30 minutes | Mar 24, 2021

Veterans Buy America.

BE SURE TO SEE THE SHOWNOTES AND LISTEN TO THIS EPISODE HERE Eve Picker: [00:00:11] Hi there, thanks for joining me on Rethink Real Estate. I'm on a mission to make real estate work for everyone. Real estate can help to solve climate change, can house people affordably, can create beautiful streetscapes, unify neighborhoods and enliven cities. So, I'm on a journey to find the most creative thinkers and doers out there. I'm not the only one who wants to rethink real estate. You can learn more about me at EvePicker.com or you can find me at SmallChange.co, a real estate crowdfunding platform with impact real estate investment opportunities open for investment right now. And if you want to support this podcast, join me at Patreon.com/rethinkrealestate, where there are special opportunities for my friends and followers.   Eve: [00:01:10] Today, I'm talking with Andy Williams, the founder of Recon Realty, amongst other things. Andy was a Marine determined to better his life through real estate. In a fairly short period of time, he built a substantial portfolio of homes, a real estate development business focused on larger projects, and a program that seeks to turn veterans into entrepreneurs just like Andy. While Recon Realty is focused on making a profit, Andy's heart is in the impact. The question for him is, how can he use real estate to turn transitioning veterans into entrepreneurs so that they too can turn a profit? Patriots need to start buying up America, he says. I'm going to learn a lot from Andy and so might you. So listen in. If you'd like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate to learn about special opportunities for my friends and followers and subscribe if you can.   Eve: [00:02:42] Hello, Andy, thanks so much for joining me today.   Andy Williams: [00:02:46] Oh, it's a pleasure to be here. Thanks for having me.   Eve: [00:02:49] So you've gone from being a U.S. Marine to a real estate developer to impact entrepreneur, in a pretty short period of time. And I wanted to start by asking you how you got involved in real estate.   Andy: [00:03:03] Real estate really was a transition from private security contracting to civilian life. I was trying to build a bridge back home, so I bought my first rental property in 2006. And it was a safe investment, an easy investment and made sense. And I just kept doing it for about six years, buying rental properties in my hometown with the intent to build enough cash flow to replace my income that I was making overseas.   Eve: [00:03:38] And where is your hometown?   Andy: [00:03:41] It's in central Texas.   Eve: [00:03:42] Okay.   Andy: [00:03:42] So I'm 5th generation Texan. So...   Eve: [00:03:45] Okay.   Andy: [00:03:46] After getting back from the Marines, I made Texas my home.   Eve: [00:03:50] What did it take to purchase your first time? I mean, that's a pretty big leap from Marine to buying a house.   Andy: [00:03:58] Yeah, actually, my first house was around 50,000-dollar rental property. So it took me, I think I put 20 percent down, so it was about 8,000 dollars. And after I got out of the Marines, I'd actually save some money while I was in. And then I was making, you know, very good pay, working with the State Department, under private security contract. So, I I'd basically reinvest my my monthly salary into rental properties for about six years.   Eve: [00:04:33] Wow. So. And did you need to make these properties tenant ready? Like, I suppose I'm wondering what skills you had to learn in that transition and how you identified the right sort of properties to buy. And you know, what your plan was. What was your big strategy?   Andy: [00:04:50] I didn't have one of that time. I grew up in in this in this community that was segregated. It was there was good houses, bad houses, you know, people that were rich and there was people that was poor. There was really not a middle class. And so when I started making money, I wanted to buy properties for the underserved and provide sustainable housing. So, my dad was a concrete foreman when I was growing up. And around that time, he was he was aging out, wasn't able to do the do the work that that he had in his trade. And he was kind of out of work. So, he was kind of my eyes on the ground, and I would buy properties and he would be my project manager and he would make them ready and then we would lease them out. It was very mom and pop.   Eve: [00:05:45] That's fabulous. Yeah. Were your first houses a success or did you have any failures, any moments where you regretted what you were doing?   Andy: [00:05:57] No.  I'm very conservative and I was always I've always been an investor for the long haul. So, you know, I think I just sold last year a property that was in my portfolio for 15 years. I think some of the the fifth house I ever bought was a duplex. It's still in my portfolio. I've always looked at real estate as a as a way to kind of build wealth, but also solve a problem. And I think that's what attracted me to the affordable housing market. Because I grew up understanding that real estate and safe housing, quality housing was really a privilege that was afforded to few.   Eve: [00:06:43] Yes.   Andy: [00:06:43] And when I was in a position to, you know, do well, I wanted to do good. And so it became a safe return. It wasn't until I started trying to build an operation around it, was there risk really being assessed because I was buying really cheap properties in a market that I felt that I understood. I actually felt that it was misaligned and I wanted to play on the long haul and being well traveled as a as a veteran and seeing kind of the simplicity of being able to buy a home, you know, fix it up and rent it out and looked at the rate in the rents and the cash flow, it just made sense. But when you started to, it was it wasn't until 2012 when I came back from Iraq. At that point, I had about 50 rentals and I wanted to kind of start a business. And so I started looking at trying to integrate construction component and I started flipping houses. And that's when I started realizing that there was a different dynamic. Most of that had to do with the characters. When I started investing in the in the city, the Dallas Fort Worth area. I ran into some bad actors and not everyone did what they said. And you had to kind of have protocols in place. And so, I spent a better part of three years building some infrastructure. But I was able to kind of make some mistakes and build through those those challenges because I always held a decent sized rental portfolio, that in my mind was kind of a baseline. It was a cushion, in case you ever ran into some problems you could dump a rental and if you needed to leverage, you had cash flow coming from your rental portfolio. So, you never really was too overexposed.   Eve: [00:08:56] So how big is that portfolio? I mean, what do you think the baseline should be for people who are listening?   Andy: [00:09:03] That really depends on your goals. I mean, mine was, you know, about a five-million-dollar portfolio. And, you know, I was thinking I got it up to about 100 houses. I've scaled it down over the last three years because I hit that threshold where I didn't want to deal in that housing stock. And then also I didn't want to reinvest in the communities where I had properties. I ran into some some infrastructure challenges. My dad passed away in 2014. My mom started managing the properties and that that original portfolio really was just kind of a mom-and-pop operation and meant to be mom and pop. And once, you know, it kind of served its purpose, I divested it. And then I moved my operation to the major market and then I started building teams. And the projects I'm doing now, they're more, you know, leveraged on teams. I'm good at I'm good at certain things, certain things. You know, I'm not as strong at or passionate about. And so I leveraged my my military background to kind of build teams and into medium to large size projects that are basically what I've learned over the last five years is that, you know, good projects are are really executed with good teams and a solid project is is really effective if you can assemble the right team around it. And so I focus on team building around projects at this point. And entrepreneurially, I have a focus on, you know, capacity building and training that I actually do what I've already done. And that's more more where I'm headed in the future. We're actually rebuilding our portfolio now, but we're doing build to rent and we're we're playing in and into areas and we're focused on distressed communities that have been redlined or segregated or socially deprived of capital because of its demographic. And we're trying to get ahead of gentrification and build capacity...   Eve: [00:11:15] Right, right.   Andy: [00:11:15] And then trying to hold some properties there as we we have an input.   Eve: [00:11:19] But what a great story. Those small properties really helped you build a much, much bigger career. And that's, that's pretty valuable, right?   Andy: [00:11:31] Yeah, I think the sense is, is, you know, you make your mistakes and you learn. But I think the biggest thing that I've learned over the last three years, maybe five, is that, you know, I got started early and I was lucky because I was you know, I was advised to invest for the long haul and I wasn't looking for, you know, a quick buck. And once I figured out something that made sense and it made money and kept doing the same thing.   Eve: [00:12:01] Yeah.   Andy: [00:12:02] It's like in the military, you know, in the Special Forces community, you don't you don't really add a magic style or systems. You just kind of focus on mastering the basics. And that's that's what I did. So when I look at, you know, buying, you know, single family homes to to do renovate to rent, it's very simple. You do it once you figure out what your kind of your cost is, you know, you take a wood frame home 1950s. You got to figure out what it's going to be to get that renovated and get it turn what it's going to rent for, what your leverage is going to be. And you just rinse and repeat once you figure out how to get in there. Right. You you get it gutted. You put it back together and you throw a tenant in there. It's really should be, you know, an operation, a management issue. And you just scale up to what your capacity is. And, you know, there's a lot of liquidity in the market now, too. And so, you know, the finance vehicles that are present today weren't present 10, 15 years ago. So it's a lot easier to to really execute the scale. You know, an operation and you just got to find the right markets and the right product.   Eve: [00:13:18] Right, right, right.   Andy: [00:13:18] So you can go that down.   Eve: [00:13:20] But I've also read that you want to use real estate to turn transitioning vets into entrepreneurs. And so, you know, to help people like you do the same thing in some way. And how do you do that?   Andy: [00:13:37] A couple of years ago, I got to a point where, you know, I had some national exposure and I was able to create a conversation with the right people. So, I've always thought that and believed in the idea that America runs on capitalism and veterans were not necessarily being positioned to build sustainable businesses. We were kind of being, you know, reintegrated into corporate America. And, you know, a lot of veterans just aren't cut out, nor that they need to just go right to work. They need to figure out a passion that they can pour their energy into. And it can be project based.   Eve: [00:14:22] You know, my son is a vet, so I witnessed that firsthand. Takes away the transition. Yeah.   Andy: [00:14:29] Yeah, so funny story. There's a Marine that got me in the real estate. He was a World War II Bronze Star recipient. He fought at the Battle of Iwo Jima. And I still have some of the properties that he sold to me. But when I when I was in Iraq, I was on leave and I have seen this old frail man pulling some carpet out of this duplex. And I stopped and I asked him what he was doing and if it was his property and if he'd be willing to sell it. And, you know, gave me his number. When I got back overseas, I called, and we talked for about a month and a half and end up selling me the property. I didn't know him until he sold me actually about 30 properties, which helped me scale, but I never got to know him. He came back from World War II and he started a fencing company, and he was moving houses from Fort Stockton down to central Texas. And he he kind of had a retirement built on free and clear properties. And so I kind of followed his blueprint. But when I when I seen myself, you know, fast forward 2012, 2013, 2014. And then I get some national exposure. I just was frustrated that my peers, my friends, my fellow veterans weren't positioned right. And I just always felt America needed to do better, but I just didn't think they understood. So, I went to the Department of Labor and I sat down with them and I worked with them to create a programatic that, you know, I believe was a transition platform. And we tested it and we brought it to market. And we're now in the process of expanding that that mission. Rehab Warriors does exactly that. We teach veterans to be the average home builders and developers. The big difference is we're not telling them to come work for me or they're not vertically integrated and we're a construction company. We actually don't have them picking up tools and hammers and we don't teach them trades to work for DR Horton or Lennar. We we actually give them the principles. We show them how to model financial projects and we give them access to capital and we have them go access properties in their market.   Andy: [00:16:42] And we've got a lot of success. And that's more my passion. You know, I could flip 1000 homes in the next ten years. I could, you know, build a large rental portfolio, but that's not success for me. Success is if I can train 10,000 veterans to do what I've already done and find peace at home. Because I think the war fighter really does deserve to own part of the country by which it served. And the other way, I think that we're going to be able to to be able to do that, you know, truthfully is to buy at a discount, create the value and rebuild the infrastructure. And that's why we have a huge emphasis on affordable housing in distress zones. We teach these veterans, and we redirect their energies and efforts into their communities. And they're finding properties and they're having a lot of success. And naturally, they're building teams. But more importantly, they're local to their community and they're solving problems in their local community and they're finding their passion. And America's better for it, you know, I'm better for it. And and America is getting a new breed of developer that I believe it deserves.   Eve: [00:17:53] So tell me about some of these success stories. Like it sounds like you're sort of starting out on this journey. How many vets have you trained? How many have been successful? What does it look like so far?   Andy: [00:18:05] So we have 100 percent success rate. And, you know, we we probably supported about 100 veterans. So far through the training, we have about 50 on the platform we're going to roll out, which we're still early stage because I focused on making sure that we had 100 percent success and then tooling it down to where the veterans wanted to be. But we had a military veteran perfect case study. Female veteran, you know, started a minority owned business right inside the community that she was discharged from. And you know, she she got into, you know, our community back in June 2020. We helped source and identify the right property by August, matched her up with a local banker. She was able to access, you know, very competitive financing. We try not to play in the hard money space. We don't play in the private money space. We really have a position. We want proper capital to execute these projects. And so access to capital was something that I emphasized the last year and a half, two years. But she just finished her project, took her 90 days, bought a working home, took it apart, put it together. And, you know, she she ran into some some contractor issues, which is mostly...   Eve: [00:19:24] Pretty normal.   Andy: [00:19:26] Yeah. And that's where we really emphasize the support is we, anyone can show you how to find a property, anyone can show you how to model, and anyone can show you where the money is. What we do is we build a community where we help walk you through it. Because we want you to be successful, because if you get you get through one property, you're going to continue on the journey. So, we help navigate the contractor issues. And she ended up completing a beautiful rehab and set on the market. She got a full price offer and she closed and she made, she made money. She made a lot of money.   Eve: [00:20:04] Good for her.   Andy: [00:20:06] It wasn't the money, though, that that was motivating. It was the fact that she she got through it and she was able to, you know, less than one mile from the gate that she left and discharged. She was able to reintegrate successfully. And she chose our program over any of the any of the programs that the military had. And so we have a waiting list. So, you know, there's a lot of veterans that that are on the waiting list. We're building out the infrastructure. But right now, as a founder, I'm kind of putting the culture in place.   Eve: [00:20:36] Yeah, yeah.   Andy: [00:20:37] The market, it's really, it's really hot right now. And I don't want to send a bunch of veterans into the communities right now to go buy, because really, you shouldn't be flipping houses in markets that are kind of peaking. And most of the market shifted to new construction. We do teach home building. And then as for myself, I shifted to developments. And I think, you know, we're being disciplined right, and we're trying to, we're waiting for the dip and then we're going to assemble and deploy. But in the meantime, we're putting the training wheels on and we're putting them, the people through the program so that they can execute. And more importantly, we we're building the culture where we want to we want to put the community first, yield second and we want to serve.   Eve: [00:21:22] Right. So, like, just generally, what are some of the challenges you've been confronted with? Because you've come a long way from your roots. There must have been financing challenges and, you know, neighborhood complaints. And I don't know what else. You know, aside from the contractor challenges which are always there.   Andy: [00:21:44] Yeah. I mean, I think, you know, let's take it down because, you know, my my smallest project we just put on the market, you know, 150,000-dollar rehab that we threw up. We bought it for 60, put 70 into it and you know, turned the market to a little affordable house that we could have tore down and rebuilt. But we wanted to connect with the community. But in that same neighborhood, we got 13 acres and a contract where we're going to throw up a tax credit investment. Low-income housing tax credit, portable housing, you know, three story corner unit, garden style apartment. And really, it's the challenges we've navigated, you know, so far has been just understanding what, while we're there and what we're doing. I don't really see real estate as complex as some people. I mean, the financing is is very intricate to the project. And I've been very, you know, focused on going downstream. You know, there's a lot of private capital out there, financial institutions, you know, there's crowdfunding platforms. But my focus has been really I want the federal allocation. You know, there's trillions of dollars spent on affordable housing. So, you know, I'm going to go get the money that, you know, is best suited and effective at modeling out.   Eve: [00:23:09] Um hmm.   Andy: [00:23:09]  I'm on the State Board of Affordable Housing. And so, I have some some initiatives and I'm pushing at the state level here in Texas. And we're executing beautifully the model and we're navigating the challenges. But what's happened with the approach for the overall mission is that I'm allowing organizations to align, that they really see the big picture, going to help me move the needle forward. And that's how we're creating progress. Because it's, we're solving the real problem.   Eve: [00:23:45] Um hmm. So one final question. What's what's next for you? It doesn't sound like you stay in one place too long.   Andy: [00:23:53] Yeah, I think what's next is just keep doing what I'm doing. I'm really focused on Rehab Warriors. We just got done redeveloping and rezoning a large tract that we're going to we're going. To have a seven-year commitment to the city where we're going to end up building 500 single family homes.   Eve: [00:24:16] Wow.   Andy: [00:24:16] Over 100 build to rent single family homes and town homes. And we got a multi-family affordable housing project, a single-family affordable housing project and some retail. So that was kind of my case study. We picked up some land, brought it to an RP from HUD and my development team and I'm a I'm a I'm a small part of the development team, but a big part of the mission. We're able to work with the city and this small community that didn't really have the right developers supporting them. And we came in and we put together this master plan.   Eve: [00:24:54] Um hmm.   Andy: [00:24:54] And, you know, the by-product of it is we're going to continue to serve the community. And my goal is to just close the loop between the size of projects I'm doing in the in the single-family homes that actually have a passion for capacity building for the veterans. Because I really believe that the veterans have, in my mind, the ability to not just reintegrate, but safely land inside America's housing market and solve a real critical problem. Because we have an affordable housing crisis across the country. We have a lot of skilled trades and unskilled trades gap, but everyone sees that as the problem. Right. But it's the opportunity for me because I see the problem is I got 250,000 more fighters coming home every year and they're trying to figure out what's next. And I'm just going to give them a very focused target. That just go and do this and you'll find not just peace of mind but purpose. And if you do it right, you execute and you end up economically mobile, which is the end state. Because if we can, you know, help our war fighters come back home and have economic mobility in America, we're better off. And so that's my mission to improve America's housing stock by, you know, reintegrating veterans, but doing it in a way where we're winning and we're ushering them into a conscious capitalist community.   Eve: [00:26:27] It's an honorable goal and a really big one. And I really hope you'll be incredibly successful at it and I thank you very much for taking the time to talk to me today.   Andy: [00:26:38] Yeah, it's a pleasure. And you've done some great work. And, you know, I think your platform is also, you know, an option. And I think I love what you're doing because, you know, you're democratizing access to great projects with great operators.   Eve: [00:26:55] Yeah.   Andy: [00:26:56] It's needed. I think everyone wants to be a part of, you know, the change. And I think that this is just one area. You know, my goal is just to capacity build, build operators so they see this is a focus. So, it was a pleasure. And I keep doing the good work.   Eve: [00:27:14] Yeah. Yeah. No, Andy, I want to say I think I mean, I think, you know, I've always been horrified at how vets have been treated when they leave the military and having seen the sort of support that they get inside before they leave. It's it's not it doesn't seem to be the right sort of support. So, I think what you're doing is fantastic. Just keep going.   Andy: [00:27:38] Yes. I appreciate it and you as well. Thank you for having me.   Eve: [00:27:42] Okay, bye.   Andy: [00:27:50] Bye, bye.   Eve: [00:27:50] That was Andy Williams. He's a self-made real estate mogul with a heart. He's passing on what he's learned to other vets just like him, so that they, too, can participate in the wealth this country has to offer. It doesn't matter how much money you have, it's whether you're solving a problem. Andy says, I want to show the world that entrepreneurs like me can exist. You can find out more about this episode on the show notes page at EvePicker.com, or you can find other episodes you might have missed. Or you can show your support at Patreon.com/RethinkRealEstate, where you can learn about special opportunities for my friends and followers. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We'll talk again soon. But for now, this is Eve Picker signing off to go make some change.
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