This week, condo sales strategist and host Uri Vaknin welcomes a very special guest - Mike Leipart, Managing Partner of The Agency Development Group, based in Beverly Hills, CA. Mike and Uri have a 10-year friendship and working relationship. In Episode 6: Condo Sales Philosophy, they take a trip down memory lane to recount one of the most significant periods in condominium sales and American real estate in general - the formation of ST Residential during the Great Recession. You'll learn how Uri made his way from Atlanta to Las Vegas, and how Mike came to collaborate with Mauricio Umansky of The Agency. They discuss:
This is an in-depth episode with one of the greatest minds in the history of condo development, sales and marketing. Enjoy the listen!
Chapter Markers:
4:35 - Origin Stories of Mike, Uri and ST Residential
25:55 - How Mike joined forces with The Agency
54:08 - Yerba Buena Island, the power in doing what you love, and a glimpse into the future
This episode is brought to you by Juhl Las Vegas, loft-style condos located in the heart of vibrant, downtown Las Vegas. From the low $200s to over $1M. Learn more at JuhlLV.com.
This episode is also brought to you by One Las Vegas, luxury high-rise condos featuring two and three bedroom plus den residences. From the mid $400s to over $1M. Learn more at theonelv.com.
Questions or comments? We'd love to hear from you! Contact us at CondoArtist@gmail.com.
This week, condo sales strategist and host Uri Vaknin welcomes a very special guest - Mike Leipart, Managing Partner of The Agency Development Group, based in Beverly Hills, CA. Mike and Uri have a 10-year friendship and working relationship. In Episode 6: Condo Sales Philosophy, they take a trip down memory lane to recount one of the most significant periods in condominium sales and American real estate in general - the formation of ST Residential during the Great Recession. You'll learn how Uri made his way from Atlanta to Las Vegas, and how Mike came to collaborate with Mauricio Umansky of The Agency. They discuss:
This is an in-depth episode with one of the greatest minds in the history of condo development, sales and marketing. Enjoy the listen!
Chapter Markers:
4:35 - Origin Stories of Mike, Uri and ST Residential
25:55 - How Mike joined forces with The Agency
54:08 - Yerba Buena Island, the power in doing what you love, and a glimpse into the future
This episode is brought to you by Juhl Las Vegas, loft-style condos located in the heart of vibrant, downtown Las Vegas. From the low $200s to over $1M. Learn more at JuhlLV.com.
This episode is also brought to you by One Las Vegas, luxury high-rise condos featuring two and three bedroom plus den residences. From the mid $400s to over $1M. Learn more at theonelv.com.
Questions or comments? We'd love to hear from you! Contact us at CondoArtist@gmail.com.
Uri Vaknin 00:16
Welcome to Condo Artist: The Other Side of Real Estate. I'm your host Uri Vaknin a condo sales strategist who has developed and sold out thousands of condos in Atlanta, Las Vegas, Florida, Detroit, Texas, Nashville and all across the United States. Each week I along with my co host and colleagues, Shahn Douglas, hello, and Mark Bunton. Hi everybody. We will bring you the latest insights, best practices and sales techniques to sell out more condos faster, no matter the market. At times, we'll delve into architecture, design, financing, and even urban planning as they pertain to condos and condo living. I am an admitted podcast junkie, but our search for podcasts, specifically about condos, we all realized that there really weren't any out there. throughout this series, you will get to know more about me, Shahn and Mark, and our 53 years of combined experience in the world of condos. One of the things that has become glaringly obvious to us is that most people including real estate agents, buyers, architects, vendors, and even condo developers don't fully understand condos. This podcast will pull back the curtain on the world of condos. This episode, Condo Sales Philosophy with Mike Leipart of The Agency took us on the road this past week to Beverly Hills, California, to meet with Mike Leipart, who is the managing partner new development for The Agency in Beverly Hills. As you all probably know, The Agency was started by Mauricio Umansky and has been heavily featured on The Real Housewives of Beverly Hills. It's an exciting interview, Mike, Mike and I had but the intro to this podcast is really important. I mean, it goes back over a decade when we worked with Mike on a project called ST residential. Remember that guys?
Mark Bunton 02:27
Yes, very well.
Uri Vaknin 02:28
Oh, yeah. And what's interesting is because ST Residential, which we'll get into in the podcast, was formed out of one of the largest failures of a bank in American history, which was Corus Bank in Chicago, Illinois, which was one of the largest banks to finance condo construction in America. From that experience, we got to meet Mike Leipart. But it was really interesting is what this podcast really is about, is about how our condo sales philosophy really became fine tuned, literally out of the failure of a major bank. And that was something that really we all worked really hard on back in the day.
Shahn Douglas 03:16
Yeah, and for all the listeners out there, this is a very in depth episode. We cover a lot of ground in this a lot of the amazing things that we've done in our past and how we came to be who we are today.
Uri Vaknin 03:29
Exactly. And when you say who we are today, is because it's exactly how we got to Las Vegas. And this podcast starts not at the beginning, but at a very pivotal point in that an American real estate history to be exact. I mean, I know that sounds like an overstatement. But this was the great recession. And this was us coming out of the Great Recession, and really becoming the experts at what we do.
Shahn Douglas 03:57
also kind of a difficult time in the world of selling condominiums. And I'm sure a lot of what we're going to be talking about today will be about how the the strategies and the things that worked for us to be able to be successful during this challenging time.
Mark Bunton 04:16
I think you're absolutely right, Shahn. I don't think we could have had a better preparation then then you know, of course bank failing and having to fine tune like Corey said the way that we did everything. And that brought us to where we are now. And we've taken Las Vegas by storm. Awesome. You're
Uri Vaknin 04:32
right. So let's get into the podcast. But I'm gonna give a little history as to how we started working together. So back at the height of the recession, there was this band called Corus bank. Corus bank at that time, was the largest bank that provided condo construction financing in America. Yes, and going into the Great Recession. They had financed 110 condo towers in some, some most iconic buildings throughout America whether was Miami, Atlanta, Las Vegas, New York. Seattle, all over Yes. And so I actually at that time was with a company called The Marketing Director under the ownership of David Tufts and Adrian Albert, who are my two mentors and I would not be where I am today. If it wasn't for David Tufts letdowns house love him, I've started working with him since the day I got my real estate license at a company called The Condo Store, which he started as well. Yep. So long history with everyone. But well, we were there. And we were leading into the Great Recession, many of the buildings in Atlanta that were financed by Corus bank, were actually our clients, we were doing the sales and marketing of those buildings at that time. And so, you know, we all saw the headwinds come in, we saw what was coming. And we knew that Corus was in a precarious situation. And I knew a bunch of I knew all the guys at Corus. And then, you know, what I did was I spent, you know, about a year because no one knew what was going to happen was really kind of researching all of the Corus financed buildings, so that if anything did happen, I would be ready to pounce. Right? And then I track the FDIC, because at that point, it was the FDIC that would have taken over the bank. Yeah, I track there every day like dealings and received every single press release that they send out. And then one day, they send out the press release, that they were taking over course bank, and it's sent shutters and waves of anxiety throughout the real estate world in America. But what it did do, it also created the single greatest opportunity for a lot of people in you know, the condo space, particularly in America. And I was determined to get that portfolio. Yeah. And so, a little bit, you know, not to get too deep in the 60. Because we could talk in this could be a whole podcast series in itself. They'll know, you know, of course, in the aftermath, of course, thank you, um, but FDIC, at that point, on knew that they couldn't alone do this. So what they wanted to do was create a public private partnership, bringing in a public private entity to really run this business and to, you know, return taxpayer dollars. Yes. And so they basically put out those RFP, to different groups all over the country. And literally, I, for lack of a better word, I hoard myself out to every group that I thought it was going after it right, providing them free data, free market intelligence, free business plans, my insights, because for the year prior, I was literally becoming, you know, the leading expert on all of these properties. Keep in mind, we're talking about 110 condo buildings that at that, you know, prior to the recession, had a market value of almost, I think nine or $10 billion,
Mike Leipart 08:16
or Yes,
Uri Vaknin 08:17
yeah, you're $10 billion, correct? Yeah. So lo and behold, after I can't remember how long the process was, but I feel it was almost, you know, a year that they went through that was it?
Mike Leipart 08:28
Yeah, yeah. About a year,
Uri Vaknin 08:31
because when once they figure out who they went to, to pick, they also to make sure that that group had the infrastructure in place the financing in place.
Mike Leipart 08:39
Not only that, that was probably like, six months, six months. Yeah. Six months from the announcement to it, actually. It felt like it felt like yours
Uri Vaknin 08:48
to me. Yeah. I couldn't sleep at night. Yeah. And so then we hear that this group, led by Barry sternlicht, Starwood capital, along with TPG, Texas Pacific group, which at that time, at the majority interest in Neiman Marcus and Burger King, that's Yeah, amongst other things, and then Perry capital, Richard Perry, who's a hedge fund. Yep. And then Lefrak, Richard Lefrak, who it was one of the largest apartment developers in America, basically built like Long Island City, and that's right, with Lefrak city and tons of other stuff.
Mike Leipart 09:23
and Wilbur Ross, and Wilbur Ross. Yes.
Uri Vaknin 09:26
So this group happened to be the only group that I didn't wear myself out to with free information because
Mike Leipart 09:33
there wasn't a group.
Uri Vaknin 09:34
You're right. It wasn't a group yet. It was a disparate group of people just like
Mike Leipart 09:39
it was just a group of people that, you know, probably met in New York City didn't, didn't know anything about anything and put in an offer. Exactly. And they want it and according to all the people who had used your services and underwritten it in a real way, way over Pay.
Uri Vaknin 10:01
He did overpay
Mike Leipart 10:02
for it. In hindsight, they didn't. But But at the time, it seemed like they had way overpaid. And and a company was created
Uri Vaknin 10:12
called ST Residential, ST Residential and job there. I was like, holy, you know the word Yeah. Um, what do I do like, but the great thing was we had inroads with corus bank for us. And the smart thing you guys did to maintain some of the institutional knowledge is not blow them all out. Exactly, you know, kept several people. One of them our good friend, Jim Dow, one of the best one of the best. Yes. So Jim Dow, I begged and pleaded, I said, Dude, gotta get me in with these new folks. I don't know them. I don't know. I know nothing about him, who was out man and working on working on it. So he finally said, Okay, guys, you could put the marketing directors of the company at the time, which marketing director was still around in New York City doing an amazing job. Adrian Albert is the owner of that company. And, you know, literally she sort of, you know, she and David Tufts taught me, you know, my philosophy about you know, condominium sales and marketing. And so they, we convinced you guys to allow us to present an RFP. So, I was in charge of the RFP, and I was basically a slave driver with my entire company. And I was up all night, I couldn't sleep. And we put together what I would say was the single most important document that I've ever created in my life. And we were so proud of it. And you should have been could not have done it without Betty Harbourt. Right? And Aletta Bernard Yeah. Who did our market intelligence, Betty Harbourt was the head of our she was the executive vice president of the company and head of marketing. And she kept everything going. And we we all work together so intensely on creating this incredible RFP. And so then we send it off to you guys. Mm hmm. And for two weeks, I couldn't sleep. we'd gotten to know each other a little bit at that time, a little bit, you would come to Atlanta, yeah. Where I was living. Yep. And where five of the major buildings that were chorus buildings were and we were marketing, actually several of them. And you know, I'd given you a presentation to the building show you around, kind of give you an overview of the market. And you kept on saying, you know, I really like you do, but like, keep in mind, the biggest players in America in real estate, you know, Coldwell Banker and RT, you know, all those people, you know, we've been talking to them,
Mike Leipart 12:41
right? Well, I mean, and I think we were I, you know, I've slept since then. But I think we were honest about the fact that, you know, there was, I don't think there was ever a point you weren't going to get a project. But there was zero intention on our part, that you would get more than one. You know, like, I think, let me just go back a little bit and get me to the point where I'm in Atlanta, right. So when you're, when you've spent a year, helping all of these investment firms underwrite all these projects and stuff. You know, I live in Oklahoma City and I'm playing golf every day.
Uri Vaknin 13:29
Okay, what do you do be a
Mike Leipart 13:31
stockbroker? Okay, I don't know a single thing about condominiums back then. Back then, well, some could argue now, but I would argue in time, it was irrefutable that I didn't know a single thing about condos. I was spending my time on my business, and I was spending a fair amount of time with one of my best friends from college, a guy who I just idolized and, and who was four years older than me in school and who I just thought was, you know, it would be like a football star. He was baseball, baseball, I knew. But you know, he, this was the guy who like had the prettiest girl metaphor point in school, you know, I think he's, you know, so Wade Hundley. So I had come to wade in, let's say, 2008 2009 and said, let's figure out something to do together. Right? Like, I don't love being a stockbroker. I'm bored to tears with it. But I do well enough with it that I've created, you know, mortgages and all these other things, and I have two kids now. So I can't just start from scratch something else. Like we're going to find something that you know, we can do together that I can at least keep the lights turned on and we have worked on a host of things, which is its own podcast of how bizarre some of these things were. But we thought we could make money at it. And then one day, he calls me and says, Hey, I got some job offers yesterday, and I've got like four days to, to accept one. And he ran me through the job offers that he had. And he had three hit three. Again, he had been kind of semi retired and
Uri Vaknin 15:29
this is a great recession time.
Mike Leipart 15:31
Yeah, but he made a lot of money.
Uri Vaknin 15:36
I like how you held back on
Mike Leipart 15:38
Yeah, he made a lot of money. In the savings alone deal. He he had experience in buying, you know, bad assets and turning them around. So and then they've gone on and had great success in the gaming business, being a CEO of a gaming company. So he lays out his offers that he has, and you know, one is to go back and be the CEO of a gaming company, publicly traded gaming company. And one is a incredibly high position with a huge investment bank firm that everyone knows the name of. And then one was this bank in Chicago that had failed, that had lent all this money on condo towers. And he could go do that, but it would be starting the company from scratch, it would be inheriting a group of bankers, okay, it to work great one sounded like the worst idea I've ever heard. Okay. And he said, I really want to do the third one, the bad idea, the bad idea, because there's just a lot of creativity in that. And we do it the way we want to do it. And you know, and the other stuffs kind of boring, it would be easy, but it'd be boring. This sounds more exciting. And, you know, this entire time I'm on this conversation, I can't pull myself out of it, which is, I don't know why you're walking me through all this. Because my plan, which to change my life, was that you and I were going to do something together. And now you're telling me that that's over? Right? So I'm trying to be a good friend, and I'm trying to listen, but all I can think is I'm gonna be a stockbroker, I'm not gonna say for the rest of my life, like I just I want to walk out into
Uri Vaknin 17:35
traffic. You're in Beverly Hills now at the number one agency in America, like The Agency, just really just takes
Mike Leipart 17:42
10 years. So, so I'm so irritated as he's telling the story. So anyway, he gets to the end, he says, Listen, I want to do the third thing, but I'm only going to do it if you come with me. But I have high praise. But I don't know anything about condos. I don't know anything about lending. Like, he goes that just be yourself. Don't, don't worry about that. Like, that's all things that can be learned. Don't worry about you're going to be great at this. So we did it. That is like November. And November, which year of 2009.
Uri Vaknin 18:18
So the height of the recession, the worst part. So
Mike Leipart 18:21
January 2010. I'm meeting you in Atlanta.
Uri Vaknin 18:24
Think about what you accomplished.
Mike Leipart 18:26
We returned well over a billion dollars more to the US government than than their current. Their projections were right. It was a home
Uri Vaknin 18:36
run forever. And sooner than ever expected.
Mike Leipart 18:39
In literally like two and a half years.
Uri Vaknin 18:41
No, but you know, what I loved about working in a meeting you like, during that time in the world, like during the Great Recession, but all these groups were buying these assets. And they had these, you know, smart kids, but like recent, you know, Wharton, there's their, their spreadsheet. They were they were spreadsheet guys, their analysts, they knew numbers. But this was the first time I met someone who not only looks like you innately understood, right? And I was like, This guy is different. Right? And he's going to go places with this. Right? And that is what I was like, between you and Jim Dow and Wade, like, you guys got it. Right. And Wade was like the dreamer. And that's what I loved about it. Like, he was like, Guys, we were gonna do this big. Yeah. And we did. Yeah. And, you know, I just want to make sure that everyone knows that I did go for the gold. Yeah, I went for the gold and I, you know, helped you guys set up your training program. Yeah. And I, you know, created we, we brought you
Mike Leipart 19:40
other places. We didn't even give you the gig
Uri Vaknin 19:42
just to teach people and use our systems and our budget and everything and all
Mike Leipart 19:47
that. And I mean, not to, you know, skip to the to the end, but so there's a great story that I love that Adam Carolla tells about Jimmy Kimmel, okay, they work together at Kmart. They were interns, okay? And Corolla talks about how, you know, it'd be there nine, and they got two left to leave it for. And that's what crolla did. And he said, you know, Kimmel would be there at like three in the morning, like working on the Christmas show, like, like he had no boundaries, right? He would do whatever anyone asked. And he didn't care. Like, he was just absorbing as much as he could, what he was as he was being an asset, right. And what I have found, and you are the prime example of this, is that when you find somebody that's an asset, you don't ever want to lose them. Right? Like so you've could have said, Oh, you're only going to give me one project, you're only going to give me three projects? Well, I'm going to do what you've asked me to do. And when it comes to everything else lose my number, right? And there are a lot of people in this world that will tell you, that's how you have to be. That's how you know your worth, you know, you got to be able to say no, right? If you can't say no, you don't know, you know, you don't know your own value. People will walk all over you. And there is a time to say no, but you have to be an asset first,
Uri Vaknin 21:13
or during the Great Recession was not a time to say no,
Mike Leipart 21:16
before proving you can be an asset. You just
Uri Vaknin 21:19
gone. Right. Right. Right. You're totally right. So
Mike Leipart 21:23
you were this huge asset. So when st was over, and I'm working with a buddy of mine and
Uri Vaknin 21:33
to St. Residential, yeah, the whole group that did the 110 there, so it's all out
Mike Leipart 21:39
there. So so that Yeah,
Uri Vaknin 21:40
how are you here today?
Mike Leipart 21:42
So Well, I mean, I'm gonna I'm gonna bring it back to you for real quick, so I don't mind that while I while this was happening. I had a friend who owned a condo project in Nashville.
Uri Vaknin 21:57
You know, that project in Nashville? You know, we don't like to call him projects, but the calm condo community Sure. Sure is going to be a play along is going to be the subject of one of my podcasts all about, you know how to change conventional wisdom on how people buy condos, because everyone previous to us, went to to sell their multi million dollar home right in Bellamy Nashville. Yes. And then buy a condo when they didn't really need to do that. But we're going to talk about that another podcast, because I love that topic.
Mike Leipart 22:26
Okay, so a, my friend had called me and said, I got this thing in Nashville. I think it's doing okay, but will you go look at it, right. So, Brian Ayers and I, I flew to Nashville, met him there and talk to the all the locals, talk to some people who wanted to sell it, talk to the people who were selling it, all that stuff. And it comes back to the being in that asset part. So when the day was over, I said, I think he had a car. There's this guy in Atlanta, right? Because like, I know what an asset you are like, and I think you ought to talk to them. And you ended up doing that project.
Uri Vaknin 23:14
All right. Yeah. Again, I was asked Do I know the national market? And of course you did well, but you didn't know. Well? Well, the interesting part was when I was an art dealer, I was very involved in the quote, Nashville market might be the Nashville art market. Sure. So there was no lie to but at least
Mike Leipart 23:34
this time you had been I've been there. Yeah. You know, so many times. Yeah. And God knows when I was on Nashville, when you're, when you were thinking about the Country Music capital of the world, you think about calling the Jewish gay guy. And like, that's the next step. Um,
Uri Vaknin 23:50
you know, it's actually kind of apropos.
Mike Leipart 23:52
Hey, listen, so, so I, I called you, you guys got involved in that? When, uh, when another friend who's the same friend, okay, buys a massive portfolio in Vegas.
Uri Vaknin 24:09
I tell them to call you and it was the portfolio that you were working on. But it was the remnants of it. It's a very small world. And the crazy thing about it was before he thought about buying it, there was a group out of Chicago that was buying, right. And their lender, which was Deutsche Bank at the time, you'd hire me to do all indirect to do all the underwriting and create all these business plans for it.
Mike Leipart 24:31
So that's it. So that's another takeaway for anyone. I mean, I gotta assume that people are listening to this podcast that there's some interest in real estate, right? So the other thing I will tell you is, is that don't have a bad day. Okay? Like always be kind. Always Be respectful and be nice because if you take nothing else away from what Barry and I are talking about, real estate, at least at this level in condo development is the smallest freaking world
Shahn Douglas 25:02
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Uri Vaknin 25:55
so just be nice. Yeah. Is that how you started with Mauricio? Oh,
Mike Leipart 26:01
yeah, well, yeah, I mean,
Uri Vaknin 26:05
and by Mauricio I mean, Mauricio Umansky is the husband of
Mike Leipart 26:11
Kyle Richards. Kyle Richards from the Housewives of Beverly
Uri Vaknin 26:15
and the aunt of
Mike Leipart 26:17
Oh, Paris Hilton Paris. Oh, yeah. I don't even think about that anymore. Yeah,
Uri Vaknin 26:22
yeah. Because you're so Beverly Hills now. Yeah. Okay. You recall when people from Oklahoma call it an okie
Mike Leipart 26:28
an okie from Muskogee, who's an okie from Muskogee.
Uri Vaknin 26:32
Okie from Muskogee. Yeah. And now. And now you're like a Beverly Hills dude. I'm literally
Mike Leipart 26:39
not, but I live here.
Uri Vaknin 26:41
So why do you do so you were in Chicago?
Mike Leipart 26:44
Well, I'm in Chicago, they still in Oklahoma, Oklahoma in Chicago and I get an email one day from a guy I don't know. Named Mauricio Umansky
Uri Vaknin 26:53
I thought you didn't know him from working on the condo building in Koreatown.
Mike Leipart 26:58
We're not even there yet.
Uri Vaknin 26:59
Um, this is prior to that. So what was this email that?
Mike Leipart 27:04
No, I was actually in LA. having lunch with a friend who was a real estate agent. And
Uri Vaknin 27:14
you were cheating on me?
Mike Leipart 27:15
Yes. And I just checked my email. And I said, some guy named Mauricio wants to meet me at one of our projects. And she worked at the same firm is him and she said, Oh my gosh, Mo wants to meet with you know me, Mauricio, you should go meet with him. So, I emailed him back. I'm going to go to the project. He says Great, great. says, great. I'll meet you at the project. Tomorrow morning.
Uri Vaknin 27:50
Community community, we don't call it a project. We call it a kind of a community. Have you learned that yet? No.
Mike Leipart 27:57
I do not call them units.
Uri Vaknin 27:59
Thank you. Thank you for calling them homes. So for for everyone who's listening. Never call a condo, a unit. Never, never, never. I did learn that. I remember when I was shopping for the course portfolio. I was in Miami. And when to know everything. And I was looking at it penthouse, and beautiful agent gorgeous agent. Yeah. And she was presenting this. It was like a $5 million penthouse. And she was this penthouse unit. And I was like, Why? Why? Why can't you just left off a penthouse? Why did she have to add the word unit? She de valued at a $2 million. For me.
Mike Leipart 28:39
You taught me that? I don't call them units. Thank you. Okay, thank you fine. I
Uri Vaknin 28:44
don't know all the other terminology, but I'm gonna have a whole podcast on my lexicon.
Mike Leipart 28:49
Great. So I go and meet with this guy that I'm told I should meet.
Uri Vaknin 28:54
It wasn't called Apex It is called concerto.
Mike Leipart 28:57
It's a project that was 70% finished in downtown LA beautiful. So I go and meet with him. And I walk in the room. And meeting Mauricio, Mo and I'm like, this guy looks so familiar. Like I can't only the handsome Dude, I can't figure out why don't you know, know this guy. And so it takes me we walk the building. And he tells me that you know about himself. And he's a huge real estate agent here in Los Angeles. And, and probably
Uri Vaknin 29:31
didn't tell that about itself. They probably like alluded to it. But
Mike Leipart 29:35
yeah, I mean, I will I mean, listen, now I was just like, well, who are you? And why am I meeting with you? And you know, it's all very transactional. And so he tells me, you know who he is, and he's a big deal. And I'm thinking the whole time like, God, dang it. This guy looks so familiar. And so we get towards the end of it, and I'm like, I this is weird, but I like I, I'm, I've seen you before. And he was like, Well, my wife's on a TV show. And I'm like, Oh my God, that's it. Like, my wife watches every episode of that, like, you know, so I put it together. And that started, we ended up taking that project rentals. So there was no opportunity to hire them to sell or hire me or anyone. Okay, like, and trust me. I know so many. That's one of the projects that so many people I know in this industry is because they were buying to sell that project, you know,
Uri Vaknin 30:39
actually think it makes a great rental. No, we did the right thing. Yeah, you made the right move with you. I think I even it was reports that I said, I even think I you stated that this would be an ideal rental there.
Mike Leipart 30:53
There were aspects about that project that were troublesome. On the sell side, that were not big issues on the red zones.
Uri Vaknin 31:02
Also downtown LA at that point, it was, I mean, downtown LA back then was not what it is today.
Mike Leipart 31:08
Well, and that that's going to come into this story really quick. So that started really nothing other than a friendship. And
Uri Vaknin 31:22
I think kind of, like you just fall in love with him,
Mike Leipart 31:24
he's just cool, dude. Right? So I would start telling him when I was gonna be in town, right. And then we would oftentimes meet at the tea room at the montage because his office was right across the street. And but he was telling me once start this new company, where he was with a different company that he was, he was we want the company we want but he was the top producer. He was the big dog there, right? But he didn't own it. So he was telling me what to start this company wants to all these things. He wants to be in development sales, what you know, all that stuff. And we probably kept in touch for eight months. And for that eight months, I tried to talk him out of that. Here's the thing. Mauricio was making a ton of money. His life was his own. He worked when he wanted to work, didn't have to work when he didn't want to after work. He had no overhead. He didn't have tons of salaries. Okay. He's living the American dream.
Uri Vaknin 32:35
Right. And we talked about it. I mean, like, truly the American dream.
Mike Leipart 32:38
Yes. And I knew two things. I knew how laborious condo sales were,
Uri Vaknin 32:46
wait, what do you mean by laborious? meeting a lot
Mike Leipart 32:49
of work. But still I work but it's kind of it's a lot of work. And it's a lot of expertise.
Uri Vaknin 32:55
It does take a lot of expertise.
Mike Leipart 32:57
So it's expensive. It's an expensive process. Yeah. But there's a lot that requires overhead and salaries and smart people. None of that necessarily required other than the agent themselves in resale.
Uri Vaknin 33:15
So explain. So this gets to the crux of everything. Okay. So you came into real estate from this. I call it developer side for lack of a better word, but your sponsorship? Oh, yeah. Yes. Your side? Yeah, you know, you're selling on site condos, which I will say is different than anything else it is. And now here you are teaming up, or eventually teaming up with this guy who does high end, resale general brokerage? Yeah, whatever you want to call it, right? Because and the reason why I bring up all these terms is because I recently found out we have listeners in Australia, or sometimes we don't understand your term. Yeah,
Mike Leipart 33:55
yeah. Well, also, my past had clued me in to all of the bad ventures with resell agents, who had tried to
34:10
exit Oh my god. This is the whole purpose of this podcast. I gotta tell you, I mean, seriously, I've created this podcast to sort of illuminate and to pull back the curtain right on this difference. So and you are highlighting,
Mike Leipart 34:25
so I was either foreclosing
Uri Vaknin 34:26
on properties that you weren't foreclosing on properties. But the group you were with were for closing
Mike Leipart 34:32
on properties, who like as a last ditch effort had hired like the top resell agent locally, never worked to try to bring some sizzle,
Uri Vaknin 34:44
right to the deal that sizzle is not unique, the expertise?
Mike Leipart 34:48
Well, you need a lot of things and because here's the thing, on one level, there is an operational aspect to selling a condominium building. Right? We have a program here and Judy's got to be there Mondays from nine to five, and Stan's gonna be there from 11 to seven, like their staffing correct issues. Okay, I look on issues well, but you need to staffing you need to have, you need that answer. Okay. And within that staffing, there's a whole nother thing, which I'm not even going to get into, which is, who's good at what? and bread, all of that stuff? Then there is the marketing of it like that. That's what's happening in that room. But then how are we going to get people in that room? Right, so then there's the marketing element, finding the right people?
Uri Vaknin 35:46
Well, that's been the hardest thing. Sometimes in marketing, you can deliver
Mike Leipart 35:49
100 people to the wrong room, but totally not gonna work.
Uri Vaknin 35:53
Right? You and I've talked about you get
Mike Leipart 35:55
out the best team in the world. And if you can't deliver anyone to the room, problematic, and not necessarily and almost guaranteed the people, the right people to be in that room are not the right people to figure out how to get people in the room. Okay, so now we got to go.
Uri Vaknin 36:14
Well, that was profound, which is take a moment.
Mike Leipart 36:18
I, you know, it takes a village to write. And the reality in our world is that there's probably, and I've never sat down and like broken it out, but there's probably like 12 skill sets that you're looking for. I think you're right. Okay, if you're really right. And your ability to make money is how many of those skill sets you can get. Right? Yeah, right. with the fewest amount of people. So you can learn a division you hire 12 P or pain to do that. 12 things you will lose money. Right. Okay. So, resale works very differently. Okay. Which is there's no need to create urgency. Everything you sell is one of one.
Uri Vaknin 37:09
So, you know what, okay? My whole mindset is how to create urgency, and you just blew my mind.
Mike Leipart 37:16
But in a home, it's all one on one, even if they're next door to each other. one's a little bit closer to this one's got a line running through the back. The other one doesn't like everything is one of one. Okay, so in resell, there's to work. There's two main pockets, right.
Uri Vaknin 37:37
Get the listing,
Mike Leipart 37:39
which that's not that's different than sell the home. Okay, true is a very specific skill set that people excel at in getting the listing. And a lot of people once they get the listing their works done. They're waiting for somebody to come by it.
Uri Vaknin 38:01
We've got to market it.
Mike Leipart 38:03
Might you'd be stunned how often
Uri Vaknin 38:06
they are. I am stunned. I am totally okay. I don't each time
Mike Leipart 38:09
there are a lot of agents in this world. I I hope none of them work at the agency that think their job is done when they get the listing. Like it'll be on the MLS. You know, it's out there. And somebody working with a buyer will find them. Okay, you, you would be stunned at the amount of people to get a $10 million listing and aren't willing to spend $100 to market it. It blows my mind.
Uri Vaknin 38:39
Okay, what's my mind? I mean, a condo building, it can do small condo building at the sell out of 10 million. And think about all the effort and resources and firms
Mike Leipart 38:50
to get involved and like all of it right, then then there the other side of it is to be a buyer's agent. Right. And you you have a person, and you're trying to find them. Uh huh. Right. So you're calling these people, some are marketing them? Some are not. And you're saying I want to come take a tour at your house and you're trying to find them? What?
Uri Vaknin 39:10
No, I never caught a tour. presentation. Thank you say you've remembered something, I remember some things you've learned. Yeah. How does always go back to that email? Are we still on that email?
Mike Leipart 39:22
Because both of the things that I'm talking to you about Ah, don't apply to selling condis got getting the listing and and being a buyer's agent. Okay, neither
Uri Vaknin 39:32
I've tried to, which is why? I've tried to tie it all together a little bit sooner than you maybe were trying to together,
Mike Leipart 39:38
which is why 95% of all resell agents who say I'm selling all these homes, maybe I can sell a condo building fail, right? Because the two primary skill sets, which is one getting a listing, or B, I'm going to find them what they want. Okay, because what happens in condo assess? are we interested in finding them what they want? Yes. But only to the extent that what they want is in our building, right?
Uri Vaknin 40:13
No great can't walk them across the street. But some of these firms, that's what they do, they get a listing from the condo building. And then they take that buyer. And then when the buyer says, Oh, this is not what I want, oh, I've got this other
Mike Leipart 40:25
listing across the street. And that's, if not illegal, at least improper?
Uri Vaknin 40:33
If not, if I do, they're not representing the fiduciary responsibility of their seller. Bingo.
Mike Leipart 40:38
So listen, I you know, way, way, way back in the day when I got of all the licenses, I got to be a stockbroker one was an insurance license. And, and I remember specifically, if you work for an insurance agency, this is different than being an insurance broker. But if you were in the employ of State Farm, your obligation is not to your client,
Uri Vaknin 41:08
State Farm. If you feel like you want to sponsor this podcast, feel free to
Mike Leipart 41:14
your responsibility is to say farm. Right? So if if you call me and you want a team quote on 10 year term life insurance, I am to give you the State Farm quote, right, I might know
Uri Vaknin 41:30
that there's cheaper, right, we can say that.
Mike Leipart 41:34
I don't, I'm not a broker, I work for them. My job is to show you the State Farm and that's it. That's it, right? condo sales are a little bit like that. Now, you taught me I'm going to give me credit. I chose an old man, right? I'm gonna give you credit for this. I'm not I might be overstating it a little bit because some of its just saying he may not deserve all the credit some
Uri Vaknin 42:00
was here first and then we'll decide
Mike Leipart 42:02
okay. You cannot effectively do that. If you don't know what all the other offerings are, of course, okay, so I would take credit for that. Okay, so if they're if they're debating between a three bedroom and our product and a three bedroom somewhere else, there's no way you can pick that apart and tell them wire RS is better if you're gonna net the other one. And the other one that was well and let me just say to all your listeners listeners that this is an appropriate podcast for you to have. Because you are a freak show. When it comes to this, you really are the condo expert. Okay. And and I prefer kind of artists, what a condo artist, but I can give multiple stories, but I will. I'll share one. So I called me one time and said, Hey, we're looking at this project in Daytona, Florida.
Uri Vaknin 43:05
No, Daytona. It was Panama City.
Mike Leipart 43:10
No, this is that's a project we had. I don't I'm talking about our project we all remember, I go there's this project in Daytona, Florida. Remember, there's no reason for you to ever be in Daytona, Florida. There's no reason for you to know anything about Daytona Florida. But if you can just make some phone calls. And like, come up with some basic ideas. I'd like to hear Okay, Uri knows everything about this random project in Daytona, Florida, and then follows up by sending me voicemails of recordings he made to himself when he toured it like two years prior. For no reason. There was no reason for you to be recording that information to know these things. Remember the stuff out this? So I'm just telling you that if it hasn't come out yet, and it will you are a true weirdo when it comes to all this stuff. Because you're interested in on it in it on a level that no one else I've ever met
Uri Vaknin 44:31
with what we call a condo artist.
Mike Leipart 44:34
I'm just saying it's weird.
Uri Vaknin 44:38
Weird, but I appreciate it. You know? If you're if you're gonna do something in this world
Mike Leipart 44:45
100 100%
Uri Vaknin 44:48
otherwise you're not gonna enjoy doing it every day. I wake up every day like excited about the day
Mike Leipart 44:53
if Listen, if I you look at the wealth, where wealth is created. It's almost always created with passion. Okay, like you can get into corrugated metal. And if you're crazy about it even become a gazillionaire I do like some corrugated metal.
Uri Vaknin 45:18
I'm
Mike Leipart 45:18
just saying like there's not there's not there's no space in the, in our economy in the world, that if you become the best at that one thing, there's not ridiculous riches.
Uri Vaknin 45:32
You know, it's funny when I was 11 years old, my dad's cousin who was like my uncle to me, you're gonna talk about corrugated metal? No, no I would not have found out Okay, so he was in real estate, and he was living in Rhode Island. And he was he originally started like buying old dilapidated houses. And then eventually he went into building new stuff. And at the age of 11, he said, Henri, you have the gift of real estate, you need to get real estate. I did it for many years. Yeah. And then finally, when I was about, in my late 20s, he was like, Uri, you really need to do this. This is where
Mike Leipart 46:11
I agree, I, by the way, I can't really imagine you. I know that you are incredibly capable of doing a lot of things. And that's a curse. Right? Like, I, I think there's a lot of things I could do that now there's a lot of things I can't do. Like, there's things I look at, and I go, I wouldn't even know where to start. But there are a lot of things in life I go, I can do that. I can do that.
Uri Vaknin 46:40
Mike, you are one of the few people in this world, who I feel like within my own industry, that I've continuously learned from, and I say that not to, to blow up your head. But like, in life, like you look for those people. You know, you can be surrounded by people who you work with, and you work great with. But the goal in this, like when you're passionate about something is to continuously learn about what you do that you love. Right?
Mike Leipart 47:08
Well, listen, I thank you, I don't want to totally denigrate your your compliment. But what I would say is that there has been great freedom in getting in this business when I was 40. And not 20.
Uri Vaknin 47:30
I agree with that, actually, that totally
Mike Leipart 47:32
okay. I'm 51 now, but uh, I don't know that I'm like, I don't believe that I'm bringing anything special to the table. What I do think is I'm bringing on a whole bunch of life experiences to the table. I bet a lot of
Uri Vaknin 47:50
people don't it's I totally disagree. I haven't had I totally disagree with
Mike Leipart 47:54
or, or let me just say this, or the fact that I don't take anything so seriously, you know, you did like a hand and vision a
Uri Vaknin 48:03
different way. I know you say that. So seriously. You say like you don't give a you know, yeah, and all that kind of stuff. But actually, you do know, you know, I? First of all, I want for the woman I met you, I knew that you had an innate understanding of what this was all about, and how this was different. And how within the realm of the real estate world, like selling condos, is so vastly different, and the expertise, and that was required to do this.
Mike Leipart 48:37
I agree with that. And obviously the last 10 years of my life when I've tried to execute on that tried, well try as I've executed on that. I have infinitely learned that to be true. But let me say this. Here's what I was good at before, and what ended up being applicable to this. Okay, which is everyone loves a story.
Uri Vaknin 49:07
That's my whole philosophy life. It's like people, you can talk facts and figures all day long. But until you can tell a story that people can relate to. It doesn't matter.
Mike Leipart 49:16
It doesn't it doesn't stick. I I knew I've known. I've benefited from the fact that I've understood from a very young age that facts and figures only substantiate an emotional decision. Right? And now it's like, it's like scientifically proven and all that stuff. But But I did understand that at a much earlier age, right? That we are all emotional animals. And then we use the facts and the figures to substantiate what we've decided emotionally. Okay. So what And I was a stock broker for 16 years, okay? And the same is true. Okay? Like if I said, Hey, I want you to buy XYZ stock, okay? And they go, Okay, why? And there needs to be a story, right? It's either the
Uri Vaknin 50:20
stock is so different than your home's not.
Mike Leipart 50:22
No, it is no, but hold on, listen to me if I said, Well, I just think it's good stock, you'd be like, well, but if I said, Hey, listen, they got a new new thing come in, and we're getting in on the ground floor, or, hey, listen, they have all this cash on hand, and they're going to be able to acquire all their competitors. Like, if there's a story there, right? And I tell you that story, and you feel like there's only 100 people that know this story. Like I just told you and my my other clients are going to know but not everybody understands this imbalance that I have figured out. Okay. You need the story.
Uri Vaknin 51:01
Everybody needs a story. Yeah. Okay. Okay. That's the whole thing. And
Mike Leipart 51:05
so the thing that spoke to me so much, and that I didn't know that I would love so much about condos is great condo projects have a story? Yep.
Uri Vaknin 51:18
Okay, well, you did. Or you make you make a story. Okay.
Mike Leipart 51:22
But But you don't think I'm making Yeah, it's that that's the thing that drives me crazy. When people like, you sell. Patrick story. If we make up a story that isn't true, it won't work.
Uri Vaknin 51:36
But if you are on the ground floor with the developer, the architect the landscape to whoever it is, and you and the designer, and you are helping to craft that story, you can illuminate that and bring that to life for the buyer. It's,
Mike Leipart 51:50
it's the most fun thing on earth. And, and, and, and, and I'm not going to listen, I'm not gonna, there's so many things we could talk about that I actually think for certain people would be interesting. So I'm not going to spend a lot of time, you know, promoting us. But there is one building though
Uri Vaknin 52:09
you, but there is one of the agency because you are the agency, but I do
Mike Leipart 52:13
want to share this because it's germane to what we're talking about. Big word. So we have a project. Yerba Buena Island. It's our love. So, before I knew you guys had that project, yeah.
Uri Vaknin 52:25
You know, like, I'm on every real estate, you know, list and everything. And they were sending me stuff. And I was like, Oh my god, this is this is paradigm shifting. I mean, this is something that no one has done in 50 years.
Mike Leipart 52:41
Listen, I'll be the first sale, I will never get to work on another project like
Uri Vaknin 52:47
this. It's the sea ranch of San Francisco,
Mike Leipart 52:53
or star Island
Uri Vaknin 52:54
or Ireland or Fisher Island or whatever, whatever you Whatever it is, it is a thing that like people are going to go back. You know, watch is completed in 50 years rounds and use it as that case study of how things changed.
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Uri Vaknin 54:08
So Yerba Buena Island. Yeah,
Mike Leipart 54:11
so I get a phone call one day from a girl who had been previously who said we're looking to hire a firm to help us settle a debate. Okay, we have we have a project that there are two owners and we cannot decide on which direction to go from here. Would you be interested in making a proposal for that so great. I call my guy in San Francisco. Works for me and say what do you know about this? Why bi he flips out is like it's not, you know, Bo blah. So we want to do this. Yes. So we respond that we would do it, we give them a price. They say, Great, we fly up there we set in two days worth of meetings where everyone involved at that point in the project kind of tells us where it's at. And then they say to us, we want you to come back and tell us what we should build. We're not going to tell you which side we're on. And we're not going to tell you what we're thinking. If you just came at it, how you're coming at it, what would you build there. And what we didn't know is that there was one side that was wanting to be very exclusive, and build like $20 million homes on it. And then there was another side that was gonna make it very dense.
Uri Vaknin 55:56
Okay. And two ownerships,
Mike Leipart 55:59
2 ownerships that owned this project 50/50.
Uri Vaknin 56:03
You're in a tough spot.
Mike Leipart 56:04
So write it well. We're getting paid a fee. That's it.
Uri Vaknin 56:10
Not that tough of a spot.
Mike Leipart 56:12
Okay. That's it. So we make our report, we go up and present it, we leave. Did you give any anticipation that you would actually sell this project? No, no, not at all.
Uri Vaknin 56:25
And they hired you because you were the agency? Correct? I mean, the name of that name has a lot to do with a lot of things. Well, the thinking was,
Mike Leipart 56:35
some people knew us and had worked on a project with me previously. And we were the one firm that they thought could argue why there could be 30 $20 million humps there. guide as we sell lots at 20 million.
Uri Vaknin 56:55
Right, actually $200 million.
Mike Leipart 56:57
Well, but So,
Uri Vaknin 56:59
I mean, those are outliers. Well, I've been watching American playboy, you know the story. Yes. Hugh Hefner? playboy. Yeah. You guys actually in there. We sold that. Yeah. You saw the Playboy Mansion for 200 million. Hundred 505 million. With an old man living in it.
Mike Leipart 57:19
Yeah, yeah. Yeah.
Uri Vaknin 57:23
I mean, that's,
Mike Leipart 57:24
yeah, no, I listen. We we saw some amazing stuff.
Uri Vaknin 57:30
Yeah, you guys.
Mike Leipart 57:32
Yeah. And we haven't even gotten back to me meaning mo which, but maybe that's
Uri Vaknin 57:37
Episode 10. But we'll
Mike Leipart 57:38
we'll get to that. But so will we. I hope I want us
Uri Vaknin 57:46
Yerba Buena Island
Mike Leipart 57:47
I want us to finish some things. Okay. Cuz my brain starting to overload with all the things I need to tie back together
Uri Vaknin 57:54
and all the things that you've done, right. But that's,
Mike Leipart 57:57
I don't look at it that
Uri Vaknin 57:58
way at all. I do it from afar. I'm okay. Like, I was great. I bow down at the altar. That's,
Mike Leipart 58:06
that's great. I don't find any of that. So we go and we present this thing we say, here's how many units we think we use. Whoa, how many what how many residences? Okay, maybe you should build and here's the price range. Okay. And here's the product type, we think would work. Okay. And it's just we're not getting nods. We're not getting these, like straight face. Yeah, they're just like, Okay, great. Thank you for your information. And we leave
Uri Vaknin 58:39
here just have you got paid a consulting fee? 100%. Okay. Yep. So money is it's also I taught Exactly.
Mike Leipart 58:45
Okay. But we've done an enormous amount of work and we've kind of fallen in love with the thing you ever went. Okay, now, it's all over that
Uri Vaknin 58:54
during that period. I mean, a beautiful bridge that goes overhead. No, it's just
Mike Leipart 58:58
it's, I mean, everything about it. No.
Uri Vaknin 59:00
So I said come once, you know, like a century opportunity and major city
Mike Leipart 59:05
well, and I had said that to them to which I didn't even get a nod in the room. Okay, you know, it's very dry. So we deliver the report. We don't necessarily get any feedback one way or the other. We leave go out of monks are bad in our lives.
Uri Vaknin 59:23
Okay, we can pretty exciting lives. Yeah.
Mike Leipart 59:26
Seven months later, I get a phone call from Chris Meany. Who is the principal at Wilson meany. Which is one of the two people that on this piece of dirt. I said nice piece of dirt. Not the person who hired me.
Uri Vaknin 59:46
Oh, it's the opposing group that yes. Okay. Got it
Mike Leipart 59:50
never spoke to him in my life.
Uri Vaknin 59:53
Okay, crazy. If you're listening to this, I hope you are happy. Well
Mike Leipart 59:58
listen, my love affair with Or my obsession with Chris meany is well documented and other places. He's my very favorite developer in the history of the world. So I'm not speaking out of school here. Do you have the
Uri Vaknin 1:00:12
project or not? We do that by area. He's your favorite. No, he's
Mike Leipart 1:00:17
just the best dude.
Uri Vaknin 1:00:19
Ever. That's awesome.
Mike Leipart 1:00:21
I know. He really is. I mean, like, when and not my kind of dude. Like he's in the him and I didn't really golf. He does not.
Uri Vaknin 1:00:30
Yeah, I think I like you crave
Mike Leipart 1:00:32
you, but I think I like you. He is. He's up here. And I'm down here.
Uri Vaknin 1:00:38
Knowing my listeners can can visual.
Mike Leipart 1:00:41
Okay. So, you know, he knows great art. He plays the piano. He's from San Francisco. Like my type of dude. He is like, the most one of the most refined people I've ever met. And I live in a gutter. Now you do not. And but I admire him so much that we have developed a relationship. But I get a weird. I get a phone call from an number. I don't know in San Francisco. I answer It's
Uri Vaknin 1:01:12
him. But you entered a phone call, you know, a number Yo, no, that's rare.
Mike Leipart 1:01:16
It is rare. And I he said hey Mike this Chris Meany. We found a lot. And we've done a lot of work since we met with you last and we're gonna go forward and it's pretty close to what you pitched. And you want to work on it. Wow. And that's how we got hired.
Uri Vaknin 1:01:39
Wait for what do you pitch? Lucky again reveal is that are you can you not reveal it?
Mike Leipart 1:01:44
No, I Well, I can because it's out there. Now.
Uri Vaknin 1:01:47
I've seen the right promotional materials.
Mike Leipart 1:01:50
So it is a mix. There's a mid rise condo. That gives us simple warms my heart warms my heart that is incredible. It sets kind of on the East Bay Bridge, right? When you hit the new bridge or the old bridge, the old bridge, living the new bridge. So it'll be gorgeous in and of itself. The nighttime views
Uri Vaknin 1:02:14
and then you'll see Salesforce tower from there. Unbelievable.
Mike Leipart 1:02:17
Oh my god. And then every other townhome or or single family home that exists on the island. You see San Francisco. Wow. Okay, so you get the Golden Gate Bridge, you get a view of San Francisco that if you lived in San Francisco, you don't have Right,
Uri Vaknin 1:02:35
exactly. Okay. You can't see yourself.
Mike Leipart 1:02:37
So it's 240 odd. residences or homes. Thank you.
Uri Vaknin 1:02:45
Thank you. He did not say unit for the listeners. He did not in mark this
Mike Leipart 1:02:50
time, there's five miles of trails. Wow, unbelievable. elevation changes. It's so with a real Island. We it is a real Island. So we've gotten to work on that for the last three and a half years. That's awesome.
Uri Vaknin 1:03:07
And that's like a dream project.
Mike Leipart 1:03:08
Right? I'll I can quit now. I'll never work on something else like it ever. Okay. The amount of people like I talked about earlier about flying town and landing and go into a room and there were 15 people in the room in the room. At times, we've had meetings, are there 50 people in the room? Okay, everybody representing one specific thing about the project, but having these massive meetings, which I've never seen another developer do, so that we don't do anything without everybody weighing in.
Uri Vaknin 1:03:48
Or sometimes, I mean, if they're good people can be right, we call them charettes back in the day, right?
Mike Leipart 1:03:53
But this was something else, like in real time. You're coming up with an idea or engineering telling you whether it's possible. Other people are pricing it out. Like I I've never been a part of anything like it and I never will. Like you'll never be able to take over a raw piece of land that has that kind of elevation change that. Like
Uri Vaknin 1:04:22
how do you get like, I mean, this is like one of the last great pieces of real estate and one of the great cities in the world so well it takes Conan's
Mike Leipart 1:04:33
Kahunas and a lending money. But you also and this is one of the other things. And again, we don't need to get into this today. But one of the reasons that one of the detriments to real estate development, his real estate is primarily developed now by fans. Right, right. It's true. And their timeline is seven to eight years. Right? Right. So if you can't deliver it Get out of it in seven or eight years, don't worry, I'm not gonna do it. Right. This is a 20 year process. Right? So it's just, it's just, it's different. I don't in any way think that it is resort type development in an urban setting. And I'm under no illusions that America to do that again. Like, I know, I'll never get to do that again. So let
Uri Vaknin 1:05:34
me ask you a question. So, you know, here your agency, you sell these, you know, 20,000,200 $5 million, you know, rise is incredible condo communities. But it's not gear, but when Island like, is the average person ever gonna be able to experience that?
Mike Leipart 1:05:53
Well, it's it's public, is it's not a gated community. Let's start there. Okay, so anybody can get in their car and drive over there or get on a ferry is any requirement for like market rate housing or affordable housing or?
Uri Vaknin 1:06:10
No? affordable? I mean, San Francisco for
Mike Leipart 1:06:14
Well, I mean,
Uri Vaknin 1:06:15
yes. So affordable housing is not the right word. Right? attainable housing is what I would just say,
Mike Leipart 1:06:22
I would say, Yes, we will be offering a product that is at the average prices of what product in San Francisco first. So what happens is, is that something sells for $1. amount, okay, condos, sells for a million dollars. All right. And then every California by the way, and then every developer in the world, every person who owns land, buy that condo, okay, or home says, Oh my gosh, values are really way up. Okay, so they raise the price of their piece of dirt or home. Okay, and you can say dirt. And then somebody comes in and buys that piece of dirt. And then they go through the labyrinth of issues that it takes to get that entitled to be in condominium.
Uri Vaknin 1:07:27
I mean, I know what it means. But for the sake of our listeners, what does that mean entitled.
Mike Leipart 1:07:32
So what that means is you have the right to build 40 from the gondola for the municipality for whatever, hundred units or 500 units, whatever it is. Okay. And that process is entirely too hard. In most municipalities, and in certain municipalities like salonica have Los Angeles, it is damn near impossible. It's
Uri Vaknin 1:07:54
Hollywood, Santa Monica, Beverly Hills. I mean, it just goes on, it's
Mike Leipart 1:07:58
very, very hard. Right? And it can take you years. Okay, I think the average is in modern, if you had like, four and a half years, I was gonna say four or five years. So you have to have extremely deep pockets to start that process, right, and very patient investors and Capital Partners.
Uri Vaknin 1:08:22
So then you go to understand what you're trying to do.
Mike Leipart 1:08:26
Yeah. So then you go through that process, and you spend all that money. And that's a lot of money. Okay. And then when you get out of that process, you've now you know, what you spend for the air, you know, you spent with the process, you get quotes on what it'll take to build it. And regardless of what your idea was, when you started, you will find at the end, the only way you can make $1 is to sell ultra luxury real estate
Uri Vaknin 1:08:59
on one end.
Mike Leipart 1:09:01
But there is no other end.
Uri Vaknin 1:09:02
Right. So here's the problem. He This is the ultimate problem and all of this, right? Is that so you have the high end that you need to do in order to make this work. Right. Then you've got what you're required by law, municipality, governmental agency, or whatever it is to create the attainable, quote, affordable component, right. And the big thing that is missing in today's market, whether you are in Tulsa, Oklahoma, or your New York City, or San Francisco, is what I refer to and what my dear friend, Ryan Ravel, who is an urban planner architect who already know where you're going with this. Yeah. Is that middle housing?
Mike Leipart 1:09:50
I know I call middle housing
Uri Vaknin 1:09:52
real people. You're right. Exactly. It is real people right now. So coming out of there's no development
Mike Leipart 1:10:01
Development for real people's all be known in the suburbs, right, with cheap land and cheap housing and easy permitting and easy permitting. And there's no one housing being made for real people in urban centers. So
Uri Vaknin 1:10:16
this is the big conundrum. And this is where this is the great divide in America right now. And coming out of COVID. You know, and you and I, offline have talked a lot about, you know, what the world real estate wise, coming out of COVID is going to look like is, how do we achieve these, these demands of the market coming out of COVID? You know, where, where people don't want to live in the suburbs? They do want that kind of lifestyle. But you know, there's just been this fear said insight into them about, you know, dense living causes infection. Right. Right. Right, which is not, you know, I listen to a great podcast is thought about, you know, density living, it's about is that that density as much as it's overcrowding.
Mike Leipart 1:11:07
Well, listen, that, again, is a totally different thing. But here's what I know about COVID. Now, next part, just what I know, it's not this magical thing,
Uri Vaknin 1:11:27
right? where,
Mike Leipart 1:11:28
like, like, we don't know how we get it.
Uri Vaknin 1:11:33
Like, we licitly know how we
Mike Leipart 1:11:36
know how we get it. Okay. And we're gonna get through this on some level, and there'll be another thing. Okay. Oh, and there'll be something else. So I do think there are aspects of COVID that we're going to carry with us, right? forever. Right? Like, I'm not a germaphobe. I'm not a guy that wash my hands all the time. I never thought about wearing a mask yet, you know, and we are going we will not erase this experience. No. But we will also not change who we are right. Going forward, we will synthesize this in some way that makes sense for us in the future.
Uri Vaknin 1:12:31
Right.
Mike Leipart 1:12:32
I will say that, historically, condos to try to remotely keep this on topic remotely. condos have sold based on their neighborhood.
Uri Vaknin 1:12:51
It's based on the whole lifestyle,
Mike Leipart 1:12:53
but hear me out. Okay. It's it's been like, you can take less square feet.
Uri Vaknin 1:13:03
And live here, efficient square footage. But think about
Mike Leipart 1:13:06
all the things you could do if you lived here. Right. Right. And that's not just the common spaces. That's the neighborhood it's within. Right. So condos have always been fairly dependent upon the neighborhood they were in.
Uri Vaknin 1:13:23
Right, right. If people wanting to live back in I want
Mike Leipart 1:13:26
to walk down the street. I want to go that restaurant. I want to do this. I want to shop here I like and I can do all that without getting in my car. Yes. Okay. That's not going away. Because that is a basic human nature need. We all need to connect on some level and we all need to feel a part of something,
Uri Vaknin 1:13:53
especially for young people. And then the empty nesters retired folks.
Mike Leipart 1:13:58
Yeah, well, I say young and young at heart.
Uri Vaknin 1:14:07
Well, that was an in depth episode. But listeners out there, Mike and I actually talked for several more hours about condo development, marketing and sales. And if you're interested, maybe we'll revisit some of those conversations in future episodes.
Mark Bunton 1:14:24
You're right or a that was a great wealth of information that we just heard. You know, one of the things that stuck out to me more than anything, was the freak show comment. Freak Show it Mike obviously knows you well.
Uri Vaknin 1:14:37
I didn't expect to be caught a freak show in a podcast but it was all in fine, but you know what he's right. We are freaky about what we do because we love it. And we do it with passion. As always, thank you for listening. And please reach out to us by email. At condo artist all one word@gmail.com calm. Thank you very much.