind. I'm thinking develop pro forma and model are they're the same thing. So I'm using them interchangeably. So it's like it's like the blueprint the blueprint the financial blueprint Financial blueprint for Real Estate development. That is the developer do the physical blueprint as well. That's going to be somebody down the line. We also we Outsource some development shops can have an architectural person on and but I outsourced so, all right. So you you study you learn you learn how to make a financial blueprint for a project like this is my vision. This is my financially how it makes sense for sure. You don't have any experience. So you go to another established developer. They've done it already have done it already. He said I already have the blueprint. Let's Got them. This week is split. Yes. Oh, so now I'm creating value. That's the key to get any partnership. You have to create value for the other person. It's not about what you want is what they want and how can you give it for them? That's a fact, right? So it's like okay. I'm and I'm gonna give you a real number. So I think that project was let's say 10 million dollars. It was time. I got to do the fee on that was 12% So we was at one point too and I'm like, all right. Well, can we go 50/50 on it? It's all right. Let's first half. Let's take a risk. Let's Supply for it. See if we get it if if so the trigger it out if not cool. Keep it pushing. So I pitched it and then at that point, I knew it's like wait a minute. I just created six hundred thousand dollars just from my mind with a developer that does this for real so I cannot do it. I was probably like 20 for 20 25 maybe so that was the first time I actually knew shortly thereafter. I actually took a job. It was very intentional. So at 24 you got the 600 ma that never went through. It never worked out but they agree to it, but they agreed to and that's all I needed to know that I can do possible. It's possible. Yeah, I'm here. I'm a developer now. Yeah, and nobody taking this from me, right? So I ended up getting a job shortly thereafter. I didn't get that money was running low. Yeah, I had to you know for unit things like that. That's fine. But I got a job working at a cdfi a real job a real job. Okay. Yeah a real job. What's a cdfi a CD of fire is a community development financial institution. Okay. We just we just learned about that. Yeah. Sorry about I'm a slow learner. Yeah, I think I heard there's a young lady here. There was a young lady here was talking just about the size in yeah City fathers, right? So the bright Woman by yeah. Shout out to the bright woman. Yeah. So yeah, I worked ended up getting a job. It was actually have time for to see if I've held on the person in the country to do this, but I work for forward Community Investments. They were a mission-based community lender that Didn't loans to small businesses and then the Community reinvestment Fund. They were a national nonprofit that did the same thing in a different way. So one was a state-based focused on Wisconsin other one was National also Target in Milwaukee. So I worked at home. I work remotely so I was really more of a contractor for real. I work remotely from home for both of these companies really going out doing technical assistance with businesses and understanding what the gaps were that why are we giving this money out? Like I had had access to one of them was from 50,000 to 5 million dollars in lending that was mind lending capacity personally. I can like give that out to businesses. So I was like, oh, this is great. It was very much all along with my vision and my mission and I was able to sit in on the credit Committees of these different companies. So when it came to like applying for loans and applying for some of these things I know exactly what they were looking for because I was sitting in there. So I worked there for two years what type of clientele or clients to what you're seeing Primarily business for Community reinvestment CRF, it was business clients. So I was looking at bars. I was looking at pubs. I was looking at cleaning companies. I was looking at it was a full gamut and in for Community Investments, it was more so real estate by for real. So you so use on the inside of the institution and you you knew what they were looking for to lend money. Yeah, you use that when you left at to get the loan you money because you already know what they're looking for. And diarrhea that way it didn't really work out that way. Okay Okay, it definitely idea. Yeah, it was idea. But now I know how all the group's work the same. So yeah, I use that same tactic to get all the rest of it. So what they what were they looking for? And what makes you attractive? Not you? I'm just and I will make somebody attractive to somebody my honestly, it's a huge gap. So II thought that I would be giving out a ton of money but and I had access to the capital but I couldn't give it out what they were looking for. It was a disconnect. It's like our people are here and their money is here. And I feel like it was my duty to kind of like bridge that Gap but that Gap so they were looking for honestly pretty traditional things. You know, it's like reserves some some, you know, may or may not do a start-up so you might have to have some income collateral is the biggest thing in our community. That was that's the biggest guy. We don't have collateral if you think about history a lot of businesses were funded because people owned real estate right you were able to get It's loans because you can put your house up Millennials. We I'm well, I'm a millennial houses, right? You know, so that that that is a challenge that is a shift in the marketplace that I don't think has been identified yet. So we all of our people are like yo, we don't have any money. We don't have any money. We don't have any money. There's such access to Capital gap which there is but on the other side there screaming. Oh, we have so much money and we can't deploy it. That's what happens every single time you talk to anyone in the industry and that's what they're going. To tell you all right, I bet so now we're going to go into the next segment. We're going to talk about like your journey into developing like how you find a deal like all little 101 or not since hitting on that on the whole. Yeah on the whole one the whole deal. Hey, let's break it down then. All right. Ernest you're currently paying off student loan debt interested in improving your financial literacy or looking for new ways to earn income and today's ever-changing digital landscape. Well on the talk money with the mesh lakhani podcast mesh will follow Paper Trails chat with experts break down complex ideas and bring Clarity to the mystical Financial phenomenon. Each episode will be filled with compelling stories covering a broad range of subjects. From buying Bitcoin dealing with student loan debt and everything in between. So listen to talk money with mesh lakhani on Spotify or wherever you listen to your favorite podcast and learn how to spend invest in learn in today's economy. All right. So now we now we're going to ask a few questions that I think people will be interested in as far as you know, one thing where you is we like we talked about different topics that nobody really knows like I don't really have an education on this stuff. So as a real estate, Developer right? So you you do the financial blueprint, but now you actually have to develop it but development cost a lot of money to scale these projects, right? So how like, how does that part of it work as far as the construction? Aspect of it and actually develop it is that in my mind. I'm thinking and development. Yeah, you're baking the financial blueprint, but I'm like, you're not even seeing a physical output before you start or do you know like what you want this place to look like going in? Yeah you create you create it. So the developer is the one that creates division in his mind very similar to a director of a movie, right? Okay, like they don't they don't they're not the actor. They're not the They're not the scriptwriter often times, but they bring it all to fruition. And this is the way that it needs to go. So a developer, let's rewind a little bit real estate development is a it's a business process that takes land and you put real estate on it. So very simple there but a little deeper so I'm a commercial real estate developer. So I'm pretty much doing that a just a larger scale and there's different like sections of it, right? So I guess let's say break it down into three phases. There's a Development phase where you do the design and you get the financials in order and you talk through some of those things the second phase of the construction phase to your point. That's when you go and you're actually building the project and you're managing the budget to make sure that this is on time and on budget because if the cost of your development is more than what you anticipated then when the recession hit that's kind of what happened like you saw buildings that were halfway developed the people stepped away because there was not enough money to continue In you to project their plea the project and then the last phase is Operation to pre-development construction operation a developer pretty much runs that entire face from beginning to end. So let's break them down pre development phase. You have I typically start off with zoning and entitlement. It's like, okay. I have a piece of land here. How large is let's say it's an acre of land. Okay based on this acre. What is his own for? What? Can I do here my Because typically multifamily so it's like okay how many units cannot put on here? Let's say, you know Acres 43,000 square feet, depending on where you are. They based zoning off of Florida area ratio. So this thing called fa are so let's say it's 2 2 times fa are so you can put if it's far2 you can put a a 6,000 square foot building on this parcel. And then you reverse engineer how many units you can fit? So 83,000 square feet depending on the unit size if they're one and two bedrooms. You may be able to get 90 units if they are, you know, three and four bedrooms. You may be able to get 60 units and then based on the program. You create a vision around what is attainable for the site. So I start with the zoning and it's like okay. Yeah. What can I do and then based on the zoning? I create a financial model and dig a little deeper in and that's when I reach out to Consultants to do some other work, it's like a Architects. I want to put 70 units right here. Can I do that? Okay, what does that look like, you know, can I do underground parking here? Can I have surface parking how many stalls kind of fit and that kind of changes the iteration of that financial model that I was working on? Okay. Let me change this up a little. How long is that first that pre-process take for you? No time for real at this point. Well ours ours couple hours. Wow, so that's sending the third second and third one is the actual development right construction second one is extra. So we not even in construction yet. So that's that's early early initial just pre pre and then what you do is like, okay, I think I'm onto something and then you go get the site under control. So you reach out to the landowner. Is it available is it private is a public is it if it's public land sometime they have rfps and that's what I was warded with the 41 million. I Awarded that land to now develop it by the state or the city that was sitting on but sometimes it stayed on some time in cities sometimes County it varies. Okay, so that was public that's a public-private partnership in that way but sometimes private so when it's private land that's when you to little more difficult. Ah, yes a little more difficult because people value their land the way that they value their land. It's not different from a property if you own a home, you may feel like you're home. Um is worth $500,000 the appraisal may say your home is worth 200 or 100. So when you go to that individual and say hey, this is my plan for this site. Y'all have to have some level of common ground to make sure that this works because if they want five times your number it's not feasible you move on that Vision can't come to fruition because this is not roadblock and then once once you then okay, yeah, I think this will work around this price. I'll give you X for it you X4, okay. What's the time in DC? I mean typically you got to have a 30-day close 60-day close like a quick no contingencies. No, nothing in Wisconsin. I could you know, sometimes do year and a half without having to close on the financing and buy clothes. I mean, I actually pay for the land you pay for the land typically when your financial construction start. So when you close on all your finances, I got every all my ducks in a row. It all comes to the table the same time and it goes out to the various parties one of those parties being the landowner they can walk away. I now purchase it. I now can start construction which is now phase two. So when you're in that phase and you try to get the land, what's the bidding process right? So you were rewarded or water not warning you I'll Water the land what kind of explain what that means but what's the process of bidding for it? Yeah to sew sew on the private side. No process it. Just wondering one. Can I buy this from you or no? And I've been told no because of my age and my color before to be honest. Yeah, but on the public side, they typically put out a list of priorities that they want the most recent one. My 89 unit was a public public partnership and they just want to Redevelopment of a blighted site. It was half a mile away from where I was raised and I wanted to develop a show up at 89 units of affordable housing in my hood. That's what I did and they agree with my plan it. Wasn't very competitive and that was that but there are other ones like the one in Madison and I just one was very very competitive. They had multiple rounds of rfps this RFP again request for proposal. So that's when the city says. Hey these these are our priorities for this site. We own inside. We don't want to own this site cities often don't want to own sites because they want to benefit from the tax revenue from it. It's not in their best interest to pay the upkeep. It's a lot of risk associated with owning land. Cities often try to partner and sell and you know, do things like that so that this priority specifically they wanted a grocery store. It's like right next door is a Pic N Save Roundy's was just acquired by Kroger and they're shutting that Pick n Save down. So now this area is about to be a food desert. So the city was like, okay in order for us to preserve some level of grocery in this area. We need to put out an RFP. So that was the number one priority or grocery store. Second was affordable housing and some level of Housing and density. So I put together the best plan to bring that grocery store in the quickest amount of time. So, all right, they need a grocery store. They write their identified a need a grocery store. Why don't they just reach out to grocery stores directly? Why did they did Oliver they they did grocery stores often don't develop their own land either they lease hmm, you know, so a developer developer Developer manage that process businesses don't typically manage that process, you know, if you think about Apple Apple isn't going to like build their own headquarters. They're gonna hire some Consultants or developer to build it for them. So that's an RFP can be in that way too. So that's it. It's of interest for them to align themselves with a developer who has the capacity to do this because it's not something that just easily can be done. Got it. They can't just do it. So Phase 2 the construction phase bit about that. Yeah construction. So each each phase is a little less risky. So pre development phase is a ton of risk. I rewind a little bit then I'll go into it. It's a ton of risk because you're paying a ton of Consultants to do work. You're doing environmental assessments a phase 1 and Phase 2 since I could be $10,000 between the two divided mental it says that when they check in the dirt to see second. Yeah. Well, yes, so environmental that's one where they seeing if it's contaminated has it been you know was this a gas station historically is this up to code? Because you don't want those fools to rise in the people get sick and die and all that stuff. So you pay for environmental Consultants you pay for civil Consultants, which put together the design of the building and make sure this is secure. Okay Architects design it but the civil engineers are saying this will be starting for x amount of time. We won't have settlement Etc and he hired Geo technical consultants to test the soil and to see is a soil okay, you know stuff like that. So the soil is more so like for settlement civil was myself structure and Longevity and things like that. So all of those people you got to hire prior to getting to construction whose feelings paint that the developer is so yeah The Great quest log is yeah, but you can you can get once you have a plan together you can get loans in theory. Yeah, they can get along. We can't get loans, really right they can get along. So I partner with the people that can get alongs and try to I'll go into that in a second but you pay for all these Consultants even architect all the architectural designs are pretty renderings and all that's like see ya, you know, this couple hundred thousand easy. So before you get to construction are any of these rfps are like do does it ever come into play with the was it mwb? Minority women business is it because I already like three half Have a certain amount of development of developed by minority developers is that case minority developers is not a thing. It's not a thing. It's not it minority contractors is a thing. Okay minority developers is not a thing. So I have to end my development counterparts. Yeah that ass. I'm an anomaly for real. So I have to hire minority women veterans and my colleagues have to do the same my counterpart to do something. We have to hire them the construction workers make sure that all of the people that are part of the same a Beat 20 25 percent 30 percent 40 percent of the total the money that is allocated to the budget has to go to work these groups, but there's no structure for me as a developer and being black to benefit from that. Why not? That's what most money has it ever been proposed don't know I've never heard of it. I'm sure it has historic black developers aren't a thing. A lot of them. Didn't know it's not a thing because historically Banks we all know about redlining we all know about that. There's a book called the color of law talked about this before but for people that don't know color a lot documented the government's effect on communities and intentionality of segregation. So what they did was if white developer even was developing something that allowed a black person to live in it Hood would not insure. So the bank would not give a loan. So that was for white developer. So imagine a black developer trying to develop something for black people wasn't possible. So the marionberries of the world and just like a see Russell in Atlanta the mayor of Atlanta the mayor of DC reached out and use their political connections to bring these two you up AJ Russell and Atlanta down people's in DC in order to create economic engine in our community that allow for growth in a way that does not exist. So again, that that's not just not a thing at all and hopefully it can become a thing but there's not enough black developers. I mean I'm a conference is all the time. I got a real estate meetups and everything like that, but oftentimes just like Most most folks are investors because it's all we know most of the developers. I know aren't they don't look like me so I don't care if Kevin Newell, it's big brother my he's killing it in Milwaukee right now. Absolutely killing it. He's a black developer that is doing his thing couple folks out here in DC as well Dr. McKinney. I really respect Don people's sun is actually doing development out of DC as well. So there's some like developers like bubbling up. Yeah, but yeah, it's just not How important political political collect connections depends on where you are I would say in Wisconsin not as much Wisconsin is a very objective state if you are doing if you are checking these boxes. You can move forward in a place like other places. It's not that objective. It's a little more subjective will you know and all yeah. Yeah. So yeah, I think we were talking about the construction part real quick. So you start off ton of pre-development risk you pay for the all of these Consultants couple hundred thousand and then at the closing table, so the benefit of getting to the closing table, is that all that risk is wiped away. It's all a part of the development budget. Although you're paying for it before. It happens. You get refunded once all your money comes in. So the 300,000 that you had out the million dollars that you had up all comes back right there. So that's a great day. And then what happens in the construction phase you have to mitigate that risk? Because you know people may not come to work or the cost of something maybe more expensive or the design wasn't you have to change the design up and things like that. So you have to look out for all of those things before you get under construction because when that construction budget gets blown up. It's a it's a real thing. And the first thing that goes at that point is your developer fee. We have to pay for that. So we got to mitigate that risk because you can get a project done and I make nothing so that point my first project 60 unit fordable Housing Development twelve point six million dollars, I made $30,000 on three and a half years worth of work. I made $30,000. That was it. What kind of insurance do you have to have to be protected like during construction just as a developer. I'm sure like anything. He said like you're on the hook, right? So I guess you don't want to have to Come out of your pocket if something happens the risk appetite. So there's no insurance. No, it's not a thing. Now. Is this a risk you take so that deal 12 and a half million my original development Partners. So this is my first project this one. I got in 2016. My regional development Partners were fully integrated farm. So they did they did development construction and Property Management. They did it all so I'm like, okay bed. Let me partner with these guys. Let me learn from their different entities is all one stop and then we gonna do it moving forward. Word. Once we got the award their board wasn't as comfortable with the original terms. We agreed to so now, you know based on so you have to make guarantees you make Financial guarantees for construction. I guarantee that this will be built even on my own die and you have to spread the risk across development profile and share that with Partners if they are making all the guarantees they're taking all the money. So that's why we get boxed out to black folks typically don't have the capital to say welcome. Yeah, we came back guarantee. I have about yeah, well, you said that because I have a friend who client. Well, whose arm developer in New York. He's black. He always tells me about these personal guarantees that he has to put up of like all this money and properties like when every time they doing a deal and it's like him and his partner, they got duties personal lines of guarantees and all that stuff personal guarantee personal guarantee. And if you don't have the bare minimum for the projects that I'm working on you need a million dollars in liquidity like cash and five million dollars in that works to start the conversation that's going to eliminate a lot of Of us that's why you don't see black developers. That's the primary reason why you don't see black developers because you can't get in a game and when you start to you get raped, it's like, okay. Well you got an idea you got a concept. I want 90% you can get 10 and then we just get used as Brokers to find sites and so they can make more money but I wasn't on that. I'm not on that. So I get the majority of my fees at this point at least 51% I'm gonna get standing on it. That's not it. So you say I'm holding Partnerships so you so you partner with a lot of people. Yeah, I have to so for a young cat or do not even okay anybody just in general cause like you said, it's a lot of barriers to get in it. at the best way to go about it is to kind of find somebody already already that's successful and kind of work with them. Yeah. I mean I can reach out to all the time. I definitely I want to support everybody but realistically I just can't capacity thing. So that said I think the best way is to create value you have to create value. If you're not creating value, then you're just there if if you want to work with me just like if I want to work with them. Is it worth my time to work with you? Not if you not bring anything to the numbering I could do it on my own. That's all people out. Uh, you got it got it be mutual and it can't because that's more of a charity thing. Right? It's like you can only do so much chatter time and a place for that. Yeah, you know, mr. Shipp charity. It's not a Business Partnership Business Partnership has it doesn't have to be equal but you have to bring something kind of bring some value. Yeah. So if you can create value in real estate the way that I did it I created the financial model are created the vision and I got the land in the contract. That's what I was my control. So if I pitched it to anybody they can't just go get this land already. Got it. Yeah, so now it's like I have leverage. So if you as a developer want to or aspiring developer want to take that strategy don't get some land on a contract put a financial plan and make sense. I talked about language earlier showed me the language. This is the language that we speak right here. When you start speaking that language we can partner with no problem. Not the last part that property management piece. Do you have your own or you still partner with somebody for most of my development Partners having on shots? I don't have my own it only makes sense when? You have so many units you got a scale is a scale thing. So when I get to you know, a couple thousand units are probably start one, but right now I know alright. So the last second we got talk about scaling. We all talk about a few other businesses that you got in the DMV since we're in the DMV. So it's about multiple streams of income for sure. What's up y'all? So if you're listening to this you obviously like podcast and you probably Music just as much on Spotify. You can listen to all your favorite artists and podcasts in one place for free. You don't need to premium account Spotify has a huge catalogue of podcast on every topic including the one you're listening to right now on Spotify. You can follow your favorite podcast. So you never miss an episode premium users can download Episode to listen to offline wherever you are and it's really easy to share what you've been listening to with your friends on Instagram if you haven't done so already be sure to download the Spotify app search for earn your leisure. Iran Spotify or browse podcast in the your library tab. Also, make sure to follow us. So you never miss an episode of Ernie Leisure again. All right. So in the last time I'm gonna talk about a few things, but first, what about scaling because obviously you've come a long way but you're still young. So what should worship what's your vision with your plan? We should we should goals as far as scaling moving forward into this new decade. Let us where I mean, I think I am an entrepreneur. So I think my profession is a real estate developer, but I'm really entrepreneur. Hmm. So scaling I'm open to different concepts one being said when I said but working on a real estate crowdfunding platform. Okay, I think that'll be my next big Endeavor. That's the probably lots of early next year. Okay, so that's that's a go and that's a tech platform. So I plan to leverage Tech to crowd fund money in real estate and then pour it back in our T in a way that doesn't currently exist there's access to Capital Challenge and this is the way that I'm gonna fix it. Right so like that Gap that you were saying that was there it would now season it. Hmm. Oh, yeah. So that's to go that's part of it. Skeleton specifically for Rural Enterprises my development company. We keep doing affordable housing primarily. That's my thing. I think it's a we need we need it everywhere and it will always be a thing. So if I could do one or two divs and Wisconsin here, I think that's cool for now. And then working on some stuff in DC working on a platform. I got snot not a platform but it's a 41 Housing Initiative with a professor at a Georgetown law called a bridge. So what we're doing is trying to identify five sites for us to develop in D.C. Baltimore in Philly. So for me, I think next year. I'm going to be targeting, you know, four to five sites in those areas. I want to do see right now that I'm working on and southwest DC. Hundred and forty units or so probably close to 80 million dollar development while 25,000 square feet. Are you bringing anybody with you as far as like a mental or Apprentice long journey, so they can see what this is like yes or no. I mentored a ton of Milwaukee has probably the most black developers in the country. Wow, that's crazy. So I got some I got it. Oh gee and then I got some young companies that are coming up to but in DC, I'm actually launching platform or launching keeps on platform launch enough. Educational type of deal for a development program development training program and I'm actually going to do it in Partnership probably with Georgetown. So that'll launch next year as well. So I'm gonna call that reinvest and you have a you have a Bar Lounge in DC. Yeah. I saw on a on a Bar Lounge in DC. What's that was supposed to deal with that? It's called the Caged Bird open that like I said, I think I mentioned earlier like are used to fund bars and pubs. And things like that so I know the finance of it. So I'm like, okay, I'm across opportunity friend of mine best friend of Milwaukee. He's a developer to but he owns a spot in Milwaukee. So he was looking at opening one of these see got introduced to a broker broker restyle. I walk the site for him. It was first sent out as marking them. Like I don't I'm really feeling this you shouldn't do it. I told him he shouldn't do it because he wanted to do it at first then identify the sighting to Dupont Circle or down only white area and see and I was like, oh this would be dealt like it was a cool opportunity. So tell him about it. Yo, I think I want to do this you down. He had some things going on in Milwaukee that needs to straighten out. He was like, yeah, I'll just take it around with it. So I said back when out created an equity pool because I practice what I preach like, I literally am all about Black. Well, that's that's who I am. I know I'm going to be straight on the development side. I'm not worried about my finances, but if I can create opportunities for ownership for my people, I think I'm living in my purpose. So created an equity pool brought in a bunch of owner's equity pool. Just a bunch of people that just pulled their money together. Yeah. So actually I did 50 percent financing and 50% like Sweat Equity. Okay. So if you wanted to come in and like be the chef or you know come in and run the bar come in and run events. I allow I kind of created an opportunity for that to toe. If you don't have money you can work it work it way. Yeah pretty much so that was you know, I have capacity constraints. Um, I'm a Full-time developer I run a whole Enterprise of just couldn't do it on my own anyway, but I thought that this would be the best way so hundred percent black owned operated stabbed and finance though all by us. It's been it's been a very good learning experience, you know comes it's been a roller coaster ride, but not easy not easy restaurant business name of the restaurant where we would you get from want to say I'm a strong black woman, so honestly, Busboys and Poets is a prominent place in DC. So I like all the names dope and it's a not to Langston Hughes. Yeah, so I was like, all right. I'm like, um who inspire me Maya Angelou was that person? So I was like, okay, you know, how can I think their name so ended up landing on the Caged Bird 2016. I saw Maya Angelou's documentary and Still I Rise it was a great documentary and it was the first time I always knew that I was living black history. But his first time I was able to like identified and He else like Joe. I saw this whole process. He was a woman. She was molested. She was silent. She then starts speaking. She became a poet. She was a she was everything under the sun. You could think of, you know, good things bad things Etc do the research you can find it but she was a true and actual person. So I wanted to create a space that people could live and be like history within so I named the cage where for sure for sure and I think it's fitting because DC has so much Rich history. Rich black history. Every histamine this is the capital of America or we can talk about America without the contributions of African American we can talk about Washington DC without the contributions of Black America. Well, that's what happened and that's why they the museum haven't got a chance to go to the museum. You have you going there? Yeah. I've been a few times. Yeah, go to be in there one day sure. In fact as a fan as a fact what's going on it? Yeah, it's a fact that's a fact man. So yeah. Congratulations. Miss is very inspiring especially a lot of times like we doing the conversation you might have forgot that you only 31 years old. Not that I'm as far removed choice or congratulations and it's great to see, you know to see people because a lot of times we highlight things that are negative for sure. We got to highlight positive. Yeah. I'm not the type. I don't look for attention. That's not really my thing. Like actually don't care for people probably don't believe that but it was something in me that said it would be a disservice to my community for not giving the knowledge that I have. So I had to like accept her night and it's the greatest gift that you can give. Yeah his inspiration and you like I said, I would tell you off camera. You never know who's listening and like the kid that was like, oh I could be a real estate developer not just an investor and not just all right, like and now exactly you know it exists. Could be a civil engineer like oh, that's so so much so much money in real estate in right in a sense. Yeah, and it's like the it's like how you look how you looked at people's like they might be somebody looking at you. I even just like that. It's gone I'm saying so it's like what that's how that's how life is so crazy for sure. You don't even realize it and it's like you inspiring somebody and it's like now they might Inspire somebody like off of what you done playing for exactly exactly, but it south of the all for having a platform to do so, thank you. No I'm saying this is this is much important for us. For our community and to be able to dig into these numbers in a way that doesn't exist. You know, you're not going to be able to Google the fact that some of these numbers that I said today I break down the restaurant business to if y'all want me to talk to you can't go get the stuff. So priests a chart. No, thank you Miss. Oh, how can people contact you any initiatives that you want to make them aware of social media and all that stuff be underscore. Are you Ellie? That's my Instagram handle be rule. Everybody called me that I was Brandon it's a ton of brand is growing outside Sports. Nine be ruled by Jarl. Yeah. Enterprise is the name of my development company Caged Bird is my restaurant Barn Dupont and I got a I got a new thing called reinvest coming out soon. So you'll stress Alton. So Troy housekeeping item. Yeah, shout everybody on patreon.com every time we come on. It seems that we get new members. So I just want to give a quick shout-out and recognition to see manual Rafael area. Well, Mark and Gregory shout out to you all for joining us on patreon tip four and five members, you know that you have access to eyl University our online school and it's grown man. We have a lot of webinars up there a lot of great content we have from tax taxes to what else do we have on the everything with notary motor mobile? Notary. We had Sabine talking about trademarking multiple streams of income the most efficient income how to start a podcast. Cast 203k loan class everything everything you can think of in this and every week is three three classes added to the curriculum. So it's this is grown-up. It's a growing University and emerges out to so as you can see Rashad has UIL University hooded gear, man. So keep tuning in man. The podcast is growing. Our streams of income have grown we come up with new ideas and new lessons mayor. This was like a history lesson and a business lesson a woman. Yeah for sure you wrote. Thank you. I appreciate it motivational purposes only. That's it - keep chasing Bill man. Sure for sure Atlanta. Don't forget Lana January 2015. We 26 we releasing information on that soon, but we come into town for sure and who knows Brandon might pop up. My pull-up was like full of the book. Tip for this week is thinking Grow Rich a black choice, but Dennis Kimbrell. Thank you guys for rocking with us. We'll see you next week. Peace. It's perfect.
Our latest edition of Home Town Heroes comes courtesy of the turbulent city of Milwaukee, Wisconsin. At the age of 31 Brandon Rule is a business prodigy. He is a commercial real estate developer with an extremely impressive resume. He has developed $50 million in affordable housing projects in Milwaukee through his company Rule Enterprises and has an additional $180 million in projects currently in his development pipeline. A few weeks ago Brandon went viral on social media after news broke that the city of Madison, WI recommended that he be awarded a contract to develop a 30,000-square-foot grocery store, 150-unit apartment building and 345-space parking garage on a city-owned lot. There aren’t too many black commercial real estate developers, and they’re definitely aren’t a lot his age. One of the reasons why there are so few black developers is that there isn’t a lot of exposure given to successful individuals in the industry. Most people think about real estate from an investor’s perspective very few aspire to be big-time commercial developers. In episode 54 of @earnyourleisure Brandon broke down the ins and outs of commercial real estate development, he explained how affordable housing credits work, he talked about financing and he gave an in-depth look into his journey into becoming an icon in the industry. Guest IG: @b_rule Book Tip: Think and Grow Rich a Black Choice  ---   This episode is sponsored by  · Anchor: The easiest way to make a podcast. 