Join us on a journey to see how Scott Wadler took the Miami real estate market by storm leading the way in financing deals over $350M. Get an inside look at how he thinks, the state of the market, debt and equity placement, structured finance advising, and much more. Learn how to achieve hyper growth in your real estate career by following a few guiding principles for success.
Join us on a journey to see how Scott Wadler took the Miami real estate market by storm leading the way in financing deals over $350M. Get an inside look at how he thinks, the state of the market, debt and equity placement, structured finance advising, and much more. Learn how to achieve hyper growth in your real estate career by following a few guiding principles for success.
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David:
Hey everyone, this is Dave Bitton, co-founder and CMO at Door Loop. Today I'm going to be hosting this podcast and I am super, super excited to be welcoming my very good friend for almost two decades now, Scott Wadler onto the show. So I've been very close friends with Scott for almost 20 years now where we met at the University of Miami, Go Canes, and honestly, he's been one of the hardest working and most successful people I know. And I think partly it's because of his work ethic, his deep passion for real estate and he just genuinely caress about helping people and solving problems in general. And he has one of the most impressive track records in the real estate industry, especially Miami overseeing institutional grade residential and commercial property transactions, debt and equity placement, structured financing, and especially in condo developments and hospitality. He is the one size fits all. He could do it all. He's amazing.
So he's also currently the managing director of the Miami office of Berkadia and was at HFF for over a decade and he's done transactions ranging from 10 million at the low end to 350 million plus with I think a deal closing soon, 350, 400 million. And you could just Google his name or look him up on LinkedIn or The Real Deal and you will see what I mean and a lot of the previous successful deals that he's done. And he also initially got his start as a market and financial analyst for the Related Group of Florida and of course UM business school grad, Go Canes.
So today we're going to discuss Scott's journey, the state of the market where we think it's heading, how to get involved in real estate, how to sort of replicate Scott's success and journey along the way in the last two decades, advice that he would've given himself. Financing, growing your own portfolio, work ethic, working with banks, and really so much more. We're going to cover a lot today. So Scott, without further ado, thank you so much for joining us in person in our Miami headquarters.
Scott Wadler:
Pleasure to be here. Love it. The new Door Loop HQ growing by the day is a lot of fun. We're all grown up. Known this guy since he is a freshman in college and I don't know, it's a new chapter.
David:
It's funny you said college because actually that's exactly where I wanted to start and get into because for everyone listening, we knew each other from college. It's almost 20 years, man. Isn't that crazy? 18 years.
Scott Wadler:
Nuts.
David:
So when I was thinking about doing this podcast with you, I was thinking about the college days and we had a lot of fun in college obviously, but you were always one of the most professional, I guess organized people that I remember from college that always knew what you wanted to do. So in college you always had that real estate internship with the Related Group and then after college you were one of those only few people who had a job lined up and it seemed like you always knew exactly what you wanted to do in life and specifically in real estate. So my first questions are how did that happen? Was it because your dad was also in the industry?
Scott Wadler:
Yeah, I'd say partially. A ton of credit to my dad, leveraged his relationships to kind of get my foot in the door, which is kind of how everyone starts out. And I think I just genuinely had a passion and was drawn to the business as a result of Miami being such a burgeoning city with so much potential. We didn't live in Brickell at the time. Brickell was really just a workplace financial district. Sleepy at night.
David:
Yeah, lots changed.
Scott Wadler:
And started to go to Brickell relative to interning there. My dad's office was there and watched it grow building by building, really falling in love with what I'm able to do now, which is we're doing loans for all types of commercial real estate, but a large segment of what I do is raise construction financing for some of these big towers and large projects.
And when you're able to play a small part in impacting the skyline and watching the city grow up, it's fun and it's visible and it's tangible and I got really lucky to get involved with it at a young age and I figured out that as opposed to going back to school to get a graduate degree or move to New York to cut my teeth for a number of years, that really the best way to get tenure and get your foot in the doors at an early age and to just ride it. And so putting your head down and working hard to learn the skillset and do what you've been doing for so many years without gaps or stops or transitions was critical to being able to get ahead of the game a little bit.
David:
So I know your entire history, but for the people listening in, kind of give them a one two minute summary on your entire career and work experience from college up until today.
Scott Wadler:
Sure. I was actually an accounting major at the recommendation of my dad and you and I met in business school and definitely didn't... Actually, UM, University of Miami didn't have a real estate program until I think a year or two after we graduated, which they only had a select number of courses on real estate. Since then, I've tried to do my best to stay involved at school and influence the real estate program, which is now a real major, but they didn't have it then. But was still working real estate, had my first internship with Fortune International, Edgardo Defortuna and team, an amazing developer and brokerage firm, brokerage house in our city and all over Florida really. And then worked at the Related Group and kind of used that experience to sort of build relationships at a young age. And then what I would say is it always takes, even though those were jobs, roles, they were internships and so that wasn't kind of a full-time position.
But we graduated in 2009 when the great financial crisis was sort of bearing down on us, people were understanding the impacts of it by the end of '09 and '10, which is about the same time I joined HFF, which is now merged, is now JLL Jones Lang Lasalle, but HFF was a publicly traded boutique real estate investment shop and I had a mentor and boss by the name of Manny De Zarraga who really gave me my first full-time analyst position and the ability to get my foot in the door at a young age. And I think it was because of the relationships and the internships and he was a UM graduate, but you just got to be in the right place at the right time and you have to be very thankful for the people that kind of pay it forward who give you an opportunity to get a start.
David:
And it sounds like now you're paying it forward back to UM.
Scott Wadler:
Trying. Yeah, trying be involved at UM. We've hired a number of UM graduates, at least three, a number of UM interns over the years and you of course grapple with, you look at a resume and you want people to have qualified experience, but yet you have to remember that someone gave you the opportunity when you had pretty much no experience. So that's always-
David:
I'm going to fix your mic and put it a little bit closer to you. There you go. Yeah. So I wanted to jump into a quick discussion on the state of the market today when we spoke offline, you said it's a hard market today, lofty and full. I have no idea what that means. So what does that mean?
Scott Wadler:
Yeah, I don't know if I would use those words exactly. I would say the market, it's long in the tooth, meaning that we've had a great run for the last seven, eight years. COVID with a little bit of a hiccup, but there was a very sharp bounce back. Miami in particular has been a shining star and has been very strong, but interest rates are creeping up on us daily, very quickly. It's what I spend most of my day over the last few months talking about. And it's really the difference just between for property managers and owners alike, it's really just how you secure your portfolio. And the difference between having fixed rate or floating rate debt right now is everything. And the people who were forward-thinking and locked in fixed rate financing early are certainly not regretting it today.
And then those who have floating rate debt are dealing with hedges and interest rate caps that are expiring on them and they are, it's a daily mark to market and we really have only had rate creep in one direction over the last year or so, year and a half. And it's impacting a lot of property cash flows and it's eroding NOI and debt coverage, which is really challenging. And so we are figuring out different solutions on how to refinance assets, whether it be through lower senior leverage and a layer of preferred equity or just outright selling the asset in order to get some relief from a property owner or seller. But every situation is a little different and I would just generally say it's an interesting time to be in commercial real estate and there's kind of the haves and the have-nots and it's as simple as... Look at residential real estate, right?
There were unbelievable mortgage rates. I think literally yesterday I just read that mortgage rates are the highest they've ever been, period. And so-
David:
Ever in history? No, they've been higher for sure.
Scott Wadler:
Well I think then it was in-
David:
The last two decades or something crazy.
Scott Wadler:
In the last couple of years. But with mortgage rates where they are today, if you bought a home 24 18 months ago and you were able to lock in two and a half, 3% debt, you're all in P&I taxes insurance, you could obviously have afforded to buy a much more substantial home. You and I were super fortunate to be two homeowners in the last few years, but there's a lot of friends and folks that I know who didn't make that move and are watching and are now paying top tier rents and are basically paying monthly rental income that is larger than most mortgages if you locked it in a year ago. So it's just sort of a little bit of a fork in the road. And again, it's an interesting time to kind of be in the industry.
David:
When you say floating rate, teach me something, that's the same as an adjustable rate mortgage? It changes after 3, 5, 7 years, like a 7/1 ARM, 10/1 ARM? That's what that means?
Scott Wadler:
Effectively. Yeah, I mean you could take out a floating rate loan in whatever term you want, but effectively you are floating over whatever index you're floating over, whether it be treasury rate or SOFR, which was previously LIBOR. Or you're locking in either via a hedge, a swap or through just a balance sheet fixed rate over treasuries or whatnot. So it's you fix at the data close or you float at the data close and you deal with the kind of benefits or not.
David:
So speaking about hedging, how can someone hedge their risk against rising interest rates that just keep going up lately?
Scott Wadler:
When you would make that purchase, you would buy a hedge, you would buy an interest rate cap, and that could be... It's just a derivative product and it could be for any term you wanted. It could be a one-year cap, it could be a three-year cap. When SOFR was five basis points, you could have capped it at 50 basis points, you could have capped it at 200 basis points. So it's all... And obviously there's a varying cost, a substantial cost to doing one versus the other. So it's all about how you hedge your risk. And people felt great for the last year or so and they may not have even felt that maturity yet, but they know it's coming. And to price out a new cap today on, I'm making this up, but on a $50 million property, they're buying a new interest rate cap on their $30 million mortgage.
It could be $300,000, it could be over a million dollars. And so that needs to come from somewhere. And when you've got debt service and you can't just... You either capital call your investors, the operator kind of sweeps net cash flow prudently on a monthly basis or quarterly basis in order to cover that cap knowing that it's coming. Or they have this big balloon and they have this realization where once that interest rate cap matures, the all in coupon will go from 5%, let's say to eight and a half because rates have just crept up over time. So like I said, there's that fork in the road where they've got to either sell the asset or they've got to purchase a new cap or they've got to convert as quickly as possible to fixed rate financing. The problem is it's not that easy to go get fixed rate financing if you have a fully levered mortgage.
And so there were a lot of people who bought deals and it was easy, liquid and comfortable to borrow a 70% loan to value, 75, 80% loan to value. And so unless you've had substantial rent growth or signed an unbelievable lease with a credit tenant or done something, chances are you've had rent growth. Everyone's experienced rent growth, whether it be on the commercial side or the residential side, but expenses are also up and that's something that you don't see and manage for your clients every day, but payroll's up and turnover costs are up. Insurance and taxes are two of the biggest non controllables.
And so there's a lot of property out there where rent growth has outpaced, but so have expenses and widening and cap rates are now wider. And so you can't go and refinance the mortgage that you have today with fixed rate financing. There's generally, on most properties, a cash in refi. And so people are having to take money out of their pocket to pay down the mortgage based on where fixed rate mortgages are today and effectively rightsize the deal. And the people that don't have the liquidity to do that are sort of forced to sell the asset or hand back the keys.
David:
To the lender, got it. So I'll tell you, I'm learning a lot in the last five minutes, I did not know any of this stuff. So I'm assuming some of our listeners will probably feel the same. So it seems like if people are trying to get larger loans, mortgages than normal, especially in this commercial world, it probably helps them and pays for them to go find an expert like you to go do it for them because you know all the different methods of doing it, you can get creative. I mean just in the last five minutes, I would've never known any of this stuff if it was me.
Scott Wadler:
Listen, we have our team is really well versed across different asset classes. I would say generally speaking, it pays to run a process. There's plenty of deep pocketed clients of ours that have their go-to banking relationships and are willing also to sign recourse, which is recourse versus non-recourse can get you better leverage, it can get you a better rate, you name it. But I would say right now there's a massive shakeup because of the illiquidity in the market. And so we've got clients who we love and want to work with and speak to, but they're just so well banked that we've really never had the opportunity to do business with them. And they're calling us now and saying, I think it's time we test the water and maybe open our doors a little bit, create a new banking relationship and spread it out a little bit.
And having one go-to banking relationship is great as long as they're there. But what we're seeing right now is a real liquidity crunch, particularly with the banks, mostly like the national banks. A little bit less so, but still some with the locals and the regionals. And you've got to have diversity. You can't put all your eggs in one basket with anything. And so Berkadia is an advisor that basically sources debt, equity capital, and we go out to the market and we are constantly on the forefront of finding new lenders, both private and public bank lenders, balance sheet lenders, private bridge lenders. And we kind of pride ourselves with being able to effectively source any type of financing for any type of deal. It's just a function of cost and leverage. I may not be able to hit your leverage rate combo, but I could tell you what is market and I could kind of show you a menu of options depending on what's available. And I'm only as good as what the market's willing to offer.
David:
So you mentioned not putting all your eggs in one basket, and it was a question I wanted to ask you earlier. So most people, if they're doing numerous deals, they have a relationship with one bank, is that usually correct?
Scott Wadler:
I'd say one or a few. A few go-to sources. And by the way, we have some clients that rely on Berkadia and come to our team for every deal, and there's benefits of doing that and they always are able to get the best that market's able to offer. They also are kind of our preferred relationships when we're going to source an off market deal or have a piece of land for a developer or we have an off market sale, we're able to bring it to those folks that we trust and do business with us. But that's not here or there. But yes, I would generally say it just depends on the type of client. They can either trust in their go-to banking relationship or they can use an advisor or both, selectively.
David:
And most of the time they're running this process with you for ground up development?
Scott Wadler:
Not always. I'd say our team is really comprised of three different buckets. One is general multifamily finance, that's both agency debt, which is Freddie Mac, Fannie Mae, and then multifamily kind of bridge lending. Large scale construction debt, mixed use, condo, resident apartment, hospitality, and then kind of other, right. And the other bucket is hotels, marinas, office buildings, retail, et cetera. So different, it just depends. And we'll do a smaller deal for a good repeat client or we'll do a several hundred million dollars deal. It just depends.
David:
So that was my question for you people listening in, if they're interested in potentially shopping their next deal around, is there a minimum where it makes sense? Hey, if the deal's under a million dollars, just do it yourself?
Scott Wadler:
Sure, yeah. I mean it depends on the opportunity to really create a longstanding relationship. We're young, I'm still young in this business and generally don't like to say no, we want to continue to grow and build our team, build my client roster. But generally I'd say it's kind of 10 to 15 million is sort of the smaller end of the spectrum. And then we just signed a term sheet for a 330 million loan and we're going to be working on another really cool project, which is about 400 million, which is a construction loan here in Miami.
David:
Wow, amazing. Okay, so anywhere from 10 to 350 million plus, pretty much the whole range. So if someone is interested in doing this diligence in finding their own loan for under $10 million, do you recommend going to smaller local banks, larger national banks, any ideas or tips or advice for them?
Scott Wadler:
Yeah, I think listen, it takes time and experience. Just like we talked earlier about it, it takes someone to give you that first shot and get your foot in the door. That's how it works with the banks. And so you can't just buy your first property and go straight to the bank up the street. You have to build a relationship with them. And so there's plenty of clients that I have and I've watched and they start out borrowing private bridge debt and it costs a little more and it's a little bit more on the risk spectrum. And once they have a track record and they've sort of sold an asset here or there or built a portfolio and they have a balance sheet, a net worth, liquidity, et cetera, that's what gets interesting for the bank. And so it kind of takes time. Some people come to us when they're really green and they say, we're going to go to Berkadia because we're young in the industry and we need to create better banking relationships or debt relationships.
And others are already super established, but they know that coming to us and running a process, if they get six term sheets and we really work the market and sort of make them compete to sharpen up on terms and structure and pricing, they'll get a good result. So it just depends. But to answer your question, yes, if you're looking for a smaller loan, you want to go and try the local bank. And we've got plenty of good ones. We've got a pretty active banking sector down here in Florida, but it's really changing a lot. There's a lot of M&A in the banking industry, people are merging, your local bank up the street just got bought by whomever, Cenovus, Bank United, et cetera. And so it's just sort of finding the right relationship manager who's really willing to take your deal to credit and go to BAFF for you and say, I think this guy's going to be a good customer and we're going to grow with him, and they just want assets and deposits.
David:
So I want to switch gears a little bit and talk to you about... I think when I was preparing for this, one of the things that I kept thinking about was how good you are just in general with people. You're always networking, you're always connecting, you're always meeting with people. And I think that's one of the things that just makes you shine. You're so good with people, but also it's because you're so genuine about it and you genuinely want to help people and solve problems. So what is, I don't know if you have a secret sauce, but if you did, what's your secret sauce that can be applied to anyone no matter what they're doing in real estate?
Scott Wadler:
Well, I'll compliment you because you and I both have that trait. So I could say I learned a lot of that from you because you demonstrate the same character and that's why you've built this amazing company. And I think we've stayed so close over the years because of that, because we care and it's not just about what you can do for me, et cetera, and it's about creating lasting relationships. Now we have families, our wives are friends and getting our kids together, et cetera. So I think people see through the bullshit a lot. And so people want to know that when they hire you... Generally you want to do business with friends. I'm in the relationship business, I'm in the people business. So you always walk a fine line. You never over promise and under deliver, that's one of the rules. But you be genuine and you make sure that if you take on a piece of business or it just doesn't matter, even if you get a missed call, you make sure you call that person back.
And so it's just sort of the golden rule, do to others as you want to be treated. And I think that if you do that and you just sort of block and tackle, I mean there's a million nights that I finish at home, put the kids to bed, whatever, and I am a victim of sitting in bed with my laptop or my phone just sort of digging out flagged emails that I didn't get back to. And so it's just trying to always never let stuff slip through the cracks and then maintain relationships and put yourself out there. And I think that that pays off and I'm in the momentum business, you're only as good as your last transaction. And so you want to make sure that you're staying on top of the market, you're continuing to build relationships. And also I guess in my business, specific to what I do every day for work, you become a little bit smarter in terms of not burning bridges.
If I sent every deal to a hundred lenders and I got 20 terms from 20 folks, you can only close with one group. So I'd have 19 people of the 20 that submitted terms who I got a callback and they're relatively disappointed. And so you become a little bit more of a strategic deal maker whereby you send it to less people. You know where the hot money is and so you can kind of connect the dots quicker and then, not burn less bridges but just sort of waste less time. And that's both yours and the markets'.
David:
I never thought of it like that, that you are upsetting 19 other people. I never thought of it. So also every time I think of you, you're always just been so organized, on top of things, professional, even in your personal life. Any tips for staying so on top of everything? I feel like no email falls through cracks, no call ever gets not returned from you. How do you do that? What's your systems and process you have in place?
Scott Wadler:
I don't know. I hear you. I like to think that there's some special software, some Door Loop software that I have that taps me on the shoulder and reminds me.
David:
You just get back to people.
Scott Wadler:
Yeah, simple. I think you get back to people, you tighten your circle as you grow up a little bit. And I don't know, like I said, we're in the relationship business, so you just try to be... By the way, you try to be a friend and a human to people whether they've got a piece of business for you or not. And so we get together on the regular and regardless of if there's something in our professional lives to talk about or not. And so I think people see that and ultimately they gravitate towards that. And it is just about... There's also, I guess the other thing I would say in terms of maintaining those relationships and stuff is you don't always have to have something for someone.
You could just say, how are you? And so there's a lot of people in our lives, close friends of ours that once they live in a different city, they have kids. As you grow up, you get busier, et cetera. But once in a while it's kind of nice. I think it's really refreshing when I receive one of those from an old friend and you don't touch base with them every week or every month, but maybe it's once a quarter and they say, Hey, how are you? How's the family? And you just pick up the phone.
David:
I think you have the same friend of mine.
Scott Wadler:
I think that's just how you sort of build everlasting, both business relationships and personal ones.
David:
Yeah, I would say one last thing and then we'll move on from this is to you, I always saw you playing the long game. You can make more money, you can cut corners, but you're going to lose your reputation. And for you, I always saw you as someone of honesty, integrity, trust because you're in it for the long game. You're not here to make a quick buck and disappear. You're here for the next 50 years. And I think you get that a lot from your parents who are just amazing. So I have one last question on this. If you can go back in time to after you graduated college, you're 22 years old and tell yourself three things, what would it be?
Scott Wadler:
Oh, boy.
David:
I know.
Scott Wadler:
I got to think about that a little bit.
David:
Or one thing.
Scott Wadler:
I think the one thing that would I hold on to is always try to maintain some of the relationships that helped you pave the way for them. I'll give you an example and then I'll maybe elaborate on the thought a little bit. But one of the gentlemen that I worked for at an early age when I was at Related, I was doing an internship there, he called me recently about a year ago and he said to me, I'd like you to return the favor and I'd like to have my son intern for you.
David:
Wow.
Scott Wadler:
It was, I don't know, 15 years later, 20 years later, whatever. I mean it was super humbling and I appreciated the call, but that means that you're always sort of going out of your way to service that person. I maintained a relationship with that guy for 15 years and always tried to say thank you in a way for giving me the opportunity, helping me expand my network, giving me this. So I think that's one thing that just applies in life and that's something that I would probably want to remind myself of if I were 20 years old. I don't know.
David:
Awesome, awesome. If you think of anything else, let us know. And I remember when you were, I mean correct me if I'm wrong, when you were at the Related Group early on you were a market and financial analyst. Is that right?
Scott Wadler:
Sure.
David:
So what advice... I mean you were doing a lot of projections, spreadsheets from what I remember best use case for certain buildings. So what advice would you give to landlords or real estate investors looking to buy either commercial residential properties and grow their businesses and portfolios? Is there any super important metric they should be analyzing? Is it cap rate, is it something else? Is there anything that people constantly mess up?
Scott Wadler:
Sure. Well I think relative to what we were talking about earlier, it's making sure that you feel very comfortable, can sleep at night and finance your portfolio correctly and don't always look to push the limit in terms of... It's a competitive market. The world has gotten smaller and so whether it's finding an off market deal. Pushing underwriting to the limit generally doesn't work unless you're in a super rising tide environment. And so I'd say be prudent with your underwriting, finance your portfolio correctly and sort of look for a niche, find a diamond in the rough that you can generate economies of scale through. There's some people that are in the Class B flex business. Self storage has been a unique sector that has really come on strong in the last few years. People like the stickiness of the fact that once you put your stuff in a storage locker, it doesn't come out very easily. Coastal hospitality, just different niches within the commercial real estate industry that once you sort of build enough scale, you kind of become an expert in that and you're kind of the go-to source.
David:
Yeah, I think people always talk about diversifying your investments and asset classes, portfolio types, but Warren Buffett was always against that. He would always say go all in on what you know best and that's it.
Scott Wadler:
Sure, a hundred percent.
David:
That's what I hear from you here. So you said the world is getting smaller, everyone has access to all the same information. So if everyone's looking at the same deals that are publicly available online, how do you find the deals like the diamonds in the rough or do you just look at those deals differently than other people and find value when others can't?
Scott Wadler:
Occasionally that's the case. I would say we are brought in to sort of make a market, at least on the sales side, when our team is selling an asset or financing an asset. Generally people are bringing us into create mass exposure. That being said, I'm an investor like you in real estate insured. We want to put our money in a better than average deal and beat the market so to speak. And so I think you have to find a niche, whether it's a stable tenant, a growing tenant, there's plenty of people that are able to buy a vacant office building and have a tenant in their pocket. You buy a vacant industrial building and you're able to capitalize because you know that so-and-so is moving to this market.
It's intelligent decisions based on, and educated decisions, based on being one step ahead of the curve and watching the expansion of some car dealership. You've got BMW who moved a plant to South Carolina and they've got now thousands of jobs and cars being delivered in the US. I did a deal recently with a client in the middle of nowhere, Georgia, LaGrange, Georgia because it was proximate and right next to where Kia has a manufacturing plant, just as an example, I think it's kind of finding a unique niche or advantage and trying to capitalize on it.
David:
What's that book called? The Blue Ocean, something like that? Have you heard of this? Red Ocean Blue Ocean?
Scott Wadler:
Cut?
David:
No, Blue Ocean, basically I think this, it's called Blue Ocean Strategy where the ocean is red, covered in blood, everyone's going after the same deals. Miami residential, it's like go find your blue ocean where there's no one there, there's no competition. Go find something different. Be different, find a niche. So you mentioned investments and beating the market, so I'm personally curious also. You to dabble a lot from an earlier age in stocks and how are you looking at that now? Are you still investing in stocks or do you focus most of your personal investments also into real estate because that's what you know best?
Scott Wadler:
Yeah, I remember our days in business school-
David:
Blackberry, buy Blackberry.
Scott Wadler:
And we would do that class where we would create our own portfolio.
David:
Yes, mock portfolio.
Scott Wadler:
Exactly. But no, we were trading real time then. I don't know, I'm a believer in, and this is sort of something I learned from my dad, right? You've got a couple different thesises. I have a portfolio of stocks that are just like blue chip, major Fortune businesses that are dividend payers. That is just good to, I think create good passive cashflow. But yeah, most of the investing that I did early on was in real estate and I found that the benefits you get relative to depreciation and capital gains and stuff was definitely unique. And it is, it's what I kind of knew best.
And I have mostly good solid investments, but there's definitely some, especially more recently that are kind of lukewarm. And I think you've got to have buckets. I think you've got to have the safe bucket that is sort of your rainy day fund-
David:
Retirement, yeah.
Scott Wadler:
Your blue chip stocks, your cash flowing multifamily. But even though I finance a lot of development deals, I don't really invest too often in development deals because they don't produce cashflow for a few years, 2, 3, 4 years. And you're highly dependent on where the market is at that time.
David:
I think it's also investor risk appetites. Some people want to hit home runs, they're only going to take those deals. Every investor's so different.
Scott Wadler:
And so yeah, it's like you said earlier, playing the long game, being patient. I know plenty of people who have started tech companies and had big pops or invested in an app and that's good. You've got to swing for the fence and you've got to have a bucket of capital that is willing to be more risky, whatever.
David:
Do you invest in REITs by any chance?
Scott Wadler:
Invest in REITs, invest in ETFs that are blended.
David:
S&P 500, index funds.
Scott Wadler:
So yeah, I think it's diversification and patience a little bit.
David:
Yeah, definitely long game.
Scott Wadler:
And what I'll say on that is, relative to our careers, I think when you network and you do right by people, and I'm an advisor for my clients, and you'll find that one day someone's going to tap you on the shoulder who you think is really smart and sharp and they're going to say, I have a great deal and I'm starting to do that and experience that with more and more of my friends and they're not going to need to go to the outside market because it's a club raise, it's a friends and family and you get to capitalize on that because you've built a strong network and you've connected with the right people who are making awesome moves. And so you got to stay patient with that. But I count on that coming and then I think A, you've built more wealth and B, you're more connected and then you can really swing harder.
David:
And from what I remember, I'm not sure if you have any more. Do you have any current active real estate investments where you bought, you're managing some, you're renting it out, you have any of those?
Scott Wadler:
I don't do that.
David:
Never?
Scott Wadler:
Nope. I haven't done that. And I think that could change. I have always found, not that I'm letting my clients down in any way or shape or form, but I've always found that if I am focused elsewhere or I'm taking time away... Yes, I have my personal residence and I would like to and plan on having a vacation home and whatnot, but I haven't wanted to buy commercial real estate and focus on that because I think it takes away from both my time and my team's time in terms of servicing my clients. It's a 24/7 business that I'm in. And so I always felt like it was a little bit, I'd rather have someone that I trust that is more focused, specialized and has economies of scale.
David:
So you're investing with other people like syndications, funds, stuff like that?
Scott Wadler:
Correct.
David:
Yeah, so more passive approach?
Scott Wadler:
More passively. And that doesn't mean that some of the investments I have aren't in the GP and the general partnership, but generally someone else is kind of more hands-on doing that list.
David:
You're very lucky in the sense that you do have a lot of friends in real estate. All you do, your work is in real estate. You have a lot of these connections, deals come to you that you can invest in. But for the average person that's looking to invest in a passive syndication or fund, is there any way they could find them? Online, the groups?
Scott Wadler:
Well, I think that's changing, right?
David:
Crowdfunding maybe.
Scott Wadler:
Yeah, well that's what I was going to say. And I am not the biggest fan of that. I think that there's a misalignment of interest between the operator if they're putting very little skin in the game and they're raising smaller checks. There's not that kind of large capital partner, institutional partner who's able to flex on major decisions or make sure the checks and balances are there. So I don't necessarily love the idea of crowdfunding or investing small checks, 10,000, 50,000, but it's not about the size per se. I wouldn't say it's about the size, it's just about keeping it a little bit tighter, having more of the pie I guess, so to speak. And I think those deals are out there. Yes, I think you've got to network, you've got to talk to people, you've got to talk to your friends.
By the way, there's plenty of people who have nothing to do with real estate that are seeing those deals and opportunities and investing in them, doctors, dentists, lawyers, you name it. So I think you've just got to kind of... Equity is a narcotic and everybody wants to find investors who are willing to back them and invest in their deals. And so people want to build an investor base and a Rolodex. And if you're interested in finding real estate investments, I definitely think there's an opportunity to do that both online and through just normal human interaction.
David:
Yeah, I can tell you I invest in, I think it's called Fundrise. I was looking it up real quick. Cool, it's nice, fun. The returns aren't anything special, but it's nice to learn. But you also can't pull your money out for months or a year, and if you do too early, you're not going to get any returns. So it's more for fun. But I wanted to ask you, if someone wanted to sort of follow in your footsteps and do what you do and learn and grow in this industry, what's the best advice you can give them?
Scott Wadler:
Start early, start young, find that person that's willing to mentor you a little bit and give you that opportunity.
David:
What's your cell phone number?
Scott Wadler:
You know where to find me. It's not hard. But that's one. I would say be patient. I like to think we're still young guys and we've got a long runway ahead of us, but I started right out of school and I was an analyst for six years and did the late nights and worked hard and started from scratch, so to speak, and nothing was given to me. And it was just sort of a unique approach. Like you mentioned, I always networked really well. I found a group of guys that were my peers, were up and coming in the business, that had worked for great companies but weren't necessarily decision makers at all there, and spent a lot of time learning from them, making introductions and just sort of hanging around the hoop. And I think that you've got to... It's like a fine wine and everything seasons with time.
And by the way, that doesn't necessarily mean don't go back and get a graduate degree. There's plenty of amazing relationships that are made at university or traveling or whatnot. Real estate's a very local game and I've been able to just be in the same market. It's just like residential brokerage and you're sort of working the same clients and relationships and making sure you deliver for them. And now you get referrals and then people are moving down from New York and they're talking and who's the right guy to talk to about this? And so it grows on itself, but you have to put yourself in a position to have that snowball effect.
David:
That was interesting what you said because today's generation is hopping around moving states, countries. So for you, I remember you always said, my last decade of my career was in Miami. All my connections are in Miami, all my network is in Miami. I need to stay in Miami. I have to keep those relationships. So it's tough to move around these days. So I am assuming your advice would be find your local market and just be the expert there and stay there as long as you can.
Scott Wadler:
Yeah, it is. For the industry that I'm in, I don't necessarily think that applies for all professions. And so there's other professions where you could take that skillset and you can go apply it and you're super valuable anywhere, regardless. But yes, for real estate, it's my ability to understand the streets block by block and understand the dynamics and the fundamentals and the traffic patterns and the access and what's going on in every part of town. And it's kind of been the beauty of our career. Miami's such a fun place to enjoy and kind of watch it grow up. And I've been going to the Miami Design District for, I don't know, a decade now, since it was really nothing. And I've really watched it get built block by block, a couple of my close friends work in that neighborhood, and for the team that's basically created that neighborhood. And it's been really fun to watch.
David:
So in today's world, I mean people might think, oh, if I want to be big in real estate, I have to move to New York or big metropolitan cities. That's not the case today.
Scott Wadler:
I always thought the opposite, actually. So when we graduated school, there were a lot of people moving to New York and I always... and maybe this goes back to what you were asking me earlier, one of my absolute mantras was big fish, small pond, and I wanted to be a bigger player in a less competitive space than go to New York, Hong Kong and just get swallowed up in a massive city where there's just a lot more competition. It's just harder to distinguish yourself. And I've found that real estate is super hot down here, obviously, and has been a great career path for the last decade. But again, it wasn't even a major at UM when we were in college.
And I think law has grown up down here. I think that medical and tech is sort of coming, but I think that Miami has definitely, it pays to be on the forefront of an emerging industry in a young market. And so I've seen some friends of mine in really great markets like Austin, Nashville, we all know kind of the young hot markets. But one of my friends does exactly what I do in Austin, and he's been wildly successful because there's been billions that have been poured into that market, cranes everywhere, just like Miami, towers going up. And he was a part of Austin when it was just a small town and really had none of the Oracles and new tenant investments. Tesla.
David:
Yeah, I guess in the last few years, Miami's sort of blown up also. Lately it's not so small anymore like it used to be. And I mean it's always been big city.
Scott Wadler:
For better and for worse.
David:
And for worse. Yeah, exactly. So to wrap up, we've got to probably one or two last questions. And you travel a lot for work. I mean especially even before COVID, you were always traveling, sightseeing, due diligence, stuff like that. How do you balance travel with family, friends, relationships, marriage? You have two beautiful kids, beautiful wife, a beautiful family. How do you balance all that in your crazy busy work life schedule?
Scott Wadler:
I'll give kudos to my wife for always sort of understanding that and being patient with me. And I'm not gone for weeks at a time. But yeah, there's certain days where I'm not able to help out in the morning or I need to catch a flight or a train. But I'd say it's slowed down a little bit and it's a couple of times a month and there's plenty of people by the way that travel a lot more. But I think it's just balance, right? And it's like if you're going to be gone for two, three days during the week, then make sure you kind of clear out the schedule for the weekend so that you could play catch up and you can spend some time with the family. I have to say this summer was actually really nice and spent a lot of good quality family time, which I haven't really done.
And I was able to get away and it was a beautiful thing. I left for a full month, which not everybody can do, but I was able to disconnect, spend a lot of time with the family, work a couple of hours a day, but I needed that. And it's been a really active liquid market really since COVID turned on the engines in Miami. And we've been really busy for the last couple of years. And it's not that we're not now, but I kind of felt like we were burning out a little bit and I needed to take a little time for myself and just sort of stay connected, but also disconnect and relax a little bit. So it's just balance.
David:
Work-life balance.
Scott Wadler:
And I think that's been one of the keys to success too.
David:
Awesome. So to wrap up, if someone wanted to see if they should run a process with you, who would be your ideal client, I guess you could say, and how can they get in touch with you?
Scott Wadler:
Sure, yeah, we're easy to get in touch with. I mean, my email, my full contact information is online. You can go to Berkadia or LinkedIn. But ideal client, I mean is really anyone who is looking to buy, refinance an asset and is interested in a long-term advisory relationship that cuts both ways and will help you source information, deal flow, financing, capital, and we want to just work with the best tried and true players in the market and grow with them.
David:
Yeah, amazing. And you do deals not only in Miami but all over the US?
Scott Wadler:
Yeah, our team is active all over the country. I'd say we're largely focused on the Southeast. A lot of our business is in Florida. It's a local business, so a lot of my business is in Miami, but we're doing stuff in Texas and Carolinas, Atlanta, Nashville, and then also all over the country.
David:
Amazing, amazing. And is there any last final thoughts? Anything I'm forgetting to ask?
Scott Wadler:
No, I mean I'm just kind of reflecting. It's nice to really sit here with you. It's been-
David:
Like old geezers.
Scott Wadler:
Yeah, it's been fantastic to just kind of catch up and reflect a little bit and I'm really impressed by what Door Loop has been able to create and I think there's honestly a lot of synergies and as you guys continue to ramp up and grow, which has been hyper quick, there's a lot of opportunity for us to crosspollinate and bring you guys new clients and landlords and take over the industry. I'm excited to continue to do that together.
David:
Awesome. Me too. Me too.
Scott Wadler:
Thank you.
David:
All right. Thank you again, Scott for joining us and for everyone tuning in by audio only on the podcast. Don't forget that we have also recorded the video for this. So if you do want to see Scott in person live in our Miami headquarters, you can go to doorloop.com/podcast to check out this one and all other podcasts or doorloop.com/webinars to see all of our upcoming and previous webinars. But that's it for today. Thank you again. We'll see you on the next one.
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