Latest / Real Investor Radio Podcast / Ep 77 | From Flipping to a Billion-Dollar Downtown Redevelopment with Alex Sifakis
Transcript
- Craig Fuhr (00:12) Hey, welcome to the 2025 season of Real Investor Radio. Jack, it's good to see you. Jack BeVier (00:19) Absolutely, sir. Good morning. Good morning. Craig Fuhr (00:20) I was thinking about the past year or so that we were recording the podcast and we've had really, I mean, just an unbelievable line up of guests on all of those episodes. So I would encourage anybody who's coming new to Real Investor Radio to go check out some of the guests that we've had in the past. And even most recently, some of those episodes. So real excited about what we have in Store Jack for 2025. I think we've got some great guests already lined up for this year. And yeah, man, I mean, I couldn't be happier with the way the podcast is going right now. How about you? Jack BeVier (00:58) Yeah, absolutely. We had Peter Lineman on who's a real estate professor at the University of Pennsylvania. Incredibly sharp guy. He publishes a quarterly newsletter on macroeconomics and really goes through each of the real estate asset classes and talks about what he thinks is important and what is affecting each of those sub markets. And I just find that he's got a just an amazing way of distilling what seemed to be very complex topics into very easy to understand just the crux of it, right? You really distills it down to what matters and what doesn't. And it makes it makes these complicated topics seem very simple. and which is, know, really a gift. So we were excited to be able to spend an hour with him. we had Tony McGill from Zelman. they're like humongous investment banking in the, building space with, home builders. They cover the housing market, supply side as well. And like Home Depot, Lowe's any companies along that, lumber suppliers, stuff like that. So they've just got an incredible perspective on what's going on in housing as a as a whole, you American housing as a whole. And so having him on was it was a really a treat as well. So we're kicking it off strong here with 2025. You want to introduce our guest? Craig Fuhr (01:58) Yeah. Yes. Yeah, today not to be outmatched by any of those guys, we have Alex Safakis. No, come on now. You're something. Alex Safakis is the president of JWB Real Estate Capital in Jacksonville, Florida. The company was founded with he and his partner back in 2006 and they create passive real estate investments for Alexander Sifakis (02:10) Clearly outmatched by all those guys though Craig Fuhr (02:30) folks who want to invest in real estate, but really don't have the time or knowledge to do so. You know, the, the, the, I could go on and on about your accolades, Alex, but the one that caught my eye was from 2013 to 2022, your clients earn 79 % more home appreciation than the average Jacksonville investor because of your platform and your sort of vertical approach. So can't wait to talk to you about sort of your trajectory and all of that. So welcome to the show, man. Really appreciate your time. Alexander Sifakis (03:01) Thanks, appreciate you guys having me. Love Dominion and what you guys do and really excited to be on the RIR Podcast. Craig Fuhr (03:10) How do you guys know each other, Jack? Jack BeVier (03:13) Man, that yeah, I was going to jump into that. So, uh, I think we met at, was it personal real estate investor magazine or the imn conferences? was, was, yeah. Yeah. 2011. Yeah. Yeah. It was like 2011, 2012 timeframe, right when the imn conferences started, we, uh, we show up there as like the Baltimore guys and we do a little bit of lending, really just kind of locally in our backyard at the time. Alexander Sifakis (03:24) thought it was I am in from like 11, 12 years ago. Jack BeVier (03:42) And so we're meeting other operators in the room and these young guys are there from Jacksonville. It's fucking killing it. They have already built an incredibly cool platform and are doing like significant volume in a totally different market. And at the time, like, you know, there wasn't really the, weren't these national conferences yet. So we weren't really sure if there were like other versions of us in other cities. Now it turns out, yeah, there's, there's a version of there's many versions of us in every single city in the country. This is like, a much older industry than than Wall Street gave it credit for. But in terms of who was the player in Jacksonville, these young guys had started JWB and were killing it and having a tremendous amount of time. And then they just took off from there like and they never never turned back. So Alex, would you mind like what was kind of the how did you guys get into the business? You guys were very young and early like you were were young when it was early in the space. Alexander Sifakis (04:35) Yeah. Jack BeVier (04:35) How did you like get that platform off the ground and, know, shoestring it together? Did you raise money? What was the business model early? All that stuff. Alexander Sifakis (04:42) Yeah, you know, it's funny you say we were the young guys. We're not young anymore. Now 13 years later, you know. But yeah, I just didn't want to get a real job. So I went to University of Florida and had a high school and college buddy that we had always talked about starting a business together. you know, I had a job. I was a marketing major. I had a job. thought I was going to be marketing for some accounting firm. It sounded terrible and decided how slipping would be better. and went to a seminar. was a Robin Thompson seminar, learn how to fix up and flip houses. And at that seminar, we met fortune builders, Fan Merrill and Paula Sajan. those guys, we hit it off those guys because we were young. Like they were at the time, they were on the show Flip This House. were the Connecticut crew from Flip This House. And, you know, they were kind of our mentors in the early years of the business. And this was 2006. So the exact Craig Fuhr (05:13) Unbelievable. I was gonna ask what year? Yeah. Alexander Sifakis (05:37) Yeah, the exact wrong time to start a house flipping business, but we had had. Craig Fuhr (05:42) Well, you had a two year run before things really hit the path for you. Alexander Sifakis (05:44) Yeah, it was about one and half years. We had about one and a half years. The bottom fell out. know, we made, I mean, honestly, the best thing we did is all the money we made in that first year and a half, we just lost. And we got rid of all the bad assets. We paid all of our investors back in full. So where everyone else had gone out of business, screwed over their investors, everyone lost everything, our investors actually were making money. And so come, because we took the losses personally, come 2009, when everyone had gone out of business, there was no competition in the market. We had access to capital because our investors trusted us when no one else did. And that's when we really started scaling the business from 40 houses a year to 80 houses to 200 to 400 to 600 homes a year. it was all through private lending. we started, you my college buddy lent me 10 grand and his dad lent us. a hundred grand and his dad's golfing buddies lent us 400 grand. We we paid everyone back. And now we have about hundred and fifty million in true private capital from about 700 different individuals that, you know, lend to us. We pay 10 percent interest. We've been lent close to a billion dollars the last 18, 19 years and paid one hundred percent of our lenders back in full. And so that's really how we were able to access capital. And back then. I mean, capital was a problem. was really hard to find anyone who was willing to put any money in a real estate. You know, going back to those IMN conferences, the questions were, is single family a real asset class? And the other question was, how is this going to get funded? Jack BeVier (07:18) Mm-hmm. Craig Fuhr (07:19) And it was back then it was an emphatic maybe. So how do you go from sort of, you know, the one and a half years of a kind of a meteoric rise to sort of, as you said, losing money and not having the PTSD from that, like so many of us did to to really, you know, when turn it all around in 2009 to sort of 2012, 13, I would assume when like Alexander Sifakis (07:22) Yeah. Craig Fuhr (07:49) finding deals was like shooting fish in a barrel, right? Like how do you go from sort of the losses of the first year and a half to scaling something so large in the next few years? what's the... And the second question I would have is, so you're a marketing major, you're partner in the business, what was his major? Alexander Sifakis (08:08) So he was a finance major. And it's funny because now he actually began the marketing guy and I became the acquisitions guy. Oh, that's funny how that happened. But yeah, so how we scaled it, honestly, I think a lot of life is timing. And we were too young and stupid to realize the whatever risks there were. And we also didn't have a lot of responsibility. I mean, I was 23 years old. I was like, why not go for it? Craig Fuhr (08:10) OK. Jack BeVier (08:14) you Alexander Sifakis (08:37) So that's one of the reasons. I think the other reason is we kind of, saw the path. I've always been kind of a think outside the box contrarian and housing has been here. It survived the Great Depression, it survived wherever. And so just understanding that there's always, you know, that's that Warren Buffett quote, you know, about, you know, when other people are. or fearful is when you need to be greedy. And we just knew we had to figure out how to keep the doors open and then there was gonna be a tremendous opportunity. We read a ton of books and when we were started the business, we'd always planned on scaling it. It's like the E-Myth was one of the first books. was, know, rich dad, poor dad is what got us started, got our asses off the couch. Craig Fuhr (09:01) There's. Right. Jack BeVier (09:01) and do another since year four. Alexander Sifakis (09:24) You know, we were drinking bush light all the time in college. like, hey, we should probably do something. We read what she had poured out. And then the E-myth was about, and the mentorship from, from Dan and Paul, the fortune builders guys, about how everything you're doing, think about building a system so that you can remove yourself from it. You can scale it. And so even when we were the guys doing the demo work in houses, we were thinking about how we were going to build the system so that we didn't have to be the demo guys. And very quickly we weren't the demo guys. And that's how. we were able to scale the business just by bringing on great people. And that's really the third thing is we started hiring people pretty early and we screwed up all the hiring, of course, but we were focused on making sure we were bringing the right people on the team. And that's been the key to the sustained success of our business is our people. We've got a tremendous team that... Craig Fuhr (10:02) Mm-hmm. Alexander Sifakis (10:17) does all that, the hard work day in and day out, and they focus on our clients and our residents, making sure that our clients are making money, that our residents are happy and having an amazing experience. And if you do those things, and our job is to focus on the team so that they can focus on the residents and clients. And I think that's one of the reasons we were able to scale so quickly. Craig Fuhr (10:29) Yeah. Jack BeVier (10:39) What was the revenue model early on? Were you wholesaling, flipping, selling turnkey rentals? I mean, you guys have turned into a humongous turnkey rental provider, like the guy in Jacksonville, but early on, was that also the case? Alexander Sifakis (10:53) No, so early on we were wholesaling. So when we started, we were just straight wholesaling. And then we got into holding houses. actually, I mean, because I mean, money was free back in 2006. By the time the market crashed in 2008, we owned 40 rental properties. Because so we were buying, we were pulling out all of our cash, refinancing. We actually, was funny, we still have the denial letter. We had like 13 loans in process. Craig Fuhr (11:10) Sounds familiar. Alexander Sifakis (11:21) in what was it October 2008 when like everything just stopped and we're sitting there like holy shit, what are we gonna do? Because all of our cash was wrapped up in these houses. So we were wholesaling, we started doing a little bit of retail, a little bit of fix to sell to homeowners and then we were keeping a lot of homes and that was our plan was always to wholesale or flip to make money and to build a portfolio so that we could have cash loan retire. And then come 2009 and 10, if you guys remember back then, was that tax, there was an $8,000 home buying tax credit that if you bought a home, the government gave you eight grand and that really ramped up our home sales to owner occupants. And then when that stopped, which I believe was 2010, is when we switched to turnkey sales. And there was a great company called Memphis Invest, which is now REI Nation. And we still are good friends with the Clothiers. We were doing our own version of that. We called it the 10-year millionaire real estate program. We were actually selling turnkey properties without really understanding what we were doing. And then we met. Yeah, I mean it was bus tours. We'd bring people in and into their Jacksonville and we'd try to sell them houses. And we met Memphis and we really kind of refined our turnkey process. And then Greg Cohen, my business partner, came up with the idea of selling houses over the phone. Craig Fuhr (12:26) doing the whole webinar thing. Alexander Sifakis (12:46) which had not been done at that point. So, you know, the fortune builders guys were selling real estate education over the phone. So they would have, you know, events and they get information and the people come in and they were selling their mastermind product over the phone. And Greg had the phenomenal idea. We can sell houses over the phone. And we all told him he was crazy or like that is never gonna work. And it did. And so we taught Memphis that we taught Memphis how to sell houses over the phone. And now it's, everyone does it, but we were really pioneers in that model. And so we scaled up that turnkey business. That became 99 % of our revenue over the last 14 years. The last two years, we've shifted again a little bit. But so we were selling 500 turnkey properties a year in 19, 20, 21, 22. Jack BeVier (13:38) something that you guys did that I've found really unique at the time, especially like early, especially was, was that you're doing those in their new construction, right? You're selling the same house over and over and over again. The JWB house, you guys have like, it's whatever it's like five models, right? Like there's, you know, it's the same thing over and over again, which really gave, I'm sure gave you guys tremendous efficiencies of scale, but It was new at the time because there were, there were, there were other turnkey providers or other turnkey sellers in different markets, but no one was selling a new house to those folks. was all like, you know, two bedroom, one bath, $750 rental built in 1950. That was a rental. You guys came in with this three, two and a half, 1260 square foot, new construction. Like it's gorgeous. And I mean, when did you guys start doing new construction? How did you learn how to do that? and then what, and then what, when did it click that you were like, this is what we're going to go do. And then just scaled the shit out of. Alexander Sifakis (14:36) Yeah Yeah, so it was 2011 when who now, you know, our main builder and really good friend Richard Briggs with American Classic Homes came to came to me and he said, Hey, I can build a house for you. The lot and the house for 65 grand and you'll be able to sell it for 85 and you can make money. I was like, you're crazy. There's no way because back then remember the whole thesis was below replacement costs. It was we can buy home. Jack BeVier (15:11) Yeah, yeah, Yeah, right. Right. Alexander Sifakis (15:13) below replacement costs and that's why it's a no-brainer. So in my mind I'm like, well if you're building it's not below replacement costs so it doesn't work. And then he showed me, he's like, you don't have to give me any money up front, I will build the house for you and only when it's done you will pay me $65,000. And he did it. I mean back then the actual house, he was building a 1400 square foot house. for $53,000. was like $35 a foot. And we're talking brick front, hardy board siding, like this was not a mobile home. And so it was another, it was our eureka moment. I remember that we contracted them for eight houses. We built those first eight houses, we sold those eight houses. And it was so much easier than buying junkers and putting 40 grand into them. And so from 2012 to 2016, Craig Fuhr (15:42) Holy shit. Alexander Sifakis (16:07) our numbers really shifted where I think 2015 was the high water mark. 2015, think we renovated like 320 homes and that took a tremendous staff, a lot of effort, lot, you know, it's a lot of work to run. You guys know, I mean, you guys buy, you know, those old houses in Baltimore and fix them up. And so it shifted from our mix was like 5 % new construction and 95 % renovations to by 2018, it was 95 % new construction and 5 % renovations. Craig Fuhr (16:24) you Alexander Sifakis (16:37) And back then there was almost no one in the country doing build to rent. There's a named Bruce McNeillage. Bruce, who we met at IMN conferences, he was doing new construction for rent. But I mean, it was a really revolutionary thing to the point where in 2013, we got a front page article in the Wall Street Journal. I still have it today, literally front page in the Wall Street Journal. It was us, and I think Bruce was in that article. Jack BeVier (16:42) Right. Yeah, yeah, yeah. Alexander Sifakis (17:06) And it was like homes are being built for rent. What is going on? Now everyone's doing it, but it was really pioneering back then. And really, you know, it was unique. think that the things that make Jacksonville work, the things that make Turnkey work for us is one, the Jacksonville market. The Jacksonville market is an appreciating market. You're in Florida, you've got the tailwinds, you've got appreciation, but it's still a cash flowing market, you know, where you can get similar cash flows to like the, you know, Memphis and those kind of middle America markets that are much lower growth. And so the market was really attracted to people, which is why we grew so quickly. But then the new construction aspect was 100%, you know, a reason why we were able to scale that turnkey business because it's a great, mean, you got very high occupancy, low maintenance, who doesn't want to rent, you know, a brand new home. Jack BeVier (17:53) Refresh my memory, are these lots well in septic or is it public water in sewer? Alexander Sifakis (17:58) We're about half and half. about half. So our new construction is infill. So we're buying lots that were platted the 2030s, 40s, 50s, 60s, 70s. A lot of times we're tearing old houses down. Sometimes it's just lots that were never built on, but they're all infill in areas that have already been built. And so we're buying these lots for five grand, 10 grand, 20 grand, 50 grand, depending on the neighborhood. And then because of our scale, we're to build pretty inexpensively. And that's shifted, you know, as home prices have gone up, our neighborhoods have shifted somewhat. And so I would have said, you know, seven years ago it was probably 70 or 80 % sewer. And now we're probably 50 % sewer, 50 % septic, just because we're moving in a neighborhood that haven't had central water and sewer, which is actually is crazy in Jacksonville. There are neighborhoods that are extremely urban or suburban that still do not have. city water and sewer. Jacksonville is also three quarters the size of Rhode Island. So it is a massive city that would be probably 10 or 15 different cities in most geographies around the US. Jack BeVier (19:02) The Craig Fuhr (19:03) So in 2011, Jack BeVier (19:03) good. Craig Fuhr (19:05) you get into the home building space and build to rent and I assume you were selling some as well, I think I heard you say. And so what did the volume look like back then? Alexander Sifakis (19:15) 2012 we sold 212 properties I want to say. So I mean it was very quick from 2009 was probably 50 and then it was 100, 150, 200 and then what happened in 2013 was crowdfunding became a thing. Obama signed some bill that allowed crowdfunding to happen. There was a company called Realty Shares where I met this guy. Jack BeVier (19:36) Yeah. Alexander Sifakis (19:44) The CEO of RealtyShares saw me speak at an IMN conference. He called me up and said, hey, I've got this platform, I've got investors, I will raise you money. You don't have to do anything. He's like, you make a post on my website and I will give you money. said, if it doesn't work, it doesn't work. So I made a post on his website and I had 250 grand in equity in literally like two hours. And I was leveraging that with a line of credit from 643 capital back then, which was, so I had 1.25 million to buy homes in, in a couple of hours. And it was just Eureka moment. And so we were at one point in 20, like 2013, 2014, we had crowdfunded more equity than anyone in the country, um, through realty shares. Cause we, we first, we did 250 grand. and then 500 grand and then a million and then two million. So we were raising these funds and then leveraging them with institutional debt. And we killed it for the clients. They were making 30 % returns of people that were investing with us from Realty Shares. But then... a lot of regulation came into that market. It became a lot harder to crowdfund. It became more institutional. But back then, in 2013 and 2014, it was the wild, wild west. We would crowdfund a million dollars and they would just wire us a million dollars. There was no controls. There was no nothing. It was amazing. And because we always do the right thing, we made a ton of money for their investors. were one of their top Jack BeVier (20:59) you Alexander Sifakis (21:11) sponsors, but there was other people that were not doing the right thing. And so a lot of controls came in. It became a lot harder to work with crowdfunding. So we don't we actually probably stopped in like 2016, 2017, I think. So we don't crowdfund money anymore. But that was that enabled us to go from 200 homes and only using private lending, which is amazing capital, but it's slow because it's referral based. And so that's how we were able to get from 200 homes. So, you know, by 2015, 16, we were doing 500, 600 homes. Craig Fuhr (21:42) How do you ramp up an acquisition engine that could find you all of those lots? mean, what did that look like? That seems to be like that would be the constraining variable here. Like, holy crap, we've got all this money. How do we go find the land? Alexander Sifakis (21:50) Well that having said That Well, because we grew up wholesaling, that was what we knew how to do. You know, when we started the business, was out, literally me and Greg were out sticking the We Buy Houses signs in the yard till 5 a.m., you know, every Friday night. So they'd survive the sign police over the weekend and we get more calls off of them. Like we knew that business, we had an acquisitions team and we had really great relationships with local people. when it was back then, we were probably Craig Fuhr (22:15) Yeah. Alexander Sifakis (22:26) buying 50 % of the properties ourselves and buying 50 % through wholesalers. Because we had a great reputation, we closed. And so we had a network of all the other guys that were putting out We Buy Houses of Science. We were their first call. Also, we were one of the only people back then that was buying, that was doing infill building. It was us and American Classic Homes. No one else was doing infill building. So there was no competition for those lots back then. Everyone that had a piece of land or a lot called us. Jack BeVier (22:54) The, um, Craig Fuhr (22:54) That's amazing. Jack BeVier (22:55) the, like the, you everyone was so focused at the time ourselves included on discount to replacement costs. Like you said before, right? And so it was like, Hey, I'm going to buy this house that would cost me 150 grand to replicate or, you know, a hundred grand to replicate. I'm going to buy it for 65 grand. How could I lose great thesis? But like the levered bet that like we went to Atlanta in 2011 from 2011 to 2015, basically, and started buying at the courthouse steps based off of that thesis. Hey, I'm buying below replacement costs. This is new stuff. Like We had a great time doing it. was super fun. What I never did was buy the land though. Like it never clicked and I'm still pissed about it is that the cost is that you had lots that were finished lots that cost 50 grand to finish that lot going for five grand. And that was the levered bet, right? Like that was the thing that if real estate values go up this 50, this $5,000 lots going to become 50. And so you're going to get 10 X You know, you're gonna get a thousand percent appreciation, you know, and and the people who were active in land at that period of time I think really murdered it and you you you guys You guys were early in that and I was we scratching our heads at the time We were like, why don't you just buy the houses like that? They're already built but I mean it ended up being just a Alexander Sifakis (24:11) Well, know what? The houses had cash flow, right? So was a safer way to hold it. It had cash flow. that, I mean, we were thinking a lot the same way as we did take some of our capital and buy those. I mean, yeah, we were buying finished lots for four, five grand. And we still, it's funny, we still own, we still own some lots we bought in 2012. We just sold eight, there was a community, there was 18 lots that were left that we just hadn't built yet. Jack BeVier (24:14) Yeah, yeah, yeah. Alexander Sifakis (24:36) We bought them for 4500 bucks back in like 2014 and Lenar just came in and bought them for 70 grand from us. Jack BeVier (24:42) Yeah, freaking crazy. That's amazing. Craig Fuhr (24:44) You literally just stuck the dagger right into Jack and then turned it. It's not as if he's ever mentioned the Atlanta story on the podcast before. Jack BeVier (24:48) The 20x Alexander Sifakis (24:52) Yeah. Jack BeVier (24:54) 2,000 % appreciation like that, you know, no houses went up by 2,000%, you know? Alexander Sifakis (25:00) Yep. And we didn't have to do shit. just had to mow the lots for the last 10 years. Jack BeVier (25:04) Yeah, yeah, that's amazing. So I'm sure the turnkey business was also, you know, benefited, you know, the market's gotten more gotten harder along the way. It's gotten harder to find deals. Replacement cost has gone up significantly. So the cost to build these deals has gone going up rents have to of course, but I'm sure you guys benefited a lot from the low interest rate environment of 2021. How's the past three years been though? Like how's the interest rate environment affected your guys business? Alexander Sifakis (25:31) The house business has been good. mean, 2021 and 2022 were in aberration. We should have known when we were there that 2 % rates was throwing so much. It was gasoline on a fire, right? And so the turnkey sales have slowed down to the point where now we're probably 50 % turnkey and 50 % owner occupant. So we built over 400 homes this year. And about half we're selling to owner occupants and about half we're selling to turnkey investors. And what was that? Yeah, all in spec. Yep. Yeah, we build it. Cause we know, I mean, if, if let's say like the world ends and homeowners stop buying and turnkey buyers stop buying, we'll just keep them ourselves. Like we, and we still do that. We still, own about 500 homes ourselves and we're adding to that portfolio every day. So, you know, we're, managing it at this point where like we have a loan. Jack BeVier (26:02) Is that all spec? All on spec. All on spec. Alexander Sifakis (26:25) that we put in place back in 2017 and it was about 180 homes. About half of those homes were selling because they've appreciated so much, a return on equity is not great. About half we're going to refinance and add back to the portfolio. And so we're managing our portfolio, but we're always growing it. Kind of like putting our money where our mouth is. We think owning real estate in Jacksonville is a great long-term bet. And so, yeah, so now about, like said, half our sales to owner occupants, about half our sales to Turnkey. And we think It'll probably stay like that until interest rates go down. They don't have to go down much. mean, if we see 5.5 % rates, and we do, when interest rates go down, we see turnkey sales pick up because that cash on cash starts making more sense again. Most of our buyers now are looking not for a cash on cash return. They're looking for... appreciation. Home prices are still going up in Jacksonville. They're looking for a great long-term IRR. They're looking for capital preservation. You can't go wrong buying an asset in Florida. And so we still have a lot of great clients that are buying. It's just the ones that are needing cashflow day one. It's hard to get nowadays. Jack BeVier (27:35) Yeah. I know we only have you for like 10 more minutes and I wanted to make sure we talk about you guys have also taken on some projects in the commercial side of things. Tell us about how you got into that project and what it entails. Alexander Sifakis (27:48) Yeah, so we've right now, you know, our business, we've got our house business. We build 400 or 500 homes a year. We've got a property management company which serves the turnkey business. We manage about 5,600 homes in Northeast Florida. So we're by far the largest single family property manager in Northeast Florida. And then about seven, eight years ago, we started doing land development where we're buying large tracts of land, permitting those lots and most of the time selling them to KB, Dream Finders, Lennar, whoever. And so that's kind of our single family house business. five years, and right now we're developing about 3,000 new single family lots. So it's a pretty, it actually is a pretty significant business at this point. And then we've got our commercial and downtown investments. So about 2019, me being the strategy and vision guy, I got bored with houses. Back in probably 2017. I was still needed in the business by 2019, 2020, my business partners were like, all right, go do something else. You're just causing trouble around the office. And so we bought a couple of historic buildings in downtown Jacksonville. And then we started buying land around those buildings. We renovated this historic building, about $20 million renovations, adaptive reuse, new market tax credits, historic tax credits. They're all mixed use. got residential above, ground floor, retail, restaurants, bars. They're really cool, sexy projects that don't make any money for a long time. So that's the thing about these urban development projects. You get a decent cash on cash return, but you make way more money investing in houses than you will day one. But the thesis was, if you do enough of these projects in downtown Jacksonville, which has grown a lot the last 10 years, but still lagging places like Tampa or Nashville or Austin. You can get that boom that you saw in Austin or Nashville or Tampa, and then values increased dramatically. And so we started buying a lot of land around those buildings we bought, which is in the heart of downtown Jacksonville. mean, you're talking the same block as City Hall. Craig Fuhr (29:57) When you say land, Alex, was this like stuff that may have been owned by the city or there was some old dilapidated building on the lot? Alexander Sifakis (30:04) You know, it was mostly just parking lots that were owned piece by piece. mean, one now we own, you know, it's a nice city block. I show it on the map. It's like we own this city block, but that was 10 individual parcels. We had to buy one at a time from mom and pop owners. Some pieces like we bought some stuff from a church that was more contiguous, but it was really like blocking and tackling land assemblage. And now we own about 30 acres, about 20 city blocks in downtown Jacksonville. Craig Fuhr (30:07) Yeah Alexander Sifakis (30:32) We've raised well over 200 million in equity. We broke ground in the first phase of our project, which is three high rise buildings. It'll be over $2 billion in development over the next 10 years. And it's really going to transform. It already has started transforming downtown Jacksonville. Downtown Jacksonville right now, the residential is 96 % occupied with the highest rents of anywhere in Jacksonville outside of waterfront. It's 250 a foot for residential rents, 96 % occupancy. Residential has gone from, there's 3,000 residents in downtown Jacksonville 10 years ago. Now there's over 8,000. So it's already been on an extremely upward trajectory. so we're just pouring gasoline on that fire. We're building true mixed use, amazing ground floor, grocery stores, gyms, bars, restaurants with A-class residential on top. And our development team is the same development team that did Water Street Tampa, which is a $4 billion development in Tampa that totally changed downtown, in Tampa, changed Tampa. And so we've got an amazing team. We've got amazing irreplaceable real estate. The support of the city behind us, our first phase, we got $100 million in incentives. So it's a really amazing project that is gonna change the city. It's going to crush it for our investors. We're still raising capital if anyone out there is interested in putting some easy money into downtown Jacksonville. And yeah, you know, I've got three boys. They're eight, five, and two. And I want them to move back to Jacksonville after they graduate college. I think that having a thriving, vibrant, urban downtown Jacksonville will attract talent, which attracts companies, which attracts talent, which attracts companies. And then My kids don't think they have to go to New York or Miami or Chicago to get that best job, that the opportunities are endless here in Jackson. So that's what honestly got me interested in downtown five or six years ago, and now we're making it a reality. Jack BeVier (32:32) Yeah, you started that you started that project that journey, so to speak, five or six years ago. Alexander Sifakis (32:38) So we started buying land in neighborhoods around the historic core in actually 2013. But we started buying buildings in the core and land in the core in 2019. so the thing was the land, so there's a neighborhood in downtown Jacksonville called Brooklyn. We were buying land there for one to $3 a foot back in 2013. So now land they're selling for 50 bucks a foot. and, you couldn't get those sort of what? Jack BeVier (33:09) you? What was the How did you finance the early phases of that? Right? Like, you know, someone who's listening to this, like, am I just is it just your equity? Are you raising capital for this? Like, how are you? How are you pitching that? That vision in the early innings? That's like such a heavy lift. Alexander Sifakis (33:13) We were buying stuff for five or 20 grand and it just passed. Well, if we're talking early innings in 2012 and 2013, we were picking up literally a third of an acre for 15 grand. yeah, when you're like when you're talking, so a million dollars an acre is $25 a foot. So if you're, if you're, you're buying stuff for, for two and a half dollars a foot, you know, that's, that's, you know, a hundred grand an acre. It's, it's not hard to do that. And that was why we bought Jack BeVier (33:33) Holy shit, really? Craig Fuhr (33:34) Yeah, he's paying for it out of his right hip pocket at that point. Alexander Sifakis (33:55) in the outskirts around downtown. couldn't afford land in downtown at that point. But our land basis in our downtown Jacksonville, like in the middle, like adjacent to existing high rises, adjacent to City Hall is less than a million dollars an acre. Where land in downtown Tampa right now is 10 to 15 million an acre. but to your point, back in 2013, I still couldn't afford to sit on stuff for a million dollars an acre. I could afford to sit on stuff for 50 grand an acre. And so that's what we did. back then. then in 2020 and 2021, when we started buying stuff in downtown, we had, I mean, that was when the market was on fire. We had so much money. We were also just using our cash. We were looking for a place to put our cash. And so we started buying land in downtown Jacksonville. When we realized that to develop this land, we were talking about billions of dollars is when we went ahead and raised equity. And by that point, we had had the land, we'd had a vision. So there was something to sell to investors to raise the capital. Jack BeVier (34:59) Yeah. Yeah. Wasn't a blind pool idea. Yeah. That's amazing, man. Super fun. Super fun. So what Craig Fuhr (35:07) Alex, we only have you for a few more minutes. Talk to the people who are listening, man. What excites you about 2025, given the vast experience that you've had, and what are some of the pitfalls that you might be seeing that might be coming our Alexander Sifakis (35:27) 2025, I think is a time to be selectively aggressive. think there's, I just was talking to a guy, we managed some properties for him and he is picking up an apartment complex for 60 % of what it traded for two years ago. And the existing lender on it is financing 90 % of that at 4%. So there are deals out there. They're not like, falling off of trees right now. And I think the distress is gonna, there's not gonna be a ton of distress because there's deals out there. Lenders are not trying to foreclose. They are trying to work out deals, they're trying to make things happen. But I think there are deals to be found. And I think it's gonna be another year to really focus on operations, to make sure you've got a great team, to make sure that you're ready for the next boom. I mean, for me, I think, Downtown is where we're focusing because that is we are in full go. We are expecting rents to go up and the restaurant, the retail to demand is going to increase there. But the market as a whole, I mean, we're not expecting interest rates to go down for significantly. know, I was I was with Jack at the IMN conference and that was kind of a consensus that that, you know, the the release of there's so much money waiting and we were kind of thinking that was going to happen in 2025 where deals were going to start flowing all over the place. Craig Fuhr (36:45) Yep. Alexander Sifakis (36:46) I'm not sure that that's gonna happen. I think it was really interest rate dependent. And so we're focusing on getting better operationally, continuing to pick up margin where we can and to focus on those things that are great deals and to be ready for when the next opportunity arises. And pitfalls. For us, being in Florida makes it, we've got tremendous tailwinds. So that can cover up a lot of mistakes. I think, I'm really focused on interest rates for I single family homes that drives a lot of the market, multifamily drives a lot of the market. And making sure that we're putting out a great product. Craig Fuhr (37:13) Mm-hmm. in Alexander Sifakis (37:30) I think there's a lot of stuff going for us though, like right now. So typically in Jacksonville, you've got about 3,500 to 4,000 apartments that deliver in a normal year. In 2024, 11,000 apartments delivered. It was almost triple the normal volume. There's about, and absorption was actually really strong, but rents had been soft. Rents had been, you know, flat up, depending on your neighborhood, up a couple percent. but we've only got 5,000 units left. And in 2025, deliveries fall off a cliff middle of the year. Cause nobody started any apartment complexes for the last year and a half. So, and in 2026, there's no deliveries. So I think we're going to see rents dramatically increase into 25, early 26, because there's no inventory coming on the market. So, so I see that as a really big opportunity where if you're looking at Craig Fuhr (38:19) Mm-hmm. Alexander Sifakis (38:25) back the last year, you're projecting no increase in rent appreciation. But if you're forward thinking, we should have some significant rent appreciation, which I think is some big upside. I don't, you're talking about macroeconomic thing, is China gonna invade Taiwan? Or are we gonna be in a war with Canada? That sort of stuff is what I worry about, but. Jack BeVier (38:31) Mm-hmm. Craig Fuhr (38:44) Hahaha! Alexander Sifakis (38:49) I go back to that old adages like, can't control it. Don't worry about it. And so for all the things that we can see and we can control, we're excited for 25. We think it's going to be a great year. And we think that all the fundamentals are pointing towards some significant growth end of this year, early 26. Craig Fuhr (38:52) Yeah. Well, man, we know you got a hard stop. How do folks get in touch if they want to invest in the platform or learn more about JWB? Alexander Sifakis (39:19) Yeah, can send me out my email. I'll give it to you. It's alex at JWBcompanies.com. Or you can reach out to you guys. I'm sure you guys can connect us too. And yeah, so any questions, opportunities? You want to give me some money? Sounds great. Craig Fuhr (39:39) By the way, Jack, we've had our first Oscar de la Hoya look alike on the podcast. I know you must get it every now and again. I think there's an uncanny resemblance. I really do. Alexander Sifakis (39:46) On Cedar Day La Jolla. I think I've heard that a time or two. Every person I meet says they know someone who looks exactly like me. It's either a personal friend or celebrities. I must have a universal face. you know, I that a couple of times. Craig Fuhr (39:58) Hahaha Jack, any final thoughts? Jack BeVier (40:06) Nice. No, man, really appreciate you taking the time to hang out and chat. the been following the commercial stuff and I'm super excited about that project. And, so thanks for, uh, for coming on the chat with us about that. And obviously the growth of JWB over time, it's just a, a really, really cool story for the past 15 years. So Alexander Sifakis (40:24) You're awesome. I appreciate you guys having me on. Always appreciate your lending and the business. Honestly, mean, you guys were a big part of us being able to scale the business to where we're at. appreciate you having me on. Appreciate what you guys do. Craig Fuhr (40:38) Alex, thanks for the time. I hope you all enjoyed this first episode of 2025. Don't know when it'll post, but I'm sure it'll be soon. Alex, honestly, we'd love to have you back on the show. was great talking with you. Alexander Sifakis (40:45) It can only go up from here. Sounds like plan. All right, you guys have a good one. See ya. Craig Fuhr (40:54) Hey hang out, we'll just hang out right now just to make sure everything's uploaded Alex and we'll go ahead and. Alexander Sifakis (41:01) Sounds good.