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Join us as we take a deep dive into the real estate market with insiders in the industry.
024 Transcript
00:00:28:17 - 00:00:51:01
Michael Conrad
Welcome back to the Business of Homes podcast. My name is Michael Conrad, and each week I get to share amazing stories of folks in the midstate here who are doing really cool stuff around real estate and business and development and all the little things that touch homes. And so my hope is that we together on this journey are figuring out better ways to do business.
00:00:51:01 - 00:01:09:11
Michael Conrad
We're learning interesting ways to interact with the home and overall getting a little bit better every day. Today, I'm joined by Josephine Seifert, who not only works in the same building as me, but is this incredible, multi-skilled, multitalented individual that I feel like every time we pass in the halls, we pass a few words between us. I'm learning something.
00:01:09:11 - 00:01:10:17
Michael Conrad
So thank you so much for being here.
00:01:10:21 - 00:01:12:01
Joséphine Saffert
Thank you so much for having me.
00:01:12:04 - 00:01:40:05
Michael Conrad
Josephine, you are probably one of the first people that I've met that has kind of grounded this idea of development for me because development as we intersect it with homes and with real estate and with building it, it kind of gets this outsized, large, even giant concept of like, I am an earth mover, I'm raising houses out of the ground, I am a developer.
00:01:40:05 - 00:02:15:04
Michael Conrad
And so I think my experience in the grander world of construction, real estate, I typically interacting with developers who are doing large scale development. I think that's pretty common. But the truth is there's a lot of boutiques, smaller development shops that are popping up, infill and small developments all around the mid-state region, and you're one of them. And so I want you to help me tease out not only for our listeners but really for me this idea of like what is a small development shop as opposed to, say, Drees homes or something, one of those big guys.
00:02:15:06 - 00:02:34:11
Joséphine Saffert
I think as a in the development world, you probably want to define small because I think because I just had this conversation earlier this morning with one of my mentors and, you know, you could have a development shop of five people or three people managing half a billion dollars of real estate.
00:02:34:14 - 00:02:35:02
Michael Conrad
Oh, my gosh.
00:02:35:03 - 00:02:48:09
Joséphine Saffert
So, you know, define small. Small in terms of like, you know, people, you know, or really asset base. And I think people underestimate what, you know, a few great people can do.
00:02:48:12 - 00:03:20:22
Michael Conrad
Amazing. Okay. So back up here because you're right, we're talking about two totally different things. Number of people to leverage their time knowledge systems to build a house to ten, 100. And then we're talking about small, big versus how much assets under development are we building, say, in a year's time. And so I guess in my mind, when I'm thinking of developers, I'm thinking of these these big national builders that are dropping, you know, homes in the hundreds and thousands, you know, into a geographic region.
00:03:21:00 - 00:03:27:15
Michael Conrad
But obviously, prices is a mitigating factor here. Where does it intersect with you? What's what's your story?
00:03:27:17 - 00:03:52:08
Joséphine Saffert
I own Sapphire Development Group and we're really focused on urban infill. So 10 to 15 minutes around Broadway, Nashville, Nashville's push for urban development, I think really started more on the residential end and then it started filling in more on the commercial, right? Because like ultimately you need the traffic to promote more commercial development. So, you know, it's it's sort of a domino effect, I think.
00:03:52:08 - 00:04:17:11
Joséphine Saffert
Right. And so I think for, you know, me and and Sapphire, you know, we started on the residential end and now we're trying to get into larger and larger projects, right? Because we've really understood well the residential side. And now, you know, I'm super interested in developing really multifamily like also vertical, right? Not just townhomes or like luxury products.
00:04:17:13 - 00:04:33:07
Joséphine Saffert
So, you know, I think Nashville is such an adult playground where, you know, you can really put your mind to something and then make it happen. And so I think for a young developer here, the opportunity is still very endless.
00:04:33:09 - 00:05:05:17
Michael Conrad
So let's back up because you are so experienced in this that I am like having trouble keeping up because when we talk about a development shop, we're not just talking about a real estate professional that is taking an existing structure, changing it, improving it and putting it back on the market. We sort of term that flipping, I suppose in a lot of ways and we're not even necessarily talking about simply just taking an empty piece of land that has maybe accidentally remained empty in an urban environment and building a house on it.
00:05:05:18 - 00:05:37:23
Michael Conrad
I suppose maybe that's the most basic rudimentary form of development. But there is this inherent idea in my mind, at least in a developer, that they have a vision and that they're looking at the larger social fabric and saying, okay, well, what's the highest and best use of the land? Not just in this one parcel, but maybe I need to start adding connected parcels or I don't need to see this street as merely a strip of old houses that can individually be renovated or or rebuilt upon.
00:05:37:23 - 00:05:59:05
Michael Conrad
But maybe this could become something else. Or this is now a corridor or for commercial traffic, so it maybe is better use. So a developer is someone who is looking at the larger sort of urban planning, but is also looking at highest and best use in this case of course, in residential, but also coming up with creative solutions.
00:05:59:11 - 00:06:23:22
Michael Conrad
Let's not just put a box there, let's come up with something that is visually interesting. Let's come up with something that's functionally interesting, or maybe is least just interesting to a certain subset of people that we want to attract for another reason. And so, I mean, I love thinking about this and talking about this, but it all feels really beyond what the regular real estate professional is able to do.
00:06:24:00 - 00:06:41:05
Michael Conrad
Yet you make it sound like it's really easy, but I know a lot of people, myself included in real estate that have a lot of experience, thousands of transactions, but like man, coming up with all of those different factors, holding them in tension and then like, where do you get the money? Who do you get to do the building work?
00:06:41:05 - 00:07:02:08
Michael Conrad
Like, who are you selling it to? There's so many connected pieces. It's way different than just advocating and representing buyers and advocating and representing sellers or conveying real estate from one party to another. So how did you begin to wrap your mind around it? Did you come from real estate and get in development, or did you come from somewhere else and get in development and have kind of backed into real estate?
00:07:02:13 - 00:07:21:02
Joséphine Saffert
I like what you said earlier to, you know, I mean, developers, someone that has a vision. I think that's really where it starts, someone that really understands, like urban planning at its core and what people want. At the end of the day, it's it's a people business backed by numbers, right. And so the backing by numbers, that's where I come from.
00:07:21:05 - 00:07:51:12
Joséphine Saffert
Okay. So I have a finance background and I'm from Germany. Family still lives over there, but I've traveled a whole lot. I lived partially in China, you know, Europe and New York City. I came back to Nashville. And so all of that to say that I think I needed that journey to understand like urban planning better, having just like, seen, you know, various forms of how people like to live, right, and how areas like grow.
00:07:51:14 - 00:08:03:13
Joséphine Saffert
And I've seen some areas in my life that have a lot of growth, right? Like, I mean, New Yorkers living in New York City is a whole nother beast. And living, you know, in Beijing was a whole another experience density.
00:08:03:13 - 00:08:04:08
Michael Conrad
On another level.
00:08:04:09 - 00:08:43:11
Joséphine Saffert
Right. Talk about density. Right. But you need that density if you want any kind of affordability. So so my background really primarily is as from finance. But, you know, I, I graduated in 2016 with a finance and international management degree and then ended up moving to New York and, you know, joined a tech startup. I full time networked the private equity of venture capital and angel investor side there and really quickly understood, understood and learned that process of of kind of connecting all the different variables and puzzle pieces together and build basically something valuable.
00:08:43:11 - 00:09:08:02
Joséphine Saffert
Right. And so I was in a green car process and at the end of the day I needed, you know, something also that materialized much faster, like really building a business faster. That was sort of like what I had to solve when I started. And so in 2017, I had that opportunity to move back to Nashville. And that was, you know, a time when the market was just so ripe here.
00:09:08:04 - 00:09:29:05
Joséphine Saffert
It was absolutely apparent, I think, to even maybe the last one that that Nashville real estate market was going to take off. Right. I think I always like to reference sort of the 2014 generation of developers because, you know, they had, you know, an opportunity to get to land at like, I don't know, 30, $40,000 a patters, you know.
00:09:29:08 - 00:09:47:12
Joséphine Saffert
Yeah. And so when I came in, we were like more so at like 60. I remember closing on, on, on a four build well land for, for unit development and that was $250,000. So $62,000 per pot, you know, And now today we're easily twice that of.
00:09:47:17 - 00:09:57:06
Michael Conrad
Any listeners here. You could just quietly raise your hand wherever you are. If you remember what it was like to get a per pad below six figures. Man, those are the good old days.
00:09:57:07 - 00:10:07:05
Joséphine Saffert
So when anybody asked me, is now a good time to buy, I like to smile and say, Well, you know, our national is going. So, you know, I think, you know, it's better.
00:10:07:05 - 00:10:09:14
Michael Conrad
Than tomorrow, right? Today is always better than tomorrow.
00:10:09:16 - 00:10:31:11
Joséphine Saffert
I would say so, yeah. So, you know, I really started by essentially in a way not stumbling, but it was very intentionally, you know, coming back to Nashville and building this real estate business. But we started at the time with fix and flips, right? So we bought auction properties and bank on properties and quickly scale from there. But I did grow up with real estate.
00:10:31:11 - 00:10:52:17
Joséphine Saffert
So I you mentioned earlier kind of like, you know, what was my background, I understood real estate because I grew up with my father and showrooms and interior design. So to me, you know, the points that you brought up earlier, you know, how do you connect sort of the vision with, you know, urban planning, with capital, with like design?
00:10:52:19 - 00:11:13:00
Joséphine Saffert
Like for me, it's been sort of a full circle type journey, right? I grew up with design and through my father's kind of entrepreneur journey, I really want to understand the capital side and own that. And I didn't want to be dependent on anybody else for that. And so I master that for me, like of, you know what I wanted to do.
00:11:13:02 - 00:11:32:03
Joséphine Saffert
So, you know, then from 13 to 18, worked in architecture, architecture shop, you know, kind of learning a little bit more on the German and the multifamily and really thought I was going to be an investment banker until immigration pulled me in. Okay, you know, we're doing this now and and then really by trial and error, figuring it out.
00:11:32:03 - 00:11:37:21
Joséphine Saffert
So it all just was really connected at a very young age. So I start when I was 24, 25.
00:11:37:21 - 00:12:07:10
Michael Conrad
So it's so interesting because I've met a lot of architects and designers, interior designers, capable real estate professionals with vision. I would argue, who are not developers. I myself would be I would probably call myself fairly speculative. Certainly I come from the the built environment, the construction background, enough to know how to to drive costs down on that side of the formula.
00:12:07:12 - 00:12:29:02
Michael Conrad
But a sticky part of this grander sort of constants and variables is money. It's so interesting. I've met folks of all walks of life who've said coming to money and make allowing that to fuel projects is easy for them. And I've met just as many, myself included, who think that just is like a mountain that can never be climb.
00:12:29:02 - 00:12:47:15
Michael Conrad
So this finance background and understanding like how to bring capital in and have it work for you and not even your own capital. I mean, to be clear, for listeners here, you are not leveraging necessarily your own capital. That may be part of it, but you're using outside capital, correct?
00:12:47:17 - 00:12:50:12
Joséphine Saffert
I started by raising capital from the from the very start.
00:12:50:14 - 00:13:01:03
Michael Conrad
And is that something that as you level up into different stages of development that you have to sort of go back to that well and and look for you know, capital to work with?
00:13:01:06 - 00:13:23:12
Joséphine Saffert
Yeah, I think I mean, I think, you know, raising learning how to raise capital I think is instrumental to creating any kind of scalable business. That's just my point of view. I mean, I think, of course, you know, you have great product businesses where you sell product, you generate revenue, you reinvest. But I think, you know, I think in real estate, a lot of things are backwards, right?
00:13:23:12 - 00:13:42:00
Joséphine Saffert
If you think about a general real estate agent delivers all the service in the hopes that they get paid eventually, at the end of the day, you have to deliver the service for, you know, a month at least. A lot of times, if it's not a cash buyer and then you get paid 4 to 6 weeks, eight weeks later.
00:13:42:02 - 00:14:08:18
Joséphine Saffert
And so I think like in real estate development and real estate, you know, it is beneficial when you're able to to raise capital and, you know, are able to access sort of that scalability up front. If you start with your own capital, then you're always going to be limited because, I mean, unless you have infinite funds available, right, you're going to you have a ceiling.
00:14:08:20 - 00:14:17:18
Joséphine Saffert
So I think with, you know, being able to raise capital, you're just a lot better positioned to create really a viable business.
00:14:17:22 - 00:14:57:06
Michael Conrad
So this is for anyone listening who is familiar with the tech industry or Silicon Valley, you know, rounds of capital raising and letting that fuel for growth before there is ever adoption or sale, you know, is a common side of the world. But there's a lot of us in the grander or sort of umbrella of real estate and and construction in the residential and commercial environment that either went by way of sort of a a profit centric model or maybe a bootstrap model or whatever, or or actually, honestly, a lot of realty professionals aren't having to spend or make a lot of money in the beginning.
00:14:57:06 - 00:15:24:21
Michael Conrad
It's sort of a very slow organic process. And so this is, in fairness, unfamiliar to some relatively large subset of real estate professionals. This idea of like, well, let's raise a bunch of money, and then our conversation isn't about like profitability so much as is a burn rate, you know. And so how how much of that is this, this squeeze that, you know, you hear about hard money lenders that, you know, have these really high rates, you know, for you know, for borrowing.
00:15:24:21 - 00:15:32:19
Michael Conrad
And so do you ever feel like you're squeezed on those capital calls, you know, on the front side, or is that something that you just learn to live with?
00:15:32:21 - 00:15:53:15
Joséphine Saffert
You know, so I think I do want to clarify a few things. So, I mean, at the end of the day, you only raise capital successfully if you can show profitability, right? So we always I mean, we make sure we we have a lot of protection and buffer there to our profitability. And I would like to avoid ever making a capital call.
00:15:53:17 - 00:16:16:18
Joséphine Saffert
So, you know, in general, you've got to put a deal together where you can show a strong profitability. And I would not suggest raising any capital if if you don't feel like you have the knowledge. I know Katie Morrell talked about that as well. You know, you really want to have the knowledge to back it up that you can deliver on what you said you're going to do.
00:16:16:20 - 00:16:35:04
Joséphine Saffert
And so we've raised more like on a deal to deal basis, Right. So when you compare the tech startup world, Silicon Valley with the real estate, like here in Nashville, it you know, it is very different raising venture capital, venture funds.
00:16:35:06 - 00:16:36:18
Michael Conrad
To be versus company versus a deal.
00:16:36:19 - 00:16:55:04
Joséphine Saffert
Correct? Correct. Correct. So ours is deal based. And so that has layers of protections as well. Right? So when a deal goes well, then, you know, obviously, you hope that the investor would want to move on to the next project, which a lot of times they do, but it's all D of a deal.
00:16:55:06 - 00:17:17:02
Michael Conrad
Do you feel like you are ever fighting a rolling clock on that? Because there obviously is a culmination of a a final product that's finished and then there's a sort of an intermediary period that you can't fully control about how fast something sells. And so, you know, the the deal timelines that you put together based on the money that you're raising, you know, make some protected assumptions, I'm guessing.
00:17:17:04 - 00:17:20:11
Michael Conrad
But is that that clock fighting you ever you feel?
00:17:20:12 - 00:17:45:04
Joséphine Saffert
Yeah, of course. I mean I usually even have my deal structured to that if I perform and the timeline that I think I can perform in that. I mean, I basically get a promote versus like if it takes me longer that it favors the investor. I always, I always like to, you know, structure any kind of deal very much incentive focused.
00:17:45:10 - 00:18:10:11
Joséphine Saffert
I have the same on the builders and ride because at the end of a day everybody's got to be incentivized to play their part and you know, I know a lot of times with entrepreneurship, you know people get into on friendship thinking that that they don't have a job or there's no boss or, you know, and at the end of the day, I mean, yeah, now we have investors and of course we have fiduciary responsibility to deliver and it's just another form.
00:18:10:11 - 00:18:29:14
Joséphine Saffert
Yes, I have a lot more freedom. You know, I don't have a ceiling to my compensation and all that, but at the end of the day, I still have, you know, someone that I need to report to. And so, yes, I you know, when I set up my deals, I want to make sure that the timelines are realistic and that I don't over like promise.
00:18:29:14 - 00:18:45:00
Joséphine Saffert
Right. And and sometimes it gets it's difficult. I mean, real estate, as you said, there's so many different variables that have to play together. But I think that's where it comes to comes down to building the right team surrounding yourself with the with the right people that can deliver.
00:18:45:06 - 00:19:17:12
Michael Conrad
Okay. So development becomes really more about being able to properly structure a deal, build a formula, properly forecast, put together a great team, and being able to know where to look for the opportunities. And so when you break it down like that, it didn't seem so hard. That's lovely. And yeah, there's, you know, a lot of people again, myself included, that aren't going out and immediately starting and doing this tomorrow because there does feel like there's this this sort of barrier in there.
00:19:17:12 - 00:19:54:22
Michael Conrad
So I guess maybe the question I'm having is why aren't more real estate professionals going into development? Because this does feel like a natural progression, at least the way that you have so eloquently put it. Because if you know real estate and you know neighborhoods and, you know, comparative market analysis and you have been a participant in conveying property from one person to another, and you know what buyers and sellers want, and you've had conversations with financiers we call banks, then you've played with all the blocks in the toybox, but you haven't stacked them up to be the developer.
00:19:54:22 - 00:20:03:13
Michael Conrad
And so why is it, as you have in your view of it, why is it that more real estate agents aren't naturally becoming developers?
00:20:03:15 - 00:20:41:02
Joséphine Saffert
I'm glad you asked, because I think as the access to knowledge and generally like developers don't really share what they know and how to get into, I don't like to come from a fair mindedness. So I started Developer Academy where I basically share everything that I know because I do believe that actually, you know, realtors, I really want more that don't want to continue in chasing clients or even wholesalers, you know, not continuing to chase contracts that they can build their own pipeline where they know that these listings are coming their way.
00:20:41:04 - 00:21:08:15
Joséphine Saffert
So they're able to create a super normal vehicle of of overall income and revenue. Right. So I think it's just the access and I think it's just like really someone kind of like breaking it down. You know, I had to learn everything by trial and error, but at the end of the day, I found great people locally in like, you know, and nationally that have, you know, helped me understand what I needed to know to get to where I'm at today.
00:21:08:20 - 00:21:31:17
Joséphine Saffert
And I do believe in and giving back. I've always been very, very open in terms of like coaching, mentorship and trying to help also other women come up and we need more women in development. And I think it's also something that unfortunately and I say unfortunately because I wish it wasn't that way, but I think a lot of times women have to see that someone else has done it.
00:21:31:18 - 00:21:43:19
Joséphine Saffert
That kind of really maybe it looks like them, man, just go for it. But, you know, I just I just would love to see, you know, others come up and putting that vision out there.
00:21:43:21 - 00:22:06:02
Michael Conrad
Yeah, there's a confidence piece I think you're talking about here for all parties. But you know, particularly women, the way you term it is that without that knowledge, it takes a certain amount of a leap. And that can be hard, you know, And it you're right, as I think about it, I'm thinking about all the influencing people out there in the world famous and otherwise on Instagram or whatever.
00:22:06:04 - 00:22:32:22
Michael Conrad
Like who are these developers that are breaking the information down and commoditized it for us? Regular people? And I'm struggling to come up with one off the top of my mind because it's just not a subject that I see a lot. You know, the TV and these channels have given us a lot of access, an insider, some sort of information into the world of real estate or repair, but but not development.
00:22:32:22 - 00:23:13:04
Michael Conrad
It it appears to be just a level above in complication that's maybe hard to present or hard to discuss, or maybe it's hard to speak about it nationally. You know, in our our world feels like a much more nascent national conversation. You know, the people who are doing business, say, in real estate in New York and in California, they're still talking to the real estate agents in Omaha, Nebraska, and in Nashville, Tennessee, and vice versa, because there's a certain universality, at least to the conversation, even if it's not totally universal in practice, but in development, different market dynamics, the speed, the demand, the integration, or even like the city fabric or the state rules and
00:23:13:04 - 00:23:40:04
Michael Conrad
regs. You know, these are all really different. And so I'm assuming development does really tend to look pretty different in New York City than it does Omaha, Nebraska. Our Nashville, Tennessee. And so, yeah, I like that you're building this access to information. You said it was called Developer Academy. Mm hmm. Okay. Well, we will put that information to show notes for any listeners here that want to get more information on that or maybe learn from themselves what that looks like.
00:23:40:05 - 00:23:51:08
Michael Conrad
But what is one of those little nuggets you can give me right now? Something you had to struggle through, learning that now you're turning into a lesson to be taught to others.
00:23:51:09 - 00:24:12:14
Joséphine Saffert
So there's so many lessons that I've learned the hard way over the years. I mean, you know, I've gotten burned by builders. And so I, you know, educate and coach on just like how to set up like those agreements like differently how to manage, you know, also that process, but also like partnerships, right? I mean, at the end of a day, pretty burned by that.
00:24:12:16 - 00:24:48:04
Joséphine Saffert
Unfortunately, it broke off from my former business partner like pretty much lost everything in 2020 and really, really restarted. So I've done it now twice from scratch. And to your earlier question. Yeah, actually, unlike the capital side, you know, the ability to raise capital is what also had me do it all over again very quickly because the skill set that I've learned over the years and I realized was actually just more over the last few years is so valuable that it's a multimillion dollar skill that nobody can ever take away from you.
00:24:48:06 - 00:25:15:09
Joséphine Saffert
So no matter what happens, you can always put it back together. I'm just like saying that it's something that, you know, in general, like it's something that gives you a lot of like security that you actually don't find really a lot in other in other jobs or, you know, occupations. Right. And so I think also being a developer, I mean, you've got to have somewhat of a strong stomach because at the end of a day, it's not for the faint hearted.
00:25:15:11 - 00:25:34:20
Joséphine Saffert
Yeah. But knowing that, you know, you've always got yourself to to figure it out. You've always figured it out before and you can leverage your skill set, I think is it's actually like really unique. And I've always loved that about real estate development.
00:25:34:21 - 00:26:03:20
Jake Hall
Hey, everyone, it's Jake, director for the Business of Homes Podcast. I hope you've been enjoying today's episode starting with Sapphire Development Group's transition from residential to commercial development. How Josephine's financial background played into her development success and why development, education is so hard to find. When we return, Michael and Josephine dive into building a business to reach its full potential, the visibility of developers and how understanding urban development can help your real estate career.
00:26:03:23 - 00:26:20:07
Jake Hall
Don't forget to follow us on Facebook and Instagram @thebusinessofhomespod, where you can interact with us and see some great bite sized pieces from all of our episodes. For you listeners out there, did you know our entire podcast are filmed and are on our YouTube channel? Check it out next time you want to see our amazing guests tell their stories.
00:26:20:09 - 00:26:37:18
Jake Hall
And are you currently watching this episode in video format? Don't forget to follow us on your preferred audio streaming service to take us with you on the go. Lastly, do you have any feedback or one to suggest someone for the show? Email us at thebusinessofhomespodcast@gmail.com. Please enjoy the rest of today's episode with Josephine.
00:26:37:20 - 00:26:42:14
Jake Hall
Let's get back to it.
00:26:42:16 - 00:27:06:12
Michael Conrad
As you grow and you build a business around yourself and this is not, you know, uncommon to any part and piece of real estate or construction, if you grow a company and you build systems and structure and employees, you're going to get to a point where it's harder to completely stop and start again than it is to continue.
00:27:06:12 - 00:27:36:18
Michael Conrad
And all of a sudden, your risk tolerance changes because the profit that you have made or the lifestyle changes that you've made, or even just like the the fate of others that are now in your hands to lose your current structure down to nothing, to crumble it down to nothing and then restart is really scary, really difficult, sometimes feels impossible and might even financially be such a long road that it might not even be possible to do it organically.
00:27:36:19 - 00:28:09:03
Michael Conrad
But as you said, if you are building this idea of understanding how to bring capital in at the right moments, then you can scale so much quicker because money fuels talent and money and talent, fuel structure. And so this for anyone listening, this is a really interesting concept that if you can learn this skill of how to bring the right money to the right situation or structure, then you have a security and a sustainable ability.
00:28:09:05 - 00:28:20:17
Michael Conrad
And I can say that's better than like the experienced structure that you built, but it's a incredibly helpful skill that almost helps you avoid a total loss. Well, I can come back from.
00:28:20:17 - 00:28:40:16
Joséphine Saffert
So well, I will say this, I will say this that, you know, in my former business partnership, I mean, I had to go through of how how things can go very south and how you bounce back from it. And at the end of a day, I think it stands and falls with you that, you know, I always I mean, I'll make sure that, you know, I want to make sure I do what's right.
00:28:40:16 - 00:29:11:11
Joséphine Saffert
And that at the end of the day, that, you know what I said I would do that, that I do. And so I don't take this lightly, as in, like managing retirement funds or, you know, self-directed, self-directed IRAs and, you know, and really, you know, funds of of high net worth individuals that, you know, either inherited the money, you know, that, you know, I've obviously, like earned well and like saved up at the end of a day.
00:29:11:13 - 00:29:37:03
Joséphine Saffert
It's a lot of responsibility. And again, I don't take this lightly. So I think there's a business component and then there's really like the investor relations component. And and there you know, that management like asset management in a way, right? So the responsible responsibility piece is on the business end. And then on the investor side and a lot of times that's that's two different, I think, buckets, if you will, right?
00:29:37:03 - 00:29:53:19
Joséphine Saffert
Because you have involved employees here and you have sort of that responsibility and then you have the investor side over here. And so I think as you raise capital, you want to make sure that you do that sustainably. So, I mean, I want to be around in ten, 20 years, right? So I don't want to scale too quickly either.
00:29:53:19 - 00:30:15:06
Joséphine Saffert
So I want to clarify that is just it's just more sort of skill set in itself. That's it's really powerful, I think. And that differentiates and to the point of like, you know, what I've seen over the years too, is, you know, yes, lifestyle may increase for a lot of developers because, you know, cash comes in fairly quick and maybe in some ways easy.
00:30:15:08 - 00:30:44:16
Joséphine Saffert
But I'm a minimalist. So for me, I'm I'm really more obsessed with actually, like figuring out like how what it takes to to build a business where you can really afford your full potential. So I think, you know, people do it for different reasons. People develop for different reasons. So for me personally, personally, what really drives me there is, is really more so like that, that obsession with like purpose potential and where can I push this to, right.
00:30:44:16 - 00:31:21:05
Joséphine Saffert
Like what can I build in regards to the skill of raising capital, you know? So I'm coming from a German culture where in general, like, it's not really common to ask people for money. So just for people to understand, like sort of my journey, I really started from like not even feel uncomfortable at all to talk really about money and nor like, ask for money just when I, you know, was recruited as a as a college athlete here and how to start going out and fundraising for like, you know, the team and, you know, good causes and and whatnot, that that's actually, you know, so that was the first spark of even understanding, oh, hey,
00:31:21:05 - 00:31:40:01
Joséphine Saffert
what like here in the U.S., you can actually fundraise and like, you know, friends and family are, you know, funding or funding. You know, I don't know these things. And like, that's not the culture where I'm coming from. And so for me, so that was the first like kind of spark of just getting more comfortable with like, okay, you know, these are more like nonprofit efforts, right?
00:31:40:01 - 00:32:11:05
Joséphine Saffert
And then going to New York and seeing sort of that to like startup culture, you know, from from Microsoft, Google, Google and and all the branch works, she works and whatnot. And seeing those pictures and and putting that together, what that business aspect, it was just really powerful and then getting really comfortable with, you know, figuring out what is a minimal viable product and then how do you connect that value proposition with what investors are looking for?
00:32:11:10 - 00:32:30:13
Joséphine Saffert
Yeah. So, so it was really an absolute journey. And then later I translate that to real estate, right? So I started really from absolutely like no understanding of raising capital. So I think here in the U.S., a lot of people have a leg up because of, you know, fundraise for college activities or kids activities or whatever it is.
00:32:30:15 - 00:32:41:16
Joséphine Saffert
And so that's not necessarily common. I mean, we don't even have a a wedding registry. German and German culture, really. You know, like I mean, we don't really ask for anything like that. So just to give perspective.
00:32:41:16 - 00:33:02:16
Michael Conrad
You know, and it's an interesting perspective because I, I think you're right. I think we do have a more common understanding of flying friendships and family for kind of that small fundraising ask. It does get dicier when you start to ask strangers for money for business. That feels a lot bigger stakes. So, yeah, that's interesting.
00:33:02:20 - 00:33:21:15
Joséphine Saffert
But I will say, you know, I mean, at the end of the day, you're doing them a favor, too, right? Because I mean, capital is more commodity than what people think. And at the end of a day, accredited investors, high net worth individuals, you know, they have to deploy their money, right? Like otherwise they're not going to earn any any yield, any return on it.
00:33:21:15 - 00:33:48:18
Joséphine Saffert
And so they need operators like us, They need the people that really have the vision and to deploy it with and multiply their, you know, their funds for for their family. So at the end of the day, I think, you know, we're offering valuable like propositions there on, you know, building communities, improving, you know, urban spaces that at the end of the day is kind of a win win.
00:33:48:21 - 00:33:57:06
Joséphine Saffert
So I believe you know, in order to raise capital successfully do a deal successfully, it needs to be a win win.
00:33:57:08 - 00:34:17:20
Michael Conrad
So is every developer that's doing small, medium sized development in the Metro thinking about this higher level of societal fabric and like balanced value both to end user, customer and investor? Is everybody doing this? Because this doesn't seem like a common conversation.
00:34:17:22 - 00:34:48:02
Joséphine Saffert
I believe I believe national developers are doing a great job with it. I do believe so. I mean, I think it's overall a pretty tight community and I've met really great developers here in town, also some other guys coming in from outside. And I think that's something that's been sort of the magic around Nashville that, you know, people move to Nashville because they all kind of share like that commonality to to do something bigger, to improve and have impact.
00:34:48:02 - 00:35:05:15
Joséphine Saffert
And so that's what I love and love about Nashville. That's I think what also draws a lot of people to Nashville to start a conversation actually earlier this afternoon, because I kind of got that question, you know, why Nashville and? I think that's a really big differentiator compared to other places because, you know, in New York, a lot of people are just about themselves.
00:35:05:15 - 00:35:09:05
Joséphine Saffert
I don't think you really have that necessarily in Nashville to that extreme.
00:35:09:06 - 00:35:29:15
Michael Conrad
Yeah, it is an interesting balance culture where there's a real connectivity and a social fabric because it's kind of born out of that southern culture, but it's been way more metropolitan than it was, you know, ten, 15 years ago. And so there is more of a hustle culture. And so somehow these things have really blended into a an interesting landscape, most definitely.
00:35:29:18 - 00:35:55:05
Michael Conrad
So I think a piece of this larger puzzle as I'm working it out is got to be the visibility of a developer in the larger sort of real estate landscape as opposed to, say, I don't know, 50 years ago or more. You know, I think the developer of yesteryear was sort of this cloistered in an office sort of bigwig, probably some white man, you know, kind of a thing.
00:35:55:05 - 00:36:33:16
Michael Conrad
And there may have even some sort of good old boy quality to that where, you know, everybody's sort of scratching, everybody's back behind closed doors. But I think what you're driving at is that there is a visibility now where you've got to be on social media and the world is wanting more transparency out of you. And so you certainly represent something different than some of the developers I've interact with in the past an openness, more social awareness, even sort of like managing your brand, you know, from what the product that Sapphire is developing.
00:36:33:16 - 00:36:37:06
Michael Conrad
So help me understand more of kind of how you've gotten to where you are.
00:36:37:06 - 00:37:04:16
Joséphine Saffert
Yeah, I believe that, you know, there's definitely been a tremendous change and like push from the baby boomer generation to now millennials to now Gen Z, Right. And I'm even seeing this like as a millennial, seeing how now really young guys either like more Gen Z pushing sort of their development businesses and and I love what I'm seeing I think it's just so inspiring because they're changing their family's lives, right?
00:37:04:16 - 00:37:37:06
Joséphine Saffert
And I'm just setting a whole nother trajectory for others to come after. So I think that within the baby boomer generation that it wasn't probably really common to to share and pass knowledge down to to others to learn development. Right. Like we're talking here about realtors, we're talking about wholesalers, you know, other real estate professionals, right? Like, I don't think that was really that interest of like, you know, why teach a realtor to learn how to develop their they're great at selling homes.
00:37:37:06 - 00:38:10:13
Joséphine Saffert
They're great at, you know, bringing buyers. And I think that has changed. You know, I believe in more collaborative approach because at the end of the day, I think we're stronger together. And I think now for the next 5 to 10 years, I believe that the next SEC sort of also currency is really a tension in the sense of like building community and and sharing passing on what, you know, to make someone else better.
00:38:10:15 - 00:38:42:19
Joséphine Saffert
Because especially after COVID, too. Right. I think we all want to feel community and it's more fun to do it together. I love the real tournaments. We have the brokers open and seeing also how they interact with our product, getting feedback, like at the end of a day, I think when we develop now, especially like luxury homes, you know, or like townhomes having that access to instant feedback from realtors is so valuable and having a brand having, you know, like sort of that social media outlet, it helps like just evolving and learning so much faster.
00:38:42:19 - 00:39:02:01
Joséphine Saffert
So I think it's only making us better as developers, you know, to a lot better products that really people want and be also like, you know, to, to then sell it more effectively. And yeah, so I think there's just a generational like staff shift from generation to generation.
00:39:02:03 - 00:39:32:00
Michael Conrad
Yeah, I don't think it's just generational. I think we're going through an evolution generally in the grander world of real estate. You don't have to look very far beyond the news and the lawsuits and all the stuff going on out there to see that the general public is wanting to interact with trades professionals, real estate professionals, you know, everyone in a a different, more transparent, simpler fashion.
00:39:32:00 - 00:39:55:17
Michael Conrad
We have a lot of technology that's being leveraged now. People are just more aware of kind of everything to your point in social media. And so I think that in some ways this is sort of a charge to the realtor out there to say, hey, you know, as your continue to evolve as a professional, make sure that you're not neglecting these adjacent skill sets and information and knowledge so that you can continue to build value within your own business.
00:39:55:22 - 00:40:24:11
Joséphine Saffert
So I think as I'm going to add to this, because I think that, you know, as a realtor, you understanding, learning like zoning, understanding, urban planning only makes you better even if you don't necessarily want to develop. But even if you want, for example, more investor Kleins or you want to speak more intelligently about what's happening like or what the max use of a property is, you you actually just have only benefits by learning at least the basic understanding there of development.
00:40:24:11 - 00:40:44:22
Joséphine Saffert
Right? And to your point in terms of like that shift to more transparency, I think you know, now is the same as like in in the pharmaceutical or like in the medical field where people self-diagnose using, you know, what they have, I think is the same in real estate. People look on Zillow and see what the property is worth and think that's it.
00:40:44:22 - 00:41:08:23
Joséphine Saffert
Right? And so we have to overall as real estate professionals, right? Like what the developer, realtor, investor, wholesaler, you name it, we all have to understand that like we have to bring a lot more to the table in terms of customer service and the knowledge that we have that was gained through experienced experience and like really like striving to learn more and dive deeper.
00:41:09:01 - 00:41:30:18
Joséphine Saffert
I think it's value, value, value and that that starts, you know, for a realtor and like customer service and, and, and probably in really some more technical, you know, know how nicias like development. But at the end of the day I think there's just such a benefit to, to being more like well-rounded on that end.
00:41:30:20 - 00:41:52:02
Michael Conrad
But let's, I mean let's get away from the touchy feely of well-rounded and get right down to numbers because at the end day, I think you're hinting at a pipeline, a pipeline that you're creating for yourself. There's a lot of conversation out in the world in real estate about leads and like, where are you getting your leads? And like, how are you farming your sphere to create leads and all this kind of stuff.
00:41:52:02 - 00:42:17:11
Michael Conrad
And the truth is, it would could be said that nobody kind of makes leads out of nothing. You don't just go poof, there's a lead. And yet, almost in development, there is a bit of like poof, there's a lead out of nothing. Because instead of conveying a product and effectively your whole focus is the people who are going from buyer to seller or whatever, You're now creating a product instead of simply conveying one.
00:42:17:11 - 00:42:37:16
Michael Conrad
And so the leads kind of begin to pop up out of nowhere, so to speak. You're creating new people in your sphere, out of what would have been strangers because they're coming in, viewing your product or there maybe buying your product or maybe their later selling your product. So I mean, there's definitely a way to truly actually generate leads out of nothing.
00:42:37:20 - 00:42:41:12
Michael Conrad
Whereas in traditional real estate buying and selling. Agent No, that's not possible.
00:42:41:14 - 00:43:02:17
Joséphine Saffert
No, I mean, that's a lot of what we kind of preach is like, you know, I mean, I got my license, my realtor license just way, way later, because, I mean, initially, like, first of all, it wasn't really necessary. But then also, you know, there was this benefit to to kind of like also list our own properties, especially like on the really true residential.
00:43:02:17 - 00:43:33:11
Joséphine Saffert
And right like now as we're growing into like larger deals, it's a little bit different too. But I mean, we've worked on we work with a lot of other realtors too, right? And we love to collaborate. So, I mean, you know, again like morale. Deborah Value like, I love those ladies. Just I mean, we have such a strong network here, and I think it's important, you know, But certainly like as a developer, you know, you kind of have leads popping up left and right because people see the building process, too, right?
00:43:33:11 - 00:43:59:16
Joséphine Saffert
So, like you, so you buy, you buy land and you can put your sign in the yard, right? And now you have nine months, 12 months, and you you get all that traffic, right? And people calling in, Oh, what's happening over here? The neighbors like, oh, you know what's happening over there. And as long as you're you're really present and you're you network and you make an effort, you meet a lot a lot of people just naturally right.
00:43:59:18 - 00:44:29:04
Joséphine Saffert
And then later on to what you also refer to as an and the brokers open or you know the actually finished product type interaction. So you just have a lot more visibility that way. Right? So obviously now like listing our own product is already, you know, is definitely a significant volume. And then we still have also the investors that work that we work with, you know, that are looking then for property or like buy or sell both ways.
00:44:29:04 - 00:44:37:19
Joséphine Saffert
Right? Right. And so again, I think like as a realtor, you're actually absolutely best positioned to to learn how to develop and do your own projects.
00:44:38:00 - 00:45:02:06
Michael Conrad
This is lovely because we have but to look no further than the traditional sort of business industries, to borrow their ideas and bring them to real estate, because we're talking about visibility, we're talking about branding, we're talking about an extension of people's everyday awareness of you. And here's the cold, hard facts, folks. Real estate becomes an accidental game of roulette.
00:45:02:08 - 00:45:27:01
Michael Conrad
A lot of the time, because if you're not top of mind at the moment, we're that person over there is willing to buy or sell. And that other person that they barely know is top of mind. They're going to use them. The the repeat business in real estate percentages we know is poor. And so how better than to be top of mind than by literally simply having more impressions, more brand awareness.
00:45:27:03 - 00:45:58:19
Michael Conrad
If you are touching more things, doing more things where your process is longer, or people are coming to you in different avenues, the number of leads, a number of opportunities, and really just the number of moments for you to be top of mind just goes way up almost exponentially. It's not even like linearly up. And so this is a great reminder that if we simply look at, well, how often can I interact with my potential sphere or my leads out there, you know, that's a better chance for me to be doing business with them on a variety of fronts.
00:45:58:20 - 00:46:23:11
Michael Conrad
Give yourself the Swiss Army knife opportunity to be working with you at all these different things. It's a bit of a vertical integration. We've talked about that here on this podcast in the past, that if you jam more skills and knowledge into yourself as a business person, you give yourself a better opportunity to monetize along the way as well as for people to enter into your larger whole from different avenues.
00:46:23:11 - 00:46:36:20
Michael Conrad
And so yeah, this is, this is a good reminder that development is not like a cousin to real estate, it is real estate. And it's as much of an overlap to the traditional buyer and seller agents out there as they want.
00:46:37:01 - 00:46:40:19
Joséphine Saffert
No, I mean, I think you put it very well together.
00:46:40:21 - 00:47:05:08
Michael Conrad
We've laid down all these charges and challenges for people, so let's give them the facts. They know what to do and where to go. First of all, you got to find Sapphire Development and Josephine's effort on social media, on Instagram and follow her. But tell us a little bit more about Developer Academy, where our listeners here who may be from all around the country can check out some of the stuff that you're offering to better themselves as business people.
00:47:05:08 - 00:47:30:11
Joséphine Saffert
Sure. Yeah. So I basically created a four month program in which we really teach you from A to see everything that you need to know about real estate development. So my goal is to get you really fully comfortable with doing your first project and preferably without any cash of your own. So I basically pass on everything that I've learned in this program and it's really nationwide.
00:47:30:12 - 00:47:53:12
Joséphine Saffert
I mean, we have also a member who's in Texas, so it's not just Tennessee. The crux to the same. And what I also offer is as people from out of town, I got off Davidson County join to jump into their county with them. So zoning planning basically there is more tailored for them. Again, love to learn as well.
00:47:53:12 - 00:48:16:19
Joséphine Saffert
I want to make sure it translates. But again, I believe that as a realtor, you know, you're best positioned to learn rosette development and build your own pipeline than for upcoming listings. And I think, you know, making $1,000,000 as a realtor is pretty difficult unless you manage a full team and you know you can do that as a developer much more easier.
00:48:16:20 - 00:48:25:18
Joséphine Saffert
And then at some point you get to the point where you probably have half a million dollars of just commissions alone that year that you're producing and you don't need a big massive team for that.
00:48:25:20 - 00:48:42:07
Michael Conrad
Amazing. All right. Well, check out Developer Academy Hits. Subscribe. Stay with us. We're going to continue to bring you great stories from folks like Josephine who are intersecting the world of real estate and the entrepreneurship and the business behind it. I'm Michael Conrad. Thanks for being with us. And we'll catch you next time.
00:48:42:09 - 00:48:47:15
Joséphine Saffert
Thank you, Michael.
00:48:47:17 - 00:49:10:04
Jake Hall
Everyone. Jake, again, director for the Business of Homes Podcast. I hope you've enjoyed today's episode. A huge thank you to Josephine for being a part of the podcast. Go follow her on Instagram @joséphinesaffert and let her know how much you enjoyed their story. Don't forget to subscribe on your preferred listening platform and make sure to follow us on Instagram as well @thebusinessofhomespod.
00:49:10:06 - 00:49:19:19
Jake Hall
Do you have any feedback or want to suggest someone for the show? Email us at thebusinessofhomespodcast@gmail.com. Thank you again for listening and we'll see you soon.