Jilliene Helman (00:00):
One of the key lessons that I learned again during COVID is the lesson of a micro-market. And so I don’t have a macro crystal ball. Right. And what I mean by the lesson of the macro or the micro-market rather is like different markets perform totally different leader. And, you know, you take a market like Utah, where you actually had unemployment go down during COVID. Right. And you take a market like New Jersey where unemployment skyrocketed during COVID right. Then you move to micro markets and your team, all of those markets. And like there’s all kinds of crazy. Right. And look at what’s going on in Dallas, Texas right now, where there’s huge population growth, tons of companies that are coming in and saying, you know, that they’re moving their headquarters there. And so you would think instinctually, I should go buy office in Dallas. Well, we think office is over supply outs, so we’re not buying office in Dallas. Right. And so like, there’s all of these micro-market considerations to be had. And so I don’t have a macroeconomic crystal ball, but I think that the micro crystal ball is try and de-risk deals in any way, shape or form that you can. Right. And one of the ways to do that today is to lock in interest rates.
Reed Goossens (01:14):
Welcome to investing in the US a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market join Reed As he interviews go-getters risk-takers and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing
Reed Goossens (01:34):
G’day ladies and gentlemen, and welcome to another cracking edition of investing in the US podcast from Los Angeles. I’m your host, Reed Goossens good as always every with us on the show. Now, I’m glad that you’ve all tuned into learn from my incredible guests and each and every one of them are the cream of the crop here in the United States. When it comes to real estate, investing, business, investing, and entrepreneurship, each show, I try and tease out their incredible stories of how they have successfully created the businesses here in the US how they’ve created financial freedom, massive amounts of cashflow, and ultimately create extraordinary lives for themselves and their families life by design. As I like to say, hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.
Reed Goossens (02:21):
If these guys can do it. So can you now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like to show the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show, every podcast on iTunes, SoundCloud, Stitcher, and Google play, but you can also find these episodes up on my YouTube channel. So head over to Reed goossens.com, click on the video link, and it’ll take you to the video recordings of these podcasts. You can see my ugly mug or the beautiful faces of my guests each and every week. All right. Not fair to me. Let’s get cracking and into today’s show 10, the show on the pleasure of speaking with Jilliene Helman.
Reed Goossens (03:11):
Now, Jilliene is the founder and CEO of Realty mogul one of the top online marketplaces for investors to invest in institutional quality real estate here in the United States. Now Realty mogul was recently named the number one real estate commercial crowdfunding platform by Motley fool. And today, get this investors have invested in over 300 unique transactions and over $3 billion of capital has been raised on the Realty Mogul platform. Jilliene has also been featured as an expert on startups and real estate alike on Bloomberg CNBC, the New York times, Yahoo finance and entrepreneur.com to say I’m a little bit excited to have her on the show. Today is an understatement, but I’m going to get enough out of me. Let’s get her out here. Can I, Jilliene, welcome to the show. How are you doing today? It’s awesome to have you, and I want to stop the conversation like I start every, every episode, uh, rewind the clock and tell me how you made your first ever dollar as
Jilliene Helman (04:07):
A kid. This one’s kind of embarrassing, but I love the question. So I was an extra in a Ken Griffey Jr. Baseball commercial, and that was the first I got paid to be an extra. I mean, we couldn’t believe I was probably like, I don’t know, five or six years old, why I was an extra on my finger for junior baseball, commercial. I have no idea. And that was my only foray into the acting world. But, um, that is how I made my first ever dollar was an extra on, well,
Reed Goossens (04:32):
I will say that is the most interesting response I’ve ever had. Everyone’s like selling lemonade. I’m just like a yeah. Like if you say lemonade of lawns, I’d be, I’d be like, okay, the show’s over, but no, that’s incredible. So you’re an extra in an ad. It was. Were your parents involved in the Hollywood saints?
Jilliene Helman (04:51):
No, not at all. I think that like one of my close friends got asked to do it and then asked if she could bring me along. And then they threw me in the scene. It was something like that. So very random. And you know, I’m not a, uh, a childhood movie star by any stretch of the imagination. I can’t even find a commercial. I’ve never in my adult life. I’ve never even seen it. So if someone wants to try and find it and dig it up and send it to me, I’d love it. But I don’t actually know, uh, you know, where it is out either. That’s a challenge.
Reed Goossens (05:16):
I think that’s a challenge for people to get over and stop Googling. Um, but, but that’s an incredible story, but now walk us through how you’ve created now. For me personally, I know Realty mogul really, really well. It’s been one of the early adopters of crowdfunding, but I want to know the story before Realty mobile. How’d you get involved in wanting to be your own CEO. You’re an entrepreneur. Did you have a career beforehand? What was that like for Jilliene Helman?
Jilliene Helman (05:42):
Yeah, I grew up in a very entrepreneurial family, so my dad’s not entrepreneurial where my mom had entrepreneurial business pursuits. I have multiple siblings who were CEOs of their own companies and their own endeavors. And so I really learned about business like at the dinner table. I’m the youngest in my family. I’m the of seven. So I have six brothers and sisters and we just, we talked a lot, you know, we talked a lot about business. My dad would come home and talk about what was going on with his company. And I always knew that I wanted to do something, you know, in business. I went to business school at Georgetown, came out of the air and I went to work in banking. So my, my first career kind of before Realty mogul was in banking, worked in strategic planning, worked in marketing, but spent the majority of my time in wealth management.
Jilliene Helman (06:21):
So working for a wealth management firm, working with high net worth individual clients, in addition to nonprofits and endowments, and, you know, the wealthiest clients were real estate investors, and I’d grown up in a real estate family. My grandfather developed property in Los Angeles. My mother was one very residential real estate, and my father owns Marshall and office real estate through his businesses. So, so I knew about real estate, you know, kind of going back to the dinner table and found that our wealthiest clients were real estate investors always just had a passion for real estate. And so when the jobs that came out in 2012, and I read through sort of crowdfunding, which is the first change to the securities laws and, you know, decades upon decades upon decades, I didn’t want to apply to startups. I didn’t want to apply to small businesses, but I thought, could you apply this to real estate? And when I got sort of the answer, um, on the regulatory front of, yeah, you could, there’s nothing limiting your ability to do that. I quit my day job and I launched Realty mogul internet. That is,
Reed Goossens (07:17):
That is awesome. Uh, I will say poor mum and dad, seven kids. That’s a lot that would have been growing up in a household full of mayhem. I’ve got friends, who’ve got four kids. I’m like, geez, that’s, you’re out. You’re out of numbered already at three. So seven, seven would be, would it be, would it be nuts? Uh, but let’s talk about the jobs act because I’ve had a lot of people on here talking about crowdfunding and as an outsider, right. I’m just going to put my hand up. I took the city seeing in 2021, so 11 years, sorry, nine years later, since the job back, when I first moved to the United States, I saw a lot of come quick, come to market. You guys who were like, we’re going to raise money and be real estate crowdfunding. I feel as if a lot of those pretenders have gone away, but yet Realty mogul has seemed to stay the distance. What, why is that? And we’ll talk a little bit about how you’ve stayed the distance with so much turbulence in and around online crowdfunding.
Jilliene Helman (08:12):
I think in general, people struggle with a long-term mindset. You know, it takes a lot of self self-discipline to have, so that long term mindset, and only today, you know, almost 10 years in, do I feel like we’ve got a lot of it figured out, you know, but it took a very long period of time. I mean the childhood thing, it’s a dual sided marketplace. So just taking a step back inside a real estate, you know, anytime you’re trying to build a business, it’s a dual sided marketplace, you’re building two businesses and you have to build them at the exact same time for the main business to work. Right. And so, like, I was incredibly naive when I started the business, knowing what I know now, I would never build a two-sided marketplace. I would go build one product, one company, one customer, because it’s really double the effort and double the work and double the failure rate.
Jilliene Helman (08:54):
Right? Ana so I’m not surprised that a lot of companies that tried to jump into this business, it’s struggled to, you know, complete their destiny if you will. Um, so you’re building two businesses at once. On one side of the marketplace, we’ve got these real estate companies, they come to us and they use the realtor mobile marketplace to raise capital for their deals. On the other side of the marketplace, we’ve got a very vast network of ambassadors who are coming to the Realty mogul marketplace to find, you know, vetted underwritten commercial real estate transactions. And we’re a marketplace sitting in the middle in between those two constituents. And so you had to go two businesses at once. And I think that that’s a big part of it is it takes a long time. It takes a lot of energy. It takes a lot of effort.
Jilliene Helman (09:32):
It takes a lot of broken. You know, we, as a business have continued to just narrow and narrow and narrow our focus for the early days, we had a lending business and an equity business. We decided that we couldn’t be the best in the country of lumping. And so we ended up selling that business in 2015, and we said, but we can be the best in the country yet, you know, medium balance, a small balance equity. And so that’s really what we’re focused on today is allowing ambassadors to gain access to equity investments in real estate and narrowing that focus. And I think there’s other companies that didn’t narrow that focus. We just weren’t patient enough. You know, in the early days, you know, almost 10 years ago, it was scary to invest on the internet. You know, people weren’t comfortable putting a banking credentials on a website that maybe they’d heard about one or two times, and it’s a different world today, you know, and I think COVID helped to accelerate that and that we’re all working out of home offices.
Jilliene Helman (10:21):
You know, you’re not sitting in front of your wealth manager, you’re not, you know, meeting in person and it’s sort of wining and dining the old fashioned way. And so people have to get more comfortable investing online and, you know, using digital platforms and using digital credentials and all of those types of things, but it’s just, it’s taken a long time for the market to catch up. And I think that, you know, companies like ours who have said, we’re going to take a long view. You know, it’s not a race to the finish line, let’s build a great business, let’s do it slow and steady. You know, this is, this is a life’s endeavor for me, right. It’s not a, it’s not a blip on the radar. And I think that this is the, the biggest company that I will ever have the pleasure of being involved with. And certainly that I’ll have the pleasure of meeting. And so I’ve got a long-term perspective. And I think that, you know, that set us apart in the early days. And you know, again now almost 10 years in, we, um, we’ve got a lot more predictability around the business and it feels like we’re in a really, really great place.
Reed Goossens (11:13):
And you bring up a couple of those drawing down some notes here. And I think one of the big things that has helped with the longterm mindset is brand recognition. Right? I think that you, you, you, you mentioned the attracting of the investors and I’ve had a few other CEOs on this show about crowdfunding, who essentially it’s like a, you’re a marketing agency, right? You have to build the trust with those investors, because like you said, historically, you haven’t been cruising around on the internet at midnight. You know, he’s a, he’s a a hundred thousand dollar investment. I’m just going to make, you know, into, into a class B multi-family in Texas. You’re not just going to do that. And changing that mindset, I think has been what I, at least from an outsider’s perspective and interviewing couple of CEO’S being the hardest part. Right. Trying to get that. So how have you broken down that outward-facing trust for people to say, I want to be an invest with Realty mogul and the deals that they put on their platform.
Jilliene Helman (12:08):
Yeah, I’m going to, I think in response that I would start with saying, we are in no way shape or form a marketing agency, we are as far from being a marketing agency in how we operate in our culture and our core values that you could possibly imagine. And, and I think that, you know, this may sound sort of corny, but I think that it starts with culture. You know, our second most important core value is protect the investment. And that means that we do due diligence on all of our offerings. We’re running background checks, criminal checks and reference checks. We know most of our clients, not all of them, but most of them, you know, I have a personal relationship with a broken bread with them. I know them through, you know, other networks like YPO or other real estate networks. Um, we also have another core value that’s details matter.
Jilliene Helman (12:47):
You know, we, we dive into the details and we walk every property. We actually fly to the properties, even during COVID, you know, masks in tow to be able to look at the property, look at the location. You know, we bet the proforma numbers, we dig into the Excel files. Um, and then our number one core value is sleep well at night. And that is for our team, for our investors, for our sponsors, you know, call it karma, call it doing the right thing. So I think that, you know, our ability to get investors to trust us is because we’re trustworthy, not because we’re a good marketing agency, right. And obviously have to have marketing and you spend money on digital ads and all the, like, I mean, that’s just the basics that to build a business today. But I think that it, it comes down to like we’re trustworthy, right?
Jilliene Helman (13:30):
And that doesn’t mean that every investment performs at a hundred percent of where you expect it to what it means is that there’s something going awry. We’re going to tell you about it. We’re not going to hide under the covers. Right. We’re the company that like we believe in open and straightforward and transparent communication. You know, I, I tell my team, you know, if you’re delivering good news, go ahead and use email. If we believe very bad news, do it in person. Right. And it’s been more challenging obviously during COVID, but like, we’re not afraid to have those conversations. And so I I’d say we, we earn the trust with people by being,
Reed Goossens (14:00):
Oh, I, I completely agree with that. And I, I think my, my thought my sentiment was, was talking about in the early days, trying to educate people in a way using marketing to say, this is what the new future is because so many people were coming away from that mano, a mano breaking bread. This is how deals are done. This is a real estate’s done. And then bringing it to an online platform was like, what, what, like, I want to go. That makes no sense. So when I say mock, I meant more like educating the consumer to be more at ease with the process of investing online, rather than the motto, a motto, which has historically been, um, what has been some of the challenges of starting, you know, being a CEO of a crowdfunding platform in over the last 10 years, looking back, what, what, what do you think has been the number one or handful of challenges that you have faced?
Jilliene Helman (14:54):
Yeah, I think the biggest challenge kind of relates back to what I was sharing earlier of like, you’re building two businesses at the same time. And so keeping supply and demand in balance is, is very, very hard even today, you know, nearly 10 years later. I mean, it’s very challenging because you’ve got reputational risks on both sides, right? When investors come to the marketplace, you want there to be high quality products, but we don’t want to put up, you know, transactions that we haven’t bedded and that we don’t think are high quality. And then the flip side, when real estate companies come to us to use the marketplace, we need to make sure that we have enough investments. Right. And so it’s, how do we grow the relationships with the real estate companies at the same speed as the relationships with investors, and you kind of got to grow them both like this very, very slowly.
Jilliene Helman (15:32):
You can’t leap frog one, because if you leap frog one, you’re gonna lose the trust of the other side. And so this was very, very hard, you know, and that, that comes down to all kinds of decisions. It comes down to how much money do we spend on marketing? You know, who do we hire and what departments are we hiring in? Um, you know, how do we capitalize the parent company? How do we think about, you know, using our own balance sheet to capitalize transactions, to make sure that our sponsors have certainty of capital. And so that’s been really challenging. Um, and it’s still challenging today and we just try and do the best that we can. And, and again, it goes back to being really transparent and upfront with people, right. And if that’s on the investor side, you know, like, I’ll give you an example.
Jilliene Helman (16:08):
We never used to do development transactions. So prior to COVID, we really felt like it was not the right time to do development, because we were worried about there being another downs. And when you get caught, you know, in another downturn with a development transaction, it’s not a good thing. And we felt like we really had to protect investors and really just said, we’re not going to do any development on the platform. Now, post COVID, we actually were pretty bullish on development from an investment thesis perspective, because we believe that there’s going to be less properties that get built. And that properties that deliver, you know, late 20, 20 to early 20, 23 are going to have strong absorption kind of coming out of COVID and sort of the resurgence of the economy. And so there’s been an educational process there with ambassadors of like, look, these are riskier deals, right?
Jilliene Helman (16:53):
We’re allowing them on the marketplace. We’re working with people that we think are high quality. We’re still walking the land and making sure that, you know, we believe in those locations, but they’re higher risk, right? You’re not suddenly having a potential to earn double digit returns with less risk. It’s just not the reality. So there’s been a huge educational piece around that. Um, and that’s been challenging to, right, to be able to, to be sort of the voice of the investor and do that in a way that treats the ambassadors as smart, intelligent decision makers, which they are right. Like our, our investors are incredibly sophisticated. They’re incredibly smart. Um, and we want to also be a gatekeeper to make sure that they’re not even seeing stuff. They shouldn’t waste their time. And so that’s been a hard balance to play because the reality is when you have, you know, we’ve got 220,000 investors on the database, right?
Jilliene Helman (17:41):
There are plenty of people in that database that, you know, can and should be investing in development deals because that is a fit for their risk profile. And there are plenty of people in that database that never should touch a development deal because it’s not appropriate for the risk profile. And they have to make that decision. Right. We don’t make that decision for them. We’re not their investment advisor. You know, they really have to have to make that decision themselves. So what we can do and what we feel very strongly about doing is educating right, and educating them on what are the risks and is this the appropriate risk for, you know, my investment profile. And then they have to make the ultimate decision, but that’s been challenging to kind of playing that, that middle ground, if you will, of what’s appropriate. What’s not appropriate when the database gets so big that there’s a subset of people, but it’s totally appropriate for, and a subset of other people that it’s totally inappropriate.
Reed Goossens (18:27):
No, I completely agree with that. You have to split the herd up of who is going to be in certain deals and who won’t be in certain deals. Um, what my question to you next is, is given what you’ve seen over the last 10 years with, you know, you you’ve vetted a lot of deals. Obviously deals have started, particularly in the historical multifamily space deals are starting to get thinner and return expectations have to adjust. How have you been able to educate people, particularly your 20 220,000 people about those return expectations as cap rates, compress, as things get tighter and more people come in essentially into the market and money’s flooding the market, uh, that, that, that causes things to be more expensive.
Jilliene Helman (19:10):
Yeah, it’s hard. I mean, at the end of the day, it’s supply and demand, right? Like we can’t, we can’t manufacture something that doesn’t exist. Right. And so we’re just honest about it. You know, we’re transparent about, you know, the underwriting, you know, our, our sponsors who work with us to post transactions on the platform, they share the financial models, right. And investors have the ability to dig into those. We host webinars so they can ask questions to the sponsors. They can talk about the transactions and, and we’re writing thought leadership pieces, right. About what’s going on in the world. You know, what, what the impact of inflation is what the macro economic risks are, you know, with the, with the micro market dynamics are so there’s, you know, a lot of education and, you know, there’s some investors who are going to opt out of investing, right.
Jilliene Helman (19:48):
There’s investors are, if I may, I think you’re going to ask me later about like a mistake, but a funny mistake that maybe isn’t funny, but is in 2012, when we started the company, we should have bought everything. Right. We should have had like no credit standards and no underwriting standards, because we would’ve looked like geniuses today. Right. But that’s not, that’s not our culture. That’s not how we’re wired. That’s not how we’re operated. But like, that was a very big missed opportunity, right? Because I think that the, the 20 12, 20 13, 20 14, 20 15, 20 16, 20 17, 20 18 vintages are like incredible real estate. Right. At least today’s markets given act operates. If the breasts, assuming you put, you know, the right debt on it and you execute well. Um, and so I think that, you know, that that’s just the reality is we try and educate people. Some people are gonna opt out.
Jilliene Helman (20:32):
Some people are going to opt in. You know, we’ve got folks who, you know, made multi-family investments with us from 2012 on, and now they’re only investing in, you know, office retail and industrial deals because they feel like the cap rates have compressed to a place they’re not comfortable. We had get other people, you know, are investing in multifamily deals where two years ago that may have been a 16 or 17% projected return. And today it’s a 14, 15, and they’re comfortable with that. Right. Because they think to themselves, we’re also, am I going to potentially make, you know, 13 or 14, 15% in a, in a risk adjusted place like multifamily? I mean, I still believe multifamily is one of the best risk adjusted returns in the market, even though capital compressed returns are coming down. I don’t, I don’t know that I expect in my lifetime though, to see the kind of vintage, like the 20 12, 13, 14 vintages. Like, I don’t know that that comes around again. So you have to ask yourself, do I sit on the sidelines? What’s the opportunity, Boston, my money just sitting in cash, or am I comfortable with lower returns? Because the risk profile has gone down and the risk profile has gone down because there’s more capital in the market. So there’s more liquidity in the market. You just have to weigh that. And that’s kind of up to each individual investor to make their own decisions. No,
Reed Goossens (21:42):
You bring up a really good point. All of that compressing return. And, uh, and people, I talk to a lot of investors in some of them not so educated, but not so much with they they’re having this fantasy that it’s going to return to those days of six, 7% cap rates and multifamily. And I know we’re going to talk about a little something you’re really passionate in a minute, but we’ll get back to supply demand. But so when the housing crisis in the United States and across the world as a housing crisis in most Western countries that we can’t build it fast enough at affordable rates, um, that is still very, very attractive for the person who is renting. And thus, as you talk about risk adjusted returns, it’s still a good return at 12 to 14% compared to where you were maybe 16, 17, 18%.
Reed Goossens (22:26):
And I think there’s just been a big shock in the average retail investor, at least in my experience to try and re recalibrate that and still think this is a good return. And I understand why. And I think that’s, you know, as, as, as an operator myself, as someone who’s, who’s constant communicating with investors, making sure that they understand the why behind it. It’s not just, this is a more risky a deal because the returns are lower and then being transparent. So, um, but with that being said, we’re talking about affordable, multi-family affordable housing, I should say, in the green room, before we press record, you mentioned some of your biggest passions are affordable housing. So do you want us to maybe start from the top for those people who aren’t as familiar with what’s going on in the United States today with, you know, who aren’t struggling to keep a roof over their head, but what, what are the factors affecting affordable housing and how we can make it better if you have any thoughts on that? Because it’s obviously a big question.
Jilliene Helman (23:20):
Yeah. I mean, look, I, I guess just taking a step back, it’s really more of an emotional one than a financial one, but like, I, I can never imagine not having a roof over my head. Right. And the homelessness situation in our country has just gotten so atrocious. You know, I, I, everywhere I go, I see people who don’t have a roof over their head and it’s just like, it makes me sad. You know, we just call it brought out emotionally. It makes me very sad. So I’ve gotten very passionate about affordable housing in addition, financially, I think to be afraid financial instruments. Right. I think that, um, they’re not making any more affordable housing. It doesn’t make sense to build, right. So if you’re going to build, you’re going to go a class a, because you look at the cost of land to foster construction and foster raw materials like lumber, and you just can’t build affordable housing without subsidies, right.
Jilliene Helman (24:04):
Without tax payments, without subsidies from the government without, you know, a church donated land as an example, what’s the deal that we saw recently. Um, but I just fundamentally believe that people deserve a roof over their heads. Right. And, um, so, so I feel passionate about that and, and I feel passionate about it being a good risk adjusted return for ambassadors as well. You know, we, we actually in investment committee, I just came straight from investment committee into this meeting. And we were talking about an affordable deals, affordable deal in Dallas. Um, under, Allura built in 2005 and you know, our CEO, we were debating the pros and cons of it. And our CIO said, you know, the, the one thing I can tell you about this property is that rents are never going to go down. And I can’t say that as many right of market rate properties and like it’s, and we’ve got, you know, analysts on that and people that were training up.
Jilliene Helman (24:48):
And so we try and have kind of really robust conversations. We use it as a training ground in addition to just a ground of like talking very deeply about deals. And it’s true, right? Like rental rates are not going to go down at affordable housing, right. Because there’s nowhere for them to go, right. There’s nowhere for these people to go there. There, there’s just not enough supply in the market. And that’s sad, right. Because we really should be able to take care of people who can’t take care of themselves, or at least I believe that we should. And how you do that. You know, I don’t wanna get in the political conversation, right. This isn’t necessarily that there’s a lot of different ways to fund it and think about it, whether that’s, you know, private capital or public capital or otherwise. But, but I do find that, you know, we’ve got a very wide divide between the haves and the have-nots in this country. And for those of us that are fortunate enough to, you know, be able to help, I think that we should be helping. And so, you know, I’m a big proponent of affordable housing, both in the emotional side and ventral side.
Reed Goossens (25:39):
And what, what are you doing with Realty mogul besides obviously just offering the more affordable projects on the platform? Is there anything else that you’re looking into in terms of being a thought leader, being a platform where people can invest in energy, going back to that education piece, to, to, to sort of combine the emotion with, with the financial
Jilliene Helman (25:58):
Yeah. Look, the financial side drives it right. For better or worse, like money talks in our country. And so it’s, it’s this belief of like, let’s finance and fund affordable housing. These, if you can create more liquidity there, you can frame more demand from the financial markets. And, and that helps. Right. And so I think that, you know, there are platforms that will say, no, we’re not going to do affordable housing, or we don’t believe in it, or, and like we really deeply, um, so I think that we’re, we’re trying to make an impact from the financial side to, you know, to, to also de-stigmatize affordable housing. Right. And, and, you know, there’s a lot of affordable housing across the country where you have sort of these slumlords, right. I won’t go into an affordable housing deal where, where the business plan has to be a slumlord, right.
Jilliene Helman (26:37):
We we’ve done other affordable housing deals where we’re building pools, we’re building parks, we’re building playgrounds, we’re partnering with nonprofits to do resume training. We’re putting in, you know, free for the resident childcare so that they can work, you know, a full work day when their kids are out of school and sort of have coverage between that two 30 and, you know, five o’clock or six o’clock range. And so we we’ve done and invested in a lot of projects like that. And I’m really, really proud of that. Um, one of we run two public real estate investment trusts, and one of the independent board directors on our, on our, um, multifamily value add Reed is a woman named Flynn. And she’s the CEO of a non profit that provides services for affordable housing. So they do a lot of those services that I just described. And like, we’re really proud of that and really happy to, you know, be in, in partnership with her.
Jilliene Helman (27:23):
And so we’re, we’re trying to help where we can, but where we can just financially we can fund these transactions, right. Because that’s the business model and that’s what we do. And you know, we’re not gonna fund a deal just because it’s an affordable housing deal. Like that’s not how we operate. Right. If we go back to our core values, like protect the investors is our core value. But at the end of the day, we think they’re good financial instruments. We think we can help create additional liquidity. And through that, and through cap X budgets, you know, we can make these properties nicer to live, right. And, and in a safe place. And that we’ve looked at deals and done deals where, you know, there’s been shootings on a property, right. And you need security and you need to put fences up and you need to put gating up and you need to make it a safe place for people to live. And so we, you know, convert a lot of properties in places that I would say are, you know, unsafe to say, right. And I’m really, really proud of that. That’s part of the cap X budget. And again, it’s, that’s a creative to the project. That’s a creative financially that is good for investors, but at the same time, we’re helping to change lives. And that’s what could be better than that. Right. Make money and change. That’s good. Couldn’t
Reed Goossens (28:24):
Have said it better myself. So with your crystal ball, looking back in 2012, and you’re kicking yourself, you should have bought everything under the sun. What’s your crystal ball telling you moving forward in the next 10 years, or even, even short-term in where we’re at with interest rates and cap rates and all that sort of stuff.
Jilliene Helman (28:39):
One of the key lessons that I learned again during COVID is the lesson of the micro market. And so I don’t have a macro crystal ball. Right. And what I mean by the lesson of the macro or the micro market rather is like different markets perform totally different leader. And, you know, you take a market like Utah, where you actually had unemployment go down during COVID right. And you take a market like New Jersey where unemployment skyrocketed during COVID right. And then you move to micro markets and your team, all of those markets. And like, there’s all kinds of craziness, right. What’s going on in Dallas, Texas right now where there’s huge population growth, tons of companies that are coming in and saying, you know, that they’re moving their headquarters there. And so you would think instinctually, I should go buy office in Dallas. Well, we think office is over supplied announced, so we’re not buying office in Dallas.
Jilliene Helman (29:26):
Right. And so like, there’s all of these micro market considerations to be had. And so I don’t have a macroeconomic crystal ball, but I think that the micro crystal ball is try and de-risk deals in any way, shape or form that you can. Right. And one of the ways to do that is to walk in interest rates. You know, I, I, we did deals, you know, three, four years ago where, you know, we locked interest rates in the fours today, that interest rate would be 3% free 20. And that was not the wrong decision, right? Like I’m not kicking myself that that was the wrong decision because that’s what we underwrote it underwrote to good financial returns. And we de-risk right at a time, we thought that interest rates are relatively low now in hindsight, that was, you know, not the right call, but it was the right call.
Jilliene Helman (30:06):
Right. Because of kind of that de-risking. So when I talk about de-risking, it’s look at the supply and demand in the micro market. I’ll give you another example. You know, Tampa, Florida thought we liked Tampa a lot. And yet the, the new starts on a new class, a multifamily are concerning to me, right. And I don’t want to own, you know, 2010 product and tamper right now, because that’s going to compete with this onslaught of new product and that could put rates down. Now we’re looking at a deal in Tampa right now that’s 1984 vintage. I like that vintage. And there’s no amount of new product that is going to impact the rental rates on 1984 vintage because it’s a totally different kind of things. Right? So as you start to de-risk, it’s like really understand the micro market to find demand at the micro market, the impact of financing, right?
Jilliene Helman (30:52):
It’s not to say on the financing side that we won’t use, you know, bridge debt and floating rate debt. We do a lot of deals with Bridget and floating rate debt because we think that that makes the most sense for the business plan. But there’s a key decision to be made of when did the refinance that you refinance at month 24, because the renovations are done do hold on until, you know, 136 until every renovation is done. Do you hold on even further until month 48 in general, I’d rather de-risk the interest rate risk sooner. So, you know, refi closer to month, 24 than month, 48 in general, again, it’s sort of, you have to, you have to depend on the micro market. Um, but that’s where my crystal ball is just trying to de-risk by looking at the micro fundamentals and not the macro fundamentals, because I think that you’re very lost today. If you look at the macro, um, and there’s so much nuance in real estate across markets,
Reed Goossens (31:38):
I completely agree. One of the big things that I learned when I first moved to United States, particularly coming out of 2009 was the UN, and this is as an international Australian reading the news, the us housing market. Right? And the first thing I realized when I moved to United States, there’s full hog, 400 MSIs in the United States. And within each MSA, there’s a north south east west good side of the tracks, bad side of the tracks. And it was just so up to surface level that was like blanketing the US housing markets, the issue, right. But yet you look at some, some economies, some markets that didn’t look completely unaffected like Austin, Texas coming out of 2008, like it goes back to your point of, you have to be real estate is local, and you have to understand the local trends in what’s happening in those exact markets.
Reed Goossens (32:21):
Because also the United States is the behemoth of commercial yielding product. When you compare it to other yields across other Western countries, you can go to Sydney, you compare it to Hong Kong, you compare it to Europe. You do not get the same yields as you do in this country. And that’s, I wanted him to get into that, but that’s, it’s just so important to not lose sight of that. And then, but obviously coupling, I did exactly the same thing on my first EverTrue deals, 4.3, 5%. I thought that was a smoking deal. Freddy fix for seven years, I’m kicking myself. I could have sold that deal three times over by now. Right. But you know, at the time you did what the best we thought things were going to the moon. So I sympathize with you on terms of having that incredible, uh, grounded approach and understanding like your example of Tampa versus a Utah versus New Jersey. So I’m really, really like that. I guess, as we come to the uninsured, what is the future for Realty mogul moving forward? What’s the future for yourself personally moving forward? And where do you see the company in 10 years time,
Jilliene Helman (33:21):
We’re going to continue to are doing, you know, I mean, like we’re, we’re slow and steady. Hopefully there’s no surprises, right? Like if we’re doing a good job, we’re just going to continue to keep growing and, you know, provide strong risk adjusted return transactions to investors and work with great operating partners and, you know, be in the real estate business, you know, you have to stay in the game, right? You have to do deals, you have to keep educating yourself. And so we don’t have some grand plan to change the company or revolutionize the company. I mean, we’re, we’re on the cutting edge. I think we’re doing a great job. There’s always room for improvement. We just want to keep doing what we’re doing, which is sourcing, you know, great deals, working with great partners and making sure that we’re communicating and being trusted by investors.
Reed Goossens (34:04):
One last question I have for you. And this is just a, more of a personal question is, do you see, I guess maybe I’m answering my question, but do you see investors going around you in the future and going directly to sponsors? Is that, is that a risk for Realty mogul at some point in the future?
Jilliene Helman (34:19):
Well, my belief is that you have to earn the respect of people, right? And so if we’re not doing a good job, well then who am I to say that they shouldn’t go around? Right. And so I looked back at that, it’s like build a great business. Who would you say you’re going to do, you know, provide the asset management services and the administrative services that we say that we’re going to do. And I think that investors are willing to pay for that, you know? And, and we’ve had so many examples of where we’ve stepped in and some of it’s, some of it’s silly, right? Some of it is they didn’t do the K one. Right, right. And there was going to be implications two or three years down the road. Right. And we thought that when we provided that, some of it is, you know, will force a sale of an asset because we see supply and demand characteristics differently than apartment.
Jilliene Helman (35:01):
Right. Some of it is we’re going to look through the financials and we’re going to do an assessment of where the property is performing and giving them these really nice, pretty concise, you know, recaps, right. And ambassadors. So different investors are willing to pay for different things. But I think that at the end of the day, like if we do a good job, there’s a there’s room for us. If we don’t do a good job, there’s not, and there shouldn’t be. And I’m perfectly okay with that. And I’m looking to run and build and continue running and building an organization where we provided meaningful service. Right. And we provide a place where investors can trust what they’re seeing and investors I’ll be it, you know, they still have to do their due diligence. We don’t know if it’s appropriate, you know, for their risk profile for where they’re at in their lives. You know, all of those types of things. If they have, you know, seven kids or no kids and stretch her income or no discretionary income, you know, that’s not our position to say whether the deal is an appropriate deal for them. But, um, again, I think if we do a nice job, but they won’t, and if we don’t do a nice job in their role,
Reed Goossens (35:58):
Very self-aware answer unlock it. What’d you learn at the end of every show, we like to go into the lightning round or the top five investing tips, you ready to get into it? What is the number one habit you practice to keep on track towards your goals
Jilliene Helman (36:12):
On Trump? I don’t know that it’s on tractors, my goals, but I would say that probably one of the most influential habits in my life is my gratitude practice. So every day before I go to bed, three things I’m grateful for every day when I wake up three things that I’m grateful for and it’s really changed the myelin in my brain. Like that may sound kind of quirky and a little crazy, but like it’s genuinely changed my brain. And it’s probably like the single most important daily habit that I do for myself that allows me to, you know, be in a place where I could even have.
Reed Goossens (36:43):
Awesome. I think it’s super important to be grateful and mindfulness and having a little bit of stillness in the morning of just before you the rush of the day. So, awesome stuff. Question number two, who’s been the most influential person in your career to date?
Jilliene Helman (36:57):
It’s probably my dad, you know, my dad has always been a key sort of mentor to me and someone that I’ve looked up to, you know, he he’s run businesses since he was in his early twenties. Didn’t graduate college, very entrepreneurial, you know, has been just a great professional and CEO and business owner in addition to a great father. And so I look up to him and so that’s it.
Reed Goossens (37:18):
Awesome. Well done, done. Uh, question number three is what’s the most influential tool in your business? When I say tool, it could be physical tools, or it could be a piece of software that you can’t run the business without. What is it?
Jilliene Helman (37:31):
I, I don’t know, maybe strange answer, but I think it’s my ears. I think it’s listening, you know, and like taking the time to listen and to seek input and to make sure that my team feels heard and to talk through deals. I mean, sometimes, you know, our, our CIO and I will like sell the phone together for two hours and talk for deals now, what are the risks? What happens if this happens? What happens if that happens? Let’s put on, on this micro market, you know, what are the crime stats? What’s, you know, it’s just listening and being willing, you know, to learn and to listen, that’s gonna be a corny answer, but
Reed Goossens (38:07):
In one sentence, what has been the biggest, and I want to say valuable or mistake or lesson that you’ve learned in your career. And what’d you learn from that mistake?
Jilliene Helman (38:17):
I mean, not investing more early on was probably the biggest one for us to be totally honest. I mean, I look back now and it’s like, we would have been such a different company if we had moved faster and we put out more capital and I was, I was cautious. Right. So I guess the lesson is be less cautious, although not really wired that way. Um, I think it’s just, I have more confidence, you know, when there’s an investment thesis that we believe in like, go for it, right? Because at the end of the day, you still own physical real estate, you know? And, and I think that as long as you have staying power and you can hold, long-term, I’m a big believer in real estate, you know, over the long-term.
Reed Goossens (38:55):
But I think it also, the other side of the coin is help you become disciplined, right. In terms of your approach to, to, to, to real estate. So, so maybe some of the practices are, you know, the, all of a sudden it’s like, we now get all the systems. We have to be more bullish because we know more. Right. So, um, awesome. Last question. Where can people reach you to continue the conversation they want to be in your circle? Where do they go?
Jilliene Helman (39:17):
Yeah. I mean, sign up at real, to mobile.com. If you’re not, it’s free to sign up. And then once you become a member, you know, you’ll start getting our flow of real estate transactions. And so those are always fun. If you’re ready to invest now, great. If not, it’d be a watcher. And then bird I’ve I’ve had, you know, so many young people reach out to me and say, I just signed up for real, to mobile, and I see your deals. And like, I’ve learned so much looking at real deals and watching real webinars and like being in the conversation, um, also feel free to reach out on LinkedIn. You can just type my name and let me know that you heard me on reach podcast and would be happy to, uh, to connect and go from there.
Reed Goossens (39:51):
Awesome. Well, look, I want to thank you so much for jumping on the show. I was one of the flexible things that I took away from today’s show. I think the big thing for me was you’re building two businesses with, with a crowdfunding platform. I think it was, it’s such a, as you said it so simply, but it is so true. It’s two facing sides of the coin, but for me, narrow your focus, details matter and sleep well at night, the three core messages, which we all as owners and operators want to do, right? I, I myself have gray hair from maybe not sleeping well at night because you’re thinking about stuff that can go wrong, but running a business and having a good culture like that helps you build that brand recognition and helps people come back and having repeat business and put you at the pinnacle of the crowdfunding industry. So, so that’s the logical way. Well done. Did I leave anything out?
Jilliene Helman (40:36):
No, I appreciate it.
Reed Goossens (40:37):
That’s awesome. Well, again, thank you so much for jumping on the show today. Enjoy the rest of your week and we’ll catch up very, very soon.
Jilliene Helman (40:43):
Thanks so much. Take care. Well, they
Reed Goossens (40:45):
Have another cracking episode. Jetpack has incredible advice from Jilliene. If you do want to check out their stuff, remember head of the Realty, mogul.com, reach out to them because so many incredible deals on their platform right now. And hopefully this interview is giving you a little bit of insight about how they go and vet those deals. I want to thank you all again for taking some time out of your day to tune in, to continue to grow your financial IQ, because that’s what we’re all about here on this show. If you do like this show, he’s just way to give back is to give it a five star review on iTunes. And we’re going to do this all again next week. So remember be bold, be brave and go [inaudible].