Inside the World of Carlyle's $8 Billion Real Estate PE Fund!

[Music] hey everyone and welcome to the red liquid podcast in today's episode I'm going to be speaking with ojima agada who is a fellow Warton NBA classmate who also went to Princeton for undergrad then to JP Morgan and then to carile in their real estate PE group and I learned a ton from this conversation because I feel like real estate is an industry I really am interested in and also is one that's not super super well covered in the PE industry and so I think you'll learn a ton from this conversation and hopefully maybe spark an interest in considering real estate to be maybe an industry in the finance world that you join in the future now before we get started if you're listening to this episode because you're interested in a career in private Equity I highly recommend you check out the PE investing certificate program being offered by Wall Street prep and Wharton this program is sponsored by top firms like Blackstone carel and KKR and over 8 weeks you can learn at your own pace through this online course that's taught by Wharton professors Wall Street prep's PE program director and real estate PE investors including David Rubenstein the founder of carile and Martin bran the head of North America PE at Blackstone who will cover topics like the PE deal process valuation how to think like a private Equity professional and more by completing the program you also unlock access to the alumni member database fireside chats with PE investors and exclusive networking events with the world's top private Equity recruiters this program runs three times a year and be sure to use my code rare liquid to get $300 off and also sign up by the early registration deadline to get an additional $200 off as well and I'll leave a link to all of this in this episode's description all right oima thanks so much for making the time and jumping straight into it can you just start off by giving us a bit about your background yeah no thank you um great to be on the podcast I'm originally from Nigeria moved moved to the states around in 20 7 um initially moved to Baltimore and I've kind of hopped over all over the country I've lived in about seven different states in my time here most recently I was in DC working at Carlile in theia real estate private Equity Fund and now I'm at Wharton I'm a first year at Wharton so it's been awesome being here got it and I know at your time in college you decided to major in engineering and then you kind of made the pivot to uh finance and so can you walk us through a little bit about your college journey and why you decided to make that pivot yeah no definitely so I applied to college undecided um got in undecided and was really wondering what I wanted to do so before before starting College I spent about a month in Nigeria with my uncle um he's a he's a real estate developer in Lagos and just shadowing him like seeing his work like going from sight to site like building these like things building houses building schools hospitals offices that people wanted and needed was really inspiring and that inspired me to be a civil engineer thinking that's the best way to get it um somewhere in my junior like towards the end of my sophomore like starting junior year I realized um civil engineering was probably enough for me um they did a different role from what my uncle did my uncle was more probably a developer in the pars of this term than actually an engineer um and I looked into switching however like taking all the courses required for a different major switching out of the engineering school into the School of Arts would have been like a challenge in terms of like graduating on time and so I decided to stick it out and finish the degree I was a civil engineer however um due to the resources I printed I was able to do like go through like recruiting um and I recruited for um the securitized product groups group at JP Morgan spe specifically focus on cnbs um commercial mortgage back Securities um which is like real estate lending and that was really cool because like I still wanted to be involved in real estate I still think it's really cool there's nothing like going to your own site and like seeing an asset CL like seeing your asset like no one no one can say oh I saw I saw a bond the other day but I can say I saw my building the other day so yeah got it and before we get into your time at JPM I actually wanted to ask a bit about your time at Princeton because obviously it's a one of the best if not the best undergrad um you're probably a little bit biased here but can you tell us about I I don't know this is kind of a broad question but what your experience was like there I mean I feel like a lot of times at these top ivy league schools you're kind of taught or yeah you kind of taught that anything is possible your the world's your oyster I mean is that the kind of feeling you got and what was your what were like the major I guess pros and maybe even any cons from your time at Prince yeah no definitely um oh wow Princeton complicated question thinking through it the first thing that comes to mind is it was hard um I had done really well in undergrad I say in high school I mean and I coming in I thought okay I've done really well I crushed the exams I took APS and whatnot and I was going to do well my first first semester and um I was a bit cocky not going to lie um and the I was humbled um it wasn't a great semester um additionally I decided to play a sport called Sprint football which is lightweight like a lightweight football that only about nine schools do um football with a weight limit um and that was that made that I think made my experience like the group of guys I got to play with like some of them are still some are still my best friends still today and just having coming in with that community at Princeton really made and shrunk the school to a size that was really manageable really easy to assess um and so like that like definitely made the experience positive but I mean Princeton Pro like similar to lot of the elite schools is like can be a very tough place um like academically can can get competitive um but and so like those definitely happen but like I was able to form a community that was like really helped me through my time there what was your favorite class at Princeton favorite class at Princeton so um as part of the engineering requirement you can't only take engineering class you have to take like classes in other departments um I had we had to take a class on like basically a Sociology class like that and I took a class called hustles and Hustlers oh interesting and not exactly what you would expect that of a title of a course at Princeton but yeah cool yeah I mean I'm sure that was in the official course title I've since forgotten the official course title but um the class basically looked at the ways like the various parts of the underworld like worked and functioned um from a sociological perspective and the professor had done like Research into like the Mafia the Italian mafia got it and then when you were starting to recruit for your first job a after undergrad I don't know what what really pivoted your interest towards Finance was there like someone you spoke with or like a mentor some kind of like company that came to campus that really sparked your interest interest yeah no definitely so um a couple things like sparked my interest um first of like I have like one of my like family friends from Nigeria had immigrated earlier and her husband worked in finance and so like talking to him and like talking with him like was really impactful and like realizing Finance was a was an option as no one in my family had done Finance before um so that was that was the first thing that was instrumental um secondly like the companies came to campus and it was informative to just go to the info sessions and see what like what does a bank do what does Investment Bank because prior to Princeton my real interactions with a bank like you ask me about Bank of America it's like is where I have my checking and savings account like and so going and seeing Oh this is what an investment Bank does that they help like Finance buildings finance companies and in a sense like almost everything we see around us has been in some way touched by finance and like that realization was pretty cool and how did you end up choosing the division that you did um you said it was SEC securitized products yes securitized products um so JP Morgan came to campus um as part of the re recruiting aspect and I was talking to the lead and I mentioned hey I'm interested in real estate um and he's like I'll put you in touch with someone and the person he put me in touch with was within the CM did cnbs at JP Morgan and I was and like I found it really fascinating because in C in the cnbs market it's to get a bit technical it's kind of like it sets a lot of the interest like debt rates for the rest of real estate like like across the country so it's one of the only publicly traded real estate debt instruments in the in the world the country I mean it's worldwide but in the country and so just like seeing how seeing what they did how they like analyzed the property because like like in a sense it's pretty boxy you have to put things in a box and I'm getting a bit technical ar time oh don't worry don't worry keep going yeah you have to put things in a in like this like box so you can securitize it and sell it off at as bonds so you have to like get really good at underwriting because you're not keeping on your balance sheet so workouts are a little bit different so like some of the strategies are different but just being able to see the the impact of it like the fact that they secuti like they were able to finance um various like some of lot of the casinos in Vegas were financed in the cnbs market like various hotels a lot of New York skyscrapers were financed there so it was just really cool like talking with him and seeing like the impact and seeing and like and also one the other thing that really was cool is like you get to go visit the buildings as part of your due diligence so yeah got it and what got you interested you in the very beginning you said Real Estate was something you were interested in what what Drew you right away to real estate um I mean I my uncle was a developer and I think and I just like that aspect like it's something is physical people see it people live in it people touch it like we'll probably get to when we go to J when we when we talk about time at Carlile but like going into a community that you helped like build and talking to the residents there sometimes telling they'll tell you like oh you did this thing correctly you did this thing badly you should spend more money like all those things I think are really cool like um just I think I like that TCT tactile aspect of it what I mean I as you're talking about the actual people you impacted and what they say you did well and didn't do well can you give us some detail about that what is like some actual feedback you've gotten from yeah I mean so it can be as minut as minute as like you didn't pick like you designed the floor plans wrong and the bathroom shouldn't be connected to the living room to shouldn't connected to the bedroom directly or some like things like that it can be as minute as that to going and talking and just and then they'll be like we need more like police or social presence to make us feel safer and then it becomes part of my role to figure out how do I like and because because how do I enhance the experience um by making them feel safer in the building um even even if I can maybe get police do I are there other things I can do to make their experience better so like when you're real estate investor your your like your concerns range that full gamut of you have to be like my countertops I want the countertop backsplash it gets dirty really easily can you fix it or shoot like or is this is a lesson learned don't use that type of color as countertop backlash because it start it like gets dirty quickly too you have to think through like where in the market you put your asset in term for just Social Services got it so yeah we're we're kind of venturing a little bit into the your time at carile but before that I do want to you know better understand your time at JPM so that so we can understand like how it really helps prepare you for your time at carel and I wanted to ask more about that your time there at JPM and what your day-to-day looked like because you know as you mentioned the the product that you're working on I think also comes out in Wolf of Wall Street uh yeah the residential version of the product yeah or maybe it was a different movie no it's it's not it's not W it's um it's the one about the great financial crisis yeah oh man The Big Short the big The Big Short that's the one I meant um and the product itself you know complicated not very well understood even back then um and I want to understand now like what your day-to-day was like when you when you working there yeah no definitely so the the day-to-day like basic like the way it would generally work is um I work closely with one of the senior Originators and one of the MDS and he had a variety of clients ranging from REITs to like individual individuals who own real estate to um to like high net worth individuals nation states and they own the real estate and they were looking and they're looking for financing Solutions so this often could be we we just finished constructing the building we want to put long-term debt or we are looking to turn around this building and we need short rate floating right debt and so they would approach him to like to like to for him to offer Solutions and my dayto dat my job was to really analyze the asset make sure that like what they said in whatever offering memorandum or whatever email they said was something we could do and that was like you look it could start usually the thing first thing you do is you Google Maps it you make sure like you go to Google Maps see what's around the building um in parts of New York that's unnecessary because you live there you kind of know oh it's a lipstick building like you know what's there um but sometimes you're doing a deal in Seattle and you haven't been to Seattle so it's like oh what is actually around here so you start there um then you do like you do an analysis of the property so who are the tenants what does it do like what what is the property used for is a hotel office multi family um do we and then you review their business plan that they come up with so you sometimes they're like oh we want to renovate so we can increase rents or we want to do some defensive capex because we need to change our position in the market so you do the analysis of that and then after that you then look at the cash flows of the at the asset um where real estate because of the fact that it's basically very cash based it's just it's usually just a straight DCF to Value the building and so you build out you build out your DCF um and you think through okay this is what this is how I think the building this is why I think the building should be valued and then this is the level of debt our Market given the current market conditions we think the market can can succeed can can the building can bear um in this market conditions and what we can achieve um and so this can be done on things as small like I think the group there would do the smallest Lo was about $10 million up to like build like buildings or portfolios that were like issuing several billion dollars worth of loans um for them and so depending on the asset of the the asset or the deal my the MD got that day it like it could be quicker analysis or if it's a portfolio of hotels like that could take a long time doing and building out the model and like checking our assumptions and seeing how comfortable we are got it and when you let's say people are if people are listening to this and they're like oh I think a lot of people are interested in real estate yeah and they may not have known about a career like this or potential career what kind of resources would you recommend for people who prep for them to prepare for interviews in this type of function yeah so definitely um so thinking through that I think adventures in CR it's it's a website and the website goes through basic like like commercial real estate modeling um how do how do we think through and value real estate buildings or real estate like properties um real estate uses some like idiosyncratic van so we don't use multiples we use cap rates um we don't really look at depreciation and amortization um as like and so our value is just usually just a straight cash like Straight Cash valuation so to speak and so just learning a little bit about that um and then the other part is like commercial real estate is also pretty big it's I think I think it might actually be one of the largest asset classes in the world because every everywhere has real estate yeah um and just thinking through where in that value chain you want to be in so I was more on the debt the like debt financing for more institutional clients at JP Morgan but there are various parts of it like their local there goes runs all the way from like small local like developers in your community all the way to like the mega developers who are like like related who just build Hudson yards um and so like thinking through where where in the chain you want to be got it and when you were interviewing was the process similar to other I guess like Banks where it's like a first round interview and then a super day yeah what was it like yeah no so I mean it was part of the full like JP Morgan um on campus recruiting cycle so the first round was the on campus team um and so that was like alums Prince and alums and then the second second round was like various EDS and MDS from different like groups within I think since these securitized products technically fell on the S&T So within S&T um and so a lot of the like a lot of those interviews because they're not like they don't really teach a lot of the things you're going to use on the desk in schools in school so I love it is like are you keeping up with the markets do you understand what you're really going to on like what you're actually going to like do you understand have an understanding of Finance right um and some and if you're particularly interested in a specific desk they will then ask you like specific knowledge so for me it's real estate so it's like talk me talk to me about like what's going on in the real estate markets what is driving the market right now um any deal you saw that could be that that was interesting and like I at that point I read my dad had gotten a Wall Street Journal subscription um and I I read it um and so it's like it becomes relatively easier because easy because it's they off like every week or so they there's always an article on like someone doing something in real estate right do you remember the hardest interview question that you got I or one of doesn't have to be the hardest I think at some point I got like a brain teaser um I hate those I do not like brain teasers um and just I I can't remember the exact brain teaser but I just remember like I just don't like brain I didn't like the brain teaser I managed to get it right but often times those just rely on like have you seen a similar problem like this in the past yeah actually during my JPM interview I was really surprised because I got a market size in question which is more like for Consulting but the question was how many times does a Wimbledon ball go across the net during the entire tournament the okay the entire time oh wow that's and luckily I had done Market sizing for Consulting prep when I was recruiting for Consulting so I was able to like get through it but I just like if I was if that if I did not have that prep I think I would have been screwed yeah I think yeah and like when J like when JP Morgan came to campus they did a like a lot of the people who had interned like helped with prep and so like they gave like I was expecting that type of question but still not a fun question and Market sizing is odd for finance like were you going into like a group that was more no it just Healthcare Healthcare banking it I I don't know why the particular she was in a associate and she came from like an engineering background I guess she might wanted to kind of just like maybe see if I could how I'd react Under Pressure yeah that's the only really thing I could think of and I well I will say also in healthcare and biotech when you're building out models there is Market sizing involved yeah CU you start from the total population the addressable population all that you you go down all the way um from the total to like your total number of people who can actually like buy the drug and all of that so I actually do think that it does like it makes sense as to why she might have thought it was reasonable I guess yeah because she like probably looks at those kinds of models all the time and I worked with her on those kinds of models in when I did eventually work at JPM um but I did also want to ask about your transition away from JPM to Carlile um did you actually wait before that I did want to ask a question um about your work life balance yeah so were your hours uh yeah what were your hours like in in this yeah no I mean I think they were less than like conventional Investment Banking my roommates were investment banking so I had better work life balance but still wasn't great so I would say it was probably closer to like a 9 to n most days um depending on like and like that's just probably more the standard day and then if you have a deal or you're going to like the committee to approve a loan um you can be there till late and then because you have to print the books and be back there early enough for the committee committee meeting and so yeah I remember like there were times I was trading emails with my MD at like 11 midnight he would sign up and I would be and I would have to finish the comments print the books get ready um so yeah it was it varied so like those days was like 2:00 a.m. 3: 300 a.m. whenever it was basically whenever it got done mhm but standard day is probably like 928 929 gotcha I love that detail you brought up about the books because I now remember those days as well you know usually a lot of times meetings can be in the morning yeah and then when you what oima is referring to is like you send your the finished presentation to the prince Center at least at JP Morgan then it they can't do it like instantly because they usually have tons and tons of requests y so hopefully the guy if it's a girl who's working there if if it's like uh they have capacity then they can make you hopefully do it in a few hours or so but that just means you're kind of waiting and so I do remember a lot of nights just waiting in my cubicle having nothing else to do and then going and pick it picking it up flipping through every single page sure there were no mistakes make sure there's no mistakes you pray to God that there's no mistakes mistakes because if there is then you have to like reprint and stuff like that y definitely part of every banker and uh Banker's job and I now yeah now I wanted to kind of ask about um one more thing actually for compensation how did that look at um when you're working in secz products yeah yeah um I think it was generally like it was in line with all what the other like Investment Banking analysts were getting um I think all of us had the same standardized base pay across the entire Bank um and the bonus I think was generally in line at least it was in line with one of my friends like one of my best friends was in JPM fig and I think it was in line with what he was making gotcha at that time yeah so that's actually cuz a lot of times people want to know maybe I don't want to work like those crazy banking hours like what are some other jobs 9 to9 is actually still a lot for the average person did you work weekends by the way um yes okay um not as consistently but generally yes like sometimes deals would come in on Frid on like Friday evening and I would have to get stuff to my MD's desk by Monday morning or he would want to have a call I've had calls on Sunday with him and principles um but yeah so weekends you're always like it's on it's indeterminate and so you have no control over it which makes scheduling like things to do on the weekends a bit challenging um because you know like a week out I have no visibility into my weekend Thursday I have no visibility Friday I might have visibility but I have also gotten emails on Saturday morning and I'm like well there goes the brunch plans yeah it's time to go back to 383 Madison gotcha so then it seems like um any job most jobs in finance unfortunately for anyone listening I guess who wants like good pay and like a chiller work life balance um most I think investment banking jobs will require know a lot of lot of those hours weekend work stuff like that yeah the only ones I think are like if you go more into like traditional sales and trading um so if you're like selling derivatives or you're trading derivatives there you're more aligned with Market hours um and so you generally will have less work on the evenings or clearly more predictable work on the evenings yeah that's true on the weekends sorry gotcha and then as you were transitioning you know what made you want to make the switch from um your time at JPM in to kind of like a more investing role yeah no definitely so the the the thing with working in debt is and especially in real estate is you do have some ability to influence a property but you're kind of taking it as the as the um principal the sponsor brings the asset to you so you have no asset control and I think and I felt that that isn't as fun as being able to say okay I'm going to come up with work in a place where I'm coming up with this business plan I'm in implementing this business plan like you own the asset and you take control of it and I and that was my my main goal when I started like looking for my post JP Morgan role is if I was going to stay within real estate um which I wanted to I wanted to be in a position to at least have control over the asset so that ruled out a lot of the debt roles there are some debt instruments that allow you to take control of the asset but so I was generally looking to go more of an equity route um and so yeah that's what informed my thinking and like I had like different interviews with different firms and I got and like I started and I got JP Morgan I say I am I got carile at the start of the pandemic so yeah got it and so was this an on cycle or off cycle offc uh it was off cycle a lot of real estate I mean I think some of the like Mega funds might stay on cycle but a lot of the like real estate roles are off cycle um just like like yeah it's off cyc and hasn't really been on on the traditional Investment Banking cycle partly because real estate is a lot of roles are open to hiring people without the traditional like you didn't work at an investment Bank like when I got to carile a lot of the associates I was with were not coming from investment Banks they were coming from like smaller like investment real estate shops um or real estate like groups there were a couple who did Investment Banking or lending in some form but by and large they didn't really like that wasn't NE that wasn't a precondition for Real Estate now if you've been enjoying this episode with ojima and have been learning a lot about the private Equity industry and want to work in PE in the future you're likely first going to have to break into Investment Banking just like he did and I'm actually building my own how to get into Investment Banking course that's going to be built by myself and also my Wharton NBA classmates who come from evercore Goldman Sachs and another from JP Morgan m&a and I also my experience from being the JP Morgan UC Berkeley recruiting Captain for 2 years when I was at the firm as well as an investment banking analyst we're teaching the concepts not just by going through text and teaching you Theory but also helping you build highlevel models that will really help the lessons SN in so you can really crush your technicals when you have to interview for those investment banking jobs and so if you're interested in this be sure to sign up early because we're giving 50% discounts for early bird signups and I'll leave a link to all of this in this episode's description so then can you walk us through what kind of deals you worked on so you know nor normally typical private Equity is just like buy out of a company you fund it maybe I don't know 70% is with debt or something like that and operate it for like fiveish years hopefully sell it for like a 20% IR what can you like can you kind of walk us through the equivalent of what it is like in real estate yeah no definitely so there are two a car so I'll talk more from the car perspective um so carile as a mega fund chose to do a relatively unique strategy for a fund of that size in that they were going to do smaller Equity checks to develope to like to take basically turn land into like new buildings new apartments um and so a prot a prototypical deal for their opportunity fund which is the fund that Target 20 Target it's 20% plus irr would be we find a piece of land or we partner with a local developer in a Sun Belt growing area um and we basically we build a new building we lease up the building and then we sell it on to a re a pension fund someone who just wants the long-term recurring cash flow so that's the opportunity fund that's the opportunity yeah opportunity yeah the opportunity fund um strategy um then the other one was more of a core plus core Plus strategy whereas you buy an asset and you just do M like fix it you think it's re is not positioned prop properly you can invest some Capital um and there you're looking for like mid low like low low teens like a 10 to like 14% irr type return but you might hold this for like 20 year span and generate like more more of an equity multiple oh that's really interesting it kind of sounds like then the you guys are kind of just like developers you know actually I know real estate developers in a sense like is there um I don't know what is what were like the main differences where maybe a real estate developer which actually I'm not an expert in but you know like maybe if on a small scale I was going to go buy a house fix it up sell it which kind of sounds like the second the core fund versus maybe if I had enough money I go pick a plot of land I develop I like create a building um as you say like sell it off to some other asset manager or something like that um the carel I'm sure they brought their expertise in some way and all and all of that like how did they how did you guys feel like you had an edge in the market yeah no definitely so the way it often worked was we would form JVS with more local developers um so and then these local developers so the the full investment the um process starts with we have a thesis of we believe I think when I was there we believe multif family in growing markets where there's tight Supply will do will perform above will perform exceptionally well and so when that thesis is formed um and the fund head agrees and everyone agrees that this is the thesis of the fund um or one of the thesis of the fund the various mdsm Partners will go to the markets we've identified so on Atlanta and Nashville a um Miami Austin Texas and we'll go and try and find local developers who have tied up land who have like who have land in that area and we'll work and partner with them often times they don't have the capital necessar needed they don't have I don't know 60-ish million needed to build a building um or however much the building we're we're looking at to build is um and so we will then produce we then say okay we're going to be your fin we're going to be the financing for you um we are going to also bring other relationships we have so we like carile have has relationships with property managers because of carile size um relationship with like various gc's things like like general contractors who actually build the building um and so we'll do this we'll build the building together and then sometimes we might put it as an aggregation strategy into our portfolio so say we've built like when this property is done we're it's going to be one of like 10 properties of similar vintage across the entire Southeast that might be more attractive for a potential buyer because they're like we can get scale really quickly or we need to put out a lot of money really quickly so like that might get a premium and then we then will pack package them all together and then sell them off and I I only have one experience with kind of remodeling with my parents remodeled parts of our house when I was in high school and things always went wrong for us it was always more expensive over budget did that happen or did were you guys so down to a te kind of like had the system down where like there wasn't that much that went wrong like how was it like in in execution mode h a lot of things went wrong um I did have a deal that actually was pretty smooth but by and large most of my deals something went wrong I started at Carlile in 2020 and about I see six months to a year in like we started I started during covid six months to a year in we started experiencing inflation um Lumber like blew through all our budgets um and that's scary yeah yeah we had a couple we had like a lot of interesting meetings because a lot of the our partner developers also have contribute money but our budgets like and they don't have the capital and suddenly like Lumber has blown through everything and like we're asking for more money and it's just becomes a whole thing so lot of meetings where we had to renegotiate some of those documents those legal documents and come up with new economics for the deal um how then other like so Lumber became an issue there's a point where like finding labor was like there was a labor shortage of like skilled construction workers um and that that was that was an issue um in thinking getting a in like legitimately finishing on time um you always have to be cognizant of like various government entities that might like not give you permits for electricity and suddenly a deal that need that was supposed to develop to to um to be ready and done in like a certain amount of time is stretched and additional 6 months and then you're paying six more months of carrying costs for the deal so like a lot of things go wrong as soon as things are signed yeah um but when you when you conceive of the deal usually we building some buffer for like like you building like an additional cash Reserve an additional contingency you you give yourself some buffer on the timing um you if things are not too frothy and you don't need to push all your underwriting levers you try and leave some under underwriting lever so that okay costs have costs have gone through it we've we exited our budget on cost but we might be able to increase rents so like our sale price will be higher and so things like that so there were a lot of day like a lot of my time at car out like especially when after deals were closed and like we were going through execution and you're just like okay Lumber has moved against us we have no ability to influence the price of lumber we didn't buy our lumber when the price was low how then do we can we still make this deal work for car or do we need to think about exercising like various options we had like to like either sell the deal to other development Partners or like what strategy is it the best to and what about the rising interest rates that affects you know the thatb you guys take on as well did that make a huge impact oh yes yes it did yes it did I can feel I can see the pain pain you probably went through oh yeah that did um it impacted Us in I'll say at least like two ways probably three ways so the first one is we took out a lot of loan so there were deals that were done in 2019 um and for those deals we didn't buy any interest rate caps and so the carrying costs became expensive when you you underwrote debt at I don't know 0.5% lior so for was at 0.5% and then three years later s for is at what I think it reached like 4% we got really high and that just impacts your carrying cost on can you actually explain carrying costs cuz I know what it is and people the way I'm I'm thinking through a carrying cost is like just the like when the building is not producing any income is still under construction or development you still have to pay apart from just the construction cost of like the people the lumber to actually build the building you still have to pay in like costs of like taxes Insurance interest to the bank um and so you still need to pay that in some ver in some way so those are like the carrying costs of the deal um to carry quote unquote carry the deal until the deal is self-sufficient um and so yeah we we like those those blew up um loans had to be renegotiated for that so that was the first way like in the like in the operating of the deal um the second part is some of like our longer term whole deals came due for refinances and the interest rate meant that we had to be careful about the leverage and sometimes we have to put equity in to cover the The Leverage shortfall since the cash flow the asset produced was lower than like while could still cover the debt with not like the lenders weren't as comfortable with it um either we did that or we bought bought expensive interest rate caps um to reduce to keep our cost of debt constant that was the other that was that was the second part and the third part that is still currently playing through in real estate is higher interest rates especially since we since like my entire working in history since 2018 very short but for more more or less for the past decade or so like interest rates had been super low and no one was used to transacting in a high cost Market in a high interest rate environment and we a lot of people put debt at really low levels and eventually debt matur matures and you have to pay back and so like it then that would then have a knock on it effect on the sales Market because you have to then sell it but the people you're selling selling it to can't get as much debt and so they have to bid at a lower price but you need to make your return so like there's a like currently in like commercial real estate there's like there's a standoff between the lenders the the owners the sellers and buyers to see who will first blink in terms of like there like there there's potentially like a lot of defaults people are papering over right now yeah actually I I spoke with one investor uh who works in real estate private Equity as well and he mentioned that he's just kind of putting out fires every day right now and it seems really tough and you kind of mentioned that you're the investors are kind of used to a low interest rate environment for a decade although I I I'm Cur I I wanted to know for the partners at your firm who had maybe been through high interest rate environments or higher interest rate environments like were they also kind of really caught by surprise because they were kind of just used to the environment we were in or were they able to they like okay i' I've kind of seen this before and here's what we should do yeah know like a lot of them had seen it before um and so they had their experience like the fund head had been there for 20 plus years and had been the I think he was the longest 10e fund head at carile so he was he is very very like well-versed in real estate um and was and wasn't like and like working in this environment isn't bad the issue is the pace at which the rates changed it was like it was it felt basically felt like one month rates are 1% Z 0% 10 months later they are 5% and it's like what just happened uh and given in mind that a real estate transaction takes a couple months to come to fruition so you might start working on an acquisition deal and it might not close for six seven eight months and so just having that type of time Gap means that like we had deals that were almost closing and then the next then like a week later the FED says oh we're we're raising interest rate and someone will back out from the deal because like it no longer pencils for them yeah and so just the pace of the increase I think caught everyone unaware and I mean given the fact that it was a decade long runup of short rates in order to win deals a lot of like a lot I would say like underwriting got very aggressive um and so things that would normally be prudent to do like buy long-term like if you're doing a floating rate deal buy long-term floating like rate interest rate caps um went out the window because you were now trying to win all these deals and grinding and getting every piece of profit so if you think rates have been low for the past decade US economy was strong at Le like pre-co why do I need to add pay this cost for a interest rate cap so that even if the economy go south maybe they will raise it a couple BBS a couple like one or two% like you'll be fine so yeah I guess the economy and is always kind of does the unexpected once in a while oh yeah yeah no one I mean no one expected Co um no one expected that world and but it was the world we ended up living in and working as an associate working working as an soan senior through so those were always it was always it wasn't F like it was fascinating just seeing it play out because it was almost like we woke up one day and deals that were fine and progressing along were suddenly not fine and we now had to suddenly start calling our banks and saying hey about that deal that was good um it's not good anymore yeah when you usually you know like sign a deal then by law it's kind of like binding I guess but when you try to reopen those negotiations I mean were these were any of the parties that you worked with very I don't know strict about things like sorry like you signed this we can't do anything about it or did they there a lot of parties where they were kind of receptive to being like hey like we're okay we're we see what the situation is we're open to renegotiating yeah no def like so a lot of the banks were open to renegotiating like at least extending the loan because I mean not them not extending the loan potentially leads to a default and suddenly a bank doesn't want to be Pro property manager property owner because that's not their core competency so they're willing to extend generally if they have like like assurances from us that we actually care and are willing to do right by the asset um usually we'll have to pay some money in so like things like that went went like swimmingly generally like the industry is relatively relational relation relational um and so you don't want to get a bad reputation as like this person is really tough to work with and really hard to negotiate so often times it's like and everyone realizes like okay we're living in this environment and so it just behooves us to just work together instead of try and like screw the other person yeah okay that makes sense but yeah yeah and I feel like given the situation that came about from covid rising inflation interest rates and working in real estate at the time there must have been certain times or moments that were looking back kind of like holy crap like that was really tough or I can't believe XYZ happened can you walk us through something like what you might call like a horror story of like back back in back in my time in investing or like anything that was really tough and challenging um any phases it could be a particular deal or it could be like a moment yeah um I mean I think in hindsight this is more humorous than not not not um one of the deals I was overseeing um [Music] we our countertops we're shipping in from somewhere in South in Asia and um they were delayed and the funny part is when the LA Port was like so backed up is we knew the exact like ship tankers they were all they all were but there was nothing we could do and so part of like my routine became checking in to see if those countertops had been unloaded because we would then need to ship them to I think the asset was in Nevada and to get them installed because you can't really open a real estate Building without sinks a multif family building and say oh yeah come and live in this place without s so that legit really became my job for a couple months as we waited for that to get through um I'm not sure if that's that does no no I think those kind of little details are great because I A lot of times when you're especially when you're not working in these kinds of fields of like private Equity or being an investor it gets very glamorized you know and when you think about this little detail of like calling each day I'm trying to see if the countertops are like coming through that's one of those like little details of what you don't expect to be be doing as an investor but especially when you own the asset and and your your Skin's really in the game then you got to kind of do whatever it takes to for you know see the project through yeah and real estate I think is unique and like it's very as like especially the way Carla did it and I think this might be more unique to Carla and like they were they were particular that and the fund head was particular that the way we generate like Superior returns is we are personally involved and we care about the deals and so like when as an associate like I could have left it to the development partner to do it but I had to make sure it was on time because he would also then make sure it was on time and the deal was opening and like every month or month and a half of like of delay is like an extra $500,000 in Lost profit and I mean that was more than what I was making but uh is is like an extra like and so like that then matters especially given Carla strategy of putting out a lot like it's it was I think it's an 8 billion doll fund and their average Equity like check size was like 30 million and so like you're like each deal might not have a huge amount of profit collectively they do um and so yeah got it and I should have asked this earlier but where was your office located we're in DC DC okay why is were there are there a lot of offices and why did you choose DC um so team yeah so I should say yeah I mean Carl was founded um and has historic like the headquarters of car is in DC oh okay yeah um there was a New York office there's a New York office but when I got recruited I got recruited specifically for the DC office and you kind of touched upon carlile's strategy culture a little bit and how it kind of likes to kind of function and work and so can you bro they kind of describe the culture at carel like how and I know it also really depends a lot depending on the the group you're in and then the office but from your lived experience how would you describe car's culture yeah um first of like I'm speaking more specifically to car real estate because it function like the way it ended up functioning was real estate was kind of separate from a lot of the firms BEC a lot of the larger firm um just I think the way the fund had ran it and there weren't a lot of like connect connection points with like our like corporate PE group or buyouts group or european real estate so just the way it ran so just to caveat that um and thinking like overall structure the way car generally was set up is at the associate and Senior associate level to some extent you're split up into like an Acquisitions and an asset management team um there is some overlap in the two in like in the sense that like as an asset manager you're able to do it like work on Acquisitions especially as you get to know the market and generally once you become senior enough it doesn't matter you asset manage the deals you acquire um I was primarily on the asset management side and that meant that once the acquisition side finish a deal in some instances like there were like I did a deal or two where I underwrote the deal and then I asset Managed IT which is a difference fascinating experience but generally once the acquisition team finishes a deal underwriting the deal closing the deal bringing it into portfolio you then take over it and take it through disposition um and so that that's generally how the structure work and each asset usually has a minimum of two usually three people on it so an associate who runs the model the day-to-day and then like a senior associate principal or VP could be one of the above like usually if it's a senior associate like a senior a principal but or VP so like two or three of two out of those three will then like sit in on the deal as a senior at a senior at the level to provide more strategic guidance um help with some of the larger decisions on like how who to hire if like if you're dealing with like cons like a budget bust um they will then sitting on those conversations to say okay this is how this is what carlile's stance is and based on our experience how to and they know the partners more so that's generally how it functioned um culture-wise I think the culture was was pretty good um what one thing I appreciated it was like because I'm not sure maybe because we're in like in DC or it was a CO thing but like a lot of the partners and the senior people like left to go home for dinner mhm which doesn't sound like a lot but that gives you like an hour or two of not necessarily downtime you still have a lot of work to do but it's you get to like go work out have an actual dinner and then also they were flexible on like they were relatively Flex at least when I was there this position still changed um on like working from home and so some days it like if I had meetings starting at 8:00 a.m. I would just work from home all day um and so there was some flexibility in going back back and forth with the office um apart from that the people were generally really nice um like really smart really liked and knew about real estate and gradually like as you get more senior you get you tend to specialize in certain markets and certain industry classes um and so it's like I worked on multif family active adult which is multif family for 55 plus year olds like 55 year olds um I worked on Medical Office Buildings um and so like the the senior people on those teams were the were experts in those particular asset classes and in the particular markets we were in so it was always cool pick picking picking their brain um and hearing about their experience and then it's like it becomes like real estate often times becomes like a story of like what happened and like like I remember talking to one of my one of the MDS about why my asset was underperforming and then he was like if you go back to the storm in I believe it was like in Atlanta in 2018 and how like it like changed public housing and moved people to certain part and so suddenly it's like you get this expansive knowledge of like what happened in like a decade ago and how it's suddenly impacting your deal today yeah so it was really cool that's really interesting insight and yeah I feel like the more senior you get you see all these yeah historical events and you get a lot of pattern recognition and all of that I I wanted to ask you a little bit more about something you just said though you said the process of acquiring and then Asset Management that part part was fascinating to you and or something like that oh yeah so I was wondering if you could touch upon that acquiring acquiring a deal that you own you then go on to asset manage um it because acquisition your incentives are to close a deal and asset management your incentives are to like get a deal to succeed and to be realistic about a deal right like I can't asset manage a deal if they're telling me to achieve 50% rents higher than the market with an asset that might not be at 50% superior to the market but you have slightly different incentives in those two roles um and so what you do to win a deal might not necessarily be what you do to asset manage the deal and so there's a little there's always a little tension in like the asset the Acquisitions guys will close it will close a deal and suddenly I call them like I get the deal I read through it and I'm like wait I know this Market these assumptions you just did are complete like no I want say I'm not are very Rosy yeah yeah they're very Rosy assumptions it's easier to put in numbers and expect something to happen yeah and then I'm sitting here and I'm like I actually have to go make this number happen and I'm like who told you the price of lumber was this it's not that um and so that was so but then when I got to do it and have to face and had to face the two incentives and like was talking to the to like the MD on the deal and just he was like yeah and I mean the senior people all know it and they understand it and they do like when they think through the deals they do put some leeway into into that because they understand that like you're two slightly different different models but and that and then on the asset management piece but that's where like the attention to detail the like the diligence like comes in in trying to make sure that you reach the lofty assumptions that Acquisitions puts in for you yeah I could totally like having I think about my experience from um well first of all I'm banking like I put together models whatever the actual deals I never was a part of that so I wouldn't really know so I guess I was more on like the acquisition side where I just was putting in numbers and then once I started entrepreneurship and I had to build my own like little models for what I expect Revenue to be and Etc I so easy to put in assumptions that are Rosy and then when actuality hits I'm like oh really didn't hit those numbers yeah yeah I totally get that and having the experience from both sides I feel like is actually very very valuable yeah so now I'm much more conservative with my projections but uh you're more realistic yeah yeah which for me means being more conservative uh I also wanted to ask as you were talking about the culture a bit about uh your work life balance you know after working at um JPM now at carile what was real estate investing you know work life balance kind of like yeah um I will say it was better not necessarily from like an hours like perspective but more from the perspective that it was much more predictable um and so it's like I had I knew certain periods of times would be busier than others like we met with like when we're meeting with the fun head on every single deal every quarter like that two three week period is like completely like like I'm going to be grinding and working very very long hours but the fact that I could plan that meant that I could then also say okay these other weekends are free I can then like have trips go see family um take vacations and that's something banking didn't really have and like banking you were at the mercy of whoever called your md that week um so that's the first thing in terms of work life balance second I joined during covid um and that meant that I started remotely um which came with like some like with the flexibility of remote working so it's like there was a time I like I started I worked in my my parents house in Indiana for a bit and then after I also spent a time a bit of time working and like a couple friends from college did like a cool working house in New Hampshire spent some time there was able you're able to like work and travel and do all these other things when you start working from Co and um due to the OS and crisis of the group um the the um the like carile like the real estate group was slower to come back fully into the office which which I which I found really helpful because it allows you to like be more flexible with your time so I found that really really great and then the other part of working in real estate um is the fact that you have to travel for your assets especially as you get more senior um and I I liked it um I think it's really cool to like hey um to just go see a see see a real estate building and tour it and talk to the people there to like walk around the neighborhood um like just really cool to just really go do that and so and depending on your your portfolio composition and if you have any particular troubled assets that you have to go often uh most people are usually traveling like at especially at the associate senior associate level like two days two to three days every two weeks um and so you just have to build that in some some portfolios require more travel than others um mine towards the end was like a relatively travel heavy portfolio um but yeah so that I Al I like that part part of it but like that's a different part of the aspect um other real estate firms that are like oh we're a New York firm we only invest in New York you'll still go to your site but your site is just a is a subway stations away yeah subway stations away whereas I had assets in Atlanta in Las Vegas in Seattle and I would have to go see the see them meet the teams and things like that a lot of people who come from Finance backgrounds whether they worked in Investment Banking private Equity or Venture Capital eventually get their NB just like oima did and if you're interested in getting into a top MBA program be sure to check out my recently announced course liquid MBA I'll leave a link to it in this episode's description and be sure to use the code welcome 25 to get 25% off and I wanted to next actually ask about since we asked about work life balance compensation if you're comfortable sharing some figures of real estate investing compensation so I think the base is probably in line is at least it's like like I think you ended up at like 1502 200 I'm not sure how specific the numbers are I think overall it's at the junior levels it's probably lower than like a pure buyout group um and I think I'm not sure if it's like specific to car or or not um but it's like it might not be as high as like pure buyout at the same time my work life is a lot was a lot better than like my buyout friends so I would I would make that trade and I like I look forward and like I had fun making that trade so I also lived in DC which influences like some of the numbers since DC is a lower cost of living city than New York got it and we don't need to go into exact specifics but is was it like 1502 200 Allin or that's the base and then bonus and that's a base and then you'll get a bonus um yeah you get a bonus like I'll say like 30 to 60% of whatever your base was got it and then Carrie is that starting like the VP level or is it soor associates also yeah so you get you get co-invest um as starting I think after you're second year at carile um or at least specifically to my group where you get to like and they will l they'll lever you up I think two or three times in your Co invest which could become very lucrative so you start doing that and then you start getting carry as a VP got it and co-invest for those don't know is you put in your own actual money into the fund and then as you're mentioning a lot of times they'll lever whatever deal they're working on so that you get multiples of your money kind of like when you uh put buy put get a mortgage for a house and kind of lever your money um but I always thought C investing was definitely a great opportunity but it's also kind of funny cuz it's like oh yeah here's the money you made and let us take some back we'll we'll make more for you but let let us take your money for that yeah no I mean you just make I mean in doing Co invest I mean there are two ways of view it one you can view it as a vote of confidence in what you're doing and in your team and in your deals that's one way um the other way as you can view it as you're just becoming highly correlated in terms of your net worth and your income to your job which depends on how you view your job could be a good or bad thing so and I wanted to also ask about throughout your time at PE there is so much that you go through and it could be mentally emotionally physically sometimes could you give us like one lesson that you feel like was very very I don't know a strong personal or professional kind of lesson or skill that you developed I think for for me for me what I ended up like what I think and what ended up helping was guess learning to communicate um and the way I think about it is just like giv like like the way I worked is I was on Deal teams with maybe two or three different partners at any given time or MDS at any given time and every senior person once believes their deal is the most important deal in the world for you who is on three of them it might not be um and so it's on it's the onus is on you then to just go and um go to like tell talk like be proactive with your md and just be like hey I am working on this deal for you it's great but I'm also working on this other deal for another de another MD um and you're on similar deadlines I'm only one person is it anything you can do to either like talk to the other MD to change their timeline or change your timeline and they're and like people are generally receptive and they understand like you're one person you're not you can be split yourself in two so just learning how to communicate and manage up and manage expectations like really like helped make the experience less stressful for me on that similar vein I also wanted to ask about if you had any productivity tips or hacks that you might have picked up yeah um because you you know investors have a lot to deal with and the various different aspects of the process and the deal that you always have to manage any productivity hacks that you can share let me think about this um I I am a believer on the two phone thing so I when I was at car I used two different phones one work one personal and generally what I think what helped me was one days that I needed to be really busy I could put my personal phone into like a do not disturb mode and the the way I did my do not disturb is like there were like five people who could always get through do not disturb like my mom and my sisters um and so like my phone would not know vibrate unless it's from them and they generally would only call me if it's like something's actually important happening and so like I was able to then ignore that and then I just had my work phone which was all work and so you it be just allowed me to be a little bit more focused as opposed to like having everything on one phone and which I had at JP Morgan and just like oh you get my work email but get my personal email I get my Instagram notifications all on the same phone and suddenly you're getting distracted I'm not sure if that's a productivity no I totally remember those days I also had one phone for both yeah and then yeah the the the work emails would just go off Non-Stop and then yeah it could also easily just go on to Instagram and you know yeah yeah yeah what about like to-do list like how did you how do you keep track of everything like what do you do for those those kinds of things yeah um so I am a big to-do list and calendar scheduling person like my Mantra was if it wasn't on my calendar it did not exist and I mean I've gotten better but like it was bad enough where like I would schedule like I had to schedule personal time time and put it in my calendar if not I do the same thing if not like didn't exist so just like making sure my calendar was up to date which sounds like a lot of work but like once you get into the flow of like oh we want to have coffee at this time you put it in um you're like okay I need when I finish a side visit it's like I need to schedule my next side visit then and there to make sure that okay I know like just to block out that day that I'm going to be traveling this day um instead of having like it just creep up on you so like making sure your calendar is up to date I'm a big fan of to-do list but like not just like a to-do list of everything but we have to organize it by priority of what's important and what's due as soon as like what's due soonest and then like you negotiate negotiate it negotiate the rest um and that's where like communicating with the senior people comes with because you you also ask them like hey these are the 10 things you've told me to do what are the five things you need need from me within the next week yeah so got it got it and you uh were working you know in investing and um a lot of times a lot of our classmates want to actually go into investing after MBA what decided what what made you want to decide to get an NBA yeah no definitely great question um I think primarily I wanted to see the see and explore the world outside of like real estate um talk to people and like take classes in in in those different types of subjects um and in top of that like gain like a more quantitative grounding in finance and real estate um because I had studied civil engineering um coming out of college I knew how to design a beam I don't know how to design a beam anymore but I did know how to do that at one point but I needed to learn like I wanted to get a a better grasp of like finance and like that like that type of knowledge because a lot of my knowledge was like self- thought self-taught and as I got more senior I realized there were holes in it in different aspects and because there's some things you learn in college or if you're doing like an econ or Finance undergrad that I just hadn't learned so I wanted to that was one aspect of it um the other aspect of it was I wanted to explore other types of investing so like while at waren I've been able to like join the PVC club like I'm going to be doing distressed investing for the summer um so just like explore some of like what else like what else is out there outside of real estate um and see if there are other types of investing or career paths that might be of interest to me um jury's still out on that so um yeah gotcha cool and I wanted to ask um in your first year what has been a kind of like standout experience every time it's school oh so I did a leadership Venture I did the atakama leadership Ventures for those who don't know what a war leadership Venture is is basically it's they take you to somewhere outdoors in nature um generally International but they do have one in Alaska um and that's close to being International for most for most Americans it's part of the us it's probably the US so but yeah you go you go there and you're basically backpacking and hiking and sleeping in tents um for about a week um and I think it's a phenomenal experience because it's something it's something like coming from a desk job you don't really do um just to go out and be nature I for the first time in my life like or at least in my adult life I saw the Milky Way galaxy as like a Milky Way not just the stars but like the and like I was like oh that's why they call it the Milky Way which is super cool like and I was like okay this was worth it um but apart from the goal of seeing like great sites and like hiking but the goal is also to like teach you like leadership and like applying like leadership skills and team building and teamwork skills in environments that you are not used to um with people who you might not necessarily know so that was also great like I had a really good like team there and I got to know them pretty well and yeah and I a is pretty hard hard it's high up altitude I got some altitude sickness towards the end but seeing the Milky Way like out there watching like shooting stars was well worth it yeah there's nothing like really juxtaposing nature with your previous life of just like always being maybe in a cubicle it sounds like you traveled a lot and saw a lot of sites and stuff like that when you're in your investor role but yeah I do remember like leaving JPM and then I backpack and traveled for around 6 months and and just like not just nature but also City and just experiencing so much that's out there yeah um I think that's one of the best parts about school as well yeah and I just have a few last questions for you that are a little bit more miscellaneous but okay one is um what do you think makes for a good investor what makes for a good investor um so um I'm thinking and what I think kind of part of what's plain in my head is like things like the fun head aala would say and he was really big on patience and patience coupled with like a rigorous decision thinking through and like decision- making process and there were Investments that like people on the team including me were like we should sell this like it's not doing well but he's like we've done the research we did the work work we are patient and we will not be forced we will not be forc sellers unless we have to actually before sellers we don't so that's just something like that stuck with me like just being patient sometimes you actually not doing that deal or holding on to the deal might actually be better than just selling or bu like so yeah just that type of patience yeah yeah I like that actually because it's not the first thing you think of when you you May most people may not think of they may think of like analytical rigor or like you know I being up to speed with the markets and whatnot and then since you know I've got to ask you about real estate in general like where do you kind of well first actually something a little bit more applicable to most people when it comes to investing in real estate and in general like when it's more of like a personal thing like purchasing a home anything like that I don't know if you have any properties but I'm guessing you've like looked into personal purchases and all of that do you have uh like just general tips of like when you're purchasing your an apartment or anything things to really be mindful of um so apart from like I think I mean the first thing I always say is make sure like the quality of where you're building you're buying like is appropriate so simple things as you're doing a Walkin a tour run the showers see if the water pipes and water pressures actually is there but like make sure like check for Quality make sure the wood is good drywall still good as the physical aspect um for a personal house I think a couple things I I always I say to my friends one it's at the end of day a personal house especially one where you're going to live in is more of a personal and a consumption good um you're going to live in them you're going to consume quote unquote consume the house so make sure it's a house you want to actually consume like it's a house in a place you want to live in you want to sleep in maybe have a family in if that's if you're going to do that so that's if you're buying a personal house like keep in mind it's a cons consumption good um along with that like don't stretch your finances for a house because a house while it's an asset can also pretty quickly become a financial burden um and so those are the two like and then make sure it's actually good physical and good quality but like those are the three things I tell help if it's a personal Pro um investment if it's more of like a financial investment I think then it's more like you're looking at things like are you buying in a good Market in a good area um you think you're getting a good basis for the asset um and then one of one very important thing is think through who your ideal customer in this building You're Building you're buying is and will the surrounding amenities work for for them so if you're buying in a place and you're like oh I'm going to like it's going to be families who are going to rent here like make sure you're buying in a place with a good school district so that the kids can go to school so things like that gotcha I really like that mindset of your house is a consump something you're consuming I haven't I hadn't thought about that in in that way before which but I thought about in generally but I think putting things into actual words a lot of times really crystallizes what you're actually doing and another one last question about real estate is like the market has been so hot as of the filming of this video for real estate and things are just kind of flying through the roof perhaps because private Equity firms are getting involved and purchasing up you know land and good properties and all of that do you see the market kind of like obviously no one can tell the future yeah but do you see the market ever kind of correcting to the point where mo more average kind of middle class people can you know take out mortgages and purchase homes in good neighborhoods again like where where do you see the market kind of going yeah no that and I think you're specifically talking about like residential Market the residential Market um I believe like Nationwide um and this is specif specifically acute in certain places I think um America hasn't been building enough homes um and so there's I think a fundamental like supply and demand issue like there's not enough supply of housing for the amount of people in the country um I'm a big proponent of like we need to build more um in a sustainable and economic fashion but I do think we need to build more and personally I believe until like we start building more houses there's going to be upward pressure on pricing on prices and this will be more acute in places where people are moving to and like the population is growing fast so that might be a lot of your Sun Belt Sun Belt um cities or sunbell states um because keep in mind housing is not a good that just flexes up and down on Supply it takes years to build how to build a house to like take it through like from Land through entitlement to the physical building so it takes years for that to correct itself but I generally I I wouldn't be shocked if like the upward pressure on prices continues for a while until like various like state and local government will like will push and like will change the incentive so that like people will build more housing and then that would then reduce like the price the like the prices will probably not rise as quickly got it yeah well hopefully by the time I don't know we all start purchasing houses they're more are more built but and one kind of last catchall question I wanted to ask you is if you could go back to your 20-year-old self kind of give either personal professional um advice to your former self what would that be personal professional advice um in thinking through like the advice I would have wanted I go back and forth I think I would want them to know like enjoy the moments you're in like like it's going to be hard like JP Morgan was hard but find the place you places you enjoy there like explore like scratch that actually it's going to be explore New York um and I get like as an as a banking analyst you you don't have you don't really have the time to do it but I would have told myself to make like make the time for like an hour or two every week if you can to go to a new part of the city and actually explore the beautiful city that you live in because New York is pretty awesome and like my experience was dominated by my time at JP Morgan and I didn't get to actually experience the city but now I go back and I visit and like I get to see things I couldn't see then um especially I lived in the city preo um and so that would have been a great experience I was a like I was able to like later like explore DC more and like live in DC but I'll just say like explore New York like life is tough but like it's a beautiful city great buildings I I love the New York skyline and the history and the stories behind like why is that building designed that way or called that name so things like that well I think that is also applicable for almost any City you live in I think you it's you forget that sometimes it's fun being like a tourist in your own City and I actually just went to New York this past week and had a blast so I know kind of exactly what you're talking about there but you know I learned a lot from this interview and I had a lot of fun talking about real say something I'm also very personally interested in I think generally speaking a lot of people are so thanks so much for sharing your time your advice insights and just making the time for this interview oh yeah thank you very much thank you for having me on it was fun all right I hope you enjoyed this conversation with oima I certainly learned a ton about real estate and the real estate private Equity industry and I think the story that'll really stick with me was when oima had to keep calling the port in order to release the countertops in order to make sure that that construction would go smoothly and I think this was just such an interesting story because a lot of times private Equity is glamorized but in order for ojima to make sure that the investment that his that Carlow made would go smoothly he had to roll up his sleeves and do some of the quote unquote dirty work and I think that's true not just for private Equity but so many other jobs a lot of times you just have to say no job is beneath me and just get the job done and so that's what I really took away from this conversation I also wanted to ask that you share this episode with anyone you feel like would be interested that'll really really help this podcast out and thank you all so much as always for joining hope to catch you all in the next episode thanks guys and peace out

Channel: rareliquid

Views: 6,995

Keywords: rareliquid, real estate private equity, private equity, carlyle, blackstone, blackrock, private equity real estate, lbo, leveraged buyout, princeton, jp morgan, wharton, wharton mba, harvard business school, morgan stanley, thoma bravo, rareliquid podcast

Id: oJx8nyScB-8

Length: 83min 22sec (5002 seconds)

Published: Mon May 06 2024