Latest / Buying Local Podcast / Scaling Real Estate the Smart Way with Brian Green | Buying Local S3E60

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Scaling Real Estate the Smart Way with Brian Green | Buying Local S3E60 · Buying Local Podcast

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All right, we'll get started. Welcome everyone to Buying
0:03
Local. I'm your host, Mike Nelson from
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5 Towers Media, joined today by the founder of Green Springs
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Companies, Brian Greene. Brian, welcome.
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Thank you for having me, Mike. Glad to be here with you today.
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Absolutely appreciate the time. And we're also joined by Matthew
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know the five towers, as some of you know, if you listen to one
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of our last episodes, Matt's going to be working in here to
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do some more podcasting with us and eventually take over the
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show completely. So welcome, Matthew.
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Yes, thank you, Brian. And looking forward to our
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conversation here absolutely so often and kind of give us a
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little bit of a rundown about Green Spring.
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Yeah. So I like to say that we are a
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development company. So that's primarily what I focus
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on. But we're a real estate family
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of companies, right. So we do real estate
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development, investment services.
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We also own a property management company.
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We have offshoots that are in the commercial construction and
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real estate financial advisory fields as well.
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But our focus primarily and how we started was, you know, kind
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of just a real estate investment firm that was buying small,
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medium sized properties in and around I guess the Saratoga
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County area to start. Originally it was, you know,
1:22
just me, you know, But then over time, the last eleven years or
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so, we've kind of grown it out to a whole family of companies
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with numerous employees and kind of different functionalities.
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But we are definitely local. We're have offices in downtown
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Saratoga. We got a lot of different
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projects going on and it's kind of hard to kind of keep my head
1:42
on straight and focus on one of the companies versus all of
1:44
them. But hopefully we'll kind of
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it'll make more sense here as we kind of go through the
1:48
conversation here a little bit. Yeah, yeah.
1:51
I, you know, one of the most fascinating things to me, Brian,
1:56
about entrepreneurs and business owners is it always starts here
2:02
and then grows into all these things, right?
2:05
And it's, it really is one of my favorite things because it's,
2:09
you know, needs arrive and pivots happen and markets
2:12
change. I'd love to hear.
2:14
So you started with the real estate investment firm, you
2:17
said, and then it kind of grew and blossomed out from there.
2:21
What what was like the the the catalyst for that growing and
2:26
blossoming and creation of other companies?
2:29
Yeah. I mean, Full disclosure, when we
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say it started as a real estate investment firm, that was
2:33
literally me just buying properties on my own for my own
2:37
investments, right. So that's, I guess you can call
2:39
that a firm. But eventually it was, you know,
2:41
it turned into that. You know, I, I think the impetus
2:44
at some point for it turning into something bigger was maybe
2:50
just out of necessity. And I got to the point where I
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had my first, I think, 5 or 6 buildings and I was managing,
2:56
you know, I don't know, somewhere around 25 apartments.
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But I was literally doing everything myself, everything
3:01
from like, you know, analyzing the property from a financial
3:04
component to figuring out the financing to drawing out my own
3:07
lease agreements. I was doing the lawn work.
3:09
I was moving the snow in the winter.
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I was painting the units during the turnover, you know, just
3:14
because that's like the traditional version of what you
3:16
consider to be a landlord. And I was just getting, I was
3:19
new to the business, right? So my previous career, I was in,
3:21
you know, retail. I owned a chain of Verizon
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stores for, you know, 11 or 12 years.
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So that was what I knew and I came into real estate after the
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sale of that old company and I was kind of like just trying to
3:33
figure it out. And I also had a lot of time on
3:36
my hands because, you know, I had sold the old company and I
3:37
didn't have that day today anymore.
3:39
But at some point it became too much and it was obvious that
3:43
there were certain parts of the business that I did not care for
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and I wasn't very good at. And, you know, so I started
3:49
outsourcing that stuff 1st and then it just freed up my time to
3:53
do more of the acquisitions work and more of the, you know, high
3:56
level systems and operations type work.
4:00
And, you know, I'm kind of the, the guy that kind of likes to
4:03
keep evolving and keep progressing forward.
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So as I keep coming up with new goals and new aspirations, it
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turns into, oh, well, what if we did this?
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And what if we did that? And maybe we should buy this
4:11
building. And then like, all right, well,
4:12
what does that look like? Who do we need to run that?
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And it just, it iterates itself and it kind of turns into this,
4:17
like you said, place where we are now.
4:20
But that's when I first started. I just thought like, hey, we'll
4:22
buy five or ten of these and it will be great, and then we'll
4:25
just sit around and make cash flow and it turned into
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something way different. As you're saying it like I can,
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I can picture the idea, right? I sold my business.
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I need to do something with my time.
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Oh, just buy a couple of buildings, right?
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It'll be fine. And then all of a sudden, you
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know, 11 years later, you, you know, you've grown it into this
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thing, right? Like it's, it's you do well, you
4:49
know what they say, right, If you're either growing or dying.
4:51
So it's a, it kind of becomes a not even a choice at that point,
4:54
right? You just got to keep moving.
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Yeah. Plus if you have that
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entrepreneurial drive in you and like you see that like even on a
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small scale that a business model works, if then you're
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like, OK, well what if it, what if I did this at a 10X higher
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level? Like the model still works, it's
5:11
just bigger numbers and it's way higher returns for the same
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amount of work. So why wouldn't I do that,
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right? I'm always like, I'm very logic
5:17
driven and very like if test case it out and figure out the
5:20
model. But once it works, like throw
5:22
gas on that thing because it, it definitely works, You know, as
5:25
long as you can manage like the kind of the quality of lifetime
5:29
constraint type stuff, which I think I'm pretty good at from,
5:31
you know, outsourcing and hiring team members, you know, just,
5:35
it's impossible for me to see something work and then not go
5:39
with it. You know what I mean?
5:40
Like it's, it's like, you know, it's impossible to like just let
5:42
that thing walk by when you see and you know how to do it once
5:46
you figure it out. It's, I'm curious, did you when
5:50
you first started out you were doing mainly like residential,
5:53
like maybe single family or multi units like 1 to 4 unit
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kind of stuff? Yeah.
5:58
And because I heard you say that, you know, it, it kind of
6:00
started off here, but it's like, well, I can do the same thing at
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a bigger level and 10X. So I I assume that means that in
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the beginning it was 1 to 4 units, and now you've moved into
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larger properties as well. Yeah, only yes, I mean,
6:15
everyone, you know, at this point we've got team members and
6:17
partners and they're always, you know, reiterating to me, you
6:21
know, it's just as much work to do this 50 unit apartment
6:24
building and as if you go buy a duplex.
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So like stop buying the duplex, you know, it's one of those
6:30
deals, right, Because you're just giving us more work to do
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for less, you know, for the same return.
6:35
So yeah, I mean, ideally it, it's scalable, right?
6:39
So like, but it's the same process over and over.
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You're going to do the same process for getting something
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under contract and underwriting is the same and the due
6:45
diligence process is the same. The financing is a little bit
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different, but mostly the same. You know, managing A tenant
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doesn't matter if there's 4 units in that building or 40,
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it's kind of the same thing. But the advantages to that
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management expertise or that, you know, underwriting expertise
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are all magnified when it's a bigger number, right?
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So like, you know, if you're going to make a 20% return, if
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you're doing that on 100 grand versus 10 million, it's a whole
7:08
different ball game, right? But you're doing the same thing.
7:10
It's the exact same work. As long as you can kind of
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manage and you know, mitigate and become comfortable with the
7:15
the risk profile, I think it it just makes sense to go in that
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direction. Do you, do you still own any of
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the properties that you bought way back when with some of those
7:25
first properties or are they all all evolved since?
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Then I've, I've sold some of them.
7:30
Many of them though I still own because, you know, we can kind
7:33
of get into it, but our model is like a heavy value add type of
7:36
strategy where we're going in, we're doing, you know, major
7:39
renovations in construction. So if we buy something, you
7:42
know, very soon thereafter it's in very much like new condition.
7:47
So once it's new, it kind of operates on its own.
7:49
It's got very low, you know, repair and maintenance type of
7:51
stuff. It it's kind of on autopilot and
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it just keeps appreciating. So at that point it makes a lot
7:57
of sense for us to keep it. I mean, when we buy something
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we're always looking at like a 10 plus year hold.
8:02
So I mean those buildings were all renovated in the new.
8:05
So it's hard for me to kind of give them up unless I have an
8:07
opportunity to sell them and roll it into something bigger,
8:11
which we may get to. I do have, you know, it's been
8:14
maybe 7 or 8 years for the, the many of the ones I still own,
8:18
the first couple, we have a couple of those in downtown
8:21
Saratoga that we're in the process of doing condo
8:23
conversions on only because we've kind of exhausted the
8:26
value of that property running it as an apartment building.
8:29
But it's worth, you know, maybe 2 times more for if they're
8:31
condos. So just on a small scale, maybe
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we'll, we'll exit those properties selling them off as
8:36
condos instead. And so, you know, we, we kind of
8:38
get creative with it, but we're, we're, we're a long term hold
8:43
type people. So, you know, it takes a lot for
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us to move off of it. Yeah.
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I so, so many questions I have as you're as you're speaking,
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You know what on one side I want to ask about some of those
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pivots in response to market changes like you just mentioned
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of going from like a say a standard apartment to a condo.
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I also want to talk about the overall model that you have.
9:05
But you also kind of mentioned, and I just want to touch on this
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real quick, the idea that, you know, whether you're doing a
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four unit or a 40 unit, it's relatively the same steps,
9:17
right? The same work, just at a
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different scale, we'll say. I'm curious to know if you are a
9:23
big process guy, like when you did you have processes in place
9:28
for like the four units that you were able to kind of adapt for
9:31
that larger model or for that larger unit?
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Yeah, I mean, at first sort of, I mean, I was kind of trying to,
9:39
I was just kind of figuring it out on the fly.
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I do do a ton of reading and listening to podcasts and stuff.
9:45
So, you know, at this point, I've definitely got my probably
9:49
2X my 10,000 hours I need into this thing just through those
9:54
type of mechanisms and on, on, you know, on the on the spot
9:58
kind of delivery when I'm doing the doing these properties.
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But yeah, I mean, it it depending on what I'm doing,
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there is checklist, there is things like that.
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But I feel, I feel like I am I'm OK doing that.
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I don't like doing that. So like the other part of
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scaling is if you're scaling it to that 40 unit building instead
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of that four and the profit margin still that 20%, well, you
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can do the process and now you can afford to bring on team
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members that are better than you at certain aspects of the deal.
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Then then you are yourself and or you can outsource the stuff
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that you don't like to do or you're not good at.
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Whereas if you're doing the four unit and you're still making
10:34
20%, that sounds great, but you don't have enough total revenue
10:37
there to have those team members on board.
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You got to do it all yourself. So that's the other advantage I
10:42
found to to scaling is then you can bring on partners and you
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can bring on high level team members and you can kind of just
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niche into the stuff that is really good, you know, and and
10:50
your real value is kind of shown.
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Interesting. Yeah.
10:55
And, and again, I, I, you know, I think you and I may have
11:00
talked about this and other conversations that we've had
11:03
over the last few months, but I, I, for six years, I had a
11:08
property management company. And like, so when you were
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talking about kind of your early days, right, of you're doing
11:14
the, you know, doing the painting, doing the renting,
11:16
doing the lawn, I was in that for like 6 years and I remember
11:20
it very well. And you know, I unfortunately
11:23
was not able to, well, I ended up selling the business itself,
11:26
but and got out entirely, but I certainly was not able to
11:30
accomplish what you have been able to accomplish.
11:32
And so it, it just makes me really curious about the whole
11:34
model and everything that you're doing.
11:36
You know, so and maybe that's a good Segway for us to talk about
11:40
your model and to kind of tell us a little bit more about how
11:43
you operate and who you work with and kind of how all that
11:46
functions together. Yeah.
11:48
So now, you know, we've been doing this.
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We're in year 11 or 12 here. So now we have 4 companies, 4
11:56
main entities. One is Green Springs Capital
11:59
Group, which focuses on real estate development and also
12:03
works with a lot of our, we, we bring on.
12:06
It's kind of a bigger conversation, but we bring on
12:08
now private investors for a lot of our projects, the bigger
12:11
stuff we're doing now. So Green Springs Capital is the
12:14
one that manages those that investment portfolio and works
12:17
with those individuals that are basically the money side of a
12:20
lot of our projects as well as going out and sourcing deals,
12:24
underwriting and kind of putting the whole thing together through
12:27
municipal approvals and financing and what have you.
12:29
So that's the kind of the the top company.
12:33
And then we have Greensprings Property Management, which is to
12:37
be honest, probably the most important one because that's
12:39
managing the operations of the properties.
12:41
You know, I can have the greatest business plan from a
12:43
developer's perspective all day long, but if the actual property
12:46
is not managed, you know, for optimization and according to
12:49
that business plan, the whole thing kind of falls on its face.
12:51
So the management company, which I still run today is also
12:56
extremely important and they primarily only manage for
12:59
ourselves. So they're managing only Green
13:01
Springs Capital properties for the most part.
13:04
We are kind of tipping our toes in the water a little bit to do
13:08
some outside property management for 3rd party companies, mostly
13:12
focused on like the maintenance side of things versus the
13:14
leasing, but that's kind of a, a new thing for us.
13:18
So primarily though they're managing in house.
13:19
And then we also have a commercial construction company.
13:22
So forever we did construction internally and my partners, one
13:26
of my partners is my brother and he was running that construction
13:29
team internally with some other team members within Green
13:33
Springs Capital Group before. And then two years ago we spun
13:36
it off into it's called CG Construction Group.
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We brought on another partner which had some, you know,
13:42
tremendous experience in construction.
13:44
His name is Matt Crudo. So now the two of them lead the
13:47
commercial construction company and they're doing all of Green
13:49
Springs construction projects like on new developments as
13:53
they're and they're also doing third party construction.
13:55
So you know, right now they're doing the big project is they're
13:57
building the extension on Glens Falls hospital.
14:00
You know, they built the new, they built new the new Ted's
14:02
fish fry on Route 50. So they're doing a bunch of
14:04
other stuff other than Green Springs capital, but their
14:07
capacity is unlimited, right. So now it kind of gives us at
14:11
Green Springs when I'm looking at projects, no longer do I have
14:15
to say like, oh, this probably makes some financial sense, but
14:17
I don't know if we can execute, right?
14:19
So now I know that from a construction perspective,
14:20
there's no limitation. And then the 4th company we have
14:23
is a real estate financial advisory firm specific to real
14:26
estate developers and investors. And they also serve as like a
14:31
commercial mortgage brokerage for those people.
14:33
But mostly what they're doing is they're giving like asset
14:36
management advice. So they're reviewing their
14:38
portfolio. They're kind of looking for ways
14:40
to optimize it, looking for strategic ways to change around
14:43
the financing to increase their cash flow, if that's what
14:45
they're looking for. They do some consulting work, a
14:48
lot of it actually on the construction consulting.
14:50
So like helping people that know how to build also put together
14:55
the financial performer behind that construction.
14:56
So it still makes sense from a project perspective.
14:58
There's a lot of builders that know how to build, but they
15:00
don't know how to do, they don't know how to math it.
15:03
So like, you know what I mean? So like we're doing the math for
15:05
them to make sure that like this is a solid project, this doesn't
15:07
make sense, go ahead and build it.
15:09
And this is the financing path. So it's kind of a unique
15:13
business in the market. It's kind of a niche, but it's,
15:17
it's, it's extremely valuable company.
15:19
It's actually probably our most profitable at this point.
15:22
So we have those four companies and they're all kind of
15:24
servicing our projects and they all have their own leaders and
15:28
their own skill sets. And that partnership kind of
15:31
overlaps between a lot of those companies with shared ownership.
15:34
So we kind of created like our own vertically integrated
15:37
ecosystem, just with different entities instead of having
15:41
everything under one umbrella. Interesting.
15:46
So I'm curious. Well, again, I have a bunch of
15:48
questions and and Matt, if you got it, you'll Matt, you'll find
15:52
out and Derek Foster, that's my Co host on blue collar startup
15:56
could tell you too. Like I always have 1000
15:58
questions. So if you got something you
16:00
could just got to jump in. You got to be you got to like
16:02
don't even raise your hand. Just be like Mike, stop talking.
16:04
I have a question, but my other question or one of the other
16:09
questions anyway is you're talking about like with the
16:13
construction company and with the property management company.
16:17
And initially you're only handling internal stuff, which
16:21
obviously makes sense, right? Because if it's your company,
16:24
you're going to be able to, it's going to be less of a liability
16:26
for you than if you were going out to a third party.
16:31
However, it still is a liability though, right.
16:33
So you talked about kind of expanding and going out and and
16:36
taking on other clients for those two businesses.
16:39
Is that part of a plan to turn that liability into an asset, so
16:44
to speak, or is is there other things behind?
16:46
It some of it is, well, there's a couple different angles to
16:51
that. One of it is in order for me to
16:55
get the high level partners that I want, they have to be owners
17:00
and they so bringing on or creating those companies right
17:07
and putting them in an ownership position is one of the ways to
17:13
do that because otherwise these people would not be somebody
17:16
that's just going to come work for you, right?
17:18
Like, you know, so they need an ownership stake.
17:20
One way to do that is to create an its own entity where we're Co
17:24
owners. But like, so you're getting in
17:26
the upside as well as, you know, kind of the the cash flow and
17:29
the kind of the ongoing rewards for this business, right?
17:32
So everyone's an owner versus you have, you know, that's a
17:35
different situation than if you have an owner and employee,
17:37
right? Just it just is.
17:39
So that's one reason for it. The other reason is if any of
17:43
your listeners know anything about real estate, it's not a
17:47
cash rich business, it's a asset rich business.
17:52
Like, you know, so like your balance sheet will keep
17:53
increasing, but you are perpetually cash poor.
17:58
So one way that my brother and I, who who were the first two
18:02
partners tried to kind of leverage that was we basically
18:07
traded asset value for cash businesses, right.
18:11
So like in those partnership agreements, we basically came
18:14
into it and said, all right, well, you know what, we'll be
18:17
willing to give up, you know, a share of our portfolio right now
18:20
and into the future. And then in exchange, you know,
18:22
we'll, we'll help you set up these new companies and you
18:24
know, your companies will be service businesses that generate
18:27
a lot of cash and our company will, you know, generate, you
18:31
know, equity and appreciation in these assets, right?
18:34
So all of our balance sheets go up and all of our, you know,
18:36
cash positions are going up simultaneously.
18:38
But it was a basically without those service businesses, it's a
18:41
very difficult business to keep doing because you're really not
18:45
making much day-to-day cash flow.
18:48
So that was kind of a strategic move on our part.
18:52
So it, it worked in all three respects, right?
18:54
Cash flow increased, got high level partners that came on
18:57
board and now we also have the internal skill set and capacity
19:00
with these high level people that you know they can execute
19:04
on any financing we need, any financial analysis we need, any
19:08
construction project we need. So like it.
19:09
It worked for everyone involved. Yeah, it's it, it, it sounds
19:15
like an amazing strategy to be, to be fair, like, you know, not
19:19
to blow smoke or anything, but it's like it really, to your
19:22
point, you got to keep feeding that machine on the real estate
19:25
side, right? And you need a way to do that
19:27
because it's, it's like, I don't know, it makes me think of like
19:30
dividend mutual funds, right? Like you buy a bunch of mutual
19:33
funds and the, the, yeah, the value keeps going up.
19:36
And so on paper, you look like you're, you know, you're doing
19:38
really well, but that little dividend that comes back each,
19:42
you know, month or quarter or whatever really isn't enough to,
19:45
you know, eat off of unless you've got a big portfolio.
19:48
So it's, it's an interesting way to, to solve that problem.
19:53
And you know, and this kind of goes back to responding to
19:58
market conditions. It sounds like you guys are very
20:00
good at responding to market conditions and figuring out
20:06
either the service edition you need or the pivot you need to
20:10
make in response to that. I'm, I'm curious of how you, do
20:16
you have a crystal ball? Do you got a?
20:19
Using ChatGPT. Some of it is just born of
20:23
necessity, right? I mean, so when we're planning
20:27
out the trajectory of the business over the next three to
20:29
five years and we have, you know, these fairly aggressive
20:33
goals, you know, if we get into a situation where the market is
20:37
difficult, right, or it's hard, I'll give you an example.
20:40
So like 2022-2023 prices were extremely high coming out of
20:46
COVID on commercial real estate, but owners, but valuations, real
20:52
valuations probably were 10 to 20% less than what everyone
20:56
thought their properties were worth, right?
20:58
So you had this disconnect between owners and buyers like
21:01
in the marketplace. So nothing was moving, right?
21:03
They didn't want to lower their price.
21:05
I knew it wasn't worth what they thought it used to be worth,
21:07
right? So like they were slow to like
21:09
take the haircut that they, the market was demanding, right?
21:12
So nothing was trading. So like if that happens and
21:15
nothing's for for sale or you can't buy anything at the right
21:18
price, what do you do Right, 'cause like you still have these
21:21
growth targets, you just sit on your hands for two years and do
21:23
nothing. So like our solution to that was
21:26
like, all right, well, something must make sense right now.
21:29
What makes sense right now and what do we do?
21:30
So like the, for us, the thing that made sense was pivoting
21:33
into historic properties, right, 'cause historic properties have
21:36
government incentives, they have historic tax credits, they have
21:39
all these other financial instruments that make them more
21:42
attractive, even if the pricing might not be perfect, right?
21:47
So I think the last five projects we did were all
21:50
historic renovations to varying degrees, whether it was a 10
21:53
unit building here or there's, you know, we just started doing
21:56
a new one up in Glens Falls, that's 20 unit.
21:58
Both of those are historic though.
21:59
And you know, the tax credit element and figuring out that
22:03
how that works and how we can return those to ourselves and to
22:06
investors to make it pay off was just kind of the pivot we
22:10
needed. And it allowed us to keep
22:11
expanding even though nothing was really transacting.
22:15
Yeah, Yeah. How does one go about learning
22:18
all this stuff? I mean, this sounds very
22:20
sophisticated and you know, you, you're like you'd said your
22:24
background of, I mean, does any of running those Verizon stores
22:28
translate to what you do now? Or is this something that you
22:32
just kind of figured out along the way over the last 11 years?
22:35
I think it's just that it's not like an expertise, it's just
22:38
like having the capacity to figure stuff out.
22:40
Like I know this makes sense. There's got to be somebody else
22:44
that's doing this. How do I get a hold of them?
22:45
How do I, you know, how do I have coffee with them?
22:48
How do I pay a consultant to help me with this?
22:51
How do I, you know, who knows how to do this right?
22:53
And you just kind of say, keep asking a bunch of questions,
22:56
kind of figuring out, talk to the right people.
22:57
And then you can kind of put it all together and say, like, all
22:59
right, this makes sense, let's do it.
23:03
I think it's just kind of that like that it's an entrepreneur
23:04
thing. It's like you got to have the
23:05
persistence. You got to like never stop when
23:09
you hit like a, you know, the blockade or somebody tells you,
23:11
no, you kind of have to, there's always a way to figure it out,
23:14
like just keep pushing forward, be persistent, figure the thing
23:17
out. And then in the end, you know,
23:20
you got to have the the confidence, I guess, of your own
23:23
convictions to say, like, all right, I know enough now to do
23:26
it. I don't know everything, but
23:27
like, I know enough and I have the right people on my team.
23:29
So let's go, let's go do this. And I think that's just, you
23:33
know, any successful entrepreneur has to have that
23:35
trait. You know, it's interesting that
23:37
you say that 'cause I was just in a conversation this morning
23:40
with Bill Tansy from the Op X shop and we were having that
23:43
conversation of the difference between an entrepreneur whose
23:48
job basically becomes problem solving all the time, right?
23:52
Like that's what your job is. Doesn't matter what the industry
23:55
is. It's you can be and and then
23:57
there's the people that don't want to have anything to do with
24:00
that and they just want to do the stuff.
24:02
They just want to do the thing right.
24:04
And what a part of that conversation was that you really
24:08
have to enjoy overcoming the obstacle when it's put in front
24:13
of you. What would you say that's fair?
24:17
Generically, yeah. I mean, there's certain things
24:19
that I'd rather not, I'd rather not tackle.
24:20
But the yeah, I think that you have to, I think taking it a
24:24
step higher than that, you have to, you have to enjoy being the
24:27
person responsible for solving the problem, right.
24:30
You might not like the problem and a lot of times they're
24:32
annoying or it's kind of a distraction, but you have to
24:36
enjoy having the responsibility and expertise in some level and
24:42
the risk taking kind of, it's not like it's when I, when you
24:48
say risk people like always, you know, it's like gambling and all
24:50
this stuff. It's not that it's like
24:51
calculated risk, right? You got to be comfortable in
24:54
that position. And most people aren't, which is
24:58
why most people don't open their own businesses or become
25:00
successful in doing that, which is fine.
25:02
It takes a certain personality profile, I think to do that.
25:05
But yeah, it's, you know, when, when everyone else can't figure
25:10
out the problem, guess where it goes?
25:11
It goes right up to you and then you have to solve it.
25:14
And like you don't solve it. Like you know what people don't
25:16
get paid or you don't get, You don't make any money or you know
25:19
the whole thing. You don't pay customers
25:21
invoices. Like you have no choice but to
25:23
figure it out, and like you have to be able to to embrace that at
25:25
some level. Yeah, and I'm sure in a little
25:30
bit of enjoyment, maybe literally.
25:32
In the payoff when you saw it. In the payoff, yeah, that's, and
25:35
that's the thing, right, Is it's not sometimes like like you
25:39
said, sometimes the problems are annoying or just, you know, like
25:42
awful and stressful. But when you get to overcome
25:45
them, it's like that hard fought one, right?
25:47
Like when the win is over a really good opponent, it's very,
25:52
very sweet, right? And when it's an easy win, it's
25:55
kind of like, yeah, whatever, big deal, but.
25:58
And it's, you know, in a former life, I played football in
26:01
college and that that's a different opponent.
26:03
This opponent now is mostly like, you know, zoning boards
26:06
and bankers. Yeah.
26:10
Yeah. So it's a it's a different, it's
26:12
a different playing field. But I guess it's where my
26:16
competitive kind of inclinations have lied.
26:20
Yeah, I'm curious about, but earlier in the conversation you
26:24
talked about turning the apartments into condos and that
26:29
in response to market conditions and and what is going to be a
26:34
better decision for you now? The obviously the real estate
26:40
market is just such a weird thing always and the last five
26:44
or six years have been, you know, very interesting to see
26:47
and be in. What do you see happening right
26:51
now or what's going on right now with the real estate market that
26:54
is of note? Well, there's not enough supply.
26:58
So that's the problem. We're not building enough
27:01
houses. A lot of that has to do with
27:04
high financing costs over the last several years.
27:07
A lot of it has to do to what should we say over complicated
27:14
zoning at the municipal level and approval processes, which is
27:18
the main culprit which everyone seems to ignore.
27:22
But no matter what the the reason is or what you want to
27:25
blame the reason on, there's not enough supply, right?
27:27
So prices keep going up. It's not affordable for people
27:30
to buy entry level homes at this point anymore, if there is even
27:33
a such thing as an entry level home.
27:35
I think I saw that the average age now for the first time home
27:37
buyers, 38 years old, which is in the early 90s, it was like
27:41
26. So like in the last 25 years,
27:44
we've managed to mess this thing up severely.
27:48
So for me as a person that owns housing, right, and is in the
27:52
housing business, you know, if I'm looking at an apartment
27:57
building, I can only charge so much in rent for those units,
28:00
right? And if whatever I charge on
28:01
those, there's a direct correlation between what then
28:03
the value of the building is. So knowing though that
28:07
condominiums, right, might suit an entry level homebuyer if
28:11
they're priced correctly. You know, if you have a three or
28:13
four unit building and it might be worth 8 or $900,000 as an
28:17
apartment building. If you turn them into condos,
28:20
you can sell each one for 404 hundred 5500 thousand, which is
28:23
still below the median here in Saratoga.
28:27
Then your property might be worth 1.31 point 4 million just
28:31
by converting them and selling them off, you know, to
28:33
homebuyers instead of to renters.
28:35
So you know that it's a good it's a better exit plan at this
28:40
time in the market. There's other times where
28:42
there's plenty of housing, right, and hasn't been recently,
28:45
but there there might be other times where there's plenty of
28:46
housing and the demand for condos might be really weak or
28:50
that model might not work in a different admissive ality like
28:53
you couldn't. You probably can't go to Glens
28:55
Falls 20 minutes off the road and try that same thing because
28:58
condos don't have the same demand and the houses are less
29:02
are more affordable, right? So like you can't do the same
29:04
thing there. But if you're in downtown
29:06
Saratoga where there is no housing and it's very expensive,
29:09
then that strategy might work. So it's very real estate is very
29:12
local, like zip code to zip code differences, right?
29:16
So that's kind of why we came up with that strategy on those
29:19
couple small buildings. Yeah.
29:22
It's so fascinating. Yeah.
29:24
And that strategy could change, right, depending on what the
29:26
market is? Yeah.
29:27
And of course, like I said about zoning, right, it takes a year
29:30
for New York State to approve a condo conversion, right?
29:32
So I start the process this fall.
29:35
By time we get to next fall and they decide that they're going
29:37
to approve this, the whole market could be completely
29:39
different. And who knows what it looks
29:40
like. I'll probably still be fine
29:42
because the worst case, I can keep renting them out as
29:43
apartments. But you have to kind of make a
29:46
calculated estimate on where things are going to be at some
29:49
point in the future. Yeah, yeah, yeah.
29:52
So, so crazy, man. But and then and that's where
29:56
that right, that risk is, although how do you describe it
30:00
as as like a calculated risk, right?
30:02
Like you, you're I'm sure you're taking those things into
30:05
consideration as you make plans and look at future markets and
30:08
changes. What a what a fun game.
30:13
Yeah. You know, I mean call it a game,
30:15
but. It it is it business is a game,
30:17
right? It's it's a game with
30:19
consequences, but and but rewards, but it's a game you got
30:22
to figure out how to move the pieces on the board and and make
30:24
the right decisions at the right time.
30:26
Yeah. So obviously a lot of growth
30:30
over the last 11 years and constantly expanding and
30:34
growing. And you know, even like on the
30:36
commercial construction side, I mean you guys are not doing
30:38
small projects. From the sounds of things, those
30:40
are some pretty large construction projects.
30:44
What what is what is the future look like for Green Spring Green
30:47
Spring companies? Yeah.
30:49
Each of the entities has their own kind of financial and like,
30:54
I guess, performative goals. But speaking to Green Springs
30:58
Capital, which is the one that I'm most focused on, the goal is
31:01
to get to 200 million in assets under management by 2030.
31:06
As of the end of this year, I think we're just slightly shy of
31:09
50 a million assets under management.
31:11
And keep in mind assets are all we own and manage all of our own
31:15
stuff, right. So like this isn't like we went
31:17
out and you know, I got an agreement to manage some 200
31:20
unit complex that somebody else owns.
31:22
Like so we're owning and managing pretty much everything.
31:24
So we want to get to 200 million by 2030.
31:28
And the reason we came up with that number is not just because
31:30
it's a big fun looking number, although it maybe it is, but we
31:34
kind of, I kind of went with like, hey, we have the vision of
31:36
like, I want a leadership team, whether that's my partners or
31:40
other people meeting these companies that could probably
31:44
somewhere in the range of eight to 10 individuals.
31:46
And we want to be able to pay them, you know, representative,
31:49
you know, salaries, right? So like how big do we need to
31:52
get in order to get to a level where we can pay all of these
31:54
people? Two, $300,000 a year.
31:57
They all are participating in some sort of bonus program with
32:00
equity in our properties, you know, of $1,000,000 plus, you
32:03
know, in cumulative total over the time of their working career
32:06
for us. And what does that mean for all
32:08
their families and everyone else that kind of works down the
32:10
chains, right? So, you know, that's the way I
32:13
kind of plan it out. Like where do we need to get to
32:15
from a scale perspective to make sure that everyone, we affect
32:18
this many people, I guess within our company structures, right?
32:22
So it's not necessarily it is the money thing, but like for US
32:25
money is like equating to freedom time, like flexibility,
32:29
like all those things you're, you're pointing to.
32:31
And it's different for everyone, but we kind of want to build
32:33
that ecosystem that allows us to impact all of their individual
32:41
families. And they're like, you know,
32:42
they're extended families and whatever that means all the way
32:44
down the chain from our company. But that's kind of where we
32:46
ended up getting it to. And then of course, if we meet
32:49
that goal, then we'll probably just push the push the line
32:52
further and see where that goes. You're either growing or dying,
32:55
right? Like.
32:56
I mean, it depends on how, how much or how long we want to
33:00
keep, you know, throwing gas on the fire here and seeing where
33:05
things go. But we're all fairly young.
33:07
So we got a, we got a long runway ahead of us.
33:09
Yeah. Yeah.
33:11
All right. Last question I have for you
33:13
here, Brian. Is there one question that you
33:17
hoped I'd ask that I didn't ask? Maybe why we pivoted from wholly
33:32
owning everything and kind of self funding it to working with
33:34
individual investors because that's a whole different
33:38
business model. Maybe that that's one pivot that
33:42
I think most real estate developers don't get to.
33:49
I think like 'cause you have to get to a certain scale for that
33:51
to make any sense. But had you asked it to me, I
33:56
would have to answer it by saying really was it kind of
34:01
extends out to what I just said, right?
34:02
When I say like we want to create financial freedom for the
34:05
people in our team and our partners, that extends out to
34:08
friends and family, right? And most of our investors are
34:09
friends, family of mine of ours, like our partners.
34:13
And we want to kind of give them a platform that allows them to
34:16
participate in what we know to be the best investment vehicle
34:19
that we have found, which is real estate.
34:22
Because normally they wouldn't have access to it, right?
34:23
Or they don't have the time or they have full time jobs like
34:25
they don't want, they don't go out and be a landlord, right?
34:28
So if they partner with us, we basically do all the work and
34:30
they, they get the benefits, right?
34:33
You know, and then also from our perspective, it allowed us to do
34:35
bigger and bigger projects because at some point our
34:38
personal balance sheets weren't big enough to kind of
34:41
accommodate some of these projects, right?
34:42
So we have to, how do we make this work for everyone where we
34:45
can kind of keep doing bigger and bigger deals and now we can
34:48
benefit, give this opportunity to our friends and family to
34:50
kind of come along and ride with us.
34:53
So that's why we we made that pivot and on certain projects we
34:57
bring on kind of limited partners in our deals, although
35:01
not not on all of them. It's kind of a project dependent
35:04
thing. But there's the answer to your
35:06
question that you can. Ask.
35:07
All right, yes, I'm glad I asked that question.
35:12
Well, Brian, if people want to learn more about you, more about
35:14
Green Springs and all the things you guys have going on or maybe
35:17
how they can get involved, where do they find you guys?
35:20
Yeah, I find this our website, which needs a little bit of an
35:23
update that Mike's working on or he's going to work on Green
35:26
Springs capitalgroup.com. You can also, you know, you can
35:31
simply just send me an e-mail. It's brian@greenspringsco.com.
35:34
Happy to have a conversation. If you're looking to get into
35:37
real estate or you know you just have questions on being an
35:39
entrepreneur or business, what have you always available like
35:43
to have those conversations? Amazing.
35:45
Love it. Thank you so much for coming on,
35:47
Brian. I really appreciate it.
35:48
Appreciate taking the time out of all those things that you got
35:51
going. It's you know, I, I mean, we, we
35:55
know each other and we've had conversations, but I guess I
35:57
didn't understand the full scale of all the things that you've
36:00
got going on. So it sounds sounds pretty
36:02
great. Well, thank you, Mike.
36:03
Appreciate the platform. And Matt, next time we're going
36:06
to get you, get you a question. And of course, thanks everybody
36:11
for listening. You can find these episodes and
36:14
all the rest of our episodes of Buying Local dot US.
36:17
And of course, we publish our podcast on Spotify, Apple Rumble
36:20
and YouTube. Appreciate everybody listening
36:22
and you'll hear from us next week.