Latest / The On The Rise Podcast / Building A Wellness First Real Estate Project
Transcript
- Rise48 Equity: Welcome to the Faith Driven Leader Podcast. I am your host, Nick Stromwall. I've got an awesome guest today. Welcome to the show, William Walker. Thanks for having me, Nick. ⁓ William and I met a couple months ago at this point now in Phoenix ⁓ at an event. Recently, ⁓ was in his hometown in Nashville. We got to hang out and have some dinner together. So I'm really excited to jump more into your story. ⁓ So read your bio and then you can help us fill in the gaps. ⁓ so William is a Nashville-based real estate developer, licensed general contractor, and CPA who's been investing since 2015. After starting his career in EWIS Transaction Real Estate Group, he acquired 1,520 apartment units between 2018 and 2020 before selling the portfolio in 2021. He co-developed a 144-unit apartment complex in Brownsville, Texas, and today leads Walkstar, a full-service real estate investment company focused on short and long-term investment strategies in Nashville, including SMR, an 18-unit luxury wellness condo on Music Row. Amazing. What do we leave out there? It sounds about right. It's a little blast from the past over the last decade or so. So is that at an event? And was talking to someone about ⁓ kind of some of the things we're doing and we realize we have a common connection ⁓ through through through one of your partners that's helping you with cold plunges. Tell us a little bit more about SMR. Yeah, so we're looking at inventing a new class of of real estate wellness. And you know, we're starting to see market dynamic shift in the residential real estate space. We've been tracking spending, On this segment, if you will. And since 2020, wellness has risen about 35% and peaked at about 6.8 trillion. And sauna usage is up 50%. So we're seeing a trajectory in the market that is telling us people are spending more money and wellness, they're spending more time in wellness, and they're ultimately prioritizing longevity and health more and more. So we're focused on trying to integrate that seamlessly into our retail residential products and our first attempt at that is SMR. It's an 18 unit luxury wellness condo in Nashville. It's a boutique building, so there's only 18 units. They're all corner, ⁓ oversized large units. And within every unit we have integrated a a wellness bathroom or ⁓ wellness amenities as we like to say. And what that means is infrared sauna and cold plunge is integrated into each individual unit. So the convenience and the privacy of using these wellness amenities is is our main focus and making it seamless into our clients' everyday lives to where we're not trying to replace your gym membership or your fitness studio, but we want to have people that are really high performing and prioritizing their health and their their wellness routines to have that as seamless as possible integrated into their condo units in downtown Nashville. I mean, not only is it an amazing location, but we're talking about some amazing amenities. How'd you get a vision for for doing this? I've owned the land since twenty nineteen and really wanted to do something ⁓ that was different and unique in Nashville. And, you know, I I'll go out on a limb here and say it, but I I believe we're the very first development to do this, and it was a combination of watching the market trends of people voting with their their wallets and voting with their dollars and spending more. and wellness and longevity and then something that I thought was cool and unique and would enjoy for my own personal use. So I kind of merged that together and trying to create a development that was unique, wellness focused, and something that I liked as well. That's awesome. Super cool. ⁓ okay, so how does someone focused as a CPA get into this type of real estate? What's what's that what was that journey like for you? Yeah, well, this is probably longer than what we have time for today, but I'll try and give you, you know, a 30,000 view flyover. ⁓ you know, I started in the business about 12 years ago. ⁓ as you mentioned, I was working for Ernst Young and their transaction real estate group. We were not on the buyer sell side, but we were consulting clients that were both buying and selling commercial real estate. And I say to people that I got a PhD in multifamily with that group. We were similar to ⁓ an investment banking role where we were basically underwriting all of these transactions, doing quality of earnings analysis, financial due diligence, purchase price allocations, and ultimately we were giving it a a valuation opinion on these properties that we're selling. Because for example, one of my clients back in 2015 was Mid America. They purchased post properties out of Atlanta, Georgia. It was a almost a four billion dollar transaction. It was about 22,000 units. And MidAmerica was taking that portfolio and ultimately writing that on their balance sheet. So for SEC regulation, there's a lot of scrutiny around companies who are buying this large of assets on a publicly traded platform to where there could be ⁓ there could be room to inflate the stock price based on unreasonable valuation. So it was our job to come in and attest to the reasonableness of the valuations of these properties. And as you know, Nick, ⁓ most of these properties are valued based on their income that they generate, also a little bit on the the cost of build and also on the market and and what a a retail buyer or a an investment buyer may be willing to pay similar to other comps in the market. So we were really digging into the assumptions ⁓ on the financial diligence level, breaking down those underwriting models and ultimately attesting to the valuations that these companies would write on their balance sheet. And, you know, that kind of led me into commercial real estate. I had dabbled a little bit in my own private investments at that time, but, you know, I kinda decided that I was on the wrong side of the table, ⁓ as I was going through some of these projects, consulting for these companies. And I also had a a knack and, you know, a passion for doing deals. So in twenty seventeen, after ⁓ a couple of years at Ernst and Young, I decided to go onto the private side, start my own business. And that was really where things accelerated for me. You know, the market ⁓ timing was pretty incredible on that last run of the cycle from twenty eighteen to twenty twenty. And You know, I was able to partner with ⁓ an individual and our complimentary strengths really led to ⁓ a great run there over the last three years of that cycle. And you know, it was just a lot of hard work and you know, ultimately ⁓ one day, one month, one year at a time and right time, right place, ⁓ all coming together. Yeah, that's amazing. Cool. Well it's it's fun to hear like someone's story of kind of what they were, you know, schooled for or trained for. the relationships and doors that opened and kind of where they're at now, you know, something that we've really connected over is just faith. And as I've learned more about you, you know, checking out your website and hearing more about your company, you've said faith, courage, and perseverance are really what you want to talk about today. So where does that story actually start for you? Yeah, you know, ⁓ my faith has always been a ⁓ a foundation in my life. And, you know, I always haven't led with faith or been as disciplined in my walk as ⁓ times I should have been. But it's all always been somewhat of a a North Star and a a moral compass, if you will. And at the end of the day, you know, I put my trust and belief in in Jesus Christ and the principles and the values that that He teaches. And, you know, what I do on a day-to-day basis is ultimately, you know, to hopefully to glorify Him. And while I make mistakes and and go astray at times, you know. the the decisions that I make are ultimately grounded in what I think is right based on on those principles. So that has always been a, you know, a a guiding ⁓ value system for me and I've tried to bring that into my work and into my life and into my decision making and into my relationships. ⁓ and the the older I've gotten, you know, the more confident and and bold I've I've become in having those conversations, I guess the less I care what people think and the more I'm willing to, you know, be loud about what I believe doesn't mean that obviously everybody has to believe what I believe, but ⁓ I'm I'm not shy and and leading with that. And I think some people appreciate that. Some people probably don't appreciate it. But at the end of the day, if if we're, you know, constantly making decisions for our own well being or what's good for William or what's good for Nick. I think we can fall into traps sometime of not always making ⁓ you know the right decisions, not only for ourselves, our family, but you know, also in in God's eyes. So, you know, I was introduced, ⁓ you know, my mom was a huge influence on my spiritual and ⁓ faith journey from an an early age, always pushing me in that direction and always, you know, encouraging me to develop my own relationship. with Christ and you know, that has matured and evolved over the years. But ⁓ I would say, you know, it's it's instrumental in in everything I do. And you know, when you're treading in deep water and, you know, real estate and development, there can be many uncertainties. In life there can be many uncertainties. And you know, as God says, you know, we will face trials and tribulations. I think people get caught up a lot of time as if there's a God, we know, why do bad things happen? Well know we do have free will. We are told that we'll face trials and tribulations, but you know, building your house and your faith on the rock, so to speak, is is what helps weather those storms when when the tribulations come. Man, that's a lot of nuggets of wisdom there. ⁓ you know, I recently saw one of your videos where you talked about one your projects and you did something special ⁓ to kind of stamp your your faith into the project. Could you talk about that a little bit? Hey everyone, just a quick word before we jump back into this episode. I'm Zach, the CEO of Rise 48 Equity, and I want to take a moment to share a little bit about what we do and why we do it, because I think it's going to resonate with a lot of you who are listening to this series. At Rise 48, we're a real estate investment company, but the way that we think about our work goes beyond just improving properties and generating returns. We genuinely believe that when you invest in a community, you have a responsibility to invest in the people who live there too. That looks like hiring community managers who are present and engaged with residents. It looks like hosting Monthly events for our residents to build an actual community. It looks like our team showing up together to volunteer and partner with nonprofits in the areas where we operate. For those of us who are faith-driven, I think there's also a deeper question underneath every investment decision. And it's not just what's the return, it's what is my capital actually building? Those two things should and can coexist together. At Rise 48, we built a model where strong returns and strong communities go hand in hand. If that's the kind of investment that you've been looking for, We'd love to connect with you and tell you about what we're building. You can learn more at rise48equity.com and we'll get you right back to the episode. Yeah, so I ⁓ ultimately integrated the ⁓ scripture and and the word of God into the foundation of the building. And I thought it was ⁓ figuratively and literally appropriate for what I was doing. Also gave me courage and confidence going into uncharted territory and uncertain times in the the market and ⁓ the world and all of the things that could, you know, create worries. But this was something that grounded me and ultimately what I did was I ⁓ I had four scriptures engraved on steel plates and I ⁓ integrated and poured those plates into the concrete corners of the foundation of of the building I'm doing. It's a ⁓ seventy five foot midrise condo development and the heart of music grow in Nashville and ⁓ it was my way of of trying to build my house on the rock, so to speak, and also give attribute and you know, acknowledge God and what I'm doing. And, you know, if it weren't for him, you know, I would not be able to do anything. So it was a small way for me to be able to, you know, give praise and give credit and recognition to, you know, the Lord Savior. That's amazing. ⁓ I kinda got goosebumps having you share it. I know, watching your video, but hearing you talk about it live. Do you by chance remember any of those scriptures that were on those four plates? I do, yeah. John three fifteen was ⁓ or John three sixteen was was one God ⁓ so loved the world that he gave his one and only son, not to condemn us, but to ⁓ to ultimately give us eternal life, paraphrasing a little bit. Another one was from Revelations, another one was from James, ⁓ James one, two, three, consider it pure boy my pure joy, my brothers and sisters, whenever you face trials of many kinds, ⁓ because you know that testing of your faith produces perseverance. and the other one was was one of the psalms. That's awesome. Cool. Well, ⁓ if if there's, you know, a link at the end of the show, I think it'd be really cool to to document that story. I think it's it's a practical way, I think, for you know, a faith-driven leader to exercise their craft. And you have a unique gift set, not only coming from the the CPA analyst side, but also wearing the hard hat and developing, which are very it's a very unique gifting to have kind of both sides of the coin there. So I want to hear more about that. But know, speak to that faith-driven leader who's listening and maybe they've recently come to faith or they want to exercise living out their faith. You know, which you've talked about is a very practical application of that. What are some small things you do outside of literally marking a building before corners building the foundation on steel scripture? What are some other ways that you're incorporating your faith into your work? Yeah. So, you know, during our groundbreaking ceremony I had a a good friend of mine who's also a young pastor come out and say a few words and and bless the site and I think it's just the intention and you know where you give credit. Are you ⁓ are you glorifying yourself and you know, there's nothing wrong with patting yourself on the back or or patting your team on the back, but no ultimately there's there's nothing new under the sun and you know, we're we're giving these We're we're given the opportunity to develop our our passions and our talents, but ultimately God is in control. And I think just remembering to be intentional and give credit where credit is due and it can be big or small. ⁓ and ⁓ I just don't shy away from those conversations or those opportunities and I'm also not trying to shove it down anybody's throat, but you know, I guess I'm just being louder on my beliefs and any opportunity that I see to give credit to God or or Jesus, you know, I try and take those opportunities. And I'm not perfect and I don't always do that, but, you know, a few simple examples were, you know, the foundation obviously that we just talked about and and ⁓ integrating scripture there, having ⁓ you know, a pastor friend of mine come out and and pray over the the groundbreaking ceremony. And then, you know, I I I talk openly about my faith and And, you know, my beliefs on site with people and you know, I I ⁓ know, s I pray over the the site and I don't think it has to be a big production, ⁓ or you know, it doesn't have to be from a mega speaker, but but these small opportunities to to share your faith or share the gospel or or share the word I think are are really where some of those those hidden opportunities are. Like like the Bible says, you know ⁓ faith is like a mustard seed or I'm paraphrasing a little bit all all we need is a mustard seed. So think of these opportunities as just planting a little mustard seed. It doesn't it doesn't have to be some grandiose ⁓ speech or presentation or idea. It can just be a small, a small little mustard seed that that ⁓ you're sharing with someone that you're working with and and ⁓ and it can be as simple as that. Yeah that's really good. ⁓ a friend of mine shared this illustration of How to get to conversations of depth that you talked about. You start with the external, you know, sports and weather, what's happening culturally. You move to the internal. How was your weekend? How you doing? Sometimes people kind of shut the door. Sometimes people open the door. If they open it, then maybe take one more step. ⁓ you know, how can I pray for you? Is a great question to kind of enter into that spiritual realm. And you know, it's kind of like one of those conversations where you're at a table and you're having a conversation and someone says, Pass the salt, right? You can just take those cues and either the door's opened or the door's closed. If the door is closed, then you move on. But if the door is open, perhaps God may be using you in that moment when you're on site talking to one of the workers or when you're closing a deal with you know the loan officer or whatever it may be to open up that door to get to something of substance. Because at the end of the day, we're all created in God's image and we're all uniquely gifted. ultimately for the purposes of glorifying God. So I love that that's weaved into your story. ⁓ okay, so we're gonna talk about leadership now. Tell me about the season you were acquiring and running well over a thousand units. What did leadership look like for you day in, day out in that stretch? Yeah, that's a great question. You know, looking back on that season, it was fast and felt like a a runaway train in a way. But You know, ultimately what I learned from that is you've gotta surround yourself with great people and you've got to be able to to lead those individuals. And and part of that is being prepared and and ready to lead yourself. So one of the things that I think you know we could have done better, you know, we ultimately acquired I think it was thirteen assets in, you know, maybe a little over sixteen months. It was over fifteen hundred units. We were self-managing those properties. And we could have had a little better onboarding systems and processes in place and better defined the roles and responsibilities of our key leaders. So that's where I'll start is somewhere that I felt like I could have done better because it's easy to have expectations. ⁓ and when those expectations aren't met, you know, point the finger or get upset. But it's more difficult and ⁓ but more you know, productive to kind of look at yourself and say, well, how could I have done more or what have I what could I have done better to set this individual up for success? So ⁓ you know, some things that we could control, some things that we couldn't. But no, I think at the end of the day, it was finding strong property managers that had good experience that were bought into what we were trying to do, ⁓ to help onboard these properties into our management systems, help run our CapEx and renovation programs, which we were also heavily involved in. And you know, the leadership was kind of I've always taken a a lead from the front type approach and wasn't scared to get on site, wasn't shared scared to show my face, wasn't wasn't scared to jump into the mix. And, you know, sometimes that's difficult to scale, but you know, we were a young company. That was growing. We went from zero to fifteen hundred and twenty units from July of 2018 to November of 2019. I think we picked up one in 2020. ⁓ so it was fast. And I learned a lot along the way as well of what I could do better, you know, over the next cycle. Wow, that's amazing. Okay. And then you had to sell that portfolio not too soon after that, 2021. What did you learn walking away from something you had built? Yeah, I went into that ⁓ experience and went into this business, you know, thinking I will never sell. I'm not a seller. I want to buy and hold. And you know, I'm just not a seller. And I think, you know, that's all fine and good, but we were raising capital from limited partner investors who had equity return expectations of of three to five years. So that was one kind of conflicting, you know, strategy with my never sell. ⁓ we were also seeing opportunities in the market that were better than what we had predicted or projected in our pro forma. So we pro forma at A, and we were, you know, the B scenario of what we were being offered on some of these assets were better than A. and we were also, you know, getting into times where we felt like the market was overheating. And I was getting offers for my assets that I would not have bought these same assets at. And that's not a dig on the asset. It's more of just ⁓ it felt like people were overpaying. So all all things considered, we had a a group of limited partners who were expecting their equity back within a three to five year period. We felt that we were approaching, you know, I I can't say that I was some macroeconomic expert and predicted that, you know, the economy and the market would have turned when it did, but There were signs that, you know, people were buying at at irresponsible prices. And if we look back on, you know, the the last cycle, basically from 2018 to 2021, we had nothing but money printing and growth. And it was very easy to, I think, get into the market and get these assets and you know, do your value add program because the market was accelerating so fast. So those three things and those three conditions were really what I think motivated us to sell. We were getting offers we couldn't refuse. We were exceeding our investor expectations faster than than what we had initially projected. And we felt like that the market was, you know, at a a top or or overheating. So I would say those are really what led us to sell our portfolio. Yeah. I love that. ⁓ okay, so ⁓ I think real estate can be one of the most secular transactional industries there is. How do you keep your faith in the midst of that from just becoming a value statement, you know, either that you you just know inherently or even that you put it on your website? How how do you, in the midst of all of the craziness that this industry has, keep at core to what you do? What does that look like for you? Yeah, it's ⁓ I mean I I would say it's a ⁓ a muscle that has to be exercised daily. Just like we we get into the gym and and exercise for our physical well being, I think that the spiritual muscle has to be exercised as well. And and some days I feel great about where I am and and some days I feel like there's room for improvement. But each day, you know, I start I try and start my day ⁓ not with you know a well paved routine, but I at least try to read some scripture first thing in the day out of Psalms. That Just kinda gets my my confidence up. It's an easy chapter to read. It's full of just incredible wisdom from Solomon. And there's just great nuggets to be taken out of Psalms. And there's always something to focus on negative. It's easy to get caught up in the day-to-day task or the fires that need to be addressed. in a new construction, there's constantly something that's gotta be performed ⁓ or or worked on. So That's just a simple thing that I try to to do to ground myself. And then from there, you know, I try and, you know, just lead lead by example. And I try and live in a way that I feel is glorifying to God and and Christ. And I never want someone to look at me and say, ⁓ he's a a bad representation of Christ. Although I'm sure that has happened, but I always try and keep that ⁓ always trying to keep that in the back of my mind and how I'm dealing with people and the patience. And then at the end of the day, you know, ⁓ you know, God God tells us to have courage because we will face trials and tribulations. And ⁓ my courage is is not always in myself or what I can control, but I've got to remember that you know, if everything goes bananas, if if the the world comes to an end, if the economy's wrecked, no, I've gotta remember that that God is in control and that this life is is not you know the end all be all. So I try and also not take things too seriously. I do the best I can to control what I can control and I try and keep my my faith and my courage and my trust and the rest and God and the rest. Yeah, love that. Okay. So if a young leader came to you wanting to leave the safety of maybe a firm they were working for or a job, ⁓ but they felt like called to maybe build something of their own, what would you tell them? So I can kind of, you know, relate to what I did. And I think ⁓ you know it's a good place to start in and giving guidance. And what I started doing was one I self-educated and I was obsessed with listening to podcasts like the one that you're ⁓ so graciously and and providing a lot of value hosting. So, you know, start with the free information that we all have access to online and and really become a student of whatever industry or whatever ⁓ specific real estate segment you're wanting to master because there's a lot of great information out there to get yourself educated on the basics. The the language if if you're not doing at least that then you're probably not really committed. The second thing is, you know, if you're not already working in that industry, it's probably a good idea to try and get a job with someone who is in that industry more on a private, small business level, or maybe that's a corporate level. For me, I was working at EY and I was in their transaction real estate group. I got exposed to publicly traded companies that were buying huge assets and selling huge assets and I learned a lot from doing that. And then lastly, I got around a community of people that were doing deals. in two thousand and fifteen, I believe it was or sixteen, I joined a coaching and networking group. ⁓ I don't tell a lot of people this, but ⁓ I ultimately maxed out a credit card at the time. I I I think it was like thirteen thousand dollars on my my credit card. So, you know, things have changed ⁓ on the limit side, but it was a ton of money to me at the time. It was a huge risk. And I'm not encouraging anyone to go out and max out your credit card, but what I'm saying is sometimes you've got to pay to get in the room or you've got to invest in your education. So, you know, once you do everything you can to self educate for free. you're working in the industry, getting experience from someone else and learning from someone else, and then you're surrounding yourself with people and investing in yourself through education, through networking. At the end of the day, like it's just a matter of time before something good clicks for you. And that was the story for me. You know, it was a slow burn for three or four years. And then I ended up partnering with someone from that community. that was four or five years ahead of me, four or five deals ahead of me that was able to put together the equity checks and I was the deal guy. I came in, I knew how to go direct to owner, I knew how to underwrite the deals, I knew how to put the investor presentations together. I coordinated the transaction. I was pretty much everything except the equity piece. And that's when we really threw fuel on the fire, so to speak, is we had the right market off ⁓ my right market timing. We had complementary strengths of my partner and I in we hit it hard. I was probably underwriting, you know, the last thing of that that question I would say is massive action. You've got to take massive action. And at some point you've got to go from learning and studying theory and getting around people and just taking massive action. ⁓ and for me that was approaching owners, approaching brokers and underwriting deals on a daily basis. And it led to, you know, one of the biggest runs that ⁓ you know I've ever had and ⁓ that I know of on this scale. ⁓ you know, we we did like I say, about fifteen hundred and thirty units, give or take a few in roughly sixteen months. ⁓ and then we were able we were able to exit in twenty one and it has set me up to, you know, now go on to build and and develop a a dream project that I have here music row in Nashville, Tennessee. do you think we're in a similar market or coming upon that with with where things are at? similar to to what you experienced here in twenty twenty six? I think the market's it's has definitely shifted. It certainly shifted, but you know, I do not think that we're about to have a huge catastrophic debt. Let me s how do I say this? Like I you know, I think the my the market is changing a hundred percent, but I don't think that we're in detrimental times in real estate. There were certainly people within the commercial multifamily space that bought at the top of the market. They were financing with variable rate short-term debt. And I, you know, from the estimates that I read about, that was at roughly 13% of the market. So I think it goes back to fundamentals. There's plenty of properties that have long-term fixed rate debt that experienced tremendous rent growth over the last five years, and they are not in need of refinance. On the other hand, there is a good swath of operators and syndicators that bought at the top of the market. They did not finance with long-term fixed rate debt. They did the opposite. And those people are hurting right now. And that will that will, you know, impact the market. But you know, I think people relate this to 2008 and 2009 when you know we were doing ninja loans, no income, no job, loan applications for single family. And There was a massive amount of retail buyers who were financing property in a similar way. I think that there's similarities in the the last two cycles, but you know, I d I don't see the entire market collapsing. You know, could there be a a greater economic thing going on that we that we're unaware of? That's always a possibility. But at the same time, if we do have some kind of economic distress or collapse. One of the best places to be invested in, in my opinion, is physical assets. And real estate is is one of those assets. Now that doesn't mean you sacrifice the fundamentals of buying. You've got to buy cash flowing assets. You've got to have good debt. You've got to know what you're doing. All of those things are still true. But I still see opportunities in the market. I think there's opportunities in every market. I think there's millionaires and billionaires made in every market. But with that, there's different headwinds that one has to navigate in every market. So I see it more as opportunities unfolding in different ways than any kind of market collapse. Yeah, that's great. ⁓ maybe just final question for our podcast. If you were to zoom out ten, twenty, thirty years from now and you were to look back on your life, what would success look like for you? Another way of saying it is, what do you want to be known for? I wanna be known for strong character and someone who was a a great friend, someone that was trustworthy and did what they said they were gonna do. I don't have to be liked by everyone, but I hope that I earn the respect of of the people that I surround myself and and work with and ⁓ you know, ultimately someone who was a good person and and ⁓ was a ⁓ a kingdom expanding Christian and and led with his heart. I ⁓ I hope to have a a thriving business, a happy, thriving family and r and you know, a handful of close, great friends that I I can call as as close relationships. ⁓ you know, I think that's about the the best that you can hope for in this world. Yeah, amazing. Well, man, what a great ⁓ opportunity just to get to know you a little more. And I hope if we can ⁓ see each other again, whether that's in Nashville or if you swing through Minnesota. ⁓ If people wanna learn more about you and your business, where's the best place to find you? Yeah, I'm on Instagram under Will Walker underscore three. That's a a good place to get in touch with me directly. And then my website is walkstarco dot com. ⁓ it's another good place to to find me. But I'm on all the social platforms under William Walker, Will Walker, my brand is is Walkstar. So hopefully not too hard to find me in in one of those places. Happy to connect. Yeah. Well thanks for your time. Really appreciate it. Thank you, Nick.