Jamison Manwaring is the co-founder and CEO of Neighborhood Ventures, a remarkable Arizona-based real estate crowdfunding company, focused on value-add multi-family properties.
It’s a real estate company, for sure – they buy, hold and sell property. But the capital plan is innovative, with a growing pool of state residents who are permitted to invest through Arizona intrastate securities law. Nine successful projects later, Jamison is now taking his plan to the national stage with their latest project, a short-stay hotel he wants to repurpose into affordable housing. And he’s raising funds on my crowdfunding platform, SmallChange.co.
Jamison attended business school at the University of Utah where he graduated with a BS in Finance. He was always interested in finance. He loved it enough to become president of the finance club. Even at a young age Jamison’s determination shone through. He wanted to work in New York, at a top finance firm. But those companies have their pick of Ivy league school graduates, which he was not. So every Thursday night he flew the red eye to New York to network. You’ll have to listen in to hear the rest of the story.
Insights and Inspirations
- Jamison’s determination and stick-to-itness has taken him to Wall Street, and on to con-founding his own successful real estate company.
- His mission? To let everyone invest in real estate opportunities.
- Value add real estate projects, with less construction time than ground up, generally mean distributions to investors can start more quickly.
Read the podcast transcript here
Eve Picker: [00:00:05] Hi there. Thanks for joining me on Re-Think Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone. If you haven’t already, check out all of my podcasts on our website at rethinkrealestateforgood.co or you can find them at your favorite podcast station. You’ll find lots worth listening to.
Eve: [00:00:56] Today, I’m talking with Jamison Manwaring. Jamison is enjoying success as the Co-founder and CEO of Neighborhood Ventures, an Arizona based real estate crowdfunding company focused on value-add multi-family properties. Always interested in finance, Jamison went to business school and studied finance. He loved it enough to become President of the Finance Club. Even at a young age, Jamison’s determination shone through. He wanted to work in New York at a top finance firm, but those companies have their pick of Ivy League school graduates, which he was not. So, every Thursday night, he flew the Red Eye to New York to network. But wait, if I tell you what happened next, I’d be a spoiler, so you’ll have to listen in to hear the rest of the story. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast and go to rethinkrealestateforgood.co., where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.
Eve: [00:02:14] Hi, Jamison, thanks so much for joining me today.
Jamison Manwaring: [00:02:17] Hey, thanks for having me, I’m happy to be on your podcast straight out of Pittsburgh. I’m here in Phoenix, still in the nineties here and…
Eve: [00:02:27] Oh wow.
Jamison: [00:02:29] Happy we have the technology we can be talking and doing this remotely.
Eve: [00:02:32] Well, I’m in the snow belt, at the moment. It’s in the low 60s here, so that’s a pretty big differential. So, your background is solidly in finance, all the way back to college when you majored in finance. And I want to know what led you to, you know, your early career was with Goldman Sachs and places like that. And I want to know what led you to launch Neighborhood Ventures and your focus on real estate.
Jamison: [00:03:02] Yeah, yeah. Great. Well, you know, I was always an entrepreneur type of person as a kid and did, I had several businesses. My most successful one was either dog walking or picking up, hauling off people’s Christmas trees into the field where the city wanted them to go for for a couple of bucks. That was a big business. And I ended up doing a bunch of telemarketing when I was in high school because you don’t have to have any experience there if you can produce results quickly. So, I started doing telemarketing and by my senior year I had 10 of my friends from school working for me and we were calling doing lead generation for mortgage company, insurance company and and I was just always pulled into business in general and in specifically real estate. My brother was in the mortgage business. My dad’s a real estate broker and has been for a long time. I always loved real estate, especially seeing a project go from what it was right now, but having a vision around what it could be and then seeing that vision come to fruition is really gratifying. And I started a real estate business right out of when I was in my early 20s before I went to college, and it was a for sale by owner business service. People want to sell their homes on their own. And we would help them with that and then charge them a flat fee. And that worked OK for a little while. But I also realized I was I had a lot of limitations when it came to my understanding of business, and even though I thought I knew everything, I clearly didn’t. And when the financial crisis happened and I was living in Phoenix at the time, you know, it really slowed things way down here. And when with real estate and with building and with the real estate market in general. And I hadn’t gone to college university and at that point decided, boy, right now is probably a good time to go to school because there’s not a lot happening economically. So I started in 2008 and I did a year at Arizona State, and then I transferred and finished at University of Utah in Salt Lake City. And when I was there, I realized finance is kind of what what helps you understand what is going on with the business. If you understand the financials, you understand the lifeblood, you’re kind of like the doctor of a company. You can really look at it, see where the problems are, see where the the great things are. See where areas that need focus. And if you can really understand how to give how to analyze a business or a real estate project financially, then then you have a really key skill set. And so that’s why I decided to study finance.
Eve: [00:06:19] Yeah. So you’ve had a kind of a you always had a background in real estate, but still it’s a pretty big leap to go from that to launching a crowdfunding platform. And tell me about that and what made you take that leap?
Jamison: [00:06:34] When I was studying at the University of Utah, I had a lot of friends who had done, a few friends who had done some internships with some investment banks. And as I talked to them, I realized and came to conclude that that would be a great option for me to try to get the experience of working in an investment bank. Most of them are were either going to be in San Francisco for us because we’re more. I was in Utah and then some people even made it all the way to New York. That was a little bit further than than most of us get to and um, I decided to go for that, not just to work on Wall Street, for the the brand or, you know, the status. I was more wanting to really go because I heard how how much they learned about companies, public companies and the markets. And so my junior year of school at University of Utah, I started going out to New York on a redeye flight, JetBlue flight on a Thursday night. I would leave at 11:30 p.m. and I’d arrive in New York at about 5:30 a.m. And then I would go out to the investment banks and try to network with with folks. And because the investment banks, they recruited their core schools, which tend to be the Ivy League schools, they are not recruiting at University of Utah, so we have to go to them. And I did that.
Eve: [00:08:06] That’s pretty intense.
Jamison: [00:08:10] Yeah, it’s, you know, I’d get on that flight and get there at six a.m., grab a little breakfast and then just try to have the most productive Friday that I could. And that usually meant meeting two or three folks face to face. And I would just, I got some some email addresses from some professors who have friends working on Wall Street, former students. Uh, from University of Utah, who maybe later went on and got an MBA at Wharton or Chicago or one of the the schools where a lot of them end up on Wall Street. And I ended up meeting probably half a dozen people, maybe 15 people who would have a 15 20 minute meeting with me. And I just said, Hey, I just want to learn about your business. I’d ask them a few questions about what they do. And it gave an opportunity for for them to get to know me and ask me questions, too. And I was hoping that something would happen, but I didn’t know exactly what would happen, and I made probably half a dozen or eight trips there. I’d stay in a hostel with eight other people snoring. You know that Friday night it was it was miserable. But I was in New York and it was fun. I had never I had never experienced New York, so I would stay there until usually Sunday night and fly back Sunday night and really grew a love for, for all things, New York. And luckily, one of the people who I met he was at Barclays, which bought Lehman Brothers after the financial crash. Barclays is a UK based bank. They came in kind of bailed out Lehman and they were one of the biggest investment banks in the world, and he was there and he helped me get an internship. And he actually he helped me get an interview, and they flew me out from Utah for the interview, for a super day and ended up getting an internship, full time summer internship, the junior year to my senior year. And that’s really what kind of got me into finance in Wall Street.
Eve: [00:10:22] It also certainly shows your determination, which you really need for a startup business.
Jamison: [00:10:28] Yes. Yeah, there’s there’s no giving up. It’s just it hasn’t happened yet. I’ve just got to keep going. As you know.
Eve: [00:10:37] I know that feeling really well. Not giving up.
Jamison: [00:10:42] Yeah. One of the things I found is a lot of times right when you’re at your worst and you’re about ready to give up that a lot of times means you’re almost there. So it’s kind of like…
Eve: [00:10:55] Oh, that’s awful.
Jamison: [00:10:56] I feel that so many times. And I was paying for this out of pocket. And luckily, JetBlue had a special, I think it was $129 round trip on that flight. And so I spent about $1,000 in the travel and stayed as cheap as I could. But, you know, had a great experience. And I ended up at Goldman Sachs after college.
Eve: [00:11:19] That’s a testament to your stick-to-itness.
Jamison: [00:11:23] You know, some folks, they might go to Ivy League and go right into a company like that, and those companies are out recruiting them, trying to get them to work there. For me, it was a little different. I had to come in the side door, not the front door, but I was in the door. And then once you’re in there, you know, you’re all equal. It’s it’s a meritocracy. It’s about what can you do? What ideas do you have? And I love that. I love the, you know, it’s kind of a low drama atmosphere. It’s just about what do you do and what can you produce. At that point, once you get the job, it’s not who you know. And I love the fact that I could be from Idaho, you know, going to school in Utah and I’m here on a level playing field and it really motivated me and I was I felt like I was with some of the smartest people I’d ever been around, for sure.
Eve: [00:12:15] That’s a great story.
Jamison: [00:12:18] Yeah, thank you. One of the companies that went public that I worked on their IPO was LifeLock in 2012, and they were based in Arizona. And I had some family in Arizona and I had lived in Arizona for a little while. And when they went public, I was always a little drawn to them because they were one of the few companies in Arizona that’s kind of like a tech company. And long story short, in 2015, they offered me a job to run their investor relations. I had been working with their investors as a Goldman Sachs equity analyst for several years, three years.
Eve: [00:12:58] Oh, okay.
Jamison: [00:12:58] And then they brought me basically from Goldman Sachs into their own into internally. And a year and a half after joining, LifeLock got bought out for three times our share price. From the time I joined. When I joined, it was about eight dollars a share and we ended up getting bought out for twenty-four dollars a share. So that was a good outcome for everybody. And at that point, I had an opportunity to do something new and different, and that kind of leads us to where we are here now with with Neighborhood Ventures and the current company. I had bought a few buildings when I was in New York, including a 10-unit building, renovated it. The buildings weren’t in New York. They were in Idaho where I was from. And I really was drawn back to real estate. Kind of came full circle back to some of my roots and where my family had spent so much time. And so I went from wanting to go to Wall Street, getting to Wall Street, seeing everything that was there and saying, you know, I kind of want to go back to the. tangible assets in real estate.
Eve: [00:14:10] But with a pocket full of different experience, right, that you could apply.
Jamison: [00:14:14] Yes, and realizing that, you know, a lot of people don’t have the opportunity to put money in real estate. They invest it in the market because you can do it from home and you don’t have to manage anything, you don’t have to be a landlord. And a lot of people think, Well, if I’m going to invest in real estate, that means I’m going to have to become a landlord and I’m going to have to get that phone call on a Saturday afternoon that the toilet’s broke. And I don’t want anything to do with that. And that’s kind of when this idea came together, about how can we make real estate more attainable as an asset class for people to own, because I saw an opportunity where it’s very easy to invest in the market, but the market has a lot of downsides. It’s a roller coaster. There’s a lot of risk there. And as I was drawn to real estate, I think a lot of people, other people are too. If we could find ways for them to invest in real estate without them having to become a landlord.
Eve: [00:15:18] Yeah, it’s definitely a more stable investment if you invest in it correctly.
Jamison: [00:15:23] Yes. And there’s REITs and there’s some of these big instruments you can invest with in real estate, but they’re also very Wall Street in many ways because they don’t really, they don’t disclose much about what they’re doing.
Eve: [00:15:37] Yes, that’s right and you don’t have a choice. You don’t have a choice about what you invest in. You’re investing in a big bucket, almost a blind pool of funds that could be invested into something you really hate, quite frankly. So…
Jamison: [00:15:52] Yeah.
Eve: [00:15:52] Yeah.
Jamison: [00:15:52] It’s more of a financial decision where they’re just saying, I want to invest in real estate, let me invest in a REIT. But there’s not that, you know, the thing that’s fun with real estate, just like piggybacking on what you’re saying is, you know where it is, and you see the, you can drive by it and you can touch it and you can… There’s a pride of ownership there that you don’t get when you just own a bond, you know, or something that…
Eve: [00:16:16] Right, especially if it’s in your own city, right? If it’s somewhere where you care about, yeah.
Jamison: [00:16:21] You can drive by it. We have investors now that drive by the assets that they own every month, and they just drive by it. And I think they do it just because it feels good. And you can’t do that with a financial instrument that’s traded on Wall Street. So…
Eve: [00:16:36] Do they send you comments about what you have to fix?
Jamison: [00:16:39] Yeah. And you know what? We think it’s an advantage because we have a couple of hundred owners keeping their eye on it.
Eve: [00:16:48] That’s right.
Jamison: [00:16:51] Our property managers do a great job, so we don’t get that feedback very often. But we’ve gotten it before. And when we say thank you, we’ll get it fixed and happy to have more sets of eyes on things.
Eve: [00:17:01] So just tell me about Neighborhood Ventures. Like, how does it work and why did you develop that? Like after this wanting to get into real estate, looking for something new? Why Neighborhood Ventures and how does it work?
Jamison: [00:17:15] Yeah. So, after I came out of the sale of LifeLock, I wanted to figure out a way to get more people to be able to invest in real estate projects. And I actually wanted to just create a platform similar to what you’ve done at Small Change. And as I dug into it, I realized that is going to be a ton of work. And thankfully. for people like me, there’s people like you that you went out and did that work. And around that same time, I met my now Co-founder John Kobierowski, and he basically convinced me instead of creating a platform, why don’t we just create a company, and I can lead all of the financial aspects of that fundraising. And he would be the real estate expert. He’s been in commercial real estate in Phoenix for 30 years. He’s been an apartment broker, very, very great reputation, and knows this market extremely well. And so, we decided to launch Neighborhood Ventures as a crowdfunding company. So, we raised funds via the Arizona intrastate laws on our first nine projects. $1,000 minimum investment. And I don’t know if I can say that or not. Maybe you can edit that out, but we raised money.
Eve: [00:18:42] No, you can say that. You can say whatever you like about Arizona intrastate.
Jamison: [00:18:46] Yes, we raised funds through the Arizona intrastate crowdfunding laws, $1,000 minimum investment. And in each of our first several projects, we had 100 or 150 investors. The first project we did…
Eve: [00:19:02] Hey, let me just stop for a second for the benefit of our listeners. So, there’s this rule called regulation crowdfunding that lets everyone 18 and over invest, but it took the SEC four and a half years to write it. So, in that four-and-a-half-year period, many states just didn’t want to wait any longer, and Arizona was one of those, and they created their own crowdfunding rules, which are called intrastate, which really only permit Arizona residents to invest. And they sort of bypassed the Federal SEC. It’s kind of like marijuana laws in individual states. Yeah, everyone, sort of, just looked away and said, okay, this has to happen because it’s happening so slowly at the Federal level. Is that a good explanation of it?
Jamison: [00:19:52] Yeah that’s, you hit the nail right on the head. Because it took so long for the SEC to implement The Jobs Act that was passed in 2012. A lot of the states like Arizona, I think we passed our intrastate law in 2015 and it’s nice in some ways, because we our regulator is the corporation commission in Arizona. And then there’s also very various and obvious limitations that we can only raise money in Arizona. So, for us, it gave us a good opportunity to start our business, but we knew at some point that we would need to grow nationally with our investors. But for our first nine projects, they were all in Arizona and all Arizona investors.
Eve: [00:20:41] So what sort of real estate projects do you focus on?
Jamison: [00:20:45] So John’s experience had been in multi-family and specifically in value-add multi-family, in walkable core areas. So, in Phoenix, what has happened in the last 15, 20 years is there had been a mass exodus of the downtown area in the eighties and nineties and moved to the suburbs, and the downtown area was kind of like the place nobody wanted to go. And then in the late nineties, the Arizona Diamondbacks built their stadium right downtown and there was became this energy around downtown. And then millennials and pre-millennial, but the younger folks decided downtown is kind of cool, and I don’t want to live way out in the suburbs where it’s a 45-minute drive in traffic anywhere. And in the 2000s and in the 2010s, we started seeing this urban migration back to these core areas, and we’re still seeing that. And what we do is we find buildings in those core areas that haven’t been renovated for a long time. A lot of them have been owned by the same owners for decades, and they’re just basically cash flowing them, and we’ll go in and fix these, kind of, cool, unique buildings. A lot of them kind of mid-century architecture that has been covered up over the years and not brought out, and we’ll go make them cool again. And people really love to move into a newly renovated building that’s in these core areas. So that’s really been our focus.
Eve: [00:22:22] And what are the limitations for you, like how are you feeling? Well, you know, financing altogether or just the Arizona rules like…
Jamison: [00:22:31] Well, our first project was a small building in Tempe, which is where Arizona State is. So, it’s a great area because there’s a lot of activity there, not only the college, but just in general. And we thought we might raise that. We’re only looking to raise half a million dollars. And we thought we might raise that in the first couple of weeks, and we launched the project on our website. We had done a little bit of PR and marketing before that. And I think the first day we got five or six investors who invested a few thousand dollars, and it became really clear about two or three weeks into it that I think we had hit maybe 100,000, but we had a long ways to go.
Eve: [00:23:15] Yes, it takes a while. Yeah, yeah.
Jamison: [00:23:18] It was our first project. So even though I had a finance background, John had a commercial real estate background, it was our first project and one of the things we committed to do, he and I, was that we wouldn’t call our friends that have deep pockets and have them invest. We want to really build a real business here with organic new investor base. Not just, kind of, call the rich folks and have them write quarter-million-dollar checks. And there’s a lot of people out there that can do that and do do that in real estate. But we wanted to open it up to a broader group of people with a 1,000-dollar minimum investment, and that’s going to take time to build. We knew that, but we didn’t anticipate how long it would take. Long story short, we ended up barely being able to close on time, it took six months to close. We had a friendly seller who gave us a six-month escrow and we literally got our, the 500,000 we needed two or three days before we needed to close. We barely made it.
Eve: [00:24:25] Wow.
Jamison: [00:24:26] We ended up having 103 investors, all Arizona residents, none of whom were our friends, that were juicing the deal. All real folks. It was painful because it was like, what are we doing? Is this really a business? But we wanted to see if there was a business here, if it was…
Eve: [00:24:47] I’m sure it was very gratifying as well.
Jamison: [00:24:49] Yeah, absolutely.
Eve: [00:24:50] A hundred people who want to invest in your project, that’s significant. You know, for first project, it really is.
Jamison: [00:24:57] Yeah. And it took a lot of work and people don’t realize that, you know, raising funds from people for investments is one of the hardest things to do because whether it’s 1,000 dollars, 100,000 dollars, that means a lot to that person. And they’re not getting any product today. They’re not driving out with a new car today. It’s just a promise that we’re going to not only pay that back, but with a nice return and good communication along the way. So, it’s hard. It’s hard and it takes time.
Eve: [00:25:27] It’s very hard. Yeah, I do agree with you.
Jamison: [00:25:29] Yeah.
Eve: [00:25:29] Facebook followers do not become investors.
Jamison: [00:25:32] Right.
Eve: [00:25:34] So I have to ask how many of those investors, original 103, have invested again?
Jamison: [00:25:40] Well, that’s really what’s built our business is those folks. We did another project two or three months later, might have been six months later that about 80 percent of those invested again.
Eve: [00:25:55] And they probably told their friends too, right?
Jamison: [00:25:59] They’ve told their friends to the point now, so we’ve just hit four years, we’ve only been working in Arizona, and we have over 500 investors in Arizona, and we have 1,500 investments, in that period of time. So, those 500 investors on average have invested in three of our projects.
Eve: [00:26:18] Pretty fabulous.
Jamison: [00:26:19] And our average investment is 5,000 dollars. So, some people invest 1,000, some people invest more than that. But it’s hard work. It’s real, it’s education because people before they’re going to place an investment, rightfully so want to feel very comfortable with our team with our strategy. And this isn’t a get rich quick for anybody. It’s slow progress. And then we sold. Now we’ve sold three of our projects, including that first project. And so, it’s gone full cycle. So, our investors have received all their principal back and all their returns. And now we’ve done that on three projects total. And that’s where things really start to click in for people and they start to see that what we’re doing works.
Eve: [00:27:08] That’s a fabulous story. So, what is your latest project?
Jamison: [00:27:15] So one of the things that’s happening in Arizona is that there had always been a lot of migration to Arizona from other states. Mid-West, California, even northeast. On average, Maricopa County, which is basically the Greater Phoenix area. It’s about four or four and a half million, folks. About 100,000 people, 100 to 125,000 people move here every year, so it’s like 10,000 people a month are relocating.
Eve: [00:27:46] That’s a lot of people. Yeah.
Jamison: [00:27:49] And when COVID happened, that accelerated because you had folks in California who were tied to working in and living in the Bay Area, for example, and now they could go, move somewhere else and start working remotely. And maybe that would be a short term. And then it’s kind of turned into more of a hybrid model. And we’re seeing a lot of these companies saying Hey, you want to keep working remotely? Go ahead. Live in Colorado, live in Utah, live in Arizona.” I’m talking about the western states because a lot of that’s from California, but we saw an acceleration in that migration. And so we’ve had a shortage of housing. And in Mesa, which is one of the fastest growing large cities in the country. I think 800,000 people live there close to a million people in Mesa alone, which is a suburb of Phoenix. There’s very little housing available, and we found a deal of a hotel owner who owned 120 unit extended stay hotel. And that meant that all of the units had full kitchens. And we went and looked at the building as a potential conversion to an apartment to meet the growing demand of folks moving here. And it had actually looked and felt like an apartment building already. We did our due diligence. We have a great attorney who’s helping us and helped us with our due diligence, and we purchased the building with the intent to convert it to an apartment where we actually have already started that process with the city and have got a lot of great initial feedback. And so, our current project is this 120-unit hotel to apartment conversion. And the great thing is, it’s not a big, heavy lift when it comes to renovations, and we’ve done some projects that are extensive renovations. It’s really cosmetic. So, we’re going in and updating the carpet and the paint and the fixtures and the appliances. And we don’t have to do plumbing and moving things around to accommodate and turn it into apartment because it was already an extended stay project. There’s 20 studios, 12 two bed two bath and the balance, I think that’s 88 one bedroom one bath, which is a really great mix when it comes to apartments.
Eve: [00:30:28] Yeah, that looks like your biggest project. What’s the total cost, development, purchase price and everything? How big a project is it?
Jamison: [00:30:36] Yeah. So, it’s just over 13 million to purchase, and our renovations are going to end up being about 6,500 per unit.
Eve: [00:30:49] Okay.
Jamison: [00:30:50] Or a total of 800,000 in renovations.
Eve: [00:30:56] Ok. Ok. So then I have to ask, how are you financing this?
Jamison: [00:31:00] Well, yeah, we have some great lender relationships we’ve built over the years. And so, we had a great lender who loved the project. They’re helping us with the purchase, and we’ve already closed on the project about over a month ago. And then they’re also helping finance some of the renovation expenses. And then we’re raising money for the equity, as we have historically in Arizona from Arizona residents. And then this is our first project that we’ve opened up nationally, through the Small Change platform, and we have 25 investors or more now from that platform. And so, we’re between raising money here in Arizona and on the Small Change platform. We’ve already had enough to close on the building a month ago and now just filling out the rest of our financing needs over the next several months as we continue to fundraise on this.
Eve: [00:32:01] So, you know, you and I talked about this national push. We must have been talking about it for years. I think before you sort of…
Jamison: [00:32:09] We have, you know, I’ve been following you for a long time. Actually, you didn’t even know, but I was watching what you were doing because you’re one of the early folks in the crowdfunding.
Eve: [00:32:19] Feeling just as much pain as you were, right?
Jamison: [00:32:23] You are definitely feeling more because you’ve been in the mix of it all. And we’re, you know, from our standpoint, so appreciative that you spent a lot of time there where it wasn’t, it was a thankless job, because you had to deal with the three-and-a-half-year wait before the thing was launched and then once it was launched following all the rules correctly, you know, doing anything new as a pioneer is going to be difficult.
Eve: [00:32:50] Yeah. And actually, you know, the interesting thing about Reg CF and is that, you know, we’re regulated by the SEC and members of FINRA. So, you know, they’ve grown up with this as well. So, I don’t want to say their interpretation, but they over the years they focused on different things in the rules. And we have to change things as their opinions have changed. And so, it’s a kind of ever moving target. It is pretty tough. But so what you, like we, were talking about this for years. So this is the goal to go national and to find some alternative investment tools to be able to let people invest in your projects all over the country.
Jamison: [00:33:38] Yeah, that’s right, and I think one of the things that prompted our discussion just to go back to your point was when they did raise the limit to five million.
Eve: [00:33:50] Yes.
Jamison: [00:33:51] It was a million for so long. And so they have improved some of those rules. And I hope that continues to open things up. And the timing worked out well for us because we were now, got to a project where it was our biggest project and we wanted to go outside of Arizona and let folks who wanted to invest in Arizona. All of our projects have been in Arizona so far. We don’t think that will always be the case, but we know the market very, very well. Our projects have done well here. And so, your platform gave us a great opportunity to start building our investor base nationally and with the same idea in mind. You know, these are these are folks who are trying to put a few thousand dollars away. And we will and they’re more comfortable investing in something that is tangible that they can see and that they can understand rather than investing in crypto or something on Wall Street. That’s so far out there.
Eve: [00:34:56] I think the advantage with the value-add is interesting, too, because value-add properties, they might even be cash flowing all along, whereas a brand new ground up project, you have to wait a while for the return. So, what I find interesting about what we do is, you know, some people can’t wait for a return because they’re on a fixed income. So, they’re looking for projects that will sort of provide more continuous cash flow and other people can wait and are more excited by an idea. And it’s just, it’s fascinating to me because you say the word investor, but investor can mean very, very many different things to different people.
Jamison: [00:35:33] That’s a great point. And if you do a ground up project, you could be a few years out before you get any cash flow coming in the door.
Eve: [00:35:40] But the returns might be better. Maybe not. It’s a risk.
Jamison: [00:35:44] Yeah, yeah, but that’s not what we do. So we take an asset that’s already generating cash flow, but that is underperforming. And that’s what we had here with this hotel.
Eve: [00:35:56] Right.
Jamison: [00:35:57] And we did liquidate the building, had everybody move out because we’re doing a renovation. But the renovations are ahead of schedule, and we have, we’ll end up being closed for about two months and then it’s we start generating cash flow again.
Eve: [00:36:12] That’s fantastic.
Jamison: [00:36:13] We’ll start sending distributions in December.
Eve: [00:36:17] Yeah.
Jamison: [00:36:18] From cash flow. So, it’s a…
Eve: [00:36:20] It’s a great model. And then the other thing, you know, while you’re opening up the market to people you don’t know, I know that some of your investors on Small Change have been following you for a while in Arizona and have been frustrated that they haven’t been able to invest in your projects.
Jamison: [00:36:35] Right.
Eve: [00:36:36] And we’re pretty early in the Small Change offering, which is nice that you sort of already started developing your crowd outside those arbitrary borders.
Jamison: [00:36:48] Yeah, that came from word of mouth because, you know, we have a lot of snowbirds in Arizona, people who live elsewhere and then they come here in the winter to golf and enjoy Arizona winters, which are amazing, but they live elsewhere and then they talk to their friends there. And so, we had a lot of folks, kind of a backlog of folks, who wanted to invest and weren’t able to because we were only open to Arizona. So yeah, that’s the great thing about Arizona, and I’ve lived in multiple places, but it’s kind of a bit of a melting pot, and it’s only because we have a lot of part-time residents. We have a lot of people who have just moved here in the last year, and it’s become a really, kind of, eclectic place with a nice southwest and Mexican influence. You know, we’re two hours from the border. I have a property in Mexico that’s an Airbnb property on the beach. That’s a three-hour drive from Phoenix, so I can go to get to the beach in three hours. And then the other thing is, in Phoenix, you’re two hours from Flagstaff to the north, where there’s snow and skiing, so you can live in Phoenix and you can be, you know, three hours from the beach in Mexico, and you can be two hours from the snow in Flagstaff.
Eve: [00:38:02] You know what? That sounds like Australia where I grew up. Sydney. On the beach, you know, two hours to the mountains.
Jamison: [00:38:12] Yes and, no knock against New York, I love New York, but when I was living there, the coolest thing you could do is get out to the Hamptons, which I couldn’t afford, right? So, you know, when you get used to living in the West and you grow up out here and you’re by West Yellowstone, you’re by the Grand Canyon and the trails, it’s tough to not have that in your life. And so, I’m happy to be back out West.
Eve: [00:38:41] So, tell me, you’ve got that building purchase, do you have another one targeted?
Jamison: [00:38:46] We’re basically slated through the end of the year to finish out our existing projects, including mostly this hotel conversion, which should be done by the end of the year. So, we’re always looking for our next project, but we’re not actively making offers on anything just yet. It’ll be a few months before we’re doing that.
Eve: [00:39:07] So one last question and that is, what’s your big, hairy, audacious goal?
Jamison: [00:39:14] That’s a good question, I don’t share that with everybody, but I will share it here, is we want to double our size every year for the next five years. So, we want to double the number of investors that we have. We want to double the number of projects, assets, the funds that we’re raising for projects for the next five years. And that means, you know, that’s kind of easy the first year and maybe the second year, but the third year, now you continue to double that as the numbers get larger, you have to double it. So that’s our goal. The next five years is doubling the business, but ultimately, it’s to bring more people who have never been able to invest in these types of assets into the game. In our early days when we were struggling, we had an open house at one of our projects, right when we had got it renovated and I was kind of like, oh man, I don’t know if this is the business for me. I’d given up a lot of other opportunities to start this, and we went to the open house and there was a man there in a U.S. Postal uniform and I thought is, I went over and talked to him, I wondered, is he an investor? And he immediately said, I’m so appreciative to what you guys are doing, because I never thought I would be able to invest in something like this.
Eve: [00:40:39] Isn’t that fantastic?
Jamison: [00:40:41] I’ve been delivering mail in this neighborhood for 20 years. I saw your flyer and I thought I could actually invest in this. $1000 minimum. And he showed up to the open house before work. You know, they have to work on Saturdays, so it was a Saturday morning. And he just said, I’m so happy to be here and to be able to invest in this, and that gave me, personally, the juice that I needed that day to get through it. This is why we’re doing what we’re doing.
Eve: [00:41:15] Well, I’m really impressed, Jamison, and I hope you’re wildly successful and I can’t wait to see what you do next.
Jamison: [00:41:23] Same to you and thank you for all your support and everything that you’re doing, and we’re all in this together. So, hoping more folks get the opportunity to get involved in these great projects.
Eve: [00:41:42] That was Jamison Manwaring, CEO of Neighborhood Ventures. Jamison’s putting his determination to work, building his innovative company in Arizona. It’s a real estate company, for sure. They buy, hold and sell property. But the capital plan is innovative, with a growing pool of Arizona residents permitted to invest through Arizona intrastate securities law. He’s seen early success, and now he’s taking his plan to the national stage raising funds on my crowdfunding platform, SmallChange.co. We can’t wait to see how it turns out.
Eve: [00:42:35] You can find out more about this episode or others you might have missed on the show notes page at rethinkrealestateforgood.co. You’ll find lots to listen to there. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending time with me today. We’ll talk again soon, but for now, this is Eve Picker signing off to go make some change.
Images courtesy of Jamison Manwaring and Neighborhood Ventures